Business Context and Reporting Period
This Form 8-K filing by Runway Growth Credit Fund Inc. (the "Company") reports events occurring on May 27, 2021, with the report filed on May 28, 2021. The Company is a business development company incorporated in Maryland. The primary focus of this filing is the approval of a Second Amended and Restated Investment Advisory Agreement and the results of the 2021 Annual Meeting of Stockholders.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on corporate governance actions and the terms of a new advisory agreement.
Material Changes and Agreement Terms
Stockholders approved a Second Amended Advisory Agreement with Runway Growth Capital LLC, effective immediately. Key changes include:
- Spin-Off Transaction Definition: Revised to remove references to a "Liquidating Fund" and to explicitly contemplate an Exchange Listing. A Spin-Off now includes either an exchange of shares for a new regulated entity or an Exchange Listing.
- Base Management Fee: Simplified to a tiered structure based on "Gross Assets" (including leveraged assets and paid-in-kind interest):
- 0.4375% quarterly (1.75% annualized) if Gross Assets are under $500 million.
- 0.40% quarterly (1.60% annualized) if Gross Assets are between $500 million and $1 billion.
- 0.375% quarterly (1.50% annualized) if Gross Assets are $1 billion or more.
- Income Incentive Fee: Removed the leverage carve-out, allowing incentive fees on income from leveraged investments. Removed the look-back period cap on fees following a Spin-Off transaction if realized losses exceeded 2%.
- Capital Gains Incentive Fee: Removed the "hurdle" concept. The fee is now 20.0% of aggregate cumulative realized capital gains, net of cumulative realized losses and unrealized depreciation, less previously paid fees.
Outlook, Risks, and Management Commentary
The filing indicates the Company has satisfied the trigger to move to the second iteration of the base management fee calculation. The Board of Directors, including all independent directors, unanimously approved the agreement prior to stockholder ratification. No specific risks, contingencies, or forward-looking guidance regarding market conditions or investment performance were disclosed in this specific filing.
Investor Verification Checklist
- Verify the current aggregate Gross Assets of the Company to determine the applicable base management fee tier.
- Review the full text of the Second Amended Advisory Agreement (Exhibit 10.1) for complete legal definitions and terms.
- Confirm the election status of the newly elected directors, Julie Persily and Lewis Solimene, Jr., who were elected unanimously.
- Monitor future filings for the Company's actual leverage levels and how the removal of the leverage carve-out impacts net investment income calculations.