At a glance
- The 7% annual preferred return is unchanged, while the breakpoint at which the manager's catch-up ends falls to 8.235% from 8.75%, matching the lower incentive rate.
- From Jan. 1, 2027, the 7% preferred return comes with a 15% incentive fee on non-founder shares, and the annual base fee on a $1 million position will fall to $15,000 from $20,000.
- The manager also amended its agreement with sub-manager Levine Leichtman Strategic Capital LLC, an affiliate of Los Angeles-based Levine Leichtman Capital Partners.
CNL Strategic Capital will cut the base management fee on its non-founder shares to 1.5% from 2%, and the total return incentive fee on those shares to 15% from 20%, effective Jan. 1, 2027.
The 7% annual preferred return is unchanged, while the breakpoint at which the manager's catch-up ends falls to 8.235% from 8.75%, matching the lower incentive rate. The amended agreement with CNL Strategic Capital Management LLC was signed Nov. 9, the company said, and covers Class A, T, D and I shares. Founder shares keep the current fee terms.
From Jan. 1, 2027, the 7% preferred return comes with a 15% incentive fee on non-founder shares, and the annual base fee on a $1 million position will fall to $15,000 from $20,000.
The manager also amended its agreement with sub-manager Levine Leichtman Strategic Capital LLC, an affiliate of Los Angeles-based Levine Leichtman Capital Partners. The sub-manager will continue to take 50% of base management fees across all share classes. From Jan. 1, it will take 50% of the incentive fee on non-founder shareholder total returns up to 11% and 80% above that; on founder shares, its share of the incentive fee remains 50%. Its prior written consent is required before any fee deferral, waiver or change. Both agreements run one-year terms and can be renewed by the board.
Shareholders rejected an enhanced liquidity plan in June, The DI Wire reported. The board has said it will consider a liquidity event on or before Nov. 1, 2027, the same date the current public offering is set to expire. Orlando-based CNL Strategic Capital had $1.6 billion in total assets as of Sept. 30 and buys controlling equity stakes alongside loan positions in middle-market businesses.
| Term | Before Jan. 1, 2027 | From Jan. 1, 2027 |
|---|---|---|
| Base management fee, non-founder shares | 2% | 1.5% |
| Total return incentive fee, non-founder shares | 20% | 15% |
| Annual preferred return | 7% | 7% |
| Catch-up breakpoint | 8.75% | 8.235% |
Reported by the New funds desk from The DI Wire. Published . Corrections