For purposes of this brochure, “Adviser” means Benefit Street Partners L.L.C. (“Benefit Street”), a Delaware limited liability company, together (where the context permits) with certain of its affiliates that provide advisory services to and/or receive advisory fees from the Funds (as defined below). These affiliates may or may not be under common control with Benefit Street, but generally possess substantially similar personnel and/or equity owners with Benefit Street. These affiliates are formed for tax, regulatory or other purposes in connection with the organization of the Funds, or serve as general partners of the Funds.

Background

Benefit Street is an investment management platform that focuses on debt-related investments across various market sectors. Benefit Street was formed in 2011.

On February 1, 2019, Franklin Resources Inc. acquired Benefit Street and became the sole owner of the Adviser.

Benefit Street is a registered commodity pool operator (“CPO”) and commodity trading advisor (“CTA”) with the Commodity Futures Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”) with respect to certain clients for which it serves as CPO and/or CTA.

Services

The Adviser provides investment advisory services to investment vehicles, including private funds that are not registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and whose securities are not registered under the Securities Act of 1933, as amended (the “Securities Act”), to certain collateralized loan obligation vehicles (“CLO Funds”), to a non-publicly traded real estate investment trust (the “REIT”) whose securities are registered under the Securities Act and which has elected to be treated as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), and to certain separate account clients, single-investor funds and tailored funds. The Adviser also provides sub-advisory services to certain registered investment companies (the “1940 Act Funds”), to certain other collective investment vehicles (collectively with the 1940 Act Funds, the “Sub-Advised Funds”). Collectively, the funds, vehicles and account arrangements discussed in this paragraph may be referred to herein, as the context permits, as the “Main Funds”). The Adviser may, from time to time, establish Funds on a transaction-by-transaction basis to allow certain persons to invest alongside one or more Main Funds in a particular investment opportunity (each such vehicle, a “Co-Investment Fund”). Co-Investment Funds are typically limited to investing in securities relating to the transaction or transactions with respect to which they were organized. As a general matter, any co-investment by a Co-Investment Fund will be on terms and conditions not more favorable than the terms and conditions of the investment by the applicable Main Fund. Additionally, the Adviser also organizes and serves as the general partner (or in an analogous capacity) of certain other Funds which are “feeder” vehicles (each, a “Feeder Fund”) organized to invest exclusively in another Fund, and/or an alternative investment vehicle (each, an “Alternative Investment Vehicle”) organized to address, for example, specific tax, legal, business, accounting or regulatory-related matters that arise in connection with a transaction or transactions. The Main Funds, Feeder Funds and Alternative Investment Vehicles are collectively referred to, as the context permits, as the “Funds.”

Certain of the Funds primarily make investments in debt instruments across various market sectors. A number of Funds also invest from time to time in equity securities, certain types of instruments which can be considered to have equity characteristics (such as preferred stock and convertible instruments), and derivative instruments. Certain of the Funds focus on primarily making investments in interests of real estate mortgage trusts and other real-estate-related debt instruments. Subject to the terms of the applicable advisory or sub-advisory agreement, the Adviser’s advisory services include investigating, identifying and evaluating investment opportunities, structuring, negotiating and making investments on behalf of the Funds, managing and monitoring the performance of such investments and disposing of such investments. The Adviser serves as the investment adviser, sub-adviser or general partner to the Funds in order to provide such services.

Except as may be the case for certain separately managed accounts or Sub-Advised Funds, investment advice is generally provided directly to the Funds and not individually to investors. Services are provided to the Funds in accordance with an advisory agreement with each of the Funds, sub-advisory agreements with a Fund’s investment adviser, and/or organizational documents of the applicable Fund. Investment restrictions for the Funds, if any, are generally set forth in the organizational documents and/or prospectus and statement of additional information (“SAI”) of the applicable Fund.

As of December 31, 2019, the Adviser managed $20,632,548,559 of client assets on a discretionary basis. please register to get more info

The Adviser or its affiliates generally receive management fees or a sub-advisory fee (collectively “Advisory Fees”) and, in certain cases, an Incentive Allocation (as defined below) or similar performance-based remuneration from each Main Fund. A Main Fund, and/or its portfolio companies may also make other payments to the Adviser or its affiliates for services provided to the portfolio companies which, in certain circumstances, may reduce the Advisory Fees payable to the Adviser. Additionally, consistent with the organizational documents of a Fund, the Fund typically bears certain out-of-pocket expenses incurred by the Adviser in connection with the services provided to the Fund and/or the portfolio companies. Further details about certain common fees and expenses are set forth below. Management Fees In respect of each Main Fund, the Adviser is typically paid a quarterly or monthly management fee or sub-advisory fee, which is paid either in advance or in arrears, in accordance with each such Main Fund’s organizational documents or the applicable sub-advisory agreement, by such Main Fund. Advisory Fees paid by a Main Fund may also be reduced by other fees or compensation received by the Adviser or its affiliates that relate to such Main Fund’s activities and investments, or by certain organization or other expenses borne by such Main Fund, as described in more detail below. Consistent with the organizational documents or advisory agreements for each of the Main Funds, management fees paid by the Main Funds are either deducted from capital accounts or billed and, in either case, are generally indirectly borne by investors in the Main Funds, including any Feeder Funds that invest in such Main Funds. The Adviser does not receive a separate management fee directly from such Feeder Funds if the fee is borne directly by the corresponding Main Fund. The advisory agreements with the Funds are generally terminable by the Funds, subject, in some cases, to an applicable notice period or the occurrence of certain conditions or events. Sub- advisory agreements are generally terminable by the primary investment adviser, the Adviser and/or the Fund. Upon termination of a relevant advisory agreement, management fees that have been prepaid are returned on a prorated basis.

The precise amount of, and the manner and calculation of, the management fees for each Fund, if any, is disclosed in the organizational and offering documents of such Fund at the time each investor invests in the Fund, or in the relevant advisory or sub-advisory agreements. Such management fees are subject to waiver or reduction by the Adviser for certain investors within a Fund. For example, the Adviser, its affiliates, certain of its principals and employees, and their family members and related vehicles may invest in certain of the Funds, and management fees assessed on such investments are typically substantially reduced or waived entirely. In addition, all or a portion of such persons’ capital subscription may be made through reductions in or waiver of the management fee payable to the Adviser by such Fund in lieu of capital contributions. Certain large or strategic investors may also be eligible for a reduction or waiver of their fees.

Except as otherwise set forth in the organizational documents or applicable advisory agreement of a Fund, the management fees paid by a Fund will generally be reduced by a percentage of: (1) the fees incurred by the Adviser in connection with the organization of such Fund that exceeds a limit specified in such Fund’s organizational documents and/or (2) certain Other Fees (as defined below) received by the Adviser or its affiliates. The amount and manner of such reduction, if any, is set forth in the advisory agreement and/or organizational documents of the applicable Fund. To the extent that an Other Fee relates to more than one Fund, the Adviser will generally allocate the resulting management fee reduction among the applicable Fund(s) in proportion to their interest (or prospective interest) in the portfolio company. As applicable, Funds that do not pay management fees will not benefit from any such reduction. Generally, the portion of Other Fees allocable to capital invested by a Fund, co-investment vehicle or third-party investor that does not pay management fees will be retained by the Adviser and such amounts will not offset any management fees. Other Fees and Expenses With respect to the non-1940 Act Funds, generally, and except as otherwise set forth in the organizational documents of a Fund, the Adviser, or, in the case of a Sub-Advised Fund, the Sub- Advised Fund’s adviser, will ultimately bear all fees and out-of-pocket expenses of any placement agent that solicits investors for the Funds. Such Funds will generally bear all legal and other expenses, including the out-of-pocket expenses of any applicable general partner, incurred in the formation of the Funds up to an amount, if any, specified in the organizational documents of the applicable Fund. Organizational expenses in excess of any such amount specified are typically ultimately borne by the Adviser or, in the case of a Sub-Advised Fund, the Sub-Advised Fund’s adviser. Generally, and except as set forth in the organizational documents and/or advisory or sub- advisory agreements of the applicable Fund, a Fund (other than certain separate account clients, single-investor funds, tailored funds or 1940 Act Funds) will pay:

