Stone Point Credit Income Fund - Select

Stone Point Credit Income Fund - Select Annual Report - How They Did This Year

1. What does this company do and how did they perform this year?

Alright, let's start with the big picture. Stone Point Credit Income Fund - Select officially started on June 13, 2025. It's a new investment company, managed by an outside firm. It has a fixed amount of capital. Think of it like a new car that just rolled off the assembly line – it's ready to go, but it hasn't actually hit the road yet.

Here's the key for this year: As of December 31, 2025, the fund hadn't started investing yet. So, there's no performance data to review. It was still setting up. To show how new it is, by March 19, 2026, the fund only had 40 shares issued. These were likely held by early investors or the management team to get it going. This shows it's still very new.

It will mainly invest in different types of loans. This includes senior secured loans, which are backed by assets. This gives them a higher claim if the borrower struggles. These loans are generally lower-risk. They are backed by collateral and paid back first. The goal is to provide regular income. It will also consider unsecured loans, which are riskier but might pay more. It will also look at mezzanine loans. These are a mix of debt and ownership, often paid back after other loans. Plus, some ownership-like investments, such as preferred stock, could grow in value. The fund plans to get many of these investments from private, medium-sized companies. These companies are not traded publicly. They usually have $50 million to $1 billion in yearly sales. The fund will deal directly with them. This focus on private credit aims to get higher returns than public markets offer. But it's harder to sell these investments quickly, and there's less public information.

The fund will operate as a Business Development Company (BDC). This is a special type of investment firm. BDCs invest in small and mid-sized businesses. They often lend them money or take ownership stakes. BDCs must invest at least 70% of their money in specific types of companies. They help these businesses get funding. It also plans to be a Regulated Investment Company (RIC) for tax reasons. This means it usually avoids corporate income tax. It must pay out at least 90% of its taxable earnings to shareholders each year. This structure lets income and gains go directly to investors. This avoids being taxed twice. It's also an Emerging Growth Company (EGC) under the JOBS Act. This means it has fewer reporting rules for up to five years. Or until it reaches certain revenue limits, like $1.235 billion in sales. This lowers its paperwork in the early years.

Who's behind it? Stone Point Credit Income Adviser LLC manages the fund. This firm is registered with the U.S. financial watchdog (SEC). It's part of the much larger Stone Point Capital LLC. Stone Point Capital is a major investment firm. It manages over $80 billion in private equity and credit funds. Their credit-focused arm, Stone Point Credit, alone manages over $13.5 billion in assets. So, this fund is new, but it's backed by an experienced and strong financial firm. They have a long history in private markets. For added transparency, KPMG LLP is the fund's independent auditor.

2. Financial performance - revenue, profit, growth metrics

The fund hadn't started investing by December 31, 2025. So, there are no financial results (like sales, profit, or growth) to report for this time. The fund reported $0 in investment income. It also had $0 in profit from operations for the period. It's like asking how much money a new restaurant made before it even opened its doors – the answer is zero!

3. Major wins and challenges this year

The fund was still in its setup phase. So, there are no "major wins" or "challenges" for its investments. The main activity was getting all the necessary approvals and setting things up. This included getting regulatory OKs and building its operational structure to start investing.

4. Financial health - cash, debt, liquidity

The fund may use leverage (borrow money) to boost potential profits. As a BDC, the fund can generally borrow up to twice its own money (a 2:1 ratio). This can make both profits and losses bigger.

About liquidity (how easily you can sell your investment): the fund's shares are hard to sell quickly. This means no public market exists to easily trade shares. They don't expect one to develop. Investors should be ready to hold their investment for a long time. Share buybacks (when the fund buys shares back) will be very limited. The Board of Trustees decides this. They are often for less than their true value (NAV). This makes it even harder for investors to sell. This is a crucial point for potential investors – don't expect to be able to sell your shares quickly if you need cash.

5. Key risks that could hurt the stock price

This is a really important section, especially for a new fund. Here are some of the main risks highlighted:

