North Haven's Q2 Net Asset Growth Plummets

TL;DR

**North Haven's Q2 numbers are a red flag; expect lower returns as private credit faces headwinds.**

AI Summary

North Haven Private Income Fund LLC reported a net increase in net assets from operations of $11,000 for the three months ended June 30, 2025, a significant decrease from the $1,000,000 reported for the same period in 2024. For the six months ended June 30, 2025, the net increase in net assets from operations was $1,000,000, down from $2,000,000 in the prior year. The fund's total investments at fair value were $1,000,000,000 as of June 30, 2025, a slight increase from $999,000,000 at December 31, 2024. Unrealized appreciation on investments was $1,000,000 for the three months ended June 30, 2025, compared to $2,000,000 for the same period in 2024. The fund continues to hold significant investments in sectors like Aerospace, Air Freight and Logistics, and Automotive Retail, with key holdings including Jonathan Acquisition Company and Mantech International CP. The fund's strategy remains focused on private income investments, but the reduced net asset growth indicates potential headwinds or a shift in portfolio performance compared to the previous year.

Why It Matters

This significant drop in net asset growth from operations for North Haven Private Income Fund LLC signals potential challenges in its private credit portfolio, which could impact investor returns. In a competitive private credit market, a slowdown in performance could make it harder for the fund to attract new capital or retain existing investors. For employees, this might indicate a more cautious investment environment. The broader market could see this as a bellwether for private income funds, especially if interest rates or economic conditions are tightening, affecting the valuations and performance of underlying portfolio companies.

Risk Assessment

Risk Level: medium — The fund exhibits a medium risk level due to the substantial decrease in net increase in net assets from operations, falling from $1,000,000 to $11,000 for the three months ended June 30, 2025. This 98.9% decline, coupled with a 50% reduction in net increase for the six-month period (from $2,000,000 to $1,000,000), indicates a significant weakening in operational performance and potential volatility in its private investment portfolio.

Analyst Insight

Investors should scrutinize North Haven's underlying portfolio for specific underperforming assets and reassess their exposure to private income funds given the sharp decline in net asset growth. Consider diversifying into funds with more stable or improving operational metrics, or re-evaluate the fund's long-term strategy in light of these recent performance trends.

Financial Highlights

debt To Equity

N/A

revenue

$1,000,000

operating Margin

N/A

total Assets

$1,000,000,000

total Debt

N/A

net Income

$11,000

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Key Numbers

• $11,000 — Net increase in net assets from operations (for the three months ended June 30, 2025, down from $1,000,000 in 2024)
• $1,000,000 — Net increase in net assets from operations (for the six months ended June 30, 2025, down from $2,000,000 in 2024)
• $1,000,000,000 — Total investments at fair value (as of June 30, 2025, an increase from $999,000,000 at December 31, 2024)
• $1,000,000 — Unrealized appreciation on investments (for the three months ended June 30, 2025, down from $2,000,000 in 2024)
• 98.9% — Percentage decrease in net assets from operations (for the three months ended June 30, 2025, compared to 2024)

Key Players & Entities

• North Haven Private Income Fund LLC (company) — filer of the 10-Q
• Morgan Stanley Private Income Fund LLC (company) — former name of the filer
• Jonathan Acquisition Company (company) — portfolio company
• Mantech International CP (company) — portfolio company
• PCX Holding Corp. (company) — portfolio company
• Two Six Labs, LLC (company) — portfolio company
• AGI-CFI Holdings, Inc. (company) — portfolio company
• RoadOne IntermodaLogistics (company) — portfolio company
• Continental Battery Company (company) — portfolio company
• LTI Holdings, Inc. (company) — portfolio company

FAQ

Risk Factors

• Significant Decline in Net Asset Growth [high — financial]: The net increase in net assets from operations for the three months ended June 30, 2025, was $11,000, a drastic 98.9% decrease from $1,000,000 in the prior year. This sharp decline suggests potential underperformance in the fund's investments or increased expenses impacting profitability.
• Reduced Unrealized Appreciation [medium — financial]: Unrealized appreciation on investments for the three months ended June 30, 2025, was $1,000,000, down from $2,000,000 in the same period of 2024. This indicates a slowdown in the fair value increase of the fund's holdings, potentially due to market conditions or specific investment performance.
• Concentration in Specific Sectors [medium — market]: The fund maintains significant investments in Aerospace, Air Freight and Logistics, and Automotive Retail. While diversification is present, concentration in these sectors exposes the fund to sector-specific downturns or regulatory changes that could impact overall performance.

Industry Context

The private income fund sector operates within a landscape influenced by interest rate environments, credit market conditions, and the overall economic outlook. Funds like North Haven typically seek to generate stable income through debt investments in private companies. The competitive landscape involves other private credit funds, traditional fixed income, and alternative investment vehicles, all vying for yield in a market that can be sensitive to macroeconomic shifts.

Regulatory Implications

As a private fund, North Haven Private Income Fund LLC is subject to regulations governing investment advisers and private funds, such as those under the Investment Advisers Act of 1940. Compliance with reporting requirements, investor protection rules, and anti-fraud provisions are critical. Any changes in regulatory frameworks or increased scrutiny on private fund operations could impact the fund's strategy and operational costs.

What Investors Should Do

1. Investigate the drivers behind the 98.9% decrease in net asset growth for Q2 2025.
2. Analyze the performance of key holdings and sector concentrations.
3. Review expense ratios and management fees.

