Joint Venture |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Equity Method Investments and Joint Ventures [Abstract] | |
| Joint Venture | Joint Venture On June 1, 2023, the Company entered into a limited liability company agreement (the “LLC Agreement”) with the Capital One Member (“COM”) to establish a joint venture to make certain unitranche loans to U.S. middle-market companies. The joint venture is called ULTRA III, LLC (“ULTRA III”). The Company and COM will provide capital to ULTRA III in the form of membership interests. The initial maximum investment amounts in ULTRA III for the Company and COM are approximately $200.0 million and $28.6 million, respectively, which correspond to initial membership interests of approximately 87.5% and 12.5%, respectively. The LLC Agreement is effective as of June 1, 2023.
On February 1, 2024, the Company entered into an amendment (“Amendment No. 1”) to the LLC Agreement with COM to increase the maximum investment amounts for the Company and COM in ULTRA III to $400.0 million and $57.1 million, respectively. The increased investment amounts for the Company and COM correspond to membership interests of 87.5% and 12.5%, respectively.
The Company and COM may, from time-to-time, make additional contributions of capital or may receive returns of capital from ULTRA III. As of June 30, 2024 and December 31, 2023, the Company had contributed $235.5 million and $129.7 million, respectively, and COM had contributed $33.6 million and $18.5 million, respectively, of capital. As of June 30, 2024 and December 31, 2023, $164.5 million and $70.3 million, respectively, of capital remained uncalled from the Company and $23.5 million and $10.1 million, respectively, of capital remained uncalled from COM. As of June 30, 2024 and December 31, 2023, the Company and COM’s membership interests are 87.5% and 12.5%, respectively, for both periods.
All portfolio decisions and generally all other decisions in respect of ULTRA III must be approved by a credit committee of ULTRA III consisting of representatives of the Company and COM (generally with approval from a representative of each required). A Capital One entity is providing a senior revolving financing facility to ULTRA III. COM receives sourcing fees in connection with investments made by ULTRA III that are sourced by COM. When COM sources investments for ULTRA III, the percentage of sourcing fees that are paid to COM is substantially greater than its percentage membership interest in ULTRA III (the “Effective Sourcing Fee”). In this regard, for the three and six months ended June 30, 2024, the Company, through its investment in ULTRA III, paid an Effective Sourcing Fee to COM of $1.8 million and $3.8 million, respectively.
The Company has determined that ULTRA III is an investment company under ASC 946, and in accordance with ASC 946, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary. The Company and COM have equal voting rights with respect to the joint venture. The Company will not consolidate the assets and liabilities of the ULTRA III joint venture.
The Company's investment in ULTRA III is disclosed on the Company’s Consolidated Schedule of Investments as of June 30, 2024 and December 31, 2023.
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