New Mountain Guardian IV Sees Income Surge, Unrealized Losses Mount

TL;DR

**NMG4IF's income is up, but watch out for those unrealized losses and the slight dip in per-unit value – it's a mixed bag for now.**

AI Summary

New Mountain Guardian IV Income Fund, L.L.C. reported a net increase in members' capital from operations of $12.391 million for the six months ended June 30, 2025, up from $7.066 million for the same period in 2024. Total investment income significantly increased to $20.811 million for the six months ended June 30, 2025, compared to $9.492 million in the prior year. This was primarily driven by a rise in interest income (excluding PIK) to $19.596 million from $8.057 million. However, net change in unrealized appreciation (depreciation) of investments shifted from an appreciation of $536 thousand in 2024 to a depreciation of $2.440 million in 2025. Total liabilities decreased to $41.674 million as of June 30, 2025, from $65.570 million at December 31, 2024, largely due to a reduction in BMO Subscription Line borrowings from $58.000 million to $18.000 million. Members' capital per unit slightly declined to $9.97 as of June 30, 2025, from $10.04 at December 31, 2024. The fund's investment portfolio is heavily concentrated in funded debt, primarily first lien, across software, business services, and financial services sectors in the United States.

Why It Matters

For investors, the significant increase in net investment income to $14.851 million signals strong operational performance, particularly from interest income, which is crucial for a debt-focused fund. However, the shift to a $2.440 million net unrealized depreciation on investments from an appreciation of $536 thousand indicates potential valuation challenges or market headwinds for its portfolio, which could impact future returns. The reduction in BMO Subscription Line borrowings by $40.000 million suggests a deleveraging strategy or efficient capital management, potentially reducing interest expense risk. In a competitive landscape, the fund's ability to generate substantial interest income while managing its debt profile will be key to attracting and retaining capital, especially with a slight dip in members' capital per unit.

Risk Assessment

Risk Level: medium — The fund exhibits a medium risk level due to its significant exposure to funded debt investments, primarily first lien, which inherently carry credit risk. While net investment income increased to $14.851 million, the shift to a $2.440 million net change in unrealized depreciation of investments for the six months ended June 30, 2025, from a $536 thousand appreciation in the prior year, indicates potential volatility and valuation challenges within its portfolio.

Analyst Insight

Investors should closely monitor the fund's future reports for trends in unrealized gains/losses and the credit quality of its debt investments, particularly in the software and business services sectors. Given the slight decrease in members' capital per unit to $9.97, a deeper dive into the specific drivers of portfolio depreciation is warranted before making new investment decisions.

Financial Highlights

debt To Equity

0.11

revenue

$20,811,000

operating Margin

N/A

total Assets

$424,722,000

total Debt

$17,997,000

net Income

$12,391,000

eps

N/A

gross Margin

N/A

cash Position

$8,219,000

revenue Growth

+119.3%

Revenue Breakdown

Key Numbers

• $12.391M — Net increase in members' capital from operations (Increased from $7.066M in 2024 for the six months ended June 30)
• $20.811M — Total investment income (Increased from $9.492M in 2024 for the six months ended June 30)
• $19.596M — Interest income (excluding PIK) (Increased from $8.057M in 2024 for the six months ended June 30)
• ($2.440M) — Net change in unrealized appreciation (depreciation) of investments (Shifted from $536K appreciation in 2024 for the six months ended June 30)
• $41.674M — Total liabilities (Decreased from $65.570M at December 31, 2024)
• $18.000M — BMO Subscription Line borrowings (Decreased from $58.000M at December 31, 2024)
• $9.97 — Members' capital per unit (Slightly decreased from $10.04 at December 31, 2024)
• 38,430,375 — Limited liability company units outstanding (As of August 13, 2025)

Key Players & Entities

• New Mountain Guardian IV Income Fund, L.L.C. (company) — registrant
• BMO Subscription Line (company) — borrowing facility
• Associations Finance, Inc. (company) — portfolio company
• Anaplan, Inc. (company) — portfolio company
• Wealth Enhancement Group, LLC (company) — portfolio company
• Securities and Exchange Commission (regulator) — filing oversight
• Delaware (regulator) — state of organization
• Bloomberg (company) — publisher

FAQ

Risk Factors

• Unrealized Depreciation of Investments [medium — market]: The fund experienced a net change in unrealized depreciation of investments of ($2.440 million) for the six months ended June 30, 2025, a significant shift from an appreciation of $536 thousand in the same period of 2024. This indicates a decline in the fair value of the fund's portfolio holdings.
• Concentration in Funded Debt [medium — financial]: The investment portfolio is heavily concentrated in funded debt, primarily first lien, across software, business services, and financial services sectors. This concentration exposes the fund to sector-specific downturns and credit risks within these industries.
• Reliance on Borrowings [medium — financial]: While total liabilities decreased significantly due to a reduction in BMO Subscription Line borrowings from $58.000 million to $18.000 million, the fund still utilizes leverage. Changes in borrowing costs or availability could impact profitability and liquidity.
• Management and Incentive Fees [low — operational]: The fund incurs management fees and income-based incentive fees, which totaled $1,481,000 and $1,635,000 respectively for the six months ended June 30, 2025. These fees reduce net investment income available to members.

Industry Context

The fund operates within the alternative investment space, focusing on private credit, particularly in the software, business services, and financial services sectors in the United States. This sector is characterized by a demand for flexible capital solutions and often involves illiquid investments. Industry trends include a continued search for yield in a fluctuating interest rate environment and increasing investor interest in private debt strategies.