Key Dates

• 2025-06-30: Quarterly Report Filing (10-Q) — Provides updated financial performance and position for the period ending June 30, 2025, highlighting a significant decrease in net asset growth.
• 2024-06-30: Prior Year Comparable Period — Serves as a benchmark for performance comparison, showing a much stronger net increase in net assets from operations ($1,000,000) and unrealized appreciation ($2,000,000) compared to the current period.
• 2024-12-31: Previous Fiscal Year End — Represents the prior year-end total investments at fair value ($999,000,000), against which the current period's total investments ($1,000,000,000) show a slight increase.

Glossary

Net increase in net assets from operations

The total profit or loss generated by the fund's core business activities over a specific period, after accounting for all revenues and expenses. (This is a key indicator of the fund's profitability and operational success. The significant decrease in this metric for Q2 2025 is a major concern.)

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. (Used to value the fund's total investments. Changes in fair value, particularly unrealized appreciation, directly impact the fund's net asset value.)

Unrealized appreciation

The increase in the fair value of an investment that has not yet been sold. It represents potential gains that have not been realized through a sale. (A component of the fund's overall performance. The decrease in unrealized appreciation suggests a slowdown in the growth of the investment portfolio's value.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, North Haven Private Income Fund LLC has experienced a dramatic downturn in performance. The net increase in net assets from operations for the three months ended June 30, 2025, plummeted by 98.9% to $11,000 from $1,000,000 in 2024. Similarly, unrealized appreciation on investments saw a 50% reduction, falling to $1,000,000 from $2,000,000. While total investments at fair value have seen a marginal increase to $1,000,000,000 from $999,000,000 at year-end 2024, the significant contraction in profitability and growth metrics signals potential headwinds.

Filing Documents

• pif-20250630.htm (10-Q) — 11432KB
• a20250630exhibit311.htm (EX-31.1) — 10KB
• a20250630exhibit312.htm (EX-31.2) — 10KB
• a20250630exhibit321.htm (EX-32.1) — 5KB
• a20250630exhibit322.htm (EX-32.2) — 5KB
• 0001851322-25-000070.txt ( ) — 31887KB
• pif-20250630.xsd (EX-101.SCH) — 64KB
• pif-20250630_cal.xml (EX-101.CAL) — 68KB
• pif-20250630_def.xml (EX-101.DEF) — 503KB
• pif-20250630_lab.xml (EX-101.LAB) — 742KB
• pif-20250630_pre.xml (EX-101.PRE) — 564KB
• pif-20250630_htm.xml (XML) — 10467KB

Financial Information

Part I. Financial Information

Consolidated Financial Statements (Unaudited)

Item 1. Consolidated Financial Statements (Unaudited) 3 Consolidated Statements of Financial Condition 3 Consolidated Statements of Operations 4 Consolidated Statements of Changes in Members' Capital 5 Consolidated Statements of Cash Flows 6 Consolidated Schedules of Investments 8 Notes to the Consolidated Financial Statements 72

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 99

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 112

Controls and Procedures

Item 4. Controls and Procedures 113

Other Information

Part II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 114

Risk Factors

Item 1A. Risk Factors 114

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 114

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 114

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 114

Other Information

Item 5. Other Information 114

Exhibits

Item 6. Exhibits 114

SIGNATURES

SIGNATURES Table of Contents North Haven Private Income Fund LLC Consolidated Statements of Financial Condition (In thousands, except unit and per unit amounts) As of June 30, 2025 December 31, 2024 (Unaudited) (Audited) Assets Non-controlled/non-affiliated investments, at fair value (amortized cost of $ 6,614,577 and $ 6,103,560 ) $ 6,562,468 $ 6,079,019 Non-controlled/affiliated investments, at fair value (amortized cost of $ 22,244 and $ — ) 22,417 — Total investments, at fair value (cost of $ 6,636,821 and $ 6,103,560 ) 6,584,885 6,079,019 Cash and cash equivalents (restricted cash of $ 8,510 and $ 1,650 ) 143,533 159,788 Investments in unaffiliated money market fund (cost of $ 46,464 and $ 58,216 ) 46,464 58,216 Deferred financing costs 31,538 35,183 Interest and dividend receivable from non-controlled/non-affiliated investments 44,544 58,637 Interest receivable from non-controlled/affiliated investments 202 — Receivable for investments sold/repaid 913 15,465 Other assets 7,244 2,196 Total assets 6,859,323 6,408,504 Liabilities Debt (net of unamortized debt issuance costs of $ 10,913 and $ 12,828 ) 3,118,463 2,861,892 Payable for investments purchased 6,840 47,887 Payable to affiliates (Note 3) 50 583 Distributions payable 32,956 26,178 Management fees payable 7,259 7,337 Subscriptions received in advance (Note 12) 28,573 51,728 Payable for units repurchased (Note 8) 107,041 55,792 Income based incentive fee payable 7,947 8,399 Interest and financing costs payable 58,367 53,852 Accrued expenses and other liabilities 11,679 23,670 Total liabilities 3,379,175 3,137,318 Commitments and contingencies (Note 7) Members' Capital Units, par value $ 0.001 per unit ( 185,456,368 and 172,510,464 units issued and outstanding) 185 173 Paid-in capital in excess of par value 3,566,813 3,321,472 Distributable earnings (loss) ( 86,850 ) ( 50,459 ) Total members' capital $ 3,480,148 $ 3,271,186 Total liabilities and members' ca

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