Audax Private Credit Fund Sees Asset Growth Amidst Unrealized Depreciation

TL;DR

**Audax Private Credit Fund is growing its asset base aggressively, but watch out for those unrealized losses dragging down portfolio performance.**

AI Summary

Audax Private Credit Fund, LLC reported a net increase in net assets from operations of $15,227,105 for the nine months ended September 30, 2025, driven by net investment income of $22,543,332. Total investment income reached $45,990,373, primarily from interest income of $45,379,829. The company's total assets grew to $796,409,715 as of September 30, 2025, up from $685,853,398 at December 31, 2024, largely due to an increase in investments at fair value to $747,176,144. Liabilities also increased, with borrowings under the leverage facility rising to $361,731,161 from $340,592,475. Net assets increased by $78,363,515 to $418,657,699, supported by $77,000,000 in capital contributions. However, the fund experienced a net change in unrealized depreciation on investments of $(7,730,901) for the nine months, indicating some portfolio valuation challenges. Distributions to shareholders totaled $(13,863,590) during the period.

Why It Matters

For investors, Audax Private Credit Fund's significant asset growth to $796.4 million and net asset increase to $418.7 million signal robust capital deployment and investor confidence, with $77 million in new capital contributions. However, the $(7.7) million in unrealized depreciation on investments warrants close scrutiny, suggesting potential valuation pressures in its portfolio, which could impact future returns. In a competitive private credit market, maintaining strong asset quality and managing unrealized losses are crucial for attracting and retaining capital, especially as interest rates fluctuate. This mixed performance could influence investor sentiment and the fund's ability to raise further capital.

Risk Assessment

Risk Level: medium — The fund shows a net change in unrealized depreciation on investments of $(7,730,901) for the nine months ended September 30, 2025, indicating potential valuation issues within its portfolio. Additionally, the increase in borrowings under the leverage facility to $361,731,161 from $340,592,475 suggests increased financial leverage, which amplifies both gains and losses.

Analyst Insight

Investors should scrutinize the underlying reasons for the $(7.7) million in unrealized depreciation and assess the quality of the fund's loan portfolio. Consider the impact of rising interest rates on the fund's leveraged positions and its ability to generate consistent net investment income.

Financial Highlights

revenue

$45,990,373

total Assets

$796,409,715

total Debt

$361,731,161

net Income

$15,227,105

eps

$25.15

Revenue Breakdown

Key Numbers

• $15.2M — Net increase in net assets from operations (For the nine months ended September 30, 2025)
• $45.99M — Total investment income (For the nine months ended September 30, 2025, primarily from interest income)
• $796.4M — Total assets (As of September 30, 2025, up from $685.85M at December 31, 2024)
• $747.17M — Investments at fair value (As of September 30, 2025, a key component of total assets)
• $361.73M — Borrowings under leverage facility (As of September 30, 2025, indicating increased financial leverage)
• $77.0M — Capital contributions (For the nine months ended September 30, 2025, boosting net assets)
• $(7.73M) — Net change in unrealized depreciation on investments (For the nine months ended September 30, 2025, indicating portfolio valuation challenges)
• $418.65M — Total Net Assets (As of September 30, 2025, an increase of $78.36M from the beginning of the period)
• $25.15 — Net Asset Value per Share (At the end of the period, providing a per-share valuation)
• $(13.86M) — Distributions to Shareholders (For the nine months ended September 30, 2025)

Key Players & Entities

• Audax Private Credit Fund, LLC (company) — Registrant
• $15,227,105 (dollar_amount) — Net increase in net assets from operations
• $45,990,373 (dollar_amount) — Total investment income
• $796,409,715 (dollar_amount) — Total assets as of September 30, 2025
• $685,853,398 (dollar_amount) — Total assets as of December 31, 2024
• $747,176,144 (dollar_amount) — Investments at fair value as of September 30, 2025
• $361,731,161 (dollar_amount) — Borrowings under leverage facility as of September 30, 2025
• $340,592,475 (dollar_amount) — Borrowings under leverage facility as of December 31, 2024
• $77,000,000 (dollar_amount) — Capital contributions for the nine months ended September 30, 2025
• $(7,730,901) (dollar_amount) — Net change in unrealized depreciation on investments

FAQ

Risk Factors

• Investment Valuation Fluctuations [medium — market]: The fund experienced a net change in unrealized depreciation on investments of $(7,730,901) for the nine months ended September 30, 2025. This indicates that the fair value of the fund's investment portfolio decreased during the period, potentially impacting overall returns.
• Leverage Facility Utilization [medium — financial]: Borrowings under the leverage facility increased to $361,731,161 as of September 30, 2025, from $340,592,475 at December 31, 2024. While leverage can amplify returns, it also increases financial risk and the potential for amplified losses.
• Compliance with Investment Regulations [low — regulatory]: As a private credit fund, Audax Private Credit Fund, LLC is subject to various regulations governing investment activities, reporting, and investor protection. Non-compliance could lead to penalties and reputational damage.

Industry Context

The private credit market continues to be a significant source of financing for companies, offering flexible and tailored debt solutions. Amidst evolving economic conditions, private credit funds like Audax Private Credit Fund, LLC focus on generating income through interest on loans. Competition remains robust, with a growing number of funds seeking to deploy capital in this space.

Regulatory Implications

As a private credit fund, Audax Private Credit Fund, LLC must navigate a complex regulatory landscape. Key areas include compliance with securities laws, anti-money laundering regulations, and reporting requirements. Any missteps in these areas could lead to significant penalties and impact investor confidence.