(i) legal, accounting, administrative, custodial, recordkeeping and third-party consulting fees for services (including, but not limited to, fees, costs, and expenses incurred in negotiating and entering into any depository agreement) rendered to or for the benefit of a Fund including, but not limited to, all fees, costs and expenses incurred in connection with certain regulatory matters including but not limited to fees, costs and expenses incurred in registering the Fund for marketing in any jurisdiction (including ongoing registration fees charged by regulators and any fees, costs and expenses incurred in complying with the disclosure, reporting and other similar obligations in any jurisdiction, including but not limited to those under the Alternative Investment Fund Managers Directive, as implemented in any relevant jurisdiction (and including any secondary legislation, rules and/or associated guidance) and any related requirements), costs relating to maintaining and producing the books and records of the Fund, and any risk management assessment expenses, fees, costs and expenses incurred in respect of, or charged by a Fund’s administrator, custodian, prime broker, and/or any depositary appointed in relation to the safeguarding, administering and/or holding of the assets of a Fund and fees, costs and expenses incurred in relation to compliance with applicable laws and regulations and the operation and administration of a Fund generally;

(ii) third party out-of-pocket expenses incurred directly in connection with Fund investments or proposed investments, whether or not consummated, which are not paid or reimbursed by a third party (including, but not limited to those incurred in relation to compliance with applicable laws and regulations and the operation and administration of the Fund generally, research and due diligence fees and expenses; consultant or expert fees and expenses for sourcing, researching, conducting due diligence, etc., for investment expenses or opportunities; news and quotation subscriptions; market or industry research expenses; information technology subscription expenses and fees related to research and due diligence; bridge financing expenses and travel expenses in connection with researching, making, monitoring and disposing of investments and for the Adviser’s personnel to attend industry conferences (which, in each case, may be first class or chartered aircraft in accordance with the Adviser’s policies)); and (iii) other operating (including travel expenses relating to a Fund or general partner’s operations) and extraordinary expenses of a Fund (including, but not limited to, brokerage fees and commissions; registration, bank, fees and expenses of any paying agent, any third-party director, general partner or similar administrative, service, and other similar fees and interest expenses incurred by a Fund; rating agency expenses; financing, investment banking and valuation expenses (including expenses of engaging valuation agents); and all interest on indebtedness of a Fund. If applicable, and other fees and expenses associated with any borrowings by a Fund (including but not limited to costs related to the setup of one or more credit facilities and the costs of upsizing such credit facilities, as applicable); filing fees, litigation costs (including potential litigation), indemnification costs and expenses, judgments and settlements (including the expenses of a Fund’s “Partnership Representative”); taxes, fees or other governmental charges (if any) required to be paid or withheld by a Fund; indemnity or insurance policies (including directors and officers insurance and errors and omissions insurance for t h e Adviser and its affiliates or premiums or other reasonable costs relating to indemnities of service providers to a Fund); any expenses of liquidating a Fund; fees and expenses of any Fund advisory committee ; expenses incurred in connection with meetings of the investors in a Fund; expenses incurred in connection with any tax audit, investigation, settlement or review of a Fund; and expenses incurred in connection with transfers of a Fund’s interests).

A Fund will generally bear the forgoing expenses regardless of whether such expenses are charged or incurred by affiliates of the general partner of a Fund or of the Adviser (but, for the avoidance of doubt, not including the Adviser).

Certain Funds invest in mutual funds, exchange traded funds (“ETFs”) or other pooled investment vehicles that include an embedded expense ratio composed of an investment management fee and/or carried interest paid to the investment adviser or general partner, as applicable, of the mutual fund, ETF or other pooled investment vehicle and other administrative and operating expenses. As such, Funds with investments in mutual funds, ETFs or other pooled investment vehicles will be subject to the fees and expenses of these underlying vehicles as well as the other types of expenses and fees described herein, including the Adviser’s management fee.

Consistent with the organizational documents or advisory and/or sub-advisory agreements for the applicable Funds, CLO Funds, separate account clients, single-investor funds, tailored funds, Sub- Advised Funds and 1940 Act Funds generally bear similar expenses and, in the case of the 1940 Act Funds, generally will also bear, among other expenses, transfer agency and distribution- related expenses.

Except as provided above and in the organizational documents of a Fund, the Adviser will typically pay ordinary operating expenses on account of rent and salaries for its personnel, and other routine administrative expenses relating to the services and facilities provided by the Adviser to the Funds. As set forth in their organizational documents, certain Funds also bear an allocable portion of the compensation (including salary, bonus and benefits), expenses and overhead attributable to certain employees of the Adviser and its affiliates, including the originations, underwriting, trading, and securitization teams; in-house accountants, operations personnel, legal, tax and compliance; and other professionals whose functions may also include the preparation of financial statements, investor reports, tax returns, the administration of assets and expenses of the Funds (including co-investment vehicles and feeder funds) and legal and regulatory compliance with applicable laws and regulations. From time to time, the general partner of a Fund may create certain “special purpose vehicles” or similar structuring vehicles for purposes of accommodating certain tax, legal and regulatory considerations of investors (“SPVs”). In the event the general partner creates an SPV, consistent with the organizational documents of the Fund, the SPV, and indirectly, the investors in such SPV, will typically bear all expenses related to its organization and formation and other expenses incurred solely for the benefit of the SPV. Expenses of the types borne by a Fund but associated with any Feeder Fund or similar vehicle organized to facilitate the participation of certain investors in the Fund (including without limitation, expenses of accounting and tax services) may be borne in whole or in part by the Fund. In certain cases, a co-investment vehicle, or other similar vehicle established to facilitate the investment by investors to invest alongside a Fund may be formed in connection with the consummation of a transaction. In the event a co-investment vehicle is created, the investors in such co-investment vehicle will typically bear all expenses related to its organization and formation and other expenses incurred solely for the benefit of the co-investment vehicle. The co- investment vehicle will generally bear its pro rata portion of expenses incurred in the making an investment. If a proposed transaction is not consummated, no such co-investment vehicle generally will have been formed, and the full amount of any expenses relating to such proposed but not consummated transaction (“Dead Deal Costs”) would therefore be borne by the Fund or Funds selected by the Adviser as proposed investors for such proposed transaction. As a general matter, no co-investor will bear Dead Deal Costs or break-up fees until they are contractually committed to invest in the prospective investment.

The Adviser may utilize the services of broker-dealers in connection with investments made by a Fund, and any brokerage or other transaction costs are borne by such Fund. For additional information regarding brokerage practices, please see Item 12 below.

In addition, please see Item 6 below for information regarding certain Incentive Allocations (as defined below) received by affiliates of the Adviser.

Related Service Fees and Related Other Fees

For certain of the Funds, the Adviser or its employees receive other fees in addition to the Management Fee, including commitment fees, break-up fees, directors’ fees, consulting fees, incentive fees or discounts from service providers and similar fees relating to the investments made by a Fund and/or to monitoring, management, advisory, transaction-related, financial advisory and other services (“Related Services”) provided by the Adviser or its affiliates to an actual or prospective portfolio company, other investment vehicles of the Funds or the Funds themselves, including fees in connection with structuring investments in such portfolio companies, as well as mergers, acquisitions, add-on acquisitions, refinancings, public offerings, sales or other dispositions and similar transactions with respect to such portfolio companies (“Other Fees”). Such Other Fees will generally, for purposes of calculating any management fee offset, be net of any expenses reasonably incurred by the Adviser or its affiliates in connection with such fees. Although these fees may be substantial and are in addition to management fees paid by the Funds, the Adviser may, in certain circumstances, reduce management fees in connection with the receipt of certain of these Other Fees. The amount and manner of such reduction is set forth in the advisory agreement and/or organizational documents of the applicable Fund. The Adviser and its affiliates may provide loan servicing, administrative and other service s with respect to debt issued by portfolio companies of a Fund and receive servicing fees, special servicing fees and other similar fees and payments for such services which are not subject to the management fee reduction arrangement described above. The payment of Other Fees by portfolio companies creates a conflict of interest between the Adviser and its affiliates and the Funds and their investors because the amounts of these Other Fees and reimbursements are often substantial and the Funds and their investors generally do not have a direct interest in these fees and reimbursements. The Adviser determines the amount of these fees for the services provided and reimbursements in its own discretion, subject to agreements with sellers, buyers, and management teams, the board of directors of or lenders to portfolio companies, and/or third party co-investors in its transactions, and the amount of such fees and reimbursements often will not (except in connection with the reductions described herein) be disclosed to investors in the Funds.

The Adviser and its affiliates may also engage and retain senior advisors, advisers, consultants, and other similar professionals who are not employees or affiliates of the Adviser and who, from time to time, receive payments from, or allocations with respect to, portfolio companies and/or other entities. In such circumstances, such amounts will not be deemed paid to or received by the Adviser and its affiliates and such amounts will not be subject to the sharing arrangements described above. For a discussion of material conflicts of interest created by the receipt of such fees, please see Item 11 below. please register to get more info

Certain of the Funds pay incentive or performance based allocations or fees or carried interest to the Adviser or certain affiliates of the Adviser (each, an “Incentive Allocation”). The Incentive Allocation paid by a Fund is indirectly borne by investors in the Fund, including any Feeder Funds that invest in such Fund. The Incentive Allocations received by such related persons of the Adviser conform with the requirements set forth in Section 205 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Co-Investment Funds and Feeder Funds pay or bear performance-based fees on a case-by-case basis as set forth in the applicable organizational documents.

