AGL Private Credit NAV Dips Amid Unrealized Losses, Aggressive Growth

TL;DR

**AGL's rapid asset growth is overshadowed by a concerning drop in NAV per share due to significant unrealized losses, signaling potential headwinds in its private credit portfolio.**

AI Summary

AGL Private Credit Income Fund reported a net increase in net assets from operations of $10,658 thousand for the nine months ended September 30, 2025, a significant improvement from the prior year's inception period. Total investment income for the nine months ended September 30, 2025, was $54,993 thousand, primarily from interest income of $53,731 thousand. However, the fund experienced a net decrease in net assets of $2,737 thousand for the three months ended September 30, 2025, largely due to a net change in unrealized depreciation on investments of $12,442 thousand. Net asset value per share decreased to $24.33 as of September 30, 2025, from $25.21 at December 31, 2024. The company significantly expanded its investment portfolio, with investments at fair value growing from $473,126 thousand at December 31, 2024, to $1,135,270 thousand at September 30, 2025. Debt also increased substantially from $384,604 thousand to $641,565 thousand over the same period, reflecting increased leverage. Common shares outstanding more than doubled from 8,758,495 to 20,638,669, indicating significant capital raises. The fund's expenses, including interest and other financing expenses, rose to $25,586 thousand for the nine months ended September 30, 2025.

Why It Matters

This 10-Q reveals AGL Private Credit Income Fund's aggressive expansion, with investments more than doubling and significant capital raises. While net investment income is positive, the decline in NAV per share from $25.21 to $24.33, driven by $12.4 million in unrealized depreciation, signals potential valuation challenges in its private credit portfolio. For investors, this indicates increased risk in a competitive private credit market, where illiquidity can amplify mark-to-market fluctuations. Employees and customers of portfolio companies may face increased scrutiny as the fund navigates these valuations. The broader market should note the rapid growth in private credit funds and the potential for unrealized losses to impact investor returns.

Risk Assessment

Risk Level: high — The risk level is high due to a significant net change in unrealized depreciation on investments of $12,442 thousand for the three months ended September 30, 2025, and $12,958 thousand for the nine months ended September 30, 2025. This directly contributed to a decrease in Net Asset Value per share from $25.21 at December 31, 2024, to $24.33 at September 30, 2025, indicating potential valuation issues within its illiquid private credit portfolio.

Analyst Insight

Investors should scrutinize the underlying reasons for the $12.4 million unrealized depreciation and consider the illiquidity inherent in private credit. AGL's aggressive growth strategy, coupled with declining NAV per share, warrants caution; investors should evaluate their risk tolerance and potentially reduce exposure until valuation stability is demonstrated.

Financial Highlights

debt To Equity

N/A

revenue

$54,993,000

operating Margin

N/A

total Assets

$1,135,270,000

total Debt

$641,565,000

net Income

$10,658,000

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $10.66M — Net increase in net assets from operations (For the nine months ended September 30, 2025, indicating operational profitability.)
• $2.74M — Net decrease in net assets from operations (For the three months ended September 30, 2025, showing a recent downturn.)
• $12.44M — Net change in unrealized depreciation on investments (For the three months ended September 30, 2025, a key driver of the net asset decrease.)
• $24.33 — Net asset value per share (As of September 30, 2025, down from $25.21 at December 31, 2024.)
• $1.14B — Investments at fair value (As of September 30, 2025, a significant increase from $473.13 million at December 31, 2024.)
• $641.57M — Debt (As of September 30, 2025, up from $384.60 million at December 31, 2024, indicating increased leverage.)
• 20.64M — Common shares outstanding (As of September 30, 2025, more than double the 8.76 million shares at December 31, 2024.)
• $54.99M — Total investment income (For the nine months ended September 30, 2025, primarily from interest income.)
• $25.59M — Interest and other financing expenses (For the nine months ended September 30, 2025, a substantial expense component.)
• 11.9% — Largest single investment percentage of net assets (Saturn Sound Bidco Limited First Lien Term Loan, indicating concentration risk.)

