AFA Asset Based Lending Fund: Mount Logan Vote, Fees, Tender

What is on the table, in dates

The sale is a business deal between two advisers. The fund does not pay for it: the proxy says the fund “will not bear any portion of the costs associated with the Transaction or any costs and expenses associated with this proxy.” Under the 1940 Act a change of control of the adviser ends the advisory contract automatically, so shareholders have to approve a new one.

One inconsistency to watch: the proxy says the transaction is expected to close “on or about [ ]” and its cover letter reads “[ ], 2026,” while Mount Logan's press release of October 20, 2026 says it “is expected to close in Q1 2027.” The definitive proxy (Form DEF 14A) should settle it.

What you vote on

For the advisory agreement, an abstention counts toward quorum but is not a vote in favor, so with the “more than 50% of all outstanding shares” route it works like a no (our reading of the standard). A related BC Partners vote on this site needed an adjournment before it carried; see the Alternative Credit Income Fund merger.

The four nominees are all trustees of Opportunistic Credit Interval Fund, the one other registered fund Mount Logan manages, and all four served on the board of Alternative Credit Income Fund until September 2026. Three would be independent trustees and also sit on the boards of two BC Partners-advised BDCs. The fourth would be an “interested” trustee because of his positions at Mount Logan Capital and BC Partners, and the proxy says he would be appointed chairperson. The new board is expected to have one standing committee, the audit committee, which would also review trustee nominees. The current board says the new slate would allow “the sharing of expenses among the Fund and the other registered investment companies managed by Mount Logan and its affiliates.”

What the new agreement changes

The incentive fee is the part to read twice. A 10% incentive fee reaches the Year 3 cap of 1.00% of net assets only if income reaches about 10% of net assets (1.00% divided by 10%, our arithmetic), so the cap is a ceiling, not a forecast. What the fee will actually be depends on the catch-up percentage, which the preliminary proxy does not state. For scale, net investment income in the year ended April 30, 2026 was 5.35% of average net assets for the Founder Class and 5.15% for the Institutional Class, below the 6.0% hurdle (financial highlights). Replacing underlying-fund fees with direct loans could lift income toward or past the hurdle (our reading).

The cost per $10,000, and the part the proxy table leaves out

This is the proxy's own table.

Year 1 costs the same as today because the incentive fee is capped at 0.10% while the underlying-fund fees stay at 1.50%. The saving arrives only if the portfolio changes: the proxy says the new adviser “will allocate future investments primarily to loans and credit instruments originated directly by Mount Logan,” and acquired-fund fees are an estimate. The table also leaves out three lines that are in the fund's August 27, 2026 prospectus. Putting them back (our arithmetic, Institutional Class, as a percentage of net assets, with every line the proxy does not change held at its prospectus level and the incentive fee at its cap):

The prospectus applies a 0.10% waiver to reach 3.93% for the Institutional Class (3.73% for the Founder Class, which pays no service fee); what the waiver would be under the new expense limit is not in the proxy. Two readings follow. If everything goes to plan, a holder pays about the same in year 1 and roughly 0.6 points less by year 3. If the portfolio is not repositioned, the 1.50% of underlying-fund fees stays while an incentive fee accrues: with the Year 3 cap, the management fee, incentive fee and underlying-fund fees add up to 1.00% + 1.00% + 1.50% = 3.50%, against 2.60% today (our arithmetic). The one change on price that is certain is that the base management fee falls 0.10 point.

What the fund owns, and how fast it can change

The proxy calls the fund a “multi-manager fund strategy” with assets “primarily allocated to underlying funds managed by third-party managers.” The April 30, 2026 annual report shows what that means: 97.82% of net assets, $240.0 million, sits in 23 private funds, valued at the net asset value each one reports. Another 8.28% ($20.3 million) is direct loans valued by the adviser with unobservable inputs. The total is above 100% of net assets because the fund borrows: $24.8 million on April 30, 2026, and $33.8 million on July 31, 2026, which is 14.5% of net assets (our arithmetic).

For a reader of this site, the real estate share is worth isolating. Three of the 23 funds lend on real estate (1543 Oceania Credit Opportunities Fund at 6.47% of net assets, Alcova Capital Yield Premium Fund at 4.28%, Mavik Real Estate Special Opportunities Fund at 2.54%) and four direct loans are real estate bridge or opportunistic loans (5.47% together). That is about 18.8% of net assets in real estate lending (our arithmetic). Two litigation-finance funds are another 15.5%. One direct loan, an art-secured loan of $825,707 (0.34% of net assets), matured on October 5, 2025 and is flagged “non-performing as of period end.”

Turning this into a book of loans originated by Mount Logan is a multi-year job, and the annual report shows why. The table groups the 23 funds by the redemption terms the fund discloses.

Lock-up periods listed run from 12 to 36 months. A footnote says redemption provisions for several funds “limit the amount redeemable on a given redemption date, and could require multiple periods to fully redeem,” and that once a redemption notice is given the fund “will become a liquidating investor.” So the fee saving the proxy estimates over three years depends on moving about $240 million out of funds that can restrict withdrawals, while the fund also meets its own quarterly offers. The proxy does not say how fast that will happen.