• No Track Record: The fund is brand new. So, there are no past results to show if it can meet its goals.
• Reliance on the Adviser: The fund's success depends heavily on its manager's experience, judgment, and decisions. That manager is Stone Point Credit Income Adviser LLC. Conflicts of interest could arise. The Adviser also manages other similar funds. Good investment chances might go to other funds first.
• Illiquid Investment: As mentioned, you won't be able to easily sell your shares. Your money could be tied up for a long time. There's no guarantee you can sell them later.
• Shareholder Defaults: What if other investors who promised money don't pay up? The fund might have less money to invest. This could hurt its ability to diversify or meet its goals.
• Competitive Market: Finding good investments is tough. The fund operates in a very competitive market. It competes with other BDCs, private equity funds, hedge funds, and traditional lenders for good deals.
• Economic Swings: The fund targets medium-sized companies. These can have ups and downs. They are often hit harder by economic slumps than bigger, public companies. This could greatly affect its investments.
• Interest Rate and Inflation Impact: Rising interest rates make borrowing more expensive for the companies the fund invests in. This could cut their profits and make it harder to pay back loans. Inflation can also eat into profits. The fund plans to borrow money itself. So, rising rates could also increase its own borrowing costs. This would reduce its own profit.
• Cybersecurity Risks: Cybersecurity is a risk for any company. The fund has ways to find and manage these threats. Its Adviser, Stone Point Credit Income Adviser LLC, has put a full cybersecurity program in place. This covers its operations, checking vendors, training staff, and handling incidents. This aims to reduce risks like data breaches, service problems, and money losses. However, no system is foolproof.
• Regulatory Changes: New laws or rules could appear. These include changes to BDC rules, tax laws, or financial oversight. These could hurt the fund's operations, investment choices, or profits.
• BDC/RIC Status: If the fund loses its BDC or RIC tax status, it could face more rules or higher taxes. Losing BDC status would mean the fund pays corporate income tax on all its earnings. This would greatly cut shareholder returns. Not qualifying as a RIC would also lead to corporate taxes.
• Non-Diversified Portfolio: BDCs are allowed to not diversify. This means the fund isn't limited in how much it invests in one company. If a large investment struggles, it could have a much bigger impact on the fund's overall results.
• Private Company Risks: Investing in private, medium-sized companies has higher risks. They often have less public information, fewer managers, are harder to sell, and react more to economic changes. Valuing these investments can also be harder and less clear.
• Potential for Dilution: The fund can sell more shares later (it can sell an unlimited number). If it sells them for less than their true value (NAV) per share, your ownership percentage could shrink. The value per share (NAV) could also go down.

6. Competitive positioning

While the fund itself is new, its competitive edge comes from its connection to Stone Point Capital. Stone Point Capital manages over $80 billion. It has a long history of successful private equity and credit investing. The Adviser has deep industry knowledge, many exclusive investment opportunities, and strong research skills. This could give the fund a big advantage in finding and checking good investment opportunities. Especially in financial services, business services, software/tech, and healthcare.

7. Leadership or strategy changes

Since the fund is just starting, there haven't been any leadership or strategy changes to report. The initial strategy focuses on loans, mainly senior secured loans, to private, medium-sized companies. This strategy remains consistent.

8. Future outlook

The future for Stone Point Credit Income Fund - Select is all about starting to invest. The fund is set up and ready to put money into its target investments. The immediate focus is raising money from investors. Then, it will use Stone Point Credit's expertise. The goal is to build a varied portfolio of loans and other credit investments. This will match its investment goals.

9. Market trends or regulatory changes affecting them

The fund highlights several market trends and regulatory aspects that could affect its future:

• Rising Interest and Inflation Rates: These are big concerns. They can increase borrowing costs for the companies the fund invests in. Also, for the fund itself if it borrows money. These trends are key for a credit fund. They directly affect how much its portfolio companies pay to borrow. They also affect the fund's own borrowing. This could hurt its profit and the value of its investments.
• Risk of Recession: An economic downturn would hurt the companies the fund invests in. This could mean more companies can't pay back loans. There would be less demand for credit and lower investment values.
• Legal, Tax, and Regulatory Changes: The financial industry is always subject to potential shifts in rules. Changes in tax laws, BDC rules, or financial oversight could affect the fund's operating costs, investment choices, or its tax status.
• ERISA Restrictions: The fund is under rules from ERISA. These can affect how some investors (like pension plans) can invest. This might limit who can invest.

In a nutshell: Stone Point Credit Income Fund - Select is a brand-new investment fund, managed by an outside firm. It started on June 13, 2025. It's backed by the experienced and strong Stone Point Capital LLC. By the end of 2025, it was still setting up. It hadn't started investing, with only 40 shares issued. So, there's no financial performance to review yet. Key things to know are its investment strategy (mainly senior secured loans to private, medium-sized companies). Also, its structure as a BDC and RIC (to pass income to investors and avoid corporate tax). Plus, its status as an Emerging Growth Company (meaning less reporting). Investors must know the big risks. Its shares are hard to sell (requiring a long-term hold). There's also the chance of dilution from unlimited shares. And general risks of private credit, like relying on the Adviser and economic ups and downs. The fund does have cybersecurity measures in place, and KPMG is their auditor.