WTI Fund XI Boosts Loan Income, Assets Amid Rising Expenses

Wti Fund Xi, Inc. 10-Q Filing Summary
FieldDetail
CompanyWti Fund Xi, Inc.
Form Type10-Q
Filed DateNov 13, 2025
Risk Levelhigh
Pages16
Reading Time19 min
Key Dollar Amounts$0.001, $250,000
Sentimentmixed

Sentiment: mixed

Topics: BDC, Loan Investments, Investment Income, Operating Expenses, Leverage, Regulatory Compliance, Asset Growth

TL;DR

**WTI Fund XI is aggressively expanding its loan portfolio, driving revenue growth but also ballooning expenses and nearing regulatory limits on non-qualifying assets, making it a high-risk, high-reward play.**

AI Summary

WTI Fund XI, Inc. reported a net decrease in net assets from operations of $1,038,217 for the nine months ended September 30, 2025, an improvement from a $1,969,542 net decrease for the same period in 2024. Total investment income significantly increased to $6,707,909 for the nine months ended September 30, 2025, up from $462,525 in 2024, primarily driven by a surge in interest on loans to $6,538,409 from $382,246. However, total expenses also rose substantially to $7,746,126 from $2,432,067, with management fees increasing to $4,643,964 and interest expense to $2,725,266. The company's total assets grew to $54,530,051 as of September 30, 2025, from $35,774,141 at December 31, 2024, largely due to an increase in loans at fair value to $45,302,454 from $23,982,777. Net assets increased to $18,160,629 from $12,672,487 over the same period, supported by $10,000,000 in contributions from shareholders. The Fund's non-qualifying assets stood at 23.0% of total assets as of September 30, 2025, nearing the 30% limit under the 1940 Act.

Why It Matters

WTI Fund XI's substantial growth in loan investments and interest income signals an aggressive expansion strategy, which could lead to higher returns for investors if managed effectively. However, the significant increase in management fees and interest expense warrants close scrutiny, as these could erode profitability. The rise in non-qualifying assets to 23.0% is a critical point for investors, as it limits future investment flexibility under the 1940 Act and could impact the Fund's ability to deploy capital efficiently. This competitive context suggests WTI Fund XI is actively seeking high-yield opportunities, but also taking on increased leverage and operational costs.

Risk Assessment

Risk Level: high — The Fund's risk level is high due to its significant increase in borrowings under debt facility to $34,000,000 as of September 30, 2025, from $21,000,000 at December 31, 2024, indicating increased leverage. Additionally, non-qualifying assets reached 23.0% of total assets, approaching the 30% limit under Section 55(a) of the 1940 Act, which restricts future investment flexibility.

Analyst Insight

Investors should closely monitor WTI Fund XI's future filings for continued expense management and its adherence to the 70% qualifying asset rule. Consider the implications of increased leverage on potential returns and the impact of non-qualifying asset limitations on the Fund's growth strategy before making any investment decisions.

Financial Highlights

debt To Equity
2.00
revenue
$6,707,909
operating Margin
-3.00%
total Assets
$54,530,051
total Debt
$36,369,422
net Income
$-1,038,217
eps
$-10.38
gross Margin
N/A
cash Position
$7,059,799
revenue Growth
+1350%

