Disclosure Information

The material provided on this website is not intended as a recommendation or as investment advice of any kind. Such material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute an offer to sell or the solicitation of an offer to buy any interest in any investment product or fund. Such offer or solicitation may only be made by means of delivery of a confidential private offering memorandum, as amended and supplemented from time to time, or other appropriate document which contains a description of the material terms (including risk factors, conflicts of interest, fees and charges) relating to such investment product or fund. All content has been provided for informational or educational purposes only and is not intended to be and should not be construed as investment, legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation. Any investment in an account, fund or other investment vehicle managed by Beach Point involves significant risk, including the risk of loss of all or a portion of an investment. References to “safeguard investor capital” or similar language are not guarantees against loss of investment capital or value. There can be no assurance that Beach Point will replicate past results or meet its objectives in the future.

Certain information contained herein includes forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include words such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “believe” or the negatives thereof and words and terms of similar substance in connection with discussions of future performance of a portfolio or an investment. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. To the extent investments are described herein, such information has been included solely to provide you with information about the types of transactions that were entered into by one or more fund or account managed by Beach Point. Future market conditions may be markedly different from the market conditions that prevailed at the time the investments referenced herein, if any, were consummated and similar opportunities may not be available in the future. The investment information provided therein, if any, should not be deemed as a recommendation to purchase or sell any such securities or investments.

Certain information contained herein has been obtained or derived from unaffiliated third-party sources believed by Beach Point to be reliable. Beach Point makes no representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained herein, including information obtained or derived from unaffiliated third-party sources, and nothing contained herein may be relied upon as an indicator or representation as to the prior or future performance of any investment or any fund or account managed by Beach Point. Registration with the SEC does not imply that Beach Point Capital Management LP has a certain level of skill or training.

General

The following key risk descriptions are not intended to be a complete or exhaustive list of all risks related to the investment activities of Beach Point’s strategies described herein and there may be other risks not reflected below that may be applicable to Beach Point’s strategies.

While all Beach Point strategies will generally be subject to the risks described in the “General” section, the applicability of the risks described under “Investment Activities” will depend on the specific investments and activities of each individual strategy.

Alternative Investment

Each of the Beach Point strategies referenced herein is speculative and involves a high degree of risk. The strategies will involve investing in securities and obligations that entail substantial risk. There can be no assurance that such investments will increase in value, that significant losses will not be incurred or that the objectives of the strategies will be achieved. Specific investment risks include, but are not limited to, those described under Investment Activities below.

Potential Conflicts of Interest

Beach Point manages a number of strategies that present the possibility of overlapping investments or investments in different parts of the capital structure. Beach Point will endeavor to manage such conflicts in good faith.

Leveraged Companies

Investments in companies whose capital structures have significant leverage are inherently more sensitive than others to declines in revenues and to increases in expenses and interest rates, posing a greater possibility of bankruptcy or default.

Bankruptcy Proceedings

Investing in companies that are involved or who may become involved in bankruptcy proceedings presents significant risks. These include, but are not limited to, a lack of control over certain events, the bankruptcy filing itself may have an adverse impact on the company, the duration of the proceedings are difficult to predict and may be further impacted by delays, the costs inherent in the process are frequently high, and creditors can lose their priority and ranking in a variety of circumstances and representation on a creditors committee may subject the creditor to various trading and confidentiality restrictions.

Illiquid Investments

The strategies will involve investing in illiquid securities or securities which are restricted as to their transferability. Such restrictions may limit the ability to sell such securities at their fair market value.

Non-index Issuers

Seeking investments in issuers that are not constituents of an index may result in holdings that are harder to value and more difficult to trade than investments in issuers that are not constituents of an index.

Mispriced Securities

The identification of investment opportunities that are mispriced by the market is a difficult task, and there is no assurance that such opportunities will be successfully recognized or acquired. While investments in mispriced securities offer opportunities for above-average capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses.

Legal Experience

While Beach Point believes that the legal background of certain members of its investment team provides valuable insight into the review and negotiation of investment-related documents (e.g., bond indentures, credit agreements, purchase agreements, offering documents, plans of reorganization, etc.), there is no assurance that such legal experience will enable Beach Point to identify opportunities with a higher likelihood of success or to avoid investments that result in substantial losses.

