Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 460

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 7
Chunk 460
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 buyout, mezzanine or subordinated debt, restructuring or distressed debt, and special situations.  Venture capital partnerships consist of two main groupings.  Early-stage venture capital partnerships invest in businesses still in the conceptual stage where products may not be fully developed and where revenues and/or profits may be several years away.  Later-stage venture capital partnerships invest in more mature companies in need of growth or expansion capital.  Buyout partnerships provide the equity capital for acquisition transactions either from a private seller or the public, which may represent the purchase of the entire company or a refinancing or recapitalization transaction where equity is invested.  Mezzanine or subordinated debt partnerships 

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provide the intermediate capital between equity and senior debt in a buyout or refinancing transaction and typically own a security in the company that carries current interest payments as well as a potential equity interest in the company.  Restructuring or distressed debt partnerships purchase opportunities generated by overleveraged or poorly managed companies.  Special situation partnerships include organizations with a specific industry focus not covered by the other private equity subclasses or unique opportunities that fall outside the regular subclasses. 

    The private equity funds have no investment withdrawal provisions prior to the termination of the partnership. Partnerships generally continue 10 to 14 years after the inception of the fund.  The partnerships are generally subject to two to three one-year extensions at the discretion of the General Partner.  Partnerships can generally be dissolved by an 80 percent vote in interest by all limited partners, with some funds requiring the occurrence of a specific event.

    Private Real Asset Investments.  The pension plan's ownership in private real asset investments consists of a pro rata share and not a direct ownership of the underlying investments.  The fair values of the pension plan's private real asset investments are estimated utilizing NAVs provided by the investment managers.  These investments have not been classified in the fair value hierarchy in accordance with FASB guidance issued in May 2015.  The investment strategies and methodologies utilized by the investment managers to calculate their NAVs are summarized as follows:

    The pension plan is invested in limited partnerships that invest in real estate securities, real estate partnerships, and direct real estate properties.  This includes investments in office, multifamily, industrial, and retail investment properties in the U.S. and international markets.  The investment strategy focuses on distressed, opportunistic, and value-added opportunities.  Partnership investments also include mortgage and/or real estate-related fixed-income instruments and related securities.  Investments are