Key Players & Entities

• AGL Private Credit Income Fund (company) — Registrant
• $10,658 thousand (dollar_amount) — Net increase in net assets from operations for nine months ended September 30, 2025
• $54,993 thousand (dollar_amount) — Total investment income for nine months ended September 30, 2025
• $12,442 thousand (dollar_amount) — Net change in unrealized depreciation on investments for three months ended September 30, 2025
• $24.33 (dollar_amount) — Net asset value per share as of September 30, 2025
• $25.21 (dollar_amount) — Net asset value per share as of December 31, 2024
• $1,135,270 thousand (dollar_amount) — Investments at fair value as of September 30, 2025
• $641,565 thousand (dollar_amount) — Debt as of September 30, 2025
• 20,638,669 (dollar_amount) — Common shares outstanding as of September 30, 2025
• AGL US DL Management LLC (company) — Adviser

FAQ

Risk Factors

• Investment Portfolio Concentration [high — financial]: The fund has a significant concentration risk, with the largest single investment, Saturn Sound Bidco Limited First Lien Term Loan, representing 11.9% of net assets as of September 30, 2025. This concentration exposes the fund to substantial losses if this specific investment underperforms.
• Increased Leverage [high — financial]: Debt has increased substantially from $384,604,000 at December 31, 2024, to $641,565,000 at September 30, 2025. This significant increase in leverage amplifies both potential gains and losses, increasing financial risk.
• Unrealized Depreciation [medium — market]: The fund experienced a net change in unrealized depreciation on investments of $12,442,000 for the three months ended September 30, 2025. This indicates a decline in the fair value of investments, impacting net asset value.
• Rising Expenses [medium — financial]: Interest and other financing expenses rose to $25,586,000 for the nine months ended September 30, 2025. These increasing costs can erode investment income and impact overall profitability.
• Net Asset Value Decline [medium — market]: Net asset value per share decreased to $24.33 as of September 30, 2025, from $25.21 at December 31, 2024. This decline, particularly the drop in the most recent quarter, signals potential challenges in investment performance or market conditions.

Industry Context

The private credit sector continues to see robust activity as investors seek higher yields in a challenging interest rate environment. Funds like AGL are expanding portfolios rapidly, often employing increased leverage to enhance returns. However, this growth comes with heightened sensitivity to market volatility and credit risk, particularly in specialized lending areas.

Regulatory Implications

As a private credit fund, AGL is subject to evolving regulatory scrutiny regarding disclosure, leverage limits, and investor protection. Changes in accounting standards or capital requirements could impact reported performance and operational flexibility.

What Investors Should Do

1. Monitor unrealized depreciation closely.
2. Evaluate the impact of increased leverage.
3. Assess portfolio diversification and concentration risk.
4. Analyze expense ratios and their impact on net returns.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported a net increase in net assets from operations of $10,658,000, showing operational profitability over the period.
• 2025-09-30: Three months ended September 30, 2025 — Experienced a net decrease in net assets of $2,737,000, largely due to unrealized depreciation, indicating recent performance challenges.
• 2025-09-30: Net asset value per share as of September 30, 2025 — Stood at $24.33, a decrease from $25.21 at December 31, 2024, reflecting a decline in per-share value.
• 2025-09-30: Investments at fair value as of September 30, 2025 — Grew to $1,135,270,000, more than doubling from $473,126,000 at December 31, 2024, indicating significant portfolio expansion.
• 2025-09-30: Debt as of September 30, 2025 — Increased to $641,565,000 from $384,604,000 at December 31, 2024, highlighting increased leverage.
• 2025-09-30: Common shares outstanding as of September 30, 2025 — Reached 20,638,669, more than doubling from 8,758,495 at December 31, 2024, indicating substantial capital raises.

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, before considering any capital transactions. (Indicates the operational profitability of the fund, with a $10.66 million increase for the nine months ended September 30, 2025.)

Net change in unrealized depreciation on investments

The decrease in the fair value of investments that have not yet been sold. It reflects market fluctuations and impacts the fund's net asset value. (A significant factor in the recent quarterly performance, with a $12.44 million depreciation for the three months ended September 30, 2025.)

Net asset value per share

The value of each share of the fund, calculated by dividing the total net assets by the number of outstanding shares. (Decreased to $24.33 as of September 30, 2025, from $25.21 at year-end 2024, indicating a reduction in per-share value.)

Investments at fair value

The current market value of all the assets held by the fund. (More than doubled to $1.14 billion as of September 30, 2025, from $473.13 million at December 31, 2024, showing aggressive portfolio growth.)

Debt

The total amount of money borrowed by the fund, representing its financial leverage. (Increased significantly to $641.57 million as of September 30, 2025, from $384.60 million at December 31, 2024, indicating higher financial risk.)

Common shares outstanding

The total number of shares of the fund that are held by investors. (More than doubled to 20.64 million as of September 30, 2025, from 8.76 million at December 31, 2024, reflecting substantial capital raises.)

Interest and other financing expenses

The costs incurred by the fund for borrowing money and other financing activities. (Rose to $25.59 million for the nine months ended September 30, 2025, impacting profitability.)

Year-Over-Year Comparison

AGL Private Credit Income Fund has demonstrated aggressive growth in its investment portfolio, with total assets more than doubling from $473.13 million to $1.14 billion over the nine-month period. This expansion was fueled by significant capital raises, evidenced by the more than doubling of common shares outstanding. However, this growth was accompanied by a substantial increase in debt, raising leverage levels. While the fund reported a positive net increase in net assets from operations for the nine-month period, the most recent quarter showed a net decrease driven by unrealized depreciation, and net asset value per share has declined.

Key Financial Figures

• $0.001 — 2 common shares of beneficial interest, $0.001 par value per share, outstanding. Tab

Filing Documents

• ck0002011498-20250930.htm (10-Q) — 5867KB
• ck0002011498-ex31_1.htm (EX-31.1) — 16KB
• ck0002011498-ex31_2.htm (EX-31.2) — 16KB
• ck0002011498-ex32_1.htm (EX-32.1) — 11KB
• ck0002011498-ex32_2.htm (EX-32.2) — 11KB
• 0001193125-25-269116.txt ( ) — 21372KB
• ck0002011498-20250930.xsd (EX-101.SCH) — 1346KB
• ck0002011498-20250930_htm.xml (XML) — 5694KB

Financial Statements

Financial Statements 6 Consolidated Statements of Assets and Liabilities as of September 30, 2025 (unaudited) and December 31, 2024 6 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 (unaudited) and 2024 (unaudited) 7 Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2025 and 2024 (unaudited) 8 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited) 9 Consolidated Schedules of Investments as of September 30, 2025 (unaudited) and December 31, 2024 11

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 19 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 40 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 54 Item 4.

Controls and Procedures

Controls and Procedures 55 PART II Item 1.

Legal Proceedings

Legal Proceedings 56 Item 1A.

Risk Factors

Risk Factors 56 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 56 Item 3. Defaults Upon Senior Securities 56 Item 4. Mine Safety Disclosures 56 Item 5. Other Information 56 Item 6. Exhibits 56

SIGNATURES

SIGNATURES 58 2 CERTAIN DEFINITIONS "Conversion" refers to the conversion of AGL Private Credit Income Fund, which was originally established on January 18, 2024 as a Delaware limited partnership named AGL Private Credit Income Fund LP, to a Delaware statutory trust on September 12, 2024. The terms "Company," "we," "us," and "our" refer to AGL Private Credit Income Fund LP prior to the Conversion, and AGL Private Credit Income Fund on and after the Conversion; "Administrator" refers to AGL US DL Administrator LLC; "Administration Agreement" refers to the Administration Agreement between the Company and the Administrator; "Adviser" refers to AGL US DL Management LLC; "AGL" refers to AGL Credit Management LLC collectively with any of its consolidated subsidiaries or joint ventures whose equity securities or whose subordinated notes or other interests that constitute the economic equity therein, as applicable, are directly or indirectly majority-owned by AGL and each individually an "AGL Party"; "Barclays" refers to Barclays Bank PLC; "Barclays Cooperation Agreement" refers to the cooperation agreement between AGL and Barclays; "Board" and "Trustees" refers to the Company's board of directors prior to the Company's Conversion to a Delaware statutory trust and board of trustees following the Company's Conversion to a Delaware statutory trust, and the members thereof; "Common Shares" refers to the Company's common shares of beneficial interest purchased by the shareholders, together with partnership interests issued by the Company prior to its Conversion to a Delaware statutory trust; "Investment Advisory Agreement" refers to the Investment Advisory Agreement between the Company and the Adviser; "Other AGL Accounts" refers to public and private AGL managed funds and accounts other than the Company; "Private Credit" means loans, bonds and other credit and related instruments that are issued in private offerings or issued by private companie

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This report contains forward-looking statements about our business, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "project," "estimate," "believe," "continue" or the negatives thereof or other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from that expressed or implied by these forward- looking statements. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved. You should carefully review the " Item 1A. Risk Factors " section of the annual report on Form 10-K for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to pub

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