Responsible Investment

Responsible Investment practices are evolving rapidly and there are different principles, frameworks, methodologies, and tracking tools being implemented by other asset managers, and Beach Point’s adoption and adherence to various such principles, frameworks, methodologies and tools is expected to vary over time. There is also a growing regulatory interest across jurisdictions in improving transparency regarding the definition, measurement and disclosure of material environmental, social and governance factors. Beach Point’s Responsible Investment policies could become subject to additional regulation in the future, and Beach Point cannot guarantee that its current approach will meet future regulatory requirements. In addition, a company’s business practices, products or services may change over time. As a result of these possibilities, among others, an investment vehicle may temporarily hold securities that are inconsistent with its Responsible Investment criteria. Beach Point’s ability to identify, evaluate, monitor, and engage issuers with respect to material Responsible Investment factors, including physical and transitional climate risk, depends on, among other things, the availability and accuracy of Responsible Investment-related information. In addition, Beach Point’s assessment of such Responsible Investment factors (and the risks and impact created thereby) is based on Beach Point’s internal research, which is subjective by nature, and subject to change. Given limited availability of Responsible Investment-related information, the inability to consistently obtain accurate or complete Responsible Investment-related information, and the subjective nature of Beach Point’s assessment of Responsible Investment factors, such information and Beach Point’s assessment thereof should not be relied on. There is no guarantee that the criteria utilized, or the judgment exercised, by Beach Point will reflect any one particular investor’s beliefs, principles, or values. It is important to note that investment strategies that restrict investments of certain issuers due to certain Responsible Investment criteria may limit available investments, which may hinder performance when compared to strategies with no such requirements. In addition, Beach Point’s Structured Credit strategy takes long and short positions in a variety of structured assets, including MBS, CLO, and ABS vehicles. While Beach Point’s team is cognizant of specific governance-related factors at the asset manager and servicer level, when appropriate and consistent with our fiduciary duty; we believe that due to the structure of these investments (e.g., a pool of auto loans, credit card receivables, mortgages, business loans, or similar underlying assets) and the data currently available for these investments, formal Responsible Investment integration is impracticable.

Third-party Ratings and Rankings

The UN Principles for Responsible Investment (the “PRI”) is an international organization that works to promote the incorporation of environmental, social, and corporate governance factors (“ESG”) into the investment decision-making process. Beach Point became a UN PRI signatory in February 2021 and the firm’s annual reporting obligations begin with respect to its investment activities in 2024. The PRI is funded primarily via an annual membership fee payable by all signatories. The annual signatory fee is payable each April and is scaled according to each signatory’s category. The PRI is a not for profit organization and signatory fees and other revenue are spent on delivering value to signatories.

CDP (formerly the Carbon Disclosure Project) is a non-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. CDP provides investors with environmental data infrastructure to integrate sustainability within the investment process. Beach Point became a CDP Capital Markets signatory in October 2021. CDP’s Capital Markets team supports its signatories with access to CDP data, updates regarding disclosure, regional insights and relevant invitations to initiatives that further support corporate disclosure. As a firm with more than $1bn of assets under management, Beach Point pays an annual signatory administrative fee of $4,200.

Predecessor Firm

The management of certain Multi-Asset Credit and Loan funds (the “Funds”) was assigned by the prior investment adviser, Post Advisory Group, LLC (“Post”), to Beach Point in January 2009. Prior to January 2009, performance for the Funds was achieved by senior members of Beach Point’s investment team while managing the Funds at Post.

Investment Activities

Loans and Other Debt or Debt-like Instruments

Loans or other debt instruments, including debt-like instruments like preferred equity, are subject to unique risks, including (i) the possible invalidation of an investment transaction as a fraudulent conveyance under relevant creditors’ rights laws, (ii) so-called lender liability claims by the issuer of the obligations and (iii) environmental liabilities that may arise with respect to collateral securing the obligations.

In addition, if an investment in a loan is structured as a participation, there may be limitations on the holder’s ability to directly enforce its rights against the borrower.

Convertible Securities

Many convertible securities are not rated investment grade. Securities in the lower-rated and non-rated categories are subject to greater risk of loss of principal and interest than higher-rated securities and are generally considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. They are also generally considered to be subject to greater risk than securities with higher ratings in the case of deterioration of general economic conditions. As investors generally perceive that there are greater risks associated with lower-rated and non-rated securities, the yields and prices of such securities may be more volatile than those for higher-rated securities. The market for lower-rated and non-rated securities is thinner, often less liquid, and less active than that for higher-rated securities, which can adversely affect the prices at which these securities can be sold and may even make it impractical to sell such securities. The limited liquidity of the market may also adversely affect the ability to arrive at a fair value for certain lower-rated and non-rated securities at certain times and could make it difficult to sell certain securities.

The risk of the issuer of a convertible security that possess high income features undergoing a reorganization under U.S. federal bankruptcy laws or similar laws may be higher than an issuer of a traditional convertible security. As such, there are a number of significant risks associated with investing in companies involved in a bankruptcy proceeding, including, among others, possible adverse effects on the issuer, costs associated with delays in the bankruptcy proceeding, and loss of ranking and priority as a creditor.