Revenue Breakdown

SegmentRevenueGrowth
Interest on loans$6,707,909+1600%
Other income$169,500+111%

Key Numbers

  • $1,038,217 — Net decrease in net assets from operations (For the nine months ended September 30, 2025, an improvement from $1,969,542 in 2024)
  • $6,707,909 — Total investment income (For the nine months ended September 30, 2025, up from $462,525 in 2024)
  • $6,538,409 — Interest on loans (For the nine months ended September 30, 2025, up from $382,246 in 2024)
  • $7,746,126 — Total expenses (For the nine months ended September 30, 2025, up from $2,432,067 in 2024)
  • $4,643,964 — Management fees (For the nine months ended September 30, 2025, up from $1,465,648 in 2024)
  • $2,725,266 — Interest expense (For the nine months ended September 30, 2025, up from $383,948 in 2024)
  • $54,530,051 — Total assets (As of September 30, 2025, up from $35,774,141 at December 31, 2024)
  • $45,302,454 — Loans, at estimated fair value (As of September 30, 2025, up from $23,982,777 at December 31, 2024)
  • $18,160,629 — Net assets (As of September 30, 2025, up from $12,672,487 at December 31, 2024)
  • 23.0% — Non-qualifying assets (As of September 30, 2025, nearing the 30% limit under the 1940 Act)

Key Players & Entities

  • WTI Fund XI, Inc. (company) — Registrant
  • Westech Investment Advisors LLC (company) — Manager of the Fund
  • P10, Inc. (company) — Ultimate parent of the Manager
  • SEC (regulator) — Securities and Exchange Commission
  • Maryland (person) — State of incorporation
  • 1940 Act (regulator) — Investment Company Act of 1940
  • WTI Fund XI, LLC (company) — Sole shareholder of the Fund

FAQ

What were WTI Fund XI's total investment income and expenses for the nine months ended September 30, 2025?

WTI Fund XI's total investment income for the nine months ended September 30, 2025, was $6,707,909, a substantial increase from $462,525 in the prior year. Total expenses for the same period were $7,746,126, up from $2,432,067 in 2024.

How did WTI Fund XI's net assets change from December 31, 2024, to September 30, 2025?

WTI Fund XI's net assets increased to $18,160,629 as of September 30, 2025, from $12,672,487 at December 31, 2024. This increase was supported by $10,000,000 in contributions from shareholders during the nine-month period.

What is the current level of WTI Fund XI's non-qualifying assets and its regulatory implications?

As of September 30, 2025, WTI Fund XI's non-qualifying assets represented 23.0% of its total assets. Under Section 55(a) of the 1940 Act, the Fund is prohibited from acquiring additional non-qualifying assets if they exceed 30% of total assets, which limits future investment flexibility.

What was the change in WTI Fund XI's loans at estimated fair value between December 31, 2024, and September 30, 2025?

WTI Fund XI's loans at estimated fair value increased significantly to $45,302,454 as of September 30, 2025, from $23,982,777 at December 31, 2024, reflecting substantial growth in its loan portfolio.

How much did WTI Fund XI's borrowings under debt facility increase by?

WTI Fund XI's borrowings under debt facility increased by $13,000,000, rising from $21,000,000 at December 31, 2024, to $34,000,000 as of September 30, 2025.

What was the net decrease in net assets resulting from operations per share for WTI Fund XI?

For the nine months ended September 30, 2025, the net decrease in net assets resulting from operations per share for WTI Fund XI was $(10.38), an improvement from $(19.70) for the same period in 2024.

When did WTI Fund XI commence its investment operations?

WTI Fund XI commenced its investment operations on June 26, 2024, as stated in the Condensed Statements of Operations.

What is the dissolution date for WTI Fund XI?

WTI Fund XI is scheduled to be dissolved on December 31, 2033, unless its Board of Directors opts for an earlier dissolution.

What were the contributions from shareholders for WTI Fund XI during the nine months ended September 30, 2025?

WTI Fund XI received $10,000,000 in contributions from shareholders during the nine months ended September 30, 2025, contributing to the increase in net assets.

What is the primary business of WTI Fund XI, Inc.?

WTI Fund XI, Inc. operates as a non-diversified, closed-end management investment company that has elected to be treated as a business development company (BDC) under the Investment Company Act of 1940, primarily investing in loans.

