Company: NMFCZ
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001496099-25-000010
Chunk: 125

Company: New Mountain Finance Corp
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1
Chunk 125
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 etc.) = 3.50% 

14

Hurdle rate(1) = 2.00%

Management fee(2) = 0.31%

Other expenses (legal, accounting, safekeeping agent, transfer agent, etc.)(3) = 0.20%

Pre-Incentive Fee Net Investment Income

(investment income – (management fee + other expenses)) = 2.99%

Incentive fee = 100.00% × Pre-Incentive Fee Net Investment Income (subject to "catch-up")(4)

Incentive fee = 100.00% × "catch-up" + (20.00% × (Pre-Incentive Fee Net Investment Income 2.50%))

Catch-up = 2.50% – 2.00%

                = 0.50%

Incentive fee = (100.00% × 0.50%) + (20.00% × (2.99% – 2.50%))

                      = 0.50% + (20.00% × 0.49%)

                      = 0.50% + 0.10%

                      = 0.60%

Pre-Incentive Fee Net Investment Income exceeds the hurdle rate, and fully satisfies the "catch-up" provision, therefore the income related portion of the incentive fee is 0.60%

.

(1)Represents 8.00% annualized hurdle rate.

(2)Assumes 1.25% annualized base management fee effective January 29, 2025 per Amendment No. 2 of the Investment Management Agreement.

(3)Excludes organizational and offering expenses.

(4)The "catch-up" provision is intended to provide the Investment Adviser with an incentive fee of 20.00% on all Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply when our net investment income exceeds 2.50% in any calendar quarter.

Example 2: Capital Gains Portion of Incentive Fee:

Alternative 1:

Assumptions

Year 1: $20.0 million investment made in Company A ("Investment A"), and $30.0 million investment made in Company B ("Investment B")

Year 2: Investment A sold for $50.0 million