The precise amount of, and the manner and calculation of, the Incentive Allocation for each Fund, if any, is disclosed in the organizational and offering documents of each Fund, or, in the case of the Sub-Advised Funds, in the applicable sub-advisory agreement or in a side letter thereto. The Incentive Allocation provisions may be subject to waiver or reduction by the general partner or Adviser, as applicable. For example, the Adviser, its affiliates, certain of its principals and employees, and their family members and related vehicles may invest in the Funds, and the Incentive Allocation assessed on such investments will typically be substantially reduced or waived entirely. In addition, all or a portion of such persons’ capital subscription may be made through reductions in or waiver of the Incentive Allocation payable to the general partner by such Fund in lieu of capital contributions. Certain large or strategic investors may also be eligible for a reduction or waiver of their Incentive Allocation. The payment by some, but not all, Funds of the Incentive Allocation, and the payment of the Incentive Allocation at varying rates by Funds that pay an Incentive Allocation, creates an incentive for the Adviser to disproportionately allocate time, services or functions to Funds paying the Incentive Allocation or Funds paying the Incentive Allocation at a higher rate. Generally, this conflict is mitigated for the Funds by the Adviser’s allocation procedures. Subject to applicable investment objectives, guidelines and other factors, as discussed in more detail in Item 11 “Code of Ethics, Participation or Interest in Client Transactions and Personal Trading,” the Adviser and its affiliates generally allocate investment opportunities on a pro-rata basis among eligible Funds and clients based upon the current available capital of such investment vehicle. With respect to Co-Investment Funds, this conflict may be mitigated where Co-Investment Funds invest in a portfolio company alongside one or more Main Funds in pre-set amounts. Any Alternative Investment Vehicle will generally contain terms and conditions substantially similar to those of the Main Fund with respect to which it is formed and profits and losses of an Alternative Investment Vehicle generally will be aggregated with those of such Main Fund for purposes of determining distributions by the Main Fund and the Alternative Investment Vehicle (except as may be advisable because of legal, regulatory or tax constraints).

The payment by the CLO Funds of the incentive management fee may create an incentive for the Adviser to seek to maximize the yield on the collateral obligations relative to investments of higher creditworthiness. Managing the CLO Funds with the objective of increasing yield, even though the Adviser is constrained by certain investment restrictions described in the CLO Funds’ organizational documents, could result in an increase in defaults or volatility and could contribute to a decline in the aggregate market value of the CLO Funds’ collateral obligations.

Please see Item 11 below for information regarding the allocation of investment opportunities and how conflicts of interest are generally addressed by the Adviser. Please also see Item 12 below regarding trade aggregation. please register to get more info

The Adviser provides investment advisory services to the Funds, including the Sub-Advised Funds. Investment advice is provided directly to the Funds and not individually to the investors in the Funds. Investors in the Funds may include, among others, individuals, banks, thrift institutions, pension and profit sharing plans, trusts, estates, charitable organizations, university endowments, corporations, sovereign wealth funds, limited partnerships and limited liability companies.

The Funds do not have a minimum size, but minimum investment commitments are generally established for investors in certain of the Funds. The general partner or board of directors of each Fund generally may, in their sole discretion, permit investments below the minimum amounts set forth in the offering documents of such Fund. please register to get more info

Methods of Analysis and Investment Strategies

Comprehensive joint industry and sector reviews, primarily focusing on debt opportunities, are completed on an ongoing basis in order to identify potential investment candidates. Moreover, the Adviser’s extensive network and relationships with Wall Street and industry professionals are invaluable for sourcing potential opportunities. Generally, once a potential investment is identified, financial modeling is introduced in the early stages of the investment process and a forward-looking financial model with full projections is built. The projections typically incorporate the Adviser’s macro views, sector analysis and individual company fundamentals. These projections are a key driver for all subsequent steps in the Adviser’s investment process. Historical financials are also reviewed, with a focus on analyzing the company’s operating performance and ability to generate free cash flow. As part of the investment process, the Adviser employs multiple valuation methodologies to generate proprietary valuations and typically receives information directly from the entity (or its agents and/or representatives) it is investigating as a potential investment opportunity for a Fund. Every position is evaluated with respect to its expected return and the probability of loss and trading liquidity. Typically, each Fund’s portfolio is continually rebalanced in order to maintain proper risk weighting. The Adviser also assesses the transaction exits for a particular investment under multiple scenarios and timelines. As various scenarios unfold, the Adviser monitors the relationship between executable exit value (where one exists) and a proprietary assessment of intrinsic value, derived as part of the Adviser’s investment process.

The Adviser’s advisory services consist of investigating, identifying and evaluating investment opportunities, structuring, negotiating and making investments on behalf of the Funds, managing and monitoring the performance of such investments and disposing of such investments. Where Funds acquire an influential position, the Adviser may be in a position to exercise influence over and add value to such investments. The Funds make investments in both publicly-listed and privately-held companies. In addition, the Adviser may provide advice concerning the following securities and instruments, among others:

 Bonds, convertible securities and equity securities issued by foreign or domestic issuers and denominated in foreign currencies or U.S. dollars;

 Private placements or other securities that are not registered or are exempt from registration under the Securities Act, such as Rule 144A securities;

 Bank loans, bank participations, loans, and loan originations;  Domestic and international convertible securities including, but not limited to (a) convertible securities that are convertible or exchangeable into equity securities of publicly traded U.S. companies, and (b) convertible securities that are convertible or exchangeable into equity securities of foreign companies listed on a foreign exchange or represented by American Depository Receipts listed on the New York Stock Exchange or the NYSE Alternext U.S. (formerly known as the American Stock Exchange);

 Futures contracts, forward contracts, swaps, swaptions, commodities, hybrid securities, other ‘synthetic’ or derivative instruments, short sales, trades executed on margin, credit- linked notes, credit default notes and credit swaps;  Repurchase agreements;  Banker’s acceptances;  Certain real estate related instruments; or  Interests in collateralized loan obligations. Except with respect to the 1940 Act Funds, the REIT, and as may be set forth in a Fund’s organizational documents, the Adviser’s investment strategy is generally not subject to specific restrictions regarding the exposure of a Fund’s overall portfolio or investments in a single issuer or a single industry. However, the Adviser, from time to time, adopts internal guidelines regarding its exposure and such investments. The 1940 Act Funds are subject to certain issuer diversification and industry concentration limitations under the Investment Company Act and related SEC guidance. The REIT is subject to certain industry concentration requirements and income tests to qualify for treatment as a REIT under Sections 856 through 860 of the Code.

From time to time the Adviser may cause the Funds to invest cash held by the Funds in temporary investments on a short-term basis, pending investment, distribution to investors or payments of expenses or other obligations of the Funds. Such temporary investments shall principally take the form of treasuries, agencies, corporate debt securities, commercial paper and certificates of deposit.

Risks

Investing in securities involves a substantial degree of risk. A Fund may lose all or a substantial portion of its investments, and investors in the Funds must be prepared to bear the risk of a complete loss of their investments.

In addition, material risks relating to the investment strategies and methods of analysis describe d above, and to the types of securities typically purchased by or for the Funds in connection with those strategies and methods, include the following: General Economic and Market Conditions

The success of a Fund’s activities is affected by general economic and market conditions, including, among others, interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws and trade barriers. These factors may affect the level and volatility of prices and the liquidity of a Fund’s investments. Volatility or illiquidity could impair a Fund’s profitability or result in losses. These factors also may affect the availability or cost of leverage, which may result in lower returns. Confidential Information The Adviser, as a holder of loans or through its or its affiliates’ management of other clients, may be entitled to receive material, non-public information regarding borrowers that may limit the ability of a Fund, under applicable securities laws or contracts, to trade in the public securities of such borrowers. To avoid some of these restrictions, the Adviser may elect not to receive such non-public information. As a result, a Fund, at times, may receive less information regarding such a borrower than is available to the other investors in such borrower’s loan. As a result of existing portfolio investments or activities on behalf of certain clients, such persons affiliated with the Adviser may from time to time acquire confidential information that they will not be able to use for the benefit of a Fund and that may restrict the ability of a Fund to acquire or dispose of investments. Tax Risks from Investments in Portfolio Companies of Certain Clients A Fund may be presented with attractive opportunities to acquire debt of a company in which certain clients of the Adviser or its affiliates hold an equity interest. Under certain circumstances, an acquisition of such debt by a Fund may result in adverse U.S. tax consequences to such company and to the Fund. Specifically, if a Fund were treated as being related to such company for U.S. tax purposes, an acquisition by the Fund of such company’s debt at a discount to the adjusted issue price of such debt may result in such company recognizing cancellation of indebtedness income and the Fund being required to treat the discount as “original issue discount” (rather than “market discount”), resulting in phantom income to investors in the Fund. It is possible that the Adviser or its affiliates may decide not to acquire such debt to avoid these or other adverse tax consequences.

