Variant Alternative Lending Fund (XALFX): Nov 13, 2026 Repurchase

What XALFX is, and how it differs from NICHX

Variant Alternative Lending Fund began operations on November 1, 2024 as a tender offer fund. Its shareholders were asked to adopt a fundamental policy to repurchase shares quarterly under Rule 23c-3 at a special meeting on October 31, 2025, and the annual report says that “prior to November 3, 2025, the Fund operated as a tender offer fund pursuant to Rule 13e-4.” The fund’s primary objective is “a high level of current income while seeking to prioritize capital preservation,” and it invests at least 80% of net assets in “senior secured alternative income-generating lending investments,” expecting in practice at least 90%. The annual letter calls the strategy “asset-based lending” through “primarily senior secured credit facilities.”

It is the small sibling of Variant Alternative Income Fund (NICHX), which we cover separately in our NICHX page. They are different registrants (XALFX: CIK 2022674; NICHX: CIK 1736510), but the same adviser and, in practice, much of the same loan book:

The overlap is the point. We matched the names of the 35 non-cash positions (loans, equity-like interests and warrants) in XALFX’s Form N-PORT at July 31, 2026 against NICHX’s Form N-PORT of the same date: 34 appear in both, 87.6% of XALFX’s net assets (our arithmetic; matching by name is a floor, since a renamed line would not match). Six of the larger ones:

Two things follow, both our reading. A holder of either fund is exposed to the same borrowers, so a markdown in one is a warning about the other (Kili is the example below). And the allocation between the two is the adviser’s call: the fund’s April 29, 2026 prospectus supplement adds that “the Investment Manager may have an incentive to sell a portion of an investment opportunity in a loan for financial or other reasons that are not directly advantageous to the Fund,” and the annual report notes exemptive relief granted by the SEC on January 19, 2022 that permits the funds to co-invest.

The offer that closes November 13, 2026

The notice, signed by the fund’s treasurer, says the fund is “offering to repurchase, for cash, up to five percent (5%) of its issued and outstanding shares at a price equal to the net asset value.” The terms that matter:

• Deadline: requests must be received by 4:00 p.m. Eastern Time on November 13, 2026, and can be withdrawn or changed until then.
• Price: NAV as of the close of the New York Stock Exchange on November 13, 2026, the repurchase pricing date. The notice quotes $24.23 for October 22 and warns the NAV “may be higher or lower.”
• Payment: within seven calendar days of the pricing date, that is by November 20, 2026 (our arithmetic). No repurchase fee, though a broker or retirement-plan trustee holding the shares “may charge a transaction fee.”
• Size: 5%, with an optional additional 2%: “the Fund may, but is not required to, repurchase up to an additional two percent (2%).” If it declines the extra 2%, or if more than 7% is tendered, the fund buys pro rata, and “subsequent repurchase requests will not be given priority over other shareholder requests.”

The notice does not say how many dollars 5% is. The last audited share count was 2,978,085 at April 30, 2026; dividing July 31 net assets of $68.85 million by the $24.32 NAV quoted for July 23 gives about 2.83 million. At $24.23 that puts 5% between $3.4 million and $3.6 million, and 7% between $4.8 million and $5.1 million (our arithmetic; the count at November 13 is not published).

In the two completed interval offers the pricing-date NAV was within $0.10 of the notice NAV. With an offer this small relative to the fund, the proration arithmetic is simple: if requests exceed the amount the fund buys, each seller gets about the offer size divided by total requests (our arithmetic; no request level is reported).

Eight offers since January 2025

Until October 2025 the fund was a tender offer fund, and its offers were set by the board. The table combines the financial-statement results with the SEC tender filings; percentages are of shares outstanding.

Three points.

The first real demand came with the conversion. The first three offers drew 0.03% to 0.23% of shares. The fourth, opened October 16, 2025, drew 5.00%, about 24 times the largest earlier offer by dollars (our arithmetic: $4,191,743 against $172,494). The annual report’s note reads: “The Fund fulfilled all repurchase requests in all repurchase offer periods except for November 14, 2025.” The offer cap was $4,123,582 and the amount accepted was 101.7% of it (our arithmetic). The final Schedule TO amendment says “2,178 Shareholders validly tendered Shares” and calls $4,191,743 “Shares,” which reads as a drafting error; the filings give no tendered amount, so the fill rate is unknown.

Two sets of filings disagree about the early offers. The three Schedule TO final amendments of October 14, 2025 each say “no Shareholders validly tendered Shares prior to the expiration of the Offer.” The annual report for April 30, 2025 records $13,874 (550 shares) repurchased in February 2025 and $130,567 in May, and the annual report for April 30, 2026 records $172,494 in August 2025. The $8,544,849 “cost of shares repurchased” in fiscal 2026 is exactly the sum of the four fiscal 2026 amounts above (our sum), so the statements tie out and we use them. Which filing is wrong is not stated.

Since conversion, requests have been at or below the 5% offer. The February offer took 5.23% by using part of the extra 2%, and May took 4.54%. That is the opposite of NICHX, where the annual report says requests exceeded the amount bought five times running. It is also a thinner signal than it looks, because the fund’s shareholders are concentrated (see below).

Where $12.6 million of net assets went in six months

The semiannual and annual reports let us reconcile the second half of fiscal 2026, November 2025 to April 2026. Every line is a difference between the two reports (our arithmetic) and the total ties to the audited figure.

Proceeds from shares sold were $26,427,340 for the six months to October 31, 2025 and $26,388,200 for the full fiscal year, so the second half added nothing. The fund’s own prospectus changed the minimum initial investment from $1 million (August 27, 2025) to $50 million (November 3, 2025); the filings do not say the two are related. Shares outstanding went from 3,248,307 on September 29, 2025 (proxy statement) to 2,978,085 on April 30, 2026, down 8.3% (our arithmetic). Quarter-end net assets from Form N-PORT:

The April difference is worth a flag: the Form N-PORT for April 30 was filed on June 29, 2026, the same date as the auditor’s report, and shows net assets 1.0% above the audited figure (our arithmetic). The July 31 report also shows no bank borrowings (the borrowing fields are zero), so the fund is not using leverage in the N-PORT sense, though its fee is charged on managed assets.

What it lends against, and how much of it has a market price

The credit facilities carry rates from 8.6% to 18.0% on the schedule (several are Term SOFR plus 6% to 14%). Interest on some is paid in kind or contingent on an event, and one footnote marks a line whose accrual rate “is set to zero as it is non-income producing.” None of the book trades.

Percentages are of net assets (our arithmetic). The annual report’s table of unobservable inputs lists a discount rate of 17.70% to 20.00% (weighted 17.88%) and a “Recovery %” of 0.00% to 75.00% (weighted 36.97%) for the credit facilities. It does not say which loans are valued on expected recovery rather than contractual payments. The fund’s book cost was $71,949,867 against a fair value of $68,809,668 at April 30, 2026, a net markdown of $3,140,199 or 4.4% of cost (our arithmetic).

One position explains most of the second-half loss. Kili Purchasing, LLC, a specialty-finance facility at 13.40% maturing December 18, 2027, was carried at $2,549,425 at April 30, 2025 and at its full $3,952,443 (4.7% of net assets) at October 31, 2025. At April 30, 2026 the schedule shows cost of $3,593,220 and fair value of $71,690, 0.1% of net assets. The markdown against cost is $3,521,530, 4.9% of net assets or $1.18 a share (our arithmetic), which is more than the whole fiscal-year net loss of $0.85 a share on realized and unrealized items. The July 31, 2026 N-PORT carries it at $57,348. The filings give no narrative about why. NICHX also holds the name.

Concentration at July 31, 2026. The ten largest non-cash lines in the Form N-PORT were 61.8% of net assets (our sum):

A borrower with two lines is larger than either: Okoa has a second line of $1.41 million (2.04%) maturing September 2, 2026. The $6,190,476 Rivonia Road line has the same principal as the Steno Agency Funding I facility on the April schedule; the NICHX report names “Rivonia Road (Steno)” warrants, so we read it as the same borrower renamed.

Maturities already behind us. Of 27 debt lines worth $55.8 million (81.1% of net assets), seven have stated maturities on or before December 31, 2026: $13.3 million, 19.3% of net assets (our sum). Five of them, 16.3% of net assets, were due between August 31 and September 30, 2026, before the next Form N-PORT:

We cannot tell from the filings whether these were repaid, extended or are in default; the Form N-PORT for October 31, 2026 should be public by late December 2026, on this fund’s filing pattern. Loans do leave this book: two large April positions, the Midway Farms group (7.2% of net assets, due June 18, 2026) and Byzfunder Funding (1.4%, due June 5, 2026), are absent from the July report, and portfolio turnover was 38% in fiscal 2026.

Income against the payout

Event-based and PIK interest were $1.95 million, 21.5% of income (our sum). The cash-flow statement shows $970,996 of non-cash paid-in-kind income, and the balance sheet carries $1.88 million of accrued interest and “Accrued return on capital” (2.6% of net assets), which is earned but not yet paid in cash.

Per share, fiscal 2026 net investment income was $2.71 and distributions $2.73, while NAV fell from $24.98 to $24.11 because realized and unrealized losses were $0.85 a share. The fund reported a 7.55% total return. The fiscal-2026 letter quotes a “1-year trailing distribution rate” of 9% as of March 31, 2026, and distributions moved from quarterly to monthly on April 1, 2026. The second half did not cover the payout; the first half did, and the year as a whole only just.

Fees, and a waiver that ended September 11, 2026

The July 2026 registration statement says: “The Expense Limitation and Reimbursement Agreement is in effect until September 11, 2026, at which time it will terminate.” We found no filing extending it, and the fee table in that same document shows no reimbursement line. The gap between the 2.31% and 1.42% ratios is 0.89 points, about $0.6 million a year on $68.85 million (our arithmetic), or 7.6% of fiscal 2026 net investment income. The semiannual report for the six months to October 31, 2026 should show whether the cap was renewed. Until then, check the current prospectus, not this table.

Who holds the shares

The July 2026 statement of additional information lists only two holders of 5% or more, both of record: Pershing LLC with 78.19% and National Financial Services LLC with 16.72% as of July 1, 2026, together 94.9% (our sum). Both are marked as shareholders of record, which usually means shares held in brokerage accounts for other people, and the fund says it “has no knowledge” whether the shares owned of record are also owned beneficially. The October 2025 proxy statement was more specific: “A substantial majority of the shareholders in the Fund are clients of Kovitz Investment Group Partners, LLC,” which voted their shares under delegated authority.

Two consequences, both our reading. First, the stated $50 million minimum cannot be what most holders paid: no one beneficially holds 5% (about $3.4 million) according to the filing, and a single $50 million investor would be 72.6% of July 31 net assets. Second, demand for repurchases can move with one adviser’s decision. One adviser deciding to raise cash could move demand from near zero to above the offer, and the 5.00% in November 2025 may have been that. The filings do not show who tendered.

A partial tender has its own rule. The annual report and the statement of additional information say a holder who tenders only part “will be required to maintain a minimum account balance of $50,000,000,” and that the fund “reserves the right to repurchase all” of the shares if the balance would fall below it; the board or the adviser can waive this. The October 2025 tender terms had said $1,000,000. If you hold through a platform, ask whether the waiver applies to you before you tender part of a position.

What a holder can do with this

• If you want out: the window closes at 4:00 p.m. Eastern on November 13, 2026, and a platform or adviser may need your instruction earlier than that. Plan for a partial fill: the offer is a small share of the fund, unfilled requests get no priority next time, and the only offer the fund says it did not fill in full was the first one with real demand.
• If you tendered before: your confirmation shows what was bought. The fund does not publish tendered amounts, so the difference is yours to resubmit.
• If you are staying: the facts to watch are the result of the August 14 offer and the next Form N-PORT for October 31, 2026, what became of the loans due in August and September 2026, whether the waiver was renewed, and whether new money returns. The matching semiannual report was filed on January 9 the last time.
• If you are weighing a purchase: a prospectus minimum of $50 million, 81.2% Level 3 assets and a book that overlaps almost entirely with a fund 34 times its size are questions for the adviser, not answers from a page.
• Taxes: a tender is generally a taxable sale; see selling interval fund shares on Form 8949. The fund reports fiscal 2026 distributions as paid entirely from earnings, with no return of capital; the final character is set on Form 1099-DIV. Each case turns on your own facts, so a CPA or attorney should look at yours.

For how this fits the other deadlines this quarter, see Q4 2026 redemption and tender deadlines, the list of interval funds, how tender offer funds work and the private credit fund redemptions tracker. The filings are on the SEC’s EDGAR page for CIK 2022674.

FAQ

All figures are from SEC filings of Variant Alternative Lending Fund (CIK 2022674) read on EDGAR on October 26, 2026: the Form N-23C3A notices of January 23, April 24, July 24 and October 23, 2026 (accessions 0001213900-26-007052, 0001213900-26-047362, 0001213900-26-081307 and 0001213900-26-111987); the annual reports on Form N-CSR for the years ended April 30, 2025 and 2026 (0001213900-25-061790 and 0001213900-26-076676); the semiannual report on Form N-CSRS for the six months to October 31, 2025 (0001213900-26-002821); the Schedule TO-I filing of October 16, 2025 and four final amendments (0001213900-25-099481, 0001213900-25-098495, 0001213900-25-098500, 0001213900-25-098501 and 0001213900-25-119624); the registration statement on Form N-2 of July 23, 2026 (0001213900-26-081014), the prospectuses of August 27 and November 3, 2025 (0001213900-25-081205 and 0001213900-25-105081) and the supplements of April 1 and April 29, 2026 (0001213900-26-038178 and 0001213900-26-048903); the proxy statement of October 14, 2025 (0001213900-25-098592); and seven Form N-PORT reports from January 2025 to July 2026. Sister-fund data come from the Form N-PORT of Variant Alternative Income Fund (CIK 1736510) for July 31, 2026 (0001193125-26-405334). The number of shares tendered in each offer is not disclosed. Sums, percentages, share-count estimates and fill rates are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.