Illustrative Fund Economics
A plain-English walk through the manager's operating model: how loan interest, modest back leverage and an 8% preferred return could combine into investor income.
Step 1 · The capital stack
10% of equity is held back as a cash reserve. The rest is paired with a credit facility that advances 75% of each loan's principal — so investor dollars sit in the junior 25% of a senior, first-lien loan book.
| Stabilized, annual | $25M fund | $50M fund | $100M fund |
|---|---|---|---|
| Investor equity (incl. 10% reserve) | $25.00M | $50.00M | $100.00M |
| Equity deployed in loans | $22.50M | $45.00M | $90.00M |
| Credit facility (75% advance) | $67.50M | $135.00M | $270.00M |
| Average loans outstanding | $90.00M | $180.00M | $360.00M |
Step 2 · Income waterfall
Borrowers pay ~9.75%. The fund pays its lender, servicing and admin costs, and sets aside a 0.50% annual allowance for credit losses. Investors receive the first 8% each year; anything above is split 80% to investors, 20% to the sponsor. No separate management fee is modeled.
| Stabilized, annual | $25M fund | $50M fund | $100M fund |
|---|---|---|---|
| Loan interest income (9.75%) | $8.78M | $17.55M | $35.10M |
| Facility interest (SOFR + 2.50% = 6.37%) | ($4.30M) | ($8.60M) | ($17.20M) |
| Servicing spread (0.50%) | ($450K) | ($900K) | ($1.80M) |
| Credit-loss allowance (0.50%) | ($450K) | ($900K) | ($1.80M) |
| Fund admin / audit / tax | ($75K) | ($75K) | ($75K) |
| Fund net income | $3.50M | $7.08M | $14.23M |
| 8% preferred return to investors | $2.00M | $4.00M | $8.00M |
| Investor 80% of excess | $1.20M | $2.46M | $4.98M |
| Sponsor 20% of excess | $300K | $615K | $1.25M |
| Total investor income | $3.20M | $6.46M | $12.98M |
| Investor annual return | 12.80% | 12.92% | 12.98% |
Step 3 · The ramp-up
In the launch scenario — $25M first close, another $25M in month 13 — early income is lower while loans fund. The 8% preference is cumulative: any shortfall carries forward and is paid before the sponsor earns any share of profit. Returns are expected to rise toward the run rate by year three.
Capital deploying; unpaid pref accrues and carries forward
Second close funds; prior arrears caught up first
Arrears cleared; fund approaches full run rate
Step 4 · Stress test
Fund net return before profit split, $50M fund. Columns show SOFR 1% lower to 1% higher than today, plus 2.50%. Base case highlighted. Even at 2% annual credit losses — four times the base allowance — the fund still clears the 8% preference at today's facility rate.
| Credit loss ↓ / Facility rate → | 5.37% | 5.87% | 6.37% | 6.87% | 7.37% |
|---|---|---|---|---|---|
| 0.0% | 18.7% | 17.3% | 16.0% | 14.6% | 13.3% |
| 0.5% | 16.9% | 15.5% | 14.2% | 12.8% | 11.5% |
| 1.0% | 15.1% | 13.7% | 12.4% | 11.0% | 9.7% |
| 2.0% | 11.5% | 10.1% | 8.8% | 7.4% | 6.1% |
| 3.0% | 7.9% | 6.5% | 5.2% | 3.8% | 2.5% |
Accredited investors can review the Private Placement Memorandum and subscribe through our investor portal.
Invest in the FundImportant: informational purposes only — no guarantee of returns. All figures are hypothetical and illustrative, based on the manager's internal operating model (September 2026) with these assumptions: 15-month loans, 9.75% average borrower rate, 75% facility advance at SOFR + 2.50% (SOFR of 3.87% as of October 8, 2026, which floats and will change), 10% equity reserve, 0.50% servicing spread, 0.50% credit-loss allowance, 8% cumulative non-compounding preference and an 80/20 split thereafter in favor of investors. This page is provided for informational and educational purposes only. Nothing here is a projection, forecast, promise or guarantee of future results, and none of it is investment, tax or legal advice. The Fund is newly formed and has no operating history. Target and illustrative returns are not guaranteed. Actual returns may differ materially, including loss of principal. Offers are made only through the Private Placement Memorandum.