Gladstone Alternative Income Fund: Its Sponsor Owns 50.75%, No Shares Were Repurchased in Four Offers, and the Adviser Waived $2.4 Million of Expenses

What the fund is, and what it is not

Gladstone Alternative Income Fund is registered under the Investment Company Act as a closed-end fund that continuously offers shares and runs as an “interval fund.” It is not a business development company, and it is not either of the two listed Gladstone BDCs. Four points the search results blur:

• Structure. The annual report says it has adopted, under Rule 23c-3, a fundamental policy to offer to repurchase at least 5% and up to 25% of its shares at NAV on a regular schedule, and that for each quarterly offer it “currently expects to offer to repurchase 5%.” It says shares should be considered illiquid. For the general mechanics see what an interval fund is.
• Manager. Gladstone Management Corporation, which the annual report says is 100% indirectly owned by the chairman and chief executive officer; the administrator and the distributor, Gladstone Securities, LLC, are also owned, indirectly, by that officer. The prospectus puts the adviser’s assets under management at about $4.7 billion at March 31, 2026.
• Age. It began operations on December 9, 2024. The fiscal year ends March 31, not December 31.
• Relation to GLAD and GAIN. The fund invests next to the listed BDCs, not in them. Its annual report says 100% of the portfolio, leaving out Treasuries, short-term holdings and repo, is “co-investments with” either Gladstone Investment or Gladstone Capital. For those two, see Gladstone Capital (GLAD) and Gladstone Investment (GAIN). A Form 4 filed on October 26, 2026 lists GAIAX as the fund’s symbol; the filing does not say which share class it belongs to (not verified).

Four offers, no shares repurchased

The annual report says the fund “completed four repurchase offers” in the year ended March 31, 2026, each for up to 5% of its shares. The table of results shows a dash, the filing’s way of reporting nothing, for amount and for shares in each. The Rule 24f-2 notice for that year, which is a count of money in and out for fee purposes, shows $1,210,562 of shares sold and $0.00 redeemed or repurchased. The offer dates are in the repurchase notices (Form N-23c-3):

What the terms say, from the July 2026 notice and the prospectus: the offer is for up to 5% of shares outstanding at the request deadline; the price is NAV on the pricing date, which the fund expects to be the deadline day and which must fall within fourteen days of it; payment comes within seven days of pricing; there is no repurchase fee, although the prospectus shows a 1.00% contingent deferred sales charge on Class C shares sold in the first 365 days; the sale is a taxable event. If requests exceed the offer the fund may, but need not, buy up to 2% more; otherwise it buys pro rata, and an unfilled request gets no priority in the next offer.

Two notes on dates. The offer that ended June 1, 2026 and the one that ended September 1, 2026 have no published result. The fund’s next report to shareholders, the semi-annual report for September 30, 2026, is the likely place (the previous one was filed December 4, 2025; our inference). And the notices forecast the next deadline loosely: the May 2026 notice said the next deadline would be September 2, 2026 and the offer ended September 1; the May 2025 notice gave August 1, 2025, which is the date the next offer opened (its deadline was September 2). The July 2026 notice says November 30, 2026, which we treat as an expected date.

An illustration of scale, not a forecast (our arithmetic): 5% of the 2,144,254 shares outstanding at March 31, 2026 is about 107,000 shares, roughly $1.07 million at $10.01. The fund held $1.26 million in a money market fund at June 30, 2026 (N-PORT), apart from the Treasury bill it had pledged to the repo lender. Because the sponsor held 50.75%, a request from it for its whole holding would be filled only about 9.9% (0.05 / 0.5075) if the fund stayed at 5%. Nothing in the filings says it plans to tender.

Who owns the fund

The prospectus control-person section says shareholders with more than 25% “may be in control” and that The Gladstone Companies, Inc. (TGC), which also owns 100% of the economic interests of the Adviser, owned 50.75% of the outstanding Shares at June 30, 2026, so it may be deemed a control person under the 1940 Act. In the first period to March 31, 2025 the fund sold $19.8 million of Class I shares (against $100,000 of Class C and $234,000 of Class A), and in the year to March 31, 2026 only $434,402 of shares were sold for cash. The filings we read do not identify the holders of the other 49.25%, and they do not say who bought the first $19.8 million (not verified).

New money has been small. The shareholder letter says “the capital-raising environment has been slower than expected.” Of the $1,210,562 net increase from share transactions in the year to March 31, 2026, $776,160 was reinvested distributions and $434,402 was cash (our reading of the cash flow statement and the changes in net assets); net assets rose 6.0% over the year, from $20,242,973 to $21,462,373 (our arithmetic).

NAV, distributions and the waiver

Class I NAV went from $10.13 to $10.01 in the second half of the year, down 1.2% (our arithmetic). The annual report’s change in net unrealized appreciation for the full year was $58,677 against $251,184 in the first half, so the second half was a net unrealized loss of $192,507 (our arithmetic); the documents we read do not explain which holdings drove it (not verified). The fund reported a Class I total return on NAV of 7.17% for the year.

The fund intends to pay monthly distributions; for the year it declared $0.69 per Class I share, 6.9% of the $10.01 NAV (our arithmetic), classified entirely as ordinary income. What the distribution rests on is in the next table.

