CNL Strategic Capital 10-Q: Buybacks 65% of Cap, NAV $40.47

The NAV by class, quarter by quarter

CNL Strategic Capital is a Delaware LLC managed by CNL Strategic Capital Management and sub-managed by Levine Leichtman Strategic Capital. It sells and buys back shares at a monthly NAV in six classes. The 10-Q's financial highlights and the October 26, 2026 Form 8-K (accession 0001999371-26-023523) give the figures below. Our September report on the failed liquidity vote covers how the fund got here; this page is about what the quarter's own filing adds.

The change column is our arithmetic. The Class I price a holder gets from the repurchase program is the NAV of the month before the repurchase date, so the September 30 repurchase was priced off the August 31 figures in the third column: the 10-Q's average of $40.36 across classes is that mix. Total net assets went from $1,479.9 million at June 30 to $1,530.3 million, a rise of $50.4 million: $48.6 million from operations, minus $11.4 million of distributions declared, plus $13.2 million from capital transactions (offering sales and reinvestment, less repurchases).

Repurchases: 65% of the cap, down from June

The program allows repurchases of up to 2.5% of aggregate NAV per calendar quarter, measured at the end of the month before the repurchase date, and up to 10% a year. A request must reach the repurchase agent at least 60 days before the repurchase date, which is generally the last business day of the quarter, and must cover at least 5% of the holder's shares. The 10-Q's repurchase table shows nothing bought in July and August and 618,000 shares at $40.36 on September 30, with $38,144 thousand of capacity before and $13,210 thousand after.

The share-of-cap column and the first-quarter figure are our arithmetic. The company writes that it has "had no unfulfilled share repurchase requests" under the program since inception and that its board approved the repurchases requested. Requests in the first nine months of 2026 were $86.4 million, against $46.2 million a year earlier.

Two readings of the quarter are possible and the 10-Q supports neither. Requests fell 27% from the second to the third quarter (our arithmetic), which could mean the spring peak, when the failed liquidity vote was in the news, has passed. Or holders who want out may be waiting for an enhanced program that the board has said it will not offer. The filing does not say which. What it does show is that the program had room: $13.2 million of cap was left on September 30.

The annual limit is looser still. Taking the four quarter-end net assets from December 31, 2025 to September 30, 2026 ($1,418.4 million, $1,451.1 million, $1,479.9 million and $1,530.3 million), their average is $1,469.9 million and 10% of it is about $147.0 million. The four repurchases from December 2025 to September 2026 add to about $114.5 million, roughly 78% of that figure (our arithmetic, reading "per year" as the trailing four quarters the program describes).

One rule in the 10-Q matters if demand climbs. If, during any two-year period, the fund does not fully satisfy 100% of properly submitted requests in at least one quarter, "we will not make any new acquisitions of businesses" and will use available investable assets to satisfy repurchase requests until the backlog is cleared, and the managers' total return incentive fee is deferred while unfulfilled requests remain. With every request met so far, that rule is not in play.

New money against money out

The fund has been selling more shares than it buys back, but the gap moves.

Offering sales are the "issuance of common shares through the Public Offerings" line of the 10-Q's statement of changes in net assets; the last column is our arithmetic. Between October 1 and November 4, 2026 the fund received $11.1 million of net proceeds from the offering and the reinvestment plan, per the 10-Q's subsequent-events note. The $24.9 million for the September 30 repurchase was a liability at quarter-end and was paid in October.

The distribution: covered in cash for nine months, not in the third quarter

Class I, A, FA and S shares receive $0.104167 a month, Class T $0.083333 and Class D $0.093750. That has not changed since 2025. What the 10-Q's quarterly tables show is how much of it net investment income covered, by quarter:

Net investment income for the first quarter is the six-month figure ($12.5 million) less the second quarter ($5.0 million); the two coverage columns are our arithmetic. The nine-month row matches the company's own tables: 103.2% of cash distributions and 48.9% of declared distributions covered by income, with $17.4 million, 51.1%, "in excess of net investment income," which the 10-Q says "consists of distributions made from offering proceeds." The same share was 49.9% in the first nine months of 2025.

