Fortress Private Lending Fund Navigates BDC Transition, Eyes Middle-Market Debt

TL;DR

**Fortress Private Lending Fund is a high-risk, illiquid bet on private credit, with its BDC status offering regulatory clarity but no public market for its 40.7M shares.**

AI Summary

Fortress Private Lending Fund, a Delaware statutory trust, filed its 10-K for the fiscal year ended December 31, 2025. The company, which elected to be regulated as a Business Development Company (BDC) on August 1, 2025, and intends to qualify as a Regulated Investment Company (RIC) for tax purposes, aims to generate current income and capital appreciation primarily by investing in U.S. middle-market companies through first lien senior secured loans. As of March 27, 2026, the issuer had 40,766,377 Class I shares outstanding. The company operates as a 'perpetual-life,' externally managed, non-diversified, closed-end management investment company. Its investment activities are managed by FPLF Management LLC, an indirect subsidiary of Fortress Investment Group LLC, under an investment advisory agreement dated February 10, 2025. The company faces risks including limited operating history, illiquidity of shares, competition for investment opportunities, and exposure to interest rate changes and inflation. Distributions are not guaranteed and may be funded from various sources, including borrowings and offering proceeds.

Why It Matters

Fortress Private Lending Fund's transition to a BDC and RIC status impacts its regulatory obligations and tax treatment, which is crucial for investors evaluating its income potential. The focus on U.S. middle-market senior secured loans offers a specific risk-reward profile, potentially appealing to investors seeking yield in a less liquid market segment. However, the lack of a public trading market for its Class I shares, with 40,766,377 outstanding as of March 27, 2026, significantly limits liquidity compared to publicly traded BDCs. This strategy places it in direct competition with other private credit funds and traditional lenders, making its ability to source high-quality deals critical for sustained performance.

Risk Assessment

Risk Level: high — The risk level is high due to the company's 'limited operating history' and the fact that its 'Shares are not listed on an exchange or quoted through a quotation system and will not be listed for the foreseeable future, if ever,' severely limiting shareholder liquidity. Additionally, the company explicitly states that 'distributions are not guaranteed and may be funded from sources other than cash flow from operations, including, without limitation, borrowings, offering proceeds,' indicating potential reliance on capital raises for shareholder returns.

Analyst Insight

Investors should approach Fortress Private Lending Fund with extreme caution, recognizing the significant illiquidity and the inherent risks of private credit. Given the lack of a public market for its 40,766,377 Class I shares, this investment is suitable only for sophisticated investors with a long-term horizon and no need for near-term liquidity. Thorough due diligence on the Adviser's track record in middle-market lending is paramount.

Financial Highlights

debt To Equity

Not Disclosed

revenue

Not Disclosed

operating Margin

Not Disclosed

total Assets

Not Disclosed

total Debt

Not Disclosed

net Income

Not Disclosed

eps

Not Disclosed

gross Margin

Not Disclosed

cash Position

Not Disclosed

revenue Growth

Not Disclosed

Key Numbers

• 40,766,377 — Class I shares outstanding (As of March 27, 2026, indicating the scale of the private offering.)
• 150% — Asset coverage ratio (Approved by initial shareholders, allowing for higher leverage than the standard 200% for BDCs.)
• $0.01 — Par value per share (For Class I Shares.)
• 2025 — Fiscal year end (The period covered by this 10-K filing.)
• 2024 — Year of formation (Fortress Private Lending Fund was formed on January 25, 2024, indicating a limited operating history.)

Key Players & Entities

• Fortress Private Lending Fund (company) — Registrant
• FPLF Management LLC (company) — Investment Adviser and Administrator
• Fortress Investment Group LLC (company) — Parent company of the Adviser
• SEC (regulator) — U.S. Securities and Exchange Commission
• SEI Global Services, Inc. (company) — Sub-Administrator
• December 31, 2025 (date) — Fiscal year end
• August 1, 2025 (date) — BDC Election effective date
• March 27, 2026 (date) — Date of outstanding shares count
• 40,766,377 (dollar_amount) — Class I shares outstanding
• Delaware (regulator) — State of incorporation