Non-U.S. Investments Risks Certain non-U.S. investments involve risks and special considerations not typically associated with U.S. investments, and investing outside the U.S. may involve greater risks than investing in the U.S. These risks include, but are not limited to: (i) less publicly available information; (ii) varying levels of governmental regulation and supervision; (iii) the difficulty of enforcing legal rights in a non-U.S. jurisdiction and uncertainties as to the status, interpretation and application of laws; (iv) different accounting, auditing and financial reporting standards, practices and requirements compared to those applicable to U.S. companies; (v) fluctuations in currency exchange rates; (vi) the risk of nationalization or expropriation of assets or confiscatory taxation; (vii) social, economic and political uncertainty, including war and revolution; (viii) dependence on exports and the corresponding importance of international trade; (ix) greater price fluctuations and market volatility; (x) less liquidity and smaller capitalization of securities markets; (xi) higher rates of inflation; (xii) controls on, and changes in controls on, non-U.S. investment and limitations on repatriation of invested capital and on the Fund’s ability to exchange local currencies for U.S. dollars; (xiii) less extensive regulation of the securities markets; (xiv) longer settlement periods for securities transactions; and (xv) less developed corporate laws regarding fiduciary duties and the protection of investors. Non-U.S. markets may be smaller, less liquid, and subject to greater influence by adverse events generally affecting the market. Brokerage commissions and other transaction costs on securities exchanges in non-U.S. countries are generally higher than in the U.S. Non-U.S. securities settlements may in some instances be subject to delays and related administrative uncertainties. In some countries there are restrictions on investments or investors such that the only practicable way for a Fund to invest in such markets is by entering into swaps or other derivative transactions with its prime brokers or others. Such transactions involve counterparty risks which are not present in the case of direct investments and which may not be controllable by the Adviser. Non-U.S. Currency and Exchange Risks To the extent that a Fund directly or indirectly holds assets in local currencies in countries outside the U.S., the Fund will be exposed to a degree of currency risk that may adversely affect performance. The investments of a Fund that are not denominated in the U.S. dollar are subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political developments. Officials in foreign countries may from time to time take actions in respect of their currencies that could significantly affect the value of a Fund’s assets denominated in those currencies or the liquidity of such investments. For example, a foreign government may unilaterally devalue its currency against other currencies, which would typically have the effect of reducing the U.S. dollar value of investments denominated in that currency. A foreign government may also limit the convertibility or repatriation of its currency or assets denominated in that currency.

A Fund is not obligated to engage in any currency hedging operations, and there can be no assurance as to the success of any hedging operations that a Fund may implement. To the extent a Fund enters into currency hedging operations, a Fund may incur costs related to such hedging arrangements, which may be undertaken in exchange-traded or over-the-counter contexts, including futures, forwards, swaps, options and other instruments.

Hedging Risk Transactions A Fund is authorized to use various investment strategies to hedge interest rate, currency exchange or other risks. Techniques and instruments may change over time as new instruments and strategies are developed or regulatory changes occur. A Fund may use any or all such types of interest rate hedging, currency hedging and other types of hedging transactions at any time and no particular strategy will dictate the use of one transaction rather than another. The choice of any particular hedging transactions will be a function of numerous variables including market conditions.

The Adviser may hedge some or all of a Fund’s investments or other assets by entering into hedging arrangements with a broker, a bank or other organizations. Hedging against a dec line in the value of an investment or other asset of a Fund does not completely eliminate risks associated with fluctuations in the values of such investment or asset, or prevent losses if the values of such investment or asset decline. The hedging arrangements seek to establish other positions designed to gain from those same fluctuations in order to moderate the decline in the values of the investment or asset. Therefore, the hedging arrangements will limit the opportunity for gain if the values of the investment or asset subject to hedging should increase. In the event of an imperfect correlation between a position in a hedging arrangement and the investment or asset that it is intended to protect, the desired protection may not be obtained and the Fund may be exposed to risk of loss. In addition, it is often not possible to hedge fully or perfectly against all risks, and hedging entails its own costs. The Adviser or its affiliates may determine in its sole discretion not to hedge against certain risks, and certain risks may exist that cannot be hedged. A Fund’s hedging arrangements that are undertaken through brokers, banks or other organizations will subject the Fund to the risk of default or insolvency of such organizations. In such event, there can be no assurance that any money advanced to such organizations would be repaid or that the Fund would have any recourse in such event of non-payment. Risks of hedging transactions include: (i) the possibility that the market will move in a manner or direction that would have resulted in gain for a Fund had a particular hedging transaction not been utilized, (ii) the risk of imperfect correlation between the risk sought to be hedged and the hedging transaction utilized, (iii) potential illiquidity for the hedging instrument utilized, which may make it difficult for a Fund to close-out or unwind a hedging transaction and (iv) credit risk with respect to the counterparty to the hedging transaction. Concentration of Investments Although a Fund is limited in the amount of capital that may be committed to any single portfolio company, a Fund is generally not limited in the amount of capital that may be committed to investments in or loans to companies in any particular industry, sector or geography. As such, its assets may not be diversified and, if its assets are concentrated in a particular company, industry, sector, geography, or similar category, a Fund would be subject to an increased risk of loss if there was a decline in the market value of any security in which a Fund had invested a large percentage of its assets or there are adverse consequences to such industry, sector, or geography or other group of companies. If a large portion of the assets of a Fund is held in cash or similarly liquid form for an extended period of time, a Fund’s ability to achieve its objective may be impacted.

The lack of an established, liquid secondary market for a Fund’s investments may have an adverse effect on the market value of such Fund’s investments and on such Fund’s ability to dispose of them. Additionally, a Fund’s investments may be subject to certain transfer restrictions that would also contribute to illiquidity. Finally, a Fund’s assets that are typically traded in a liquid market may become illiquid if the applicable trading market tightens as a result of a significant macro-economic shock or for any other reason. Therefore, no assurance can be given that, if a Fund is determined to dispose of a particular investment, it could dispose of such investment at the prevailing market price or the current valuation of a Fund. A portion of a Fund’s investments may consist of securities that are subject to restrictions on resale by a Fund because they were acquired in a “private placement” transaction or because a Fund is deemed to be an affiliate of the issuer of such securities. Generally, a Fund will be able to sell such securities only under Rule 144 under the Securities Act, which permits limited sales under specified conditions, or pursuant to a registration statement under the Securities Act. When restricted securities are sold to the public, a Fund may be deemed to be an underwriter or possibly a controlling person, with respect thereto for the purposes of the Securities Act and be subject to liability as such under the Securities Act.