The decline in the third quarter is not a collapse in the portfolio's cash flow. Total investment income was $23.2 million against $25.5 million a year earlier, with dividend income from portfolio companies at $9.5 million against $11.9 million. The larger movement is on the expense side: the total return incentive fee accrued was $11.0 million in the quarter against $8.4 million a year earlier, and $24.1 million for nine months. Adding the quarter's incentive fee back to net investment income gives $15.2 million, 133% of declared distributions (our arithmetic). The fee is charged on total return, which includes unrealized gains: under the 10-Q's description no fee is payable in a year in which a class's total return does not exceed 7%, a catch-up applies up to 8.75% for non-founder shares, and 20% of total return applies above that. The accrued $24.1 million is due to the managers no later than 90 days after year-end, which is March 31, 2027 (our arithmetic). For Class I, the nine-month total return was 9.05% before the fee and 7.27% after it.

A second fee line is new this quarter. Affiliates of the Sub-Manager may now charge monitoring fees to the fund's minority equity positions, and the Sub-Manager's share of the base management fee is reduced by the amount attributable to the fund. The 10-Q shows $594 thousand credited in the third quarter. The amended management agreements were signed on August 6, 2026 (10-Q for the quarter ended June 30, Item 5).

What the NAV rests on

Fair value is $466.0 million above cost, 44% of cost (our arithmetic), and almost all of it is in common equity. Every investment is Level 3. The board determines fair value "in good faith" with input from the managers, its audit committee and an independent valuation firm; the unobservable inputs in the 10-Q are a discount rate of 10.8% to 18.8% (weighted 14.3%) and an EBITDA multiple of 5.0x to 19.0x (weighted 12.4x). At December 31, 2025 the weighted figures were 13.7% and 12.8x. For the nine months the 10-Q attributes gross unrealized appreciation of $99.9 million on 16 companies to EBITDA growth, add-on acquisitions and multiple expansion in some of them, and depreciation of $8.5 million on two companies. The company held 18 portfolio companies at September 30, none of its debt investments was on non-accrual, and all were in compliance with their debt covenants.

The debt book has shifted: the weighted average rate on debt investments was 12.5% at September 30 against 15.6% at December 31, 2025, and the remaining term 3.3 years against 4.1. Two secured notes mature in 2027: $37.0 million (ATA, April 1, 2027) and $24.4 million (HSH, July 16, 2027), at cost, $61.4 million together (our arithmetic).

On October 2, 2026 the fund sold its roughly 7.8% indirect equity interest in Resolution Economics for about $29.2 million net and was repaid about $2.8 million of notes in the company (Form 8-K filed October 7, 2026, accession 0001999371-26-022381). The buyer was an entity owned by an affiliate of the Sub-Manager, together with the company's management and other owners. The 10-Q repeats the facts (Note 13) and, in its schedule of investments, carries the common equity in Resolution Economics at a fair value of $29.8 million at September 30 (cost $7.6 million; December 31, 2025: $23.2 million). The valuation table lists $29.8 million of common equity valued by the "Transaction Precedent" method, a transaction price. Net proceeds of $29.2 million, stated after transaction-related fees, are about $0.6 million, 2%, below that carrying value (our arithmetic); the 10-Q does not explain the gap. That leaves 17 portfolio companies after the sale, if none was added in October (our arithmetic).

Cash, the credit line and the next 90 days

Cash was $75.2 million at September 30 (June 30: $80.4 million; December 31, 2025: $84.8 million). Against it the balance sheet carried a $24.9 million payable for shares repurchased, paid in October, and $26.6 million due to related parties, $24.1 million of it the incentive-fee accrual. Together those two items are about 69% of the cash (our arithmetic); the $29.2 million from the Resolution Economics sale arrived on October 2. Management wrote in the 10-Q: "We expect we will have sufficient cash from current sources to meet our liquidity needs for the next twelve months."

The fund's one bank facility is a $50 million revolving line with Valley National Bank at 1-Month Term SOFR plus 2.75%. The 10-Q says the fund "had not borrowed any amounts" under it and nothing was outstanding at September 30. Since the May 29, 2026 amendment, which followed the failed vote, the line may be used to finance share repurchases up to 90% of trailing six-month net new investment proceeds. The latest maturity, set in August, is November 15, 2026, eight days after the date of this page. The 10-Q, filed November 5, reports no further extension. The maturity has been moved four times since February 2025 (to February 2026, May 2026, August 2026 and November 2026).