FAQ

Risk Factors

• Limited Operating History [medium — operational]: The Company was formed on January 25, 2024, and elected to be regulated as a BDC on August 1, 2025. This limited operating history means there is less historical data to assess performance and operational effectiveness, potentially increasing uncertainty for investors.
• Illiquidity of Shares [medium — financial]: As a closed-end management investment company, the shares of the Company are not traded on a public exchange. This illiquidity means investors may have difficulty selling their shares, especially on short notice or at a desired price.
• Competition for Investment Opportunities [medium — market]: The Company operates in a competitive environment for sourcing middle-market investment opportunities. Intense competition could lead to higher acquisition costs, lower yields on investments, and reduced deal flow, impacting the Company's ability to deploy capital effectively.
• Interest Rate and Inflation Risk [high — market]: The Company's investments are primarily in loans, making them sensitive to changes in interest rates and inflation. Rising interest rates could increase borrowing costs for portfolio companies and potentially reduce the value of existing fixed-rate investments. Inflation can erode the real return on investments.
• Distribution Funding Uncertainty [medium — financial]: Distributions are not guaranteed and may be funded from various sources, including borrowings and offering proceeds. This reliance on external funding for distributions, rather than solely from investment income or realized capital gains, introduces risk regarding the sustainability and consistency of payouts.
• BDC and RIC Compliance [medium — regulatory]: As a BDC and intending RIC, the Company must comply with specific regulatory requirements under the 1940 Act and the Internal Revenue Code. Failure to meet these requirements could result in penalties or loss of BDC/RIC status, impacting operations and tax treatment.
• Cybersecurity and Data Breaches [medium — operational]: The Company is exposed to risks related to information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks. Such events could lead to financial losses, reputational damage, and regulatory scrutiny.
• Leverage and Asset Coverage [high — financial]: The Company has an asset coverage ratio of 150%, which allows for higher leverage than the standard 200% for BDCs. While approved by initial shareholders, increased leverage amplifies both potential returns and risks, making the Company more vulnerable to adverse market movements.

Industry Context

The private lending market, particularly for middle-market companies, is characterized by increasing competition from various sources including other BDCs, private equity funds, and traditional lenders. Trends include a continued demand for flexible financing solutions and a focus on senior secured debt. However, rising interest rates and economic uncertainty pose challenges to borrower repayment capabilities and investment valuations.

Regulatory Implications

The company's election to be a BDC and its intention to qualify as a RIC subjects it to stringent regulatory oversight under the 1940 Act and the Internal Revenue Code. Compliance with asset coverage, distribution, and diversification rules is critical. Failure to adhere to these regulations could lead to significant penalties and impact the fund's operational and tax efficiency.

What Investors Should Do

1. Review the investment advisory agreement and related party disclosures carefully.
2. Assess the impact of the 150% asset coverage ratio on risk.
3. Evaluate the sustainability of distributions.
4. Understand the illiquidity of closed-end fund shares.

Key Dates

• 2024-01-25: Formation of Fortress Private Lending Fund — Marks the beginning of the company's existence, indicating a very limited operating history.
• 2025-02-10: Investment Advisory Agreement dated — Establishes the management relationship with FPLF Management LLC, an indirect subsidiary of Fortress Investment Group LLC.
• 2025-08-01: BDC Election — The company elected to be regulated as a Business Development Company, subjecting it to specific regulatory requirements and investment strategies.
• 2025-12-31: Fiscal Year End — The period covered by this 10-K filing, important for understanding the financial performance within this timeframe.
• 2026-03-27: Class I shares outstanding reported — Provides a snapshot of the fund's scale as of a recent date, with 40,766,377 shares outstanding.

Glossary

Business Development Company (BDC)

A type of closed-end investment company created by Congress to make equity and debt investments in small and medium-sized businesses. BDCs are regulated under the Investment Company Act of 1940. (Fortress Private Lending Fund elected to be regulated as a BDC, which dictates its investment strategy, regulatory compliance, and reporting requirements.)

Regulated Investment Company (RIC)

A U.S. tax term for a company that qualifies to be taxed under Subchapter M of the Internal Revenue Code. RICs generally do not pay corporate income tax if they distribute at least 90% of their investment income to shareholders. (The company intends to qualify as a RIC to avoid corporate-level taxation, which is a common structure for investment funds.)

Perpetual-life

Refers to a fund structure that does not have a fixed termination date, allowing it to operate indefinitely. (Indicates the long-term nature of the fund, contrasting with traditional closed-end funds that may have a defined lifespan.)

Non-diversified

An investment company that is permitted to invest in the securities of fewer than 75% of the value of its total assets in the securities of any one issuer and fewer than 50% of the value of its total assets in the securities of any one issuer. (Suggests a potentially higher concentration risk in the fund's portfolio compared to diversified funds.)

Closed-end management investment company

A type of investment company that issues a fixed number of shares in an initial public offering. After the IPO, shares typically trade on a secondary market, and the company does not redeem shares. (This structure implies that the fund's shares are illiquid and not directly redeemable by the company.)

Asset Coverage Ratio

A financial metric used by BDCs to measure their ability to cover their total debt with their total assets. The 1940 Act generally requires a ratio of at least 150% (or 200% for certain types of debt). (The company's 150% ratio indicates it is operating at the maximum leverage allowed under certain BDC regulations, amplifying risk and potential return.)

Middle-market companies

Companies that fall between small businesses and large corporations, typically defined by revenue or employee count. For private lending, this often refers to companies with EBITDA between $10 million and $50 million. (This is the target market for the fund's investments, indicating the type of borrowers the fund aims to lend to.)

1940 Act

The Investment Company Act of 1940, a U.S. federal law that regulates the organization of companies, including mutual funds, face-amount certificate companies, and closed-end companies. (As a BDC, the company must comply with the provisions of this Act, which governs its operations, investments, and reporting.)

