John Hancock Comvest Private Income Fund Annual Report: A Year in Review

I’ve put together this guide to help you understand the latest annual report for the John Hancock Comvest Private Income Fund. My goal is to explain what’s happening with the fund in plain English so you can decide if it fits your investment goals.

1. What does the fund do?

The fund acts as a private lender for middle-market businesses. These companies typically earn between $15 million and $50 million in annual profit. Instead of using a traditional bank, these businesses borrow directly from the fund.

The fund earns money primarily through interest on these loans. As of the 2025 fiscal year, 92% of the portfolio consists of "First Lien Senior Secured" loans. This means if a borrower defaults, the fund has the first claim on their assets, which helps protect your investment.

2. Financial performance

As of December 31, 2025, the fund held $485 million in net assets. Since starting, the fund has invested in 45 different companies. Its main goal is to provide you with steady income, targeting an annual payout of 9.5% to 10.5%. The fund focuses on defensive sectors, with 28% of capital in healthcare services and 22% in software. Management believes these areas hold up well during economic ups and downs.

3. Major wins and challenges

The fund’s income moves with the Secured Overnight Financing Rate (SOFR). Most loans feature floating interest rates of SOFR plus 5.5% to 6.5%. With SOFR near 4.5% to 5.0% in 2025, the fund earned 10.0% to 11.5% on its loans.

However, the fund’s own borrowing costs rose. As interest rates stayed high, the cost to borrow money for the fund’s operations increased by 12%. This put slight pressure on the fund’s profit margins.

4. Financial health: Cash, debt, and liquidity

The fund has a $250 million credit line, with $142 million used as of year-end 2025. This debt costs the fund SOFR plus 2.75%. To manage cash efficiently, the fund uses "Delayed Draw Term Loans." This allows the fund to commit money to borrowers but only pay interest when the borrower actually takes the cash. To keep its tax status, the fund must pay out 90% of its profit to shareholders. This requires the fund to regularly sell new shares to raise money for new loans.

5. Key risks

• Limited History: The fund is less than three years old and has not yet been tested by a major economic recession.
• Private Company Risk: The fund invests in private companies that do not share the same level of public financial disclosure as larger, publicly traded corporations.
• No Easy Exit: Shares aren't traded on a public exchange. You can only sell shares through a "tender offer," where the fund buys back a limited amount of shares, usually 5% per quarter.
• Leverage: The fund uses debt to boost returns. While this can increase gains, it also carries the risk of shrinking the value of your shares if borrowers default.

6. Future outlook

The fund is growing, aiming for $750 million in assets by the end of 2026. Management is focused on finding new loans while keeping credit quality high by targeting companies with low debt levels. The fund will remain a private, non-traded investment.

Is this fund right for you? Before investing, consider that this is a long-term commitment rather than a liquid asset you can sell at any time. If you are looking for steady income and are comfortable with the risks of private lending and limited liquidity, this fund may align with your portfolio. If you need quick access to your cash, you may want to look at more liquid, publicly traded alternatives.