What the 10-Q does not say about liquidity

Our September report covers the "enhanced liquidity plan" that would have offered up to 25% of the shares for repurchase. It failed at the special meeting concluded on May 27, 2026: 20,122,701 shares voted for, 55% of the 36,307,994 outstanding at the January 27 record date (our arithmetic), and two-thirds of outstanding shares was required (Form 8-K, accession 0001999371-26-011900). The third-quarter 10-Q does not mention the vote, the November 1, 2027 date by which the prospectus said the board intends to contemplate a liquidity event, or a perpetual-life decision (we searched the filing text for each). Its only references to a liquidity event are mechanical: the board "cannot terminate the Share Repurchase Program absent a liquidity event or where otherwise required by law", and the program ends if the shares list or a secondary market develops. The 10-Q describes the program as one where the board may "amend or suspend" it on 30 days' notice for reasons including an undue burden on liquidity.

The one governance event of the quarter was the annual meeting on October 28, 2026 (Form 8-K, Item 5.07, accession 0001999371-26-023789). Two director nominees were re-elected for terms to 2029 and the auditor, Ernst & Young LLP, was ratified. On the first nominee 11,330,583 shares voted for, 136,068 against and 580,923 withheld, with 6,692,011 broker non-votes. A quorum needed a majority of the shares entitled to vote. The record-date count in the proxy, 37,259,785 shares (the sentence in the proxy transposes it with the 15,771 holders of record), makes the quorum 18,629,893 shares; 18,739,585 were present. The margin was 109,692 shares, 0.3% of the total (our arithmetic). The company's shareholders also face the tax side of holding the shares: the 10-Q says "Our shareholders will be taxed on their allocable share of income, even if their distributions are reinvested", which is partnership treatment; see K-1 versus 1099-DIV.

Where this 10-Q changes the September reading

• The September 30, 2026 repurchase, "not yet reported" in September, was $24.9 million, 65% of the cap, not a climb toward it.
• The 2.5% cap is not the binding constraint right now: $13.2 million was unused in the third quarter.
• Cash distributions were covered by income over nine months, but the cover fell each quarter.
• The Resolution Economics sale to an affiliate of the Sub-Manager: the October 8-K gave $29.2 million of net proceeds without a carrying value; the 10-Q carries the stake at $29.8 million.
• The credit line is undrawn, and the November 15, 2026 maturity is eight days away.
• Shares outstanding at the August 3, 2026 proxy record date were 37,259,785, against 36,307,994 at the January 27, 2026 record date, a rise of 2.6% (our arithmetic).

For the wider family of CNL programs, see what happened to CNL Financial's REITs. For how other evergreen vehicles handle repurchase limits, see evergreen funds' redemptions compared, and for a non-traded BDC whose quarter went the other way, Blue Owl Capital Corporation II.

What a reader can do with this

• Check the repurchase price base. A December 31, 2026 repurchase is priced at the November 30 NAV, not the September 30 figures above. The October 31 NAV Form 8-K had not been filed as of November 7, 2026; the September figures came 26 days after month-end.
• Know the next deadlines. Requests for December 31, 2026 were due about November 1. For March 31, 2027 the 60-day rule points to about January 30, 2027 (our arithmetic); confirm the date with the repurchase agent.
• Size the cap against the NAV. At the September 30 total of $1,530.3 million, 2.5% is $38.3 million (illustration only; the real base is the November 30 NAV).
• Read the distribution as part income, part capital. Over nine months 49% of what was declared was covered by net investment income and 51% came from offering proceeds, which is the company's own split.
• Watch November 15, 2026. The line has been extended four times since February 2025; it is the facility the board redirected toward repurchases in May.
• Mind the concentration. If this single fund is a large part of your savings, the questions are how much you could sell in a quarter, what a sale costs in tax, and what else would hold the money.

FAQ

All figures are from SEC EDGAR filings of CNL Strategic Capital, LLC (CIK 1684682) read on November 7, 2026: the Forms 10-Q for the quarters ended September 30, 2026 (accession 0001684682-26-000024, filed November 5, 2026) and June 30, 2026 (0001684682-26-000019); the Forms 8-K of October 7 (0001999371-26-022381), October 26 (0001999371-26-023523) and October 28, 2026 (0001999371-26-023789); and the definitive proxy statement of August 6, 2026 (0001999371-26-017228). Shares of cap used, quarterly income coverage, new money per dollar repurchased, the first-quarter net investment income, the annual-limit estimate, the quorum margin and the date arithmetic are ours. The last filing on this CIK as of November 7, 2026 was the Form 10-Q of November 5, 2026. This is analysis of public documents, not investment, legal or tax advice.