Lack of Diversification

A Fund may not be highly diversified. Lack of diversification would expose a Fund to losses disproportionate to market declines in general if there were disproportionately greater adverse price movements in the particular investments held by a Fund. To the extent a Fund invests a relatively high percentage of its assets in bank loans or other debt instruments of a limited number of borrowers, a Fund will be more susceptible than a more widely diversified investme nt fund to the negative consequences of a single corporate, economic, political or regulatory event. Valuation of Illiquid Assets The process of valuing securities for which reliable market quotations are not available is based on inherent uncertainties and the resulting values may differ from values that would have been determined had an active market existed for such securities and may differ from the prices at which such securities may ultimately be sold. Third-party pricing information may at times not be available regarding certain of a Fund’s assets. Derivatives Regulation Certain of the Funds engage in derivative transactions. A derivative is a financial contract the value of which depends upon, or is derived from, the value of underlying assets, reference rates or indices. Derivatives may relate to securities, interest rates, currencies or currency exchange rates, inflation rates, commodities and related indices, and include foreign currency contracts, swap contracts, options, forward contracts, repurchase or reverse repurchase agreements or other over- the-counter contracts. A Fund may use derivatives for many purposes, including as a substitute for direct investment in securities or other assets, as a means to hedge other investments and to manage liquidity and excess cash. A Fund also may use derivatives as a way to adjust its exposure to various securities, markets and currencies without actually having to sell existing investments and/or make new investments. The U.S. government has enacted legislation that provides for new regulation of the derivatives market, including clearing, margin, reporting, and registration requirements, which may restrict a Fund’s ability to engage in derivatives transactions or increase the cost or uncertainty involved in such transactions. The European Union (and some other countries) are implementing similar requirements, which will affect a Fund when it enters into a derivatives transaction with a counterparty organized in that country, or otherwise subject to that country’s derivatives regulations. Because these requirements are new and evolving (and some of the rules are not yet final) their ultimate impact remains unclear. In some ways, cleared derivative arrangements are less favorable to the Funds than bilateral arrangements, for example, by requiring that the Funds provide more margin for their cleared derivatives positions. Also, as a general matter, in contrast to a bilateral derivatives position, following a period of notice to a Fund, a clearing member at any time can require termination of an existing cleared derivatives position or an increase in margin requirements above those required at the outset of a transaction. Clearing houses also have broad rights to increase margin requirements for existing positions or to terminate those positions at any time. Any increase in margin requirements or termination of existing cleared derivatives positions by the clearing member or the clearing house could interfere with the ability of a Fund to pursue its investment strategy. Also, a Fund is subject to risk if it enters into a derivatives transaction that is required to be cleared (or that the Adviser expects to be cleared), and no clearing member is willing or able to clear the transaction on the Fund’s behalf. In those cases, the position might have to be terminated, and the Fund could lose some or all of the benefit of the position, including loss of an increase in the value of the position and loss of hedging protection. Some types of cleared derivatives are required to be executed on an exchange or on swap execution facilities (“SEFs”). A SEF is a trading platform where multiple market participants can execute derivatives by accepting bids and offers made by multiple other participants in the platform. While this execution requirement is designed to increase transparency and liquidity in the cleared derivatives market, trading on a swap execution facility can create additional costs and risks for the Fund. For example, SEFs typically charge fees, and if the Fund executes derivatives on a SEF through a broker intermediary, the intermediary may impose fees as well. Also, a Fund may indemnify a SEF, or a broker intermediary who executes cleared derivatives on a SEF on the Fund’s behalf, against any losses or costs that may be incurred as a result of the Fund’s transactions on the SEF. The U.S. government and the European Union have adopted mandatory minimum margin requirements for bilateral derivatives. Such requirements may increase the amount of margin a Fund needs to provide in connection with its derivatives transactions and, therefore, make derivatives transactions more expensive. These and other new rules and regulations may, among other things, further restrict a Fund’s ability to engage in, or increase the cost to the Fund of, derivatives transactions, for example, by making some types of derivatives no longer available to the Fund or otherwise limiting liquidity. Derivative instruments involve risks different from, and, in certain cases, greater than the risks presented by more traditional investments. Derivative products are specialized instruments that require investment techniques and risk analyses different from those associated with other types of investments. The use of a derivative requires an understanding not only of the underlying instrument, but also of the derivative itself. In particular, the use and complexity of derivatives require the maintenance of adequate controls to monitor the transactions entered into and the ability to assess the risk that a derivative adds to a Fund’s portfolio. Many derivative instruments also have documentation risk. Because the contract for each over- the-counter derivative transaction is individually negotiated with a specific counterparty, there exists the risk that the parties may interpret contractual terms (e.g., the definition of default) differently when a Fund seeks to enforce its contractual rights. If that occurs, the cost and unpredictability of the legal proceedings required for a Fund to enforce its contractual rights may lead the Fund to decide not to pursue its claims against the counterparty. A Fund, therefore, assumes the risk that it may be unable to obtain payments the Adviser believes are owed to it under derivatives instruments or those payments may be delayed or made only after the Fund has incurred the costs of litigation. Also, payment amounts calculated in connection with standard industry conventions for resolving contractual issues (e.g., ISDA protocols and auction processes) may be different than would be realized if a counterparty were required to comply with the literal terms of the derivatives contract (e.g., physical delivery). There is little case law interpreting the terms of most derivatives or characterizing their tax treatment. In addition, the literal terms of an over-the-counter contract may be applied in ways that are at odds with the investment thesis behind the decision to enter into the contract. Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives. Many derivatives, in particular over-the-counter derivatives, are complex and their valuation often requires modeling and judgment, which increases the risk of mispricing or improper valuation, and there can be no assurance that the pricing models employed by the Adviser will produce valuations that are consistent with the values realized when over-the- counter derivatives are actually closed out or sold. This valuation risk is more pronounced when a Fund enters into over-the-counter derivatives with specialized terms because the value of those derivatives in some cases is determined in part by reference to similar derivatives with more standardized terms. Improper valuations may result in increased cash payment requirements to counterparties, under collateralization and/or errors in calculation of a Fund’s net asset value. Furthermore, derivatives also involve the risk that changes in their value may not correlate perfectly with the assets, rates or indices they are designed to track. The risk may be more pronounced when outstanding notional amounts in the market exceed the amounts of the referenced assets. Suitable derivatives are not available in all circumstances. For example, the economic costs of taking some derivatives positions may be prohibitive. Consequently, a Fund’s use of derivatives may not always be an effective means of furthering the Fund’s investment objective. In addition to the risks referenced above, derivatives are subject to market risk, counterparty risk, illiquidity risks, leverage risk, and non-U.S. currency risks, which are discussed elsewhere in this section. Options

Certain of the Funds invest in options. Purchasing put and call options, as well as writing such options, are highly specialized activities and entail greater than ordinary investment risks. Although an option buyer’s risk is limited to the amount of the original investment for the purchase of the option, an investment in an option may be subject to greater fluctuation than is an investment in the underlying securities. In theory, an uncovered call writer’s loss is potentially unlimited, but in practice the loss is limited by the term of existence of the call. The risk for a writer of a put option is that the price of the underlying securities may fall below the exercise price. The ability to trade in or exercise options may be restricted in the event that trading in the underlying securities interest becomes restricted.

Unlike exchange-traded options, which are standardized with respect to the underlying instrument, expiration date, contract size, and strike price, the terms of over-the-counter options (options not traded on exchanges) are generally established through negotiation with the other party to the option contract. While this type of arrangement allows a Fund greater flexibility to tailor an option to its needs, over-the-counter options generally involve greater credit risk than exchange-traded options, which are guaranteed by the clearing organization of the exchanges where they are traded.

Swap Contracts Certain of the Funds enter into swap contracts, including but not limited to, total return, interest rate, basis, currency, credit default, and inflation. A Fund may enter into swaps for speculative or hedging purposes and therefore may increase or decrease a Fund’s exposure to the underlying instrument; certain Funds utilize swaps where the Adviser believes such investments will further the objectives of the Fund. Notional amounts of swap transactions are not subject to any limitations, and swap contracts may expose a Fund to unlimited risk of loss. Swaps may be used as an alternative to futures contracts. To the extent a Fund invests in repos, swaps, forwards, futures, options and other “synthetic” or derivative instruments, a Fund would be subject to counterparty risk. In addition, a Fund may enter into swaps on securities, baskets of securities or securities indices and a Fund may use such swaps to gain investment exposure to the underlying security or securities where direct ownership is either not legally possible or is economically unattractive. A Fund also may enter into swaps to modify its exposure to particular currencies using currency swaps. Credit Default Swaps A Fund may directly or indirectly use credit default swaps to take an active long or short position with respect to the likelihood of default by a corporate or sovereign issuer of fixed income securities (including asset-backed securities). In a credit default swap, one party pays, in effect, an insurance premium through a stream of payments to another party in exchange for the right to receive a specified return in the event of default (or similar events) by one or more third parties on their obligations. For example, in purchasing a credit default swap, a Fund may pay a premium in return for the right to put specified bonds or loans to the counterparty, such as a U.S. or non-U.S. issuer or basket of such issuers, upon issuer default (or similar events) at their par (or other agreed-upon) value. Rather than exchange the bonds for the par value, a single cash payment may be due from the protection seller representing the difference between the par value of the bonds and the current market value of the bonds (which may be determined through an auction). A Fund, as the purchaser in a credit default swap, bears the risk that the investment might expire worthless. It also would be subject to counterparty risk the risk that the counterparty may fail to satisfy its payment obligations to such Fund in the event of a default (or similar eve nt). In addition, as a purchaser in a credit default swap, a Fund’s investment would only generate income in the event of an actual default (or similar event) by the issuer of the underlying obligation. A Fund also may invest in credit default indices, which are indices that reflect the performance of a basket of credit default swaps. A Fund also may use credit default swaps for investment purposes by selling a credit default swap, in which case such Fund will receive a premium from its counterparty in return for the Fund’s taking on the obligation to pay the par (or other agreed-upon) value to the counterparty upon issuer default (or similar events). As the seller in a credit default swap, the Fund effectively adds economic leverage to its portfolio because, in addition to its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. If no event of default (or similar event) occurs, the seller of a credit default swap would keep the premium received from the counterpa rty and generally would have no payment obligations, with the exception of an initial payment made on the credit default swap or any margin requirements with the credit default swap counterparty. For credit default swap agreements, trigger events for payment under the agreement vary by the type of underlying investment (e.g., corporate and sovereign debt, asset-backed securities, and credit default swap indices) and by jurisdiction (e.g., United States, Europe and Asia). The credit default swap market in high-yield securities is comparatively new and rapidly evolving compared to the credit default swap market for more seasoned and liquid investment grade securities. Swap transactions that are dependent upon credit events are priced incorporating many variables including the pricing and volatility of the common stock, potential loss upon default and the shape of the U.S. Treasury Market curve, among other factors. As such, there are many factors upon which market participants may have divergent views. The Adviser may also enter into credit default swap transactions, even if the credit outlook is positive, if it believes that participants in the marketplace have incorrectly valued the components which determine the value of a swap. Futures and Related Options The Adviser buys and sells futures contracts and related options on behalf of a Fund. A futures contract is an agreement between two parties to buy and sell a specific quantity of a commodity (including a securities index or an interest-bearing security) for a set price at a future date. A Fund may also buy and sell call and put options on futures or on securities indexes in addition to or as an alternative to purchasing or selling futures contracts, or, to the extent permitted by applicable law, to earn additional income. The use of futures and related options involves certain special risks. Futures and options transactions involve costs and may result in losses. Certain risks arise because of the possibility of imperfect correlations between movements in the prices of futures and options and movements in the prices of the underlying securities, securities index, currencies or other commodities or of the securities or currencies in a Fund’s portfolio which are the subject of the hedge (to the extent a Fund uses futures and options for hedging purposes). The successful use of futures and options further depends on the Adviser’s ability to forecast market or interest rate movements correctly.