Without the waivers and the fee credits, income less gross expenses would have been negative $1,055,603 (our arithmetic). The expense support agreement has the adviser reimburse costs “to the extent that aggregate distributions made to its shareholders of a Class during the applicable quarter exceed Available Operating Funds,” and the fund agrees to repay it only if, among other tests, the repayment is made within three years of the payment and distributions per share at the time of payment were below the current rate. On April 28, 2026 the agreement was renewed to November 6, 2027. Read together: the 6.9% payout in this period exists because the adviser covered $2.4 million of costs that the fund could in principle be asked to repay. The management fee itself was $259,508, of which $117,169 was credited back without recourse; no incentive fee was earned. The prospectus says the agreement will terminate on November 6, 2027 “unless renewed by the mutual agreement of the Adviser and us,” and that the risk of not receiving a distribution “will be further magnified” if it is not renewed.

What it owns

The annual report schedule and the June 30 N-PORT give the same portfolio. Between March 31 and June 30, 2026 the fair value of loans ($14,369,497) and equity ($2,608,366) did not move by even a dollar (our arithmetic), which suggests no new investment and no change in marks in the quarter (our inference).

Equity adds $2,608,366 (12.15% of net assets): common stock of Dutch Gold Honey ($864,069) and preferred stock in Detroit Defense ($750,839), Nielsen-Kellerman, Smart Chemical Solutions and Flexible Technology Solutions; Viron’s common stock is carried at zero. Detroit Defense is therefore 20.6% of net assets as loan plus preferred stock. The seven loans carry annualized rates of 10.66% to 13.50% in the N-PORT, a fair-value-weighted 12.0% (our arithmetic). All the loans and equity are Level 3, valued with unobservable inputs. The schedule notes every holding as an affiliated-fund co-investment under the SEC exemptive order; the prospectus adds that the SEC granted the adviser a new co-investment order in September 2025, after one dated 2012.

The part of the balance sheet that is not loans: at March 31, 2026 the fund held a $9.0 million Treasury bill (41.9% of net assets) and $3.7 million in a money market fund, and owed $8.1 million under a reverse repurchase agreement with UMB at 4.40%, entered into on March 27 and due April 2, when the bill matured and paid it off. Total investments were 138.26% of net assets. At June 30 the N-PORT shows a $9.0 million bill maturing July 2 and an $8.1 million repo maturing July 6. During the year the fund took in $33.3 million and repaid $34.2 million of repo. The documents we read do not say why the position is repeated across quarter-ends (not verified). On the rates shown, the bill (3.46%) earned less than the repo cost (4.40%) on the March trade (our arithmetic). The $5.0 million PNC credit line, expandable to $50.0 million, matures October 2, 2028, bears SOFR plus 3.0% and had nothing drawn at March 31.

Fees and share classes

Other terms: the incentive fee is 15% of pre-incentive net investment income above a 1.75% quarterly hurdle (7.00% annualized) with a catch-up. The “Other Expenses” line is 13.66% for Class I because the prospectus estimates $2.8 million of costs on $20.8 million of average net assets. As of March 31, 2026 there were no Class U shares outstanding (the annual report lists Class I, C and A only), and the Class I minimum is $250,000, The fund’s Class I ratios for the year were 15.06% gross, 11.66% waived and 3.40% net. The share classes themselves cannot be compared on returns with so little time on record.

What changed in October 2026

A supplement dated October 26, 2026 (Form 424B3) says one independent trustee resigned effective October 22, 2026, that another independent trustee was named Lead Independent Trustee, and that the Valuation Committee has a new chairperson. The board now has seven trustees, two of them interested persons. The valuation committee matters here because all seven loans and all the equity are valued with unobservable inputs. The supplement gives no reason for the resignation.

What a holder can do with this

• Know what you own. Your class decides the fee and the minimum you could have bought at. If you hold through an adviser or broker, your request goes through that firm, which may charge a transaction fee; if you hold directly, the request form goes to the transfer agent before the New York Stock Exchange close on the deadline.
• If you want out, the next deadline is expected on November 30, 2026, and the notice should be mailed before then. The price is the NAV on the pricing date, so you will not know it when you submit. With every holding priced by the adviser’s valuation team rather than a market, check the NAV the fund publishes against the last NAV in your statement.
• What to look for next: the results of the June 1 and September 1 offers in the semi-annual report (expected early December 2026); whether the sponsor’s 50.75% moves; whether net assets grow beyond $22 million, since the 15.12% gross expense ratio is mostly a size effect; and whether the waived amount, $2.4 million in the year, falls.
• What it is not: a high-yield savings account. The filings describe loans to small private companies with floors at 13% to 13.5%, no market price for the shares and a bank-style repo to hold Treasuries. Other funds’ queues are in the private credit redemptions tracker and the size ranking is in the list of interval funds.

FAQ

All figures are from Gladstone Alternative Income Fund’s SEC filings read on EDGAR on October 27, 2026: the annual report on Form N-CSR for the year ended March 31, 2026 (accession 0001193125-26-255173), the semi-annual report on Form N-CSRS for September 30, 2025 (0001193125-25-307614), the prospectus on Form 486BPOS dated July 24, 2026 (0001193125-26-316188), the Form N-PORT for June 30, 2026 (0001049169-26-002083), six Form N-23c-3 repurchase notices (April 2025 to July 2026), the Rule 24f-2 notices of June 2025 and June 2026, and the Form 424B3 and Form 4 of October 26, 2026. Percentages of net assets, coverage ratios, sums, weighted rates and the scale illustration are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.