High Yield Bonds

Securities in the lower rated categories and comparable non-rated securities are subject to greater risk of loss of principal and interest than higher rated and comparable non-rated securities and are generally considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. They are also generally considered to be subject to greater risk than securities with higher ratings or comparable non-rated securities in the case of deterioration of general economic conditions. Because investors generally perceive that there are greater risks associated with the lower rated and comparable non-rated securities, the yields and prices of such securities may be more volatile than those for higher rated and comparable non-rated securities. The market for lower rated and comparable non-rated securities is thinner, often less liquid, and less active than that for higher rated or comparable non-rated securities, which can adversely affect the prices at which these securities can be sold and may even make it impractical to sell such securities.

Direct Lending

Lending and investments in other debt instruments entail normal credit risks (i.e., the risk of non-payment of interest and principal) and market risks (i.e., the risk that certain market factors will cause the value of the instrument to decline). When originating a loan, a lender expects to rely significantly upon representations made by the borrower. There can be no assurance that such representations are accurate or complete, and any misrepresentation or omission may adversely affect the valuation of the collateral underlying the loan, or may adversely affect the ability of the lender to perfect or foreclose on a lien on the collateral securing the loan, or may result in liability of the lender to a subsequent purchaser of the loan. Finally, under certain circumstances, payments to the lender may be reclaimed if any such payment or distribution is later determined to have been a fraudulent conveyance or a preferential payment.

Derivative Instruments

Certain Beach Point strategies may involve investments in derivative instruments. Derivatives are investment instruments that consist of a contract between parties in which the derivatives’ value is derived from and depends on the value of an underlying financial instrument. Examples of derivatives include foreign currency contracts, options and credit default and total return swaps. Primary risks associated with trading in derivatives may include market, counterparty and liquidity risks. Additional risks associated with short sales and options and swaps are described below.

Short Sales and Options

A short sale of a security involves the risk of a theoretically unlimited loss from a theoretically unlimited increase in the market price of the security that could result in an inability to cover the short position. The successful use of options depends principally on the price movements of the underlying securities, and if the price of the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option premium and transaction costs, the strategy will lose part or all of its investment in the option.

Swaps

Certain strategies may engage in activities that involve the use of swaps, including total return swaps, interest rate swaps and credit default swaps, in which case there is usually a contractual relationship only with the counterparty of such swap, and not the issuer, As a result, there will be exposure to the credit risk of the counterparty. In addition, certain swaps may be required to be submitted to a central clearing counterparty, in which case there will be exposure to the credit risk of the central clearing counterparty and any Futures Commodity Merchant that may be used to access such central clearing counterparty. The regulation of derivatives transactions and portfolios that engage in such transactions is an evolving area of law and is subject to modification by governmental and judicial action. The effect of any future regulatory change on the strategies could be substantial and adverse.

Stressed Credits

Any deterioration of underlying market fundamentals could negatively impact the performance of investments in stressed companies. Changes in general economic conditions, tax rates, operating expenses, interest rates and the availability of debt financing may also adversely affect the performance of such investments. For these or other reasons, investments in stressed companies may become “non-performing” after their acquisition, and during an economic downturn or recession, stressed investments are more likely to go into default than securities of other issuers not experiencing financial stress. Securities of stressed companies are also often less liquid and more volatile than securities of companies not experiencing financial difficulties, often involving a higher degree of credit and market risk.

Use of Leverage

Certain strategies may engage in activities that involve the use of leverage. While leverage presents opportunities for increasing an account’s total return, it may increase losses as well. Accordingly, any event that adversely affects the value of an investment would be magnified to the extent leverage is used.

Real Estate Investments

The value of real estate-related securities can fluctuate for various reasons. Real estate values can be seriously affected by a variety of factors, including interest rate fluctuations, changes in global or local economic conditions, bank liquidity, the availability of financing, changes in supply and demand fundamentals and by regulatory or governmentally imposed factors such as a zoning change, an increase in property taxes, the imposition of height or density limitations, the requirement that buildings be accessible to disabled persons, the requirement for environmental impact studies, the potential costs of remediation of environmental contamination or damage and the imposition of special fines to reduce traffic congestion or to provide for housing. Income from income-producing real estate may be adversely affected by general economic conditions, local conditions such as oversupply or reduction in demand for space in the area, competition from other available properties, and the owner provision of adequate maintenance and coverage by adequate insurance. Furthermore, certain investments in mortgages, real estate or non-publicly traded securities and private debt instruments have a limited number of potential purchasers and sellers. This factor may have the effect of limiting the availability of these investments for purchase and may also limit the ability to sell such investments at their fair market value in response to changes in the economy or the financial markets.