Other risks arise from a Fund’s potential inability to close out its futures or options positions, and there can be no assurance that a liquid secondary market will exist for any futures contract or option at a particular time. The use of futures and options for purposes other than hedging is regarded as speculative. Certain regulatory requirements may also limit a Fund’s ability to engage in futures and options transactions.

Short Sales The Adviser makes short sales of investment securities on behalf of a Fund. In a short sale, the seller sells a security that it does not own, typically a security borrowed from a broker or dealer. Because the seller remains liable to return the underlying security that it borrowed from the broker or dealer, the seller must purchase the security prior to the date on which delivery to the broker or dealer is required. The making of short sales exposes a Fund to the risk of liability for the market value of the security that is sold, which is an unlimited risk due to the lack of an upper limit on the price to which a security may rise. In addition, there can be no assurance that securities necessary to cover a short position will be available for purchase or that securities will be available to be borrowed by a Fund at reasonable cost. If a request for return of borrowed securities occurs at a time when other short sellers of the security are receiving similar requests, a “short squeeze” can occur, and the Fund may be compelled to replace borrowed securities previously sold short with purchases on the open market at the most disadvantageous time, possibly at prices significantly in excess of the proceeds received in originally selling the securities short.

The SEC has in the past adopted interim rules requiring reporting of all short positions above a certain de minimis threshold and is expected to adopt rules requiring monthly public disclosure of short positions in the future. In addition, other non-U.S. jurisdictions where a Fund may trade have adopted reporting requirements. If a Fund’s short positions or its strategy become generally known, it could have a significant effect on the Adviser’s ability to implement its investment strategy. In particular, it would make it more likely that other investors could cause a “short squeeze” in the securities held short by a Fund forcing a Fund to cover its positions at a loss. Such reporting requirements may also limit the Adviser’s ability to access management and other personnel at certain companies where the Adviser seeks to take a short position. In addition, if other investors engage in copycat behavior by taking positions in the same issuers as a Fund, the cost of borrowing securities to sell short could increase drastically and the availability of such securities to a Fund could decrease drastically. Such events could make a Fund unable to execute this investment strategy. The SEC has adopted restrictions on the short sale of securities which fall more than 10 percent in a given day (referred to as the “circuit breaker” or “modified uptick rule”). It is unclear what effect these restrictions will have on a Fund. If the SEC were to adopt additional restrictions on short sales, such restrictions could restrict a Fund’s ability to engage in short sales in certain circumstances, and a Fund may be unable to execute this investment strategy as a result The SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases have adopted) bans on short sales of certain securities. Bans on short selling may make it impossible for a Fund to execute certain investment strategies and may have a material adverse effect on a Fund’s ability to achieve its investment objective and generate returns. In addition, engaging in short selling may increase the risk of a Fund becoming subject to government investigation.