The exit: nine offers and one open

An interval fund must offer to repurchase between 5% and 25% of its shares every quarter. This fund offers 5% and may repurchase up to 2% more. The offers it has completed:

Repurchases jumped from 1.57% to 6.80% of the fund in the offer closing November 6, 2025 and stayed near 7%, which is the 5% offer plus the 2% the fund may add. In the offer closing May 8, 2026 the fund reported: “Shareholders actually tendered 2,231,996 total shares for repurchase.” They were accepted pro rata, and about 84.80% were taken, so a holder who tendered 1,000 shares had about 848 repurchased (our arithmetic) and the rest returned. The result of the August 7, 2026 offer is not yet filed; it should appear in the semi-annual report for October 31, 2026, due in early 2027. In the year to April 30, 2026 the fund paid $41.4 million in cash for repurchased shares, 16.9% of its April 30, 2025 net assets (our arithmetic), and sold $38.1 million of new shares.

The offer now open matters more than the vote. The notice dated October 7, 2026 runs to November 6, 2026 and prices at the NAV of that day; it gave the NAV as $8.93 for the Institutional Class and $8.95 for the Founder Class on September 30, 2026. The meetings come later, and the closing later still. If the fund is again oversubscribed, the offer would be prorated and tendered shares that are not accepted are returned. A tender can be changed or withdrawn before the deadline. The fund currently charges no processing fee for a request, though a broker or plan trustee holding the shares might. For other quarterly deadlines in the same window see our Q4 2026 tender deadline list; for how the rule works see what an interval fund is.

From April 30 to September 30, 2026 the NAV fell 1.5% in both classes, and net assets fell 5.1% from April 30 to July 31, 2026 (our arithmetic). The fund's reported total return for the year ended April 30, 2026 was 8.62% (Institutional) and 8.85% (Founder).

Where the distributions come from

The shareholder letter says the Institutional Class returned 8.62%. The statements show how the cash was paid.

In the year to April 30, 2026 total distributions were 1.9 times net investment income (our arithmetic). Return of capital is not a loss in itself, and for a fund that holds other funds it can start in the underlying funds, which the annual report says it estimates (“the Fund uses return of capital and income estimates to allocate the distribution received”). But it is part of why NAV per share drifted from $9.24 to $9.09 (Founder Class) in a year when the fund reported a gain, and it lowers your cost basis if you hold. Our page on return of capital and REIT distributions shows the basis math, and the prospectus warns that the fund may need to ask for more time to issue Forms 1099-DIV beyond January 31, as our 1099-DIV timing page explains.

The same buyer, two months earlier

Mount Logan Management is not new to this kind of vote. On August 24, 2026 the Yieldstreet fund sold to ordinary investors was absorbed by Mount Logan's Opportunistic Credit Interval Fund (SOFIX); per our page on that deal, total annual expenses in the proxy went from 3.53% to 6.17%, and the departing fund's last exit filled 11.8% of requests. The record is in our Yieldstreet Prism Fund page. The AFA proposal is different on price: year 1 is flat at $260 per $10,000 in the proxy's table, and the incentive fee waiver is written into the proposal. It is similar on structure: a larger group of affiliated funds, a board seated from that group, and a promise of scale. Mount Logan's press release says the combined interval fund assets of Mount Logan would total about $460 million with this fund's roughly $230 million.

For a different kind of vote at an interval fund, where one block of shares decided the outcome, see the City National Rochdale proxy. The AFA proxy lists 5% holders in Exhibit B, which is blank in the preliminary version.

What is still blank, and what to watch

• The record date. Only shareholders of record on that date vote, “even if that person subsequently redeems those shares.” The share counts by class are blank too.
• The meeting dates. Each is “[ ], 2026.” The press release timing points to the first quarter of 2027.
• Exhibit B, the list of 5% holders. Blank.
• Fee waivers. The amount AFA waived in the year to April 30, 2026 is blank in the proxy; the annual report says $340,320.
• The fund complex. The proxy leaves the number of funds in the BC Partners Funds Complex blank.
• The August 7, 2026 offer result. Not filed. The offer closing November 6, 2026 will be reported later.

What a reader can do with this

This is analysis of public documents, not investment, legal or tax advice.

• Check who votes your shares. Your broker or adviser will receive the voting materials for the record date; if you hold through an adviser's platform, ask who votes them.
• Treat November 6, 2026 as the real decision point. The tender closes before the proxy is final. Whether to tender, and how much, depends on your cash needs and tax position, and an oversubscribed offer fills only part of a request.
• Read the final proxy for four numbers: the record date, the catch-up percentage on the incentive fee, the expense-limit waiver after closing and the list of 5% holders.
• Know what the new name leaves out. The fund would become Mount Logan Asset Based Lending Fund; the proxy says objectives will not change, but the way the fund invests will, from other managers' funds to loans Mount Logan originates.
• Ask about your tax basis before you reinvest. Return of capital reduces basis, and a 1099-DIV may arrive late.
• Look at the whole position. We read the filings for holders in a similar position as a Forensic Filing Read, in 72 hours.

FAQ

All figures come from documents read on October 23, 2026: the preliminary proxy statement on Form PRE 14A filed October 22, 2026 (accession 0001999371-26-023315); the annual reports on Form N-CSR for April 30, 2026 (0001999371-26-014454) and April 30, 2025 (0001999371-25-008844); the prospectus supplement on Form 486BPOS of August 27, 2026 (0001999371-26-018980); the repurchase notices on Form N-23C3A of January 13, April 7, July 8 and October 7, 2026 (0001999371-26-000747, -007775, -014518, -022293); the monthly portfolio report on Form NPORT-P for July 31, 2026 (0001193125-26-396284); and Mount Logan Capital Inc.'s press release of October 20, 2026. The preliminary proxy is not final; blanks and terms may change in the definitive proxy statement.