Risk Factors

  • Non-qualifying Assets Limit [medium — regulatory]: The Fund's non-qualifying assets represent 23.0% of total assets as of September 30, 2025. This is nearing the 30% limit imposed by the 1940 Act, which could restrict investment flexibility or require divestment if exceeded.
  • Increased Leverage and Interest Expense [medium — financial]: Total liabilities increased significantly to $36,369,422 from $23,101,654, driven by borrowings under a debt facility which rose to $34,000,000 from $21,000,000. This led to a substantial increase in interest expense to $2,725,266 from $383,948 for the nine months ended September 30, 2025.
  • Rising Management Fees [medium — financial]: Management fees increased to $4,643,964 for the nine months ended September 30, 2025, from $1,465,648 in the prior year. This substantial rise, alongside increased interest expenses, contributed to the overall increase in total expenses.
  • Loan Portfolio Valuation Risk [high — market]: The Fund's primary assets are loans at estimated fair value, totaling $45,302,454 as of September 30, 2025. Fluctuations in the fair value of these loans, influenced by market conditions and borrower performance, can significantly impact the Fund's net assets and investment income.
  • Unfunded Commitments [medium — operational]: The Fund has unexpired unfunded commitments of $18,250,000 as of September 30, 2025, up from $17,129,000 at December 31, 2024. These commitments represent potential future capital outlays that could impact liquidity.

Industry Context

WTI Fund XI, Inc. operates in the investment fund sector, likely focusing on debt investments given its significant loan portfolio. The industry is characterized by intense competition, evolving regulatory landscapes, and sensitivity to interest rate movements and credit market conditions. Funds like WTI XI often leverage debt to enhance returns, which also amplifies risk.

Regulatory Implications

The Fund is approaching the 30% limit for non-qualifying assets under the 1940 Act. Exceeding this limit could trigger regulatory scrutiny and require divestment of assets, potentially impacting the Fund's investment strategy and profitability.

What Investors Should Do

  1. Monitor non-qualifying asset levels closely.
  2. Analyze the drivers of increased interest income and expenses.
  3. Evaluate the fair value methodology for loans.
  4. Assess the impact of rising management fees.

Key Dates

  • 2025-09-30: Nine months ended September 30, 2025 reporting period — Significant increase in investment income driven by loans, but also a substantial rise in expenses, leading to a reduced net loss compared to the prior year.
  • 2025-09-30: Total assets reached $54,530,051 — Represents substantial growth from $35,774,141 at year-end 2024, primarily due to an increase in the loan portfolio.
  • 2025-09-30: Non-qualifying assets at 23.0% of total assets — Approaching the 30% limit under the 1940 Act, posing a potential regulatory constraint.
  • 2024-12-31: Total assets were $35,774,141 — Baseline for the significant asset growth observed in the current reporting period.
  • 2024-06-26: Fund commenced investment operations — Marks the beginning of the Fund's operational history, providing context for year-over-year comparisons.

Glossary

1940 Act
The Investment Company Act of 1940, a U.S. federal law that regulates the organization of companies, including mutual funds, closed-end funds, and unit investment trusts. (Sets limits on the proportion of non-qualifying assets a fund can hold, impacting WTI Fund XI, Inc.'s investment strategy.)
Non-qualifying assets
Assets held by a registered investment company that do not meet certain criteria defined by the 1940 Act, potentially subject to limitations. (The Fund's high percentage of these assets (23.0%) is nearing a regulatory threshold.)
Net assets
The total value of a company's assets minus its liabilities. For a fund, it represents the net worth available to shareholders. (Increased to $18,160,629, indicating growth in shareholder value, supported by capital contributions and operational performance.)
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. (Loans are reported at fair value, meaning their reported value can fluctuate based on market conditions.)
Cumulative return of capital distributions
The total amount of capital that has been returned to shareholders over time, reducing their initial investment. (A negative value indicates distributions have been made, impacting the net asset calculation.)

