hard · Private Credit & Debt
A direct lending fund, Meridian Credit Partners, manages a portfolio with $1,000,000,000 in gross assets, financed with $500,000,000 of equity and $500,000,000 of fund-level debt at a cost of SOFR + 200 bps. The gross asset yield is 11.5%, and SOFR is 4.5%.
If the fund charges a 1.5% management fee on gross assets and no incentive fee for this period, what is the net return on equity (ROE) before credit losses and expenses?
- 10.0%
- 15.0%
- 13.5%
- 12.0%
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