What Investors Should Do

1. Monitor unrealized depreciation trends.
2. Assess the impact of increased leverage.
3. Review capital contribution strategy.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Period for which financial performance, including net increase in net assets, investment income, and changes in unrealized depreciation, is reported.
• 2025-09-30: Total Assets as of September 30, 2025 — Reported at $796,409,715, showing growth from the previous reporting period.
• 2025-09-30: Total Net Assets as of September 30, 2025 — Reported at $418,657,699, indicating an increase in shareholder equity.
• 2024-12-31: Total Assets as of December 31, 2024 — Benchmark for asset growth, reported at $685,853,398.

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. (Indicates the overall profitability of the fund's operations for the nine months ended September 30, 2025, amounting to $15,227,105.)

Net investment income

The income generated from the fund's investments after deducting operating expenses. (A key component of the net increase in net assets, totaling $22,543,332 for the nine months ended September 30, 2025.)

Investments at fair value

The current market value of the fund's investment portfolio. (Represents the largest asset on the balance sheet, valued at $747,176,144 as of September 30, 2025, and is subject to valuation changes.)

Leverage facility

A line of credit or loan that a company uses to increase its purchasing power or investment capacity. (The fund utilizes a leverage facility, with borrowings of $361,731,161 as of September 30, 2025, to finance its investments.)

Unrealized depreciation

A decrease in the value of an asset that has not yet been sold. (The fund recorded a net change of $(7,730,901) in unrealized depreciation, highlighting potential valuation challenges in its investment portfolio.)

Capital contributions

Funds invested into the company by its owners or investors. (Contributed $77,000,000 during the nine months ended September 30, 2025, supporting the increase in net assets.)

Distributions to shareholders

Payments made by the fund to its investors, typically from profits or capital gains. (The fund made distributions totaling $(13,863,590) for the nine months ended September 30, 2025.)

Year-Over-Year Comparison

The nine months ended September 30, 2025, show a significant increase in total assets to $796.4M from $685.85M at December 31, 2024, primarily driven by a rise in investments at fair value. Net assets also grew substantially to $418.65M, supported by $77M in capital contributions. However, the period was marked by a net change in unrealized depreciation of $(7.73M), indicating a potential headwind in portfolio valuation compared to periods with stable or positive unrealized gains.

Key Financial Figures

• $0.001 — of limited liability company interests, $0.001 par value per share (the "Shares"), out

Filing Documents

• ck0002033362-20250930.htm (10-Q) — 11279KB
• ck0002033362-ex31_1.htm (EX-31.1) — 16KB
• ck0002033362-ex31_2.htm (EX-31.2) — 16KB
• ck0002033362-ex32_1.htm (EX-32.1) — 9KB
• ck0002033362-ex32_2.htm (EX-32.2) — 9KB
• 0001193125-25-277887.txt ( ) — 32950KB
• ck0002033362-20250930.xsd (EX-101.SCH) — 1270KB
• ck0002033362-20250930_htm.xml (XML) — 9386KB

Financial Statements

Financial Statements Consolidated Statements of Assets and Liabilities as of September 30, 2025 (Unaudited) and December 31, 2024 1 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 (Unaudited) 2 Consolidated Statement of Changes in Net Assets for the nine months ended September 30, 2025 (Unaudited) 3 Consolidated Statement of Cash Flows for the nine months ended September 30, 2025 (Unaudited) 4 Consolidated Schedules of Investments as of September 30, 2025 (Unaudited) and December 31, 2024 5

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 30 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 48 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 57 Item 4.

Controls and Procedures

Controls and Procedures 58 PART II. OTHER INFORMATION 59 Item 1.

Legal Proceedings

Legal Proceedings 59 Item 1A.

Risk Factors

Risk Factors 59 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 59 Item 3. Defaults Upon Senior Securities 59 Item 4. Mine Safety Disclosures 59 Item 5. Other Information 59 Item 6. Exhibits 60

Signatures

Signatures 61 i Audax Private Credit Fund, LLC Consolidated Statem ents of Assets and Liabilities September 30, 2025 and December 31, 2024 (Expressed in U.S. Dollars) September 30, 2025 (unaudited) December 31, 2024 Assets Investments at fair value: Non-controlled/non-affiliated investments (cost of $ 749,963,934 and $ 646,031,655 , respectively) $ 747,176,144 $ 650,974,766 Cash and cash equivalents 37,907,054 31,592,264 Interest receivable 6,190,274 2,399,856 Prepaid investments 4,950,000 — Receivable for loan repayment 127,054 181,269 Receivable from affiliates 48,030 306,938 Escrow receivable 11,159 — Due from Administrator (Note 4) — 398,305 Total assets $ 796,409,715 $ 685,853,398 Liabilities Borrowings under leverage facility (net of deferred financing costs of $ 4,435,423 and $ 2,416,667 , respectively) (Note 8) $ 361,731,161 $ 340,592,475 Distributions due to shareholders 6,326,745 — Interest payable 5,755,568 3,503,024 Payable to Adviser (Note 4) 1,393,609 — Incentive fee payable (Note 4) 950,388 — Deferred tax liability 811,214 — Accounts payable and accrued expenses 599,229 190,492 Payable for investments purchased 184,102 186,020 Payable to Administrator (Note 4) — 1,087,203 Total liabilities 377,752,016 345,559,214 Commitments and Contingencies (Note 8) Net Assets Shares, $ 0.001 par value per share, unlimited shares authorized, 16,649,329 and 0 shares issued and outstanding, respectively 16,649 — Capital in excess of par value 417,017,862 326,284,899 Total distributable earnings 1,623,188 14,009,285 Total Net Assets $ 418,657,699 $ 340,294,184 Net Asset Value per Share at End of Period $ 25.15 N/A The accompanying notes are an integral part of these consolidated financial statements. 1 Audax Private Credit Fund, LLC Consolidated S tatements of Operations

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