Company: PDCC
Filing Date: 2025-03-11
Form Type: N-CSR
Source: 0001398344-25-005419
Chunk: 42

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-03-11
Form: N-CSR
Chunk 42
---
then reviewed, considered and discussed: (1) the performance results of the Adviser’s investment personnel with respect to investments
in CLO securities that are similar to the CLO securities to be invested in by the Company and (2) the performance data for the Peer Funds.

Investment Management Fee Rate and Total Expense Ratio. The Directors then reviewed and considered the base management fee rate and incentive fee rate proposed to be payable by the
Company to the Adviser under the Investment Advisory Agreement (“advisory fees” and “Proposed Management Fee Structure”).
The Directors considered a comparison with the base management fee rate and incentive fee of each of the comparable funds and Peer Funds
(as applicable), and also information about the total expense ratio of each of the comparable funds and the Peer Funds as of a recent
date. Among other things, the Directors considered the differences between the proposed investment strategy of the Company and that of
each of the Peer Funds. The Directors noted that each of the Company’s proposed base management fee rate and incentive fee rate
was generally comparable to those of the Peer Funds. The Directors also considered the reasons provided by the Adviser for the differences
among the Proposed Management Fee Structure and the fees charged to the comparable funds and Peer Funds.

In considering the management fee rate, the Directors
also discussed the Company’s expected use of leverage, including the potential issuance of preferred stock by the Company and borrowing
by the Company under a line of credit. The Directors noted that, while the Adviser believes that the prudent use of leverage is in the
best interests of the Company and its stockholders, the issuance of preferred stock has the potential to increase the Adviser’s
overall management fee under the Proposed Management Fee Structure and the use of leverage in general has the potential to increase the
proposed incentive fee.

Profitability. The Directors next considered
a projected profitability analysis of the Adviser with respect to the Company as presented in the Meeting materials. The Directors considered
the Adviser’s estimated costs and expenses that were expected to be incurred on behalf of the Company in connection with the Company’s
organizational costs and the IPO compared to the proposed management fees and incentive fees expected to be received by the Adviser from
the Company. The Directors concluded that the Adviser’s potential profitability was not excessive.

Economies of Scale. The Directors then considered
the potential growth of the Company and information presented regarding whether the Investment Advisory Agreement adequately addresses
economies of scale with respect to providing advisory services to the Company