Year-Over-Year Comparison

As this is the first 10-K filing for Fortress Private Lending Fund, there are no prior year filings to compare against. The company was formed in January 2024 and elected BDC status in August 2025, indicating a very limited operating history. Key metrics such as revenue, net income, and asset/debt levels are not yet comparable to previous periods. New risks related to its BDC/RIC status and its specific investment strategy are now being formally disclosed.

Key Financial Figures

• $0.01 — of the Act: Class I Shares, par value $0.01 per share Indicate by check mark if t
• $25 million — companies to consist of companies with $25 million to $250 million of earnings before inte
• $250 million — onsist of companies with $25 million to $250 million of earnings before interest, taxes, dep

Filing Documents

• ck0002012139-20251231.htm (10-K) — 6652KB
• ck0002012139-ex4_2.htm (EX-4.2) — 54KB
• ck0002012139-ex10_12.htm (EX-10.12) — 2854KB
• ck0002012139-ex14_1.htm (EX-14.1) — 43KB
• ck0002012139-ex19_1.htm (EX-19.1) — 9KB
• ck0002012139-ex21_1.htm (EX-21.1) — 8KB
• ck0002012139-ex31_1.htm (EX-31.1) — 20KB
• ck0002012139-ex31_2.htm (EX-31.2) — 19KB
• ck0002012139-ex31_3.htm (EX-31.3) — 20KB
• ck0002012139-ex32_1.htm (EX-32.1) — 10KB
• ck0002012139-ex32_2.htm (EX-32.2) — 10KB
• ck0002012139-ex32_3.htm (EX-32.3) — 10KB
• img17692176_0.jpg (GRAPHIC) — 17KB
• 0001193125-26-128496.txt ( ) — 22631KB
• ck0002012139-20251231.xsd (EX-101.SCH) — 1652KB
• ck0002012139-20251231_htm.xml (XML) — 3315KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 28 Item 1B. Unresolved Staff Comments 68 Item 1C. Cybersecurity 68 Item 2.

Properties

Properties 70 Item 3.

Legal Proceedings

Legal Proceedings 70 Item 4. Mine Safety Disclosures 70 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 71 Item 6. [Reserved] 74 Item 7.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 75 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 90 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 92 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 125 Item 9A.

Controls and Procedures

Controls and Procedures 125 Item 9B. Other Information 125 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 125 PART III Item 10. Directors, Executive Officers and Corporate Governance 126 Item 11.

Executive Compensation

Executive Compensation 129 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 131 Item 13. Certain Relationships and Related Transactions, and Director Independence 132 Item 14. Principal Accounting Fees and Services 135 PART IV Item 15. Exhibits, Financial Statement Schedules 137 Item 16. Form 10-K Summary 139 i CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This annual report on Form 10-K (this "Form 10-K") contains forward-looking statements, which relate to future events or the future performance or financial condition of Fortress Private Lending Fund (the "Company," "we," "us," or "our"). Forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "target," "project," "estimate," "intend," "continue" or "believe" or the negatives thereof or other variations thereon or comparable terminology, although not all forward-looking statements include these words. Some of the statements in this Form 10-K constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this Form 10-K may include statements as to: the Company's future operating results and distributions; the Company's business prospects and the prospects of its investments, including the dependence of the Company's future success on general economic and political trends and other external factors; the ability of the FPLF Management LLC, a Delaware limited liability company (the "Adviser" or "Administrator", as applicable) and an indirect subsidiary of Fortress Investment Group LLC ("Fortress") to identify suitable investments for the Company and to monitor and administer the Company's investments; the effect of investments that the Company expects to make and the competition for those investments; the ability of the Company's investments to achieve t

Business

Item 1. Business Overview Fortress Private Lending Fund (the "Company") is a Delaware statutory trust formed on January 25, 2024. The Company is a "perpetual-life", externally managed, non-diversified, closed-end management investment company that elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"), on August 1, 2025 (the "BDC Election"). Prior to the BDC Election, the Company conducted its investment activities and operations in reliance on an exemption from the definition of "investment company" under Section 3(c)(7) of the 1940 Act. For U.S. federal income tax purposes, beginning with the tax year ending December 31, 2025, the Company expects to elect to be treated, and the Company intends to qualify annually thereafter, as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), effective August 1, 2025. As a BDC and a RIC, the Company will be required to comply with certain regulatory requirements. The Company is managed by FPLF Management LLC (in its capacity as investment adviser, the "Adviser"), an indirect subsidiary of Fortress Investment Group LLC ("Fortress"), which provides management services to the Company pursuant to an amended and restated investment advisory agreement, dated February 10, 2025, between the Adviser and the Company (the "Investment Advisory Agreement"). See further discussion in Note 3 – "Related Party Transactions and Agreements" to our consolidated financial statements. Subject to the overall supervision of the Board of Trustees (the "Board"), the Adviser is responsible for managing our business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring the Company's investments and monitoring its portfolio on an ongoing basis through a team of investment professionals. The Adviser is registered as

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