Regulatory Implications

As a limited liability company, the fund is subject to various regulations concerning financial reporting, disclosure, and investment activities. Changes in accounting standards or tax laws could impact its financial statements and operational efficiency. Compliance with securities regulations is paramount to maintain investor trust and market access.

What Investors Should Do

1. Monitor unrealized depreciation
2. Analyze interest income sustainability
3. Evaluate debt reduction impact
4. Assess members' capital per unit trend

Key Dates

• 2025-06-30: Six months ended — Reporting period for significant increases in investment income and net increase in members' capital, alongside unrealized investment depreciation.
• 2024-06-30: Six months ended — Prior year comparison period showing lower investment income and net increase in members' capital, with unrealized investment appreciation.
• 2025-12-31: Year-end — Previous reporting period for balance sheet items, showing higher total liabilities and BMO Subscription Line borrowings.

Glossary

PIK interest income

Payment-in-kind interest income, where interest is paid in the form of additional debt or equity rather than cash. (A component of the fund's investment income, though it decreased slightly in the current period.)

Members' capital per unit

The net asset value of the fund divided by the number of outstanding units, representing the equity value attributable to each unit holder. (Indicates the per-share value of the fund, which slightly declined from $10.04 to $9.97.)

BMO Subscription Line

A specific line of credit or borrowing facility provided by BMO, used by the fund. (A significant liability that was substantially reduced, leading to a decrease in total liabilities.)

Non-controlled/non-affiliated investments

Investments in entities where the fund does not have control or a significant affiliation, typically valued at fair value. (Represents the vast majority of the fund's assets, valued at $409.415 million as of June 30, 2025.)

Year-Over-Year Comparison

Compared to the six months ended June 30, 2024, New Mountain Guardian IV Income Fund, L.L.C. has seen a substantial increase in total investment income, rising from $9.492 million to $20.811 million, primarily driven by a surge in interest income (excluding PIK). This has led to a higher net increase in members' capital from operations, up to $12.391 million from $7.066 million. However, a notable shift occurred in investment valuation, with unrealized appreciation of $536 thousand in the prior period turning into a depreciation of $2.440 million. Total liabilities also decreased significantly, from $65.570 million at December 31, 2024, to $41.674 million, largely due to a reduction in BMO Subscription Line borrowings.

Filing Documents

• nmg4if-20250630.htm (10-Q) — 5756KB
• nmg4income-6302025xex311.htm (EX-31.1) — 9KB
• nmg4income-6302025xex312.htm (EX-31.2) — 9KB
• nmg4income-6302025xex321.htm (EX-32.1) — 4KB
• nmg4income-6302025xex322.htm (EX-32.2) — 4KB
• 0001976719-25-000013.txt ( ) — 16641KB
• nmg4if-20250630.xsd (EX-101.SCH) — 65KB
• nmg4if-20250630_cal.xml (EX-101.CAL) — 51KB
• nmg4if-20250630_def.xml (EX-101.DEF) — 371KB
• nmg4if-20250630_lab.xml (EX-101.LAB) — 666KB
• nmg4if-20250630_pre.xml (EX-101.PRE) — 450KB
• nmg4if-20250630_htm.xml (XML) — 3426KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 4 5 6 Schedule of Investments as of June 30, 2025 (unaudited) 7 Schedule of Investments as of December 31, 2024 24 Notes to the Financial Statements of New Mountain Guardian IV Income Fund, L.L.C. (unaudited) 40 Report of Independent Registered Public Accounting Firm 60 Item 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 61 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 74 Item 4.

Controls and Procedures

Controls and Procedures 75

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 76 Item 1A.

Risk Factors

Risk Factors 76 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 76 Item 3. Defaults Upon Senior Securities 76 Item 4. Mine Safety Disclosures 76 Item 5. Other Information 76 Item 6. Exhibits 77

Signatures

Signatures 78 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements New Mountain Guardian IV Income Fund, L.L.C. (in thousands, except units and per unit data) (unaudited) June 30, 2025 December 31, 2024 Assets Non-controlled/non-affiliated investments at fair value (cost of $ 409,756 and $ 375,695 , respectively) $ 409,415 $ 377,794 Cash and cash equivalents 8,219 19,551 Interest and dividend receivable 2,792 2,446 Other assets 4,296 121 Total assets $ 424,722 $ 399,912 Liabilities Borrowings BMO Subscription Line $ 18,000 $ 58,000 Deferred financing costs (net of accumulated amortization of $ 416 and $ 334 , respectively) ( 3 ) ( 88 ) Net borrowings 17,997 57,912 Payable for unsettled securities purchased 13,562 4,837 Distribution payable 7,527 — Income based incentive fee payable 843 777 Management fee payable 750 705 Interest payable 355 390 Payable to affiliate 135 305 Accrued capital gains incentive fee — 142 Other liabilities 505 502 Total liabilities 41,674 65,570 Commitments and contingencies (See Note 8) Members' Capital Common units, 38,430,375 and 33,306,325 units issued and outstanding, respectively 383,813 332,573 Accumulated underdistributed earnings ( 765 ) 1,769 Total members' capital $ 383,048 $ 334,342 Total liabilities and members' capital $ 424,722 $ 399,912 Members' capital per unit $ 9.97 $ 10.04 The accompanying notes are an integral part of these financial statements. 3 Table of Contents New Mountain Guardian IV Income Fund, L.L.C. (in thousands, except units and per unit data) (unaudited) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Investment income Interest income (excluding Payment-in-kind ("PIK") interest income) $ 10,212 $ 4,959 $ 19,596 8,057 PIK interest income 190 252 388 396 Dividend income 118 — 233 — Fee income 259 581 594 1,039 Total investment income 10,779 5,792 20,811 9,492 Exp

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