Year-Over-Year Comparison

Compared to the nine months ended September 30, 2024, WTI Fund XI, Inc. has seen a dramatic increase in total investment income, primarily from interest on loans ($6.5M vs $0.4M). However, total expenses have also surged, driven by higher management fees ($4.6M vs $1.5M) and interest expense ($2.7M vs $0.4M). Despite the revenue growth, the net decrease in net assets from operations has narrowed to $1.0M from $2.0M, indicating improved operational efficiency relative to income generation, though the Fund remains unprofitable on an operating basis. Total assets have grown substantially to $54.5M from $35.8M, largely due to an expanded loan portfolio, and net assets have increased to $18.2M from $12.7M, supported by shareholder contributions.

Filing Stats: 4,688 words · 19 min read · ~16 pages · Grade level 8.5 · Accepted 2025-11-13 16:03:21

Key Financial Figures

  • $0.001 — as of November 13, 2025 Common Stock, $0.001 par value 100,000 WTI FUND XI, INC.
  • $250,000 — t exceed the federal insurance limit of $250,000, expose the Fund to a concentration of

Filing Documents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Condensed Statements of Assets and Liabilities (Unaudited) As of September 30, 2025 and December 31, 2024 Condensed Statements of Operations (Unaudited) For the three and nine months ended September 30, 2025 and 2024 Condensed Statements of Changes in Net Assets (Unaudited) For the three and nine months ended September 30, 2025 and 2024 Condensed Statements of Cash Flows (Unaudited) For the nine months ended September 30, 2025 and 2024 Condensed Schedules of Investments (Unaudited) As of September 30, 2025 and December 31, 2024 Notes to Condensed Financial Statements (Unaudited)

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

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Controls and Procedures

Item 4. Controls and Procedures

— OTHER INFORMATION

PART II — OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings

Risk Factors

Item 1A. Risk Factors

Unregistered Sales of Equity Securities and Use of Proceeds

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

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities

Mine Safety Disclosures

Item 4. Mine Safety Disclosures

Other Information

Item 5. Other Information

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements WTI FUND XI, INC. CONDENSED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 September 30, 2025 December 31, 2024 ASSETS Loans, at estimated fair value (amortized cost of $ 45,302,454 and $ 23,982,777 , respectively) $ 45,302,454 $ 23,982,777 Cash and cash equivalents 7,059,799 9,535,729 Dividend and interest receivables 828,231 495,733 Other assets 1,339,567 1,759,902 Total assets 54,530,051 35,774,141 LIABILITIES Borrowings under debt facility 34,000,000 21,000,000 Accrued management fees 1,562,536 1,655,566 Accounts payable and other accrued liabilities 806,886 446,088 Total liabilities 36,369,422 23,101,654 NET ASSETS $ 18,160,629 $ 12,672,487 Analysis of Net Assets: Capital paid in on shares of capital stock $ 32,325,000 $ 22,325,000 Cumulative return of capital distributions ( 9,383,280 ) ( 5,909,639 ) Total distributable losses ( 4,781,091 ) ( 3,742,874 ) Net assets (equivalent to $ 181.61 and $ 126.72 per share based on 100,000 shares of capital stock outstanding - See Note 5 and Note 11) $ 18,160,629 $ 12,672,487 Commitments & Contingent Liabilities: Unexpired unfunded commitments (See Note 9) $ 18,250,000 $ 17,129,000 See notes to condensed financial statements (unaudited). 3 WTI FUND XI, INC. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 For the Three Months Ended September 30, 2025 For the Three Months Ended September 30, 2024 For the Nine Months Ended September 30, 2025 For the Nine Months Ended September 30, 2024* INVESTMENT INCOME: Interest on loans $ 2,545,712 $ 376,841 $ 6,538,409 $ 382,246 Other income 29,717 78,793 169,500 80,279 Total investment income 2,575,429 455,634 6,707,909 462,525 EXPENSES: Management fees 1,562,536 $ 1,402,657 $ 4,643,964 $ 1,465,648 Interest expense 980,993 383,948 2,725,266 383,948 Banking and professional fees 40,603 36,1

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