Leveraged Entities Certain Funds make investments whose capital structures have significant leverage. Such investments are inherently more sensitive to declines in revenues and asset values and to increases in expenses and interest rates. The leveraged capital structure of such investments will increase the exposure of the investments to adverse economic factors such as downturns in the economy or deterioration in the condition of the investment, its underlying assets or its industry. Additionally, depending on the level in the capital structure in which a Fund acquires investments, a Fund may be subject to a greater risk of loss than if it acquires securities higher in a capital structure. Certain Funds invest in and utilize derivative instruments, such as put and call options, swaps, futures contracts and options on futures contracts, each of which involves certain special risks and may result in losses, and in certain cases, potentially unlimited losses. To the extent a Fund invests in repurchase transactions, swaps, forwards, futures, options and other “synthetic” or derivative instruments, counterparty exposures can develop and a Fund takes the risk of nonperformance by the other party on the contract. This risk may differ materially from those entailed in exchange- traded transactions which generally are supported by guarantees of clearing organizations, daily marking-to-market and settlement, and segregation and minimum capital requirements applicable to intermediaries. In the international securities markets, the existence of less mature settlement structures and systems can result in settlement default and exposure to counterparty credits. Certain regulatory requirements may also limit a Fund’s ability to engage in derivatives transactions. In addition, the use of futures and related options involves certain additional risks. The successful use of futures and options further depends on the Adviser’s ability to forecast market or interest rate movements correctly. Other risks arise from a Fund’s potential inability to close out its futures or options positions, and there can be no assurance that a liquid secondary market will exist for any futures contract or option at a particular time. Certain regulatory requirements may also limit a Fund’s ability to engage in swaps, futures and options transactions. Swaps and certain options and other custom instruments are subject to the risk of non- performance by the swap counterparty, including risks relating to the creditworthiness of the swap counterparty, market risk, liquidity risk and operations risk. Counterparty Risk A Fund is exposed to counterparty risk to the extent it uses certain derivatives, enters into repurchase agreements, or lends its portfolio securities or posts margin due to changes in the market value of a derivative contract. If a counterparty fails to meet its contractual obligations, goes bankrupt, or otherwise experiences a business interruption, a Fund could miss investment opportunities or otherwise hold investments it would prefer to sell, resulting in losses for the Fund. Certain markets in which a Fund may effect transactions are “over-the-counter” and may include unregulated private markets. This exposes the Fund to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing a Fund to suffer a loss. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where a Fund has concentrated its transactions with a single or small group of counterparties. A Fund may also be exposed to similar risks with respect to non-U.S. brokers in jurisdictions where there are delayed settlement periods. A Fund typically may only close out over-the-counter transactions with the relevant counterparty, and may only transfer a position with the consent of the particular counterparty. A Fund may invest in derivatives (i) as to which the counterparty’s obligations are not secured by collateral, (ii) that require collateral but in which a Fund’s security interest is not perfected, (iii) that require significant upfront deposits unrelated to the derivatives’ intrinsic value, or (iv) that do not require the collateral to be regularly marked-to-market. When a counterparty’s obligations are not fully secured by collateral, a Fund is essentially an unsecured creditor of the counterparty. If the counterparty defaults, a Fund will have contractual remedies, but there is no assurance that a counterparty will be able to meet its obligations pursuant to such contracts or that, in the event of default, a Fund will succeed in enforcing contractual remedies. Under recent rules and regulations, transactions in some types of swaps (including interest rate swaps and credit default swaps on North American and European indices) are required to be centrally cleared (“cleared derivatives”). In such cases, a Fund’s counterparty is a clearing house, rather than a bank or broker. Since a Fund is not a member of a clearing house and only members of a clearing house (“clearing members”) can participate directly in the clearing house, a Fund will hold cleared derivatives through accounts at a clearing member. In cleared derivatives transactions, a Fund will make payments (including margin payments) to and receive payments from a clearing house through its accounts at a clearing member. A Fund may be treated as an unsecured creditor of such clearing member in the event of insolvency, such increase or termination a Fund’s behalf. Counterparty risk also may be more pronounced if (i) a counterparty’s credit risk of market participants, with respect to derivatives that are centrally cleared, is concentrated in a fe w clearing houses, and it is not clear how an insolvency proceeding of a clearing house would be conducted and what impact any such insolvency would have on the financial system, (ii) a counterparty’s obligations exceed the amount of collateral held by a Fund (if any), (iii) a Fund is unable to exercise its interest in collateral upon default by the counterparty, or (iv) the termination value of the instrument varies significantly from mark-to-market value of the instrument. When a counterparty’s obligations are not fully secured by collateral, a Fund is exposed to the risk of having limited recourse if the counterparty defaults. These risks may be particularly acute in environments in which financial services firms are exposed to systemic risks. During periods of market disruptions, a Fund may have a greater need for cash to provide collateral for large swings in the mark-to-market obligations arising under the derivatives used by a Fund. A Fund will be exposed to the credit risk of its counterparties and may also bear the risk of settlement default. For example, although the seller under a repurchase agreement will be required to maintain the value of the securities subject to the agreement in an amount exceeding the repurchase price, default by the seller would expose a Fund, as buyer, to possible loss due to adverse market action or delay in connection with the disposal of the underlying obligations. Conversely, where a Fund acts as seller under a repurchase agreement it is exposed to the risk of the buyer defaulting in its obligation to return the securities when it is required to do so, and a Fund could realize a loss on the purchase of the underlying security to the extent that the purchase price of the underlying security is greater than the cash collateral posted by the buyer. In addition, if the seller becomes involved in bankruptcy or litigation proceedings, the Fund may incur delay and costs in selling the underlying security or may suffer a loss of principal and interest if a Fund is treated as an unsecured creditor and is required to return the underlying collateral to the seller’s estate. In the case of over-the-counter derivatives, the bankruptcy or insolvency of the counterparty may allow a Fund to elect to terminate early with respect to some or all the transactions under the agreement with such counterparty, and any relevant agreement may permit the non-defaulting party to calculate a single net payment to close out applicable transactions. However, there is no guarantee that the terms of any such agreement will be enforceable, including, for example, when bankruptcy or insolvency laws impose restrictions on or prohibitions against rights to terminate, offset obligations or apply collateral to the counterparty’s obligations. Additionally, in the event of a counterparty’s (or its affiliate’s) insolvency, the possibility exists that a Fund’s ability to exercise remedies, such as the termination of transactions, netting of obligations or realization on collateral, could be stayed or eliminated under new special resolution regimes adopted in the United States, the European Union (“EU”) and various other jurisdictions. Such regimes provide governmental authorities broad authority to intervene when a financial institution is experiencing financial difficulty. In particular, in the EU, governmental authorities could reduce, eliminate, or convert to equity the liabilities of a counterparty experiencing financial difficulties (sometimes referred to as a “bail in”). Assets held outside the United States may be subject to different and/or diminished protection in the event of the failure of a counterparty located in such jurisdiction. Securities purchased or sold on a “when-issued” or “delayed delivery” basis involve a risk of loss if the value of the securities to be purchased declines prior to the settlement date or if the value of the securities to be sold increases prior to a settlement date. Loans of securities also involve risks of delay in receiving additional collateral or in recovering the securities loaned, or possibly loss of rights in the collateral, should the borrower of the securities become insolvent. Due to the nature of a Fund’s investments, a Fund may invest in derivatives and/or execute a significant portion of its securities transactions through a limited number of counterparties and events that affect the creditworthiness of any of those counterparties may have a pronounced effect on a Fund. In addition, the creditworthiness of a counterparty may be adversely affected by larger than average volatility in the markets, even if the counterparty’s net market exposure is small relative to its capital. A Fund is not restricted from dealing with any particular counterparty or from concentrating any or all transactions with one counterparty. The ability of a Fund to transact business with any one of a number of counterparties, the lack of any meaningful and independent evaluation of such counterparties’ financial capabilities and the absence of a regulated market to facilitate settlement may increase the potential for losses by a Fund. A Fund may sustain a loss as a result of the failure of the other party to a derivative to comply with the terms of the derivative contract. Custodial Risk One or more banks or broker-dealers may act as custodians for certain assets of a Fund. Custodians could provide certain clearing, including prime brokerage, margin financing or other financing facilities in addition to custodial functions. If a custodian were to become insolvent, a Fund would, in respect of financial assets credited to securities accounts and held in street name, have only rights in common with other customers of the custodian and would not have ownership of, or rights with respect to, any specific financial assets maintain by the custodian. If any custodian has insufficient financial assets to satisfy all of its customers and its secured creditors, a Fund could suffer losses. Furthermore, if a Fund uses a broker-dealer as custodian (or prime broker), the bankruptcy of such custodian might have a greater adverse effect on a Fund than would be the case if the Fund used a bank as custodian. This is because, subject to certain limitations, a broker generally has the ability to loan, pledge, and rehypothecate the securities in its customers’ accounts, as is typical market practice, and therefore may have insufficient assets to meet all of its obligations to “customers” in the event of insolvency of the broker-dealer. Even if a custodian has sufficient assets to meet all “customer” claims, there may be a substantial delay in proceedings against a custodian and the assets of a Fund could become substantially impaired during such proceedings. With respect to assets held with custodians outside of the U.S., a Fund’s assets could be subject to laws and regulations that are less favorable to a Fund than those of the U.S. (including with respect to the priority of any claims that a Fund may have upon a bankruptcy, insolvency or liquidation of any custodian, which may result in a Fund being an unsecured creditor of such custodian rather than having a priority “customer” claim). Placement of a custodian in bankruptcy or similar proceeding outside of the U.S. could result in a great deal of uncertainty as to the status of assets or the ultimate recovery, if any, of such assets held by such custodian. SEC rules require the prime brokers to maintain physical possession and control of fully paid securities held in a Fund’s account and to establish certain reserves for the benefit of customers. Credit Risk A Fund’s investments will generally be subject to credit risk. “Credit risk” refers to the likelihood that an issuer will default in the payment of principal and/or interest on an instrument, in which case a Fund may lose some or all of its investment in that instrument, subject a Fund to loss. Financial strength and solvency of an issuer are the primary factors influencing credit risk. In addition, subordination, lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument and securities which are rated by rating agencies are often reviewed and may be subject to downgrade. A significant downturn in the economy or a particular economic sector could have a significant impact on the business prospects of the companies to which a Fund is invested and their ability to comply with their loan repayment obligations, or their ability to refinance such obligations. In order to manage the risks associated with prime broker insolvency, a Fund may establish relationships with multiple prime brokers. However, a Fund may not be able to identify potential solvency concerns with respect to a Fund’s prime brokers or to transfer assets from one prime broker to another prime broker in a timely manner. A Fund may change the brokerage arrangements described above at any time without notice. There are likely to be operational and other delays associated with changes in prime brokerage arrangements. Collateral Obligation Performance Risk In the past, negative economic trends nationally as well as in specific geographic areas of the United States have resulted in an increase in loan defaults and delinquencies. Though levels of defaults and delinquencies have decreased from past peak levels, there is a material possibility that economic activity in the future will be volatile or will slow, and some obligors may be significantly and negatively impacted by negative economic trends. A decreased ability of obligors to obtain refinancing (particularly as high levels of required refinancing approach) may result in economic decline that could delay future economic recoveries and cause deterioration in loan performance generally.

Credit and Market Risks A Fund’s investments will entail normal credit risks and market risks (e.g., the risk that certain market factors will cause the value of the instrument to decline).

To the extent that a Fund invests in bank loans and other debt instruments, the value of a Fund may fluctuate less significantly as a result of interest rate changes than would a portfolio of fixed- rate obligations. A Fund that invests in bank loans may still be subject to fluctuations due to changes in an issuer’s credit quality. In addition, because interest rates on bank loans only reset periodically and may not perfectly correlate with prevailing interest rates, during such time as the interest rate of a loan is fixed, such loan may be subject to the same fluctuations due to interest rate changes as fixed-rate obligations of similar duration. Also, a default on a loan that is held by a Fund or a sudden and extreme increase in prevailing interest rates may cause a decline in the value of a Fund’s assets.

