Twelve months of interest paid on time, then the extension fee hit and the math changed

Eighteen percent concentration in one loan is the number I'd have walked out over before the extension conversation even started.

The ratio disappearing from the supplement the same quarter as the extension is the part that would make me walk. That is not an oversight, that is a decision.

What was the fund manager's stated reason for switching from cash-collected to accrued recognition on the extension fee, and did that reason show up in writing anywhere in the reporting documents?

The accrued-not-collected mechanics here are well described, so I want to focus on the promote calculation, because that is the part with the sharpest conflict of interest and it tends to get the least attention from allocators reviewing supplements.

When a manager calculates its promote against accrued income that has not yet been received in cash, the manager's economic incentive and the LP's economic reality are running on different tracks. The manager booked the 1.5 percent extension fee as income the quarter it was added to the balance, the promote accrued against it, and the LP received a distribution that was partially return of capital, but the manager's carried interest calculation did not adjust for that distinction. Most fund agreements allow this if the PPM defines income to include accrued amounts, and many do, which makes it legal and still misaligned. The thing to read in the fund documents is not just whether the promote is based on realized or unrealized income, but whether the clawback provision has teeth: specifically, whether it requires the manager to return promote dollars if a loan that accrued fees ultimately settles at a discount, or if the extension fee gets waived in a workout. A clawback that only triggers on total fund loss is nearly useless on a loan-by-loan basis when the rest of the book is clean. On the cash-versus-accrued ratio, I would ask the manager directly what the ratio was in the supplement before it disappeared and why the reporting line was removed, because that answer tells you more about manager transparency than any quarterly letter will. What does the fund agreement actually say about the income base used for the promote calculation?