Public Debt In the event that a Fund acquires fixed income securities and/or other instruments that are publicly traded, the Fund will be subject to certain inherent risks. In some circumstances, a Fund may be unable to obtain financial covenants or other contractual rights, including management rights, that it might otherwise be able to obtain in making privately-negotiated debt investments. Moreover, a Fund may not have the same access to information in connection with investments in public instruments, either when investigating a potential investment or after making an investment, as compared to a privately-negotiated debt investment. Bank Loans and Participations Certain Funds will seek to invest in bank loans, assignments and participations. These obligations are subject to certain special risks, including: (i) the possible invalidation of an investment transaction as a fraudulent conveyance under relevant creditors’ rights laws; (ii) so-called lender- liability claims by the issuer of the obligations; (iii) environmental liabilities that may arise with respect to collateral securing the obligations; and (iv) limitations on the ability of a Fund to enforce its rights directly with respect to participations. Successful claims by third parties arising from these and other risks, absent certain conduct by the Adviser and certain other individuals, will be borne by the Fund. Refinancing Risk A Fund’s assets may include loans for which most or all of the principal is due at maturity. The ability of the obligor(s) under such loan to make such a large payment upon maturity could depend upon its ability to refinance the loan prior to maturity. The ability of an obligor to consummate a refinancing will be affected by many factors, including the availability of financing at acceptable rates to such obligor, the financial condition of such obligor, the marketability of the collateral (if any) securing such loan, the operating history of the obligor and related businesses, tax laws and prevailing general economic conditions. Additionally, middle-market or smaller obligors generally have more limited access to capital and higher funding costs, may be in a weaker financial position, may need more capital to expand or compete, and may be unable to obtain financing from public capital markets or from more traditional sources, such as commercial banks. Consequently, such obligor may not have the ability to repay the loan at maturity and, unless it is able to refinance such loan, it could default in payment at maturity, which could result in losses to a Fund and, indirectly, to the investors. Significant numbers of obligors are expected to need to refinance their debt over the next few years, and significant numbers of collateralized loan obligation transactions (historically an important source of funding for loans) have reached or are close to reaching the end of their reinvestment periods or the final maturities of their own debt. As a result, there could be significant pressure on the ability of obligors to refinance their debt over the next few years unless a significant volume of new please register to get more info

There are no legal or disciplinary events that are material to a Client’s (or investor’s) or a prospective Client’s (or investor’s) evaluation of the Adviser’s advisory business or the integrity of the Adviser’s management. please register to get more info

Related General Partners and Directors

The Adviser organizes certain of the Funds, which in certain cases are limited partnerships for which the Adviser (including affiliates of Benefit Street) serves as general partner or exempted companies for which employees or affiliates of Benefit Street serve as members of the board of directors. For a description of material conflicts of interest created by these relationships, as well as a description of how such conflicts are addressed, please see Item 11 below.

Affiliated Advisers

Benefit Street is affiliated with the investment advisers listed below.

 BDCA Adviser, LLC: a U.S. registered investment adviser with the SEC.  BSP CLO Management LLC: a U.S. registered investment adviser with the SEC.  Franklin BSP Capital Adviser LLC: as of the date of this brochure, pending registration as a U.S. registered investment adviser with the SEC.

Clients of the Adviser from time to time participate in transactions alongside other clients of the Adviser or clients of an affiliated adviser. Certain employees and management persons of the Adviser are also listed as principals or registered as associated persons of the Adviser in connection with the Adviser’s registration as a CPO and as a CTA, and membership with the NFA.

The Adviser is a subsidiary of Franklin Resources, Inc., a global investment management organization (together with its affiliated advisers (but excluding the Adviser), referred to in this section as “Franklin Templeton”). Franklin Templeton is operated and managed separately from the Adviser, and Franklin Templeton does not have any involvement in the day to day investment operations of the Adviser. The Adviser does not direct or coordinate with Franklin Templeton. All recommendations and allocations of investment opportunities are made by the Adviser independent of Franklin Templeton. For a description of material conflicts of interest created by the relationship among the Adviser and the affiliated advisers, as well as a description of how such conflicts are addressed, please see Item 11 below. please register to get more info

Trading
Code of Ethics The Adviser’s code of ethics (“Code of Ethics”) requires each of the Adviser’s employees to deal honestly and fairly with all persons with whom he or she has contact. The Code of Ethics is designed to comply with Rule 17j-1 of the Investment Company Act and Rule 204A-1 of the Advisers Act. Employees at all times must place the interests of the Funds and their investors first. Employees are required to conduct their personal trading so as to avoid any actual or potential conflicts of interest or any abuse of a position of trust or responsibility. Moreover, employees may not take inappropriate advantage of their positions. The Code of Ethics includes policies regarding personal trading by the Adviser’s employees and members of their immediate families. These policies limit personal trading by employees in a wide range of securities, including common and preferred stock, debt instruments, securities that are convertible or exchangeable for equity or debt securities, derivative instruments, and shares of closed-end investment companies registered under the Investment Company Act and business development companies. Employees must report every account in which they have a direct or indirect beneficial interest, other than personal savings or checking accounts that are not able to hold securities of any type, and have copies of periodic account statements sent by their broker(s) to the Adviser’s compliance department. In addition, if they directly or indirectly influence or control trading in the account, they must pre-clear covered securities transactions with the Adviser’s compliance department.

Proprietary Fund, as defined and discussed below, investments generally are not expected to be suitable for any Fund (although such investments may have originally been considered for investment by one or more Funds and subsequently determined to be not appropriate for investment by such Funds). In making determinations about investment suitability, the Adviser considers a number of factors, including, without limitation, the investment strategies of the Funds, the return parameters of the Funds, and the Adviser’s fiduciary duties to the Funds and the Funds’ investors. In the event that an investment of the Propriety Fund is also suitable for Funds, any such investment shall be allocated in accordance with the Adviser’s investment allocation policy and procedures in effect at the time.

A copy of the Code of Ethics is available to any client or prospective client upon request by calling Alexander H. McMillan at 212-588-6712 or by writing to Mr. McMillan, Chief Compliance Officer, Benefit Street Partners L.L.C., 9 West 57th Street, Suite 4920, New York, New York 10019. Valuation of Fund Assets The Adviser has a duty to value the Funds as provided in and consistent with the organizational documents and policies and procedures of those Funds as applicable. The Adviser has adopted a policy regarding the valuation of Fund assets in order to provide a basis for establishing valuations reported by Funds. Certain Funds have portfolio investments that include restricted securities in publicly held companies and privately held investments, which are carried at an estimate of fair value as determined in good faith and in accordance with the organizational documents of the applicable Fund or pursuant to procedures determined by a Valuation Committee of the Fund, when applicable. In the absence of special circumstances, all portfolio investments, other than restricted and privately held portfolio investments, are valued at market value. Market value for unrestricted, publicly traded portfolio investments is determined based on the closing price on the exchange on which the security is principally traded. Restricted and privately held portfolio investments, which may not have readily ascertainable market values, are valued at fair value, which is the estimated amount that would be received upon the sale of the portfolio investment in an orderly transaction between market participants on the measurement date. In establishing the fair value of portfolio securities, the Adviser or applicable general partner takes into consideration, for each portfolio company, some or all of the following: (a) the prices of securities of comparable quality and type; (b) the liquidity of the position; (c) any correlation with general market indicators, such as indices; (d) transactions in similar securities; (e) a significant event occurs after either a security’s last trade or the close of regular trading on the market where that security trades and before the portfolio’s valuation time; (f) the nature and duration of restrictions on the disposition of securities (if applicable); (g) an evaluation of the forces which influence the market in which these securities may be purchased or sold; (h) input from third-party valuation consultants; and (i) any other specific factors which may affect pricing. The Adviser also considers the application of control premiums and certain discounts in various situations. However, because of the inherent uncertainty of valuation, the recommended values may differ significantly from values that would have been used had a ready market for the restricted and privately held portfolio investments existed, and may differ significantly from the amounts realized upon disposition, and the differences could be material. Furthermore, the Adviser’s, or applicable general partner’s, use of discretion in the valuation of a Fund may give rise to conflicts of interest if such valuations are utilized in the calculation of the Incentive Allocation and management fees attributable to the Adviser.

The Adviser may, when applicable, value investments in accordance with U.S. generally accepted accounting principles (“GAAP”). Additionally, the Adviser may use independent third-party valuation services to assist with any or all valuations of a Fund’s portfolio investments. Notwithstanding the foregoing, valuations for a particular Fund will comply with the requirements of the relevant Fund’s organizational documents.

The Adviser may modify the valuation methods described above if it determines that such modifications are appropriate and reasonable to reflect the value of any securities or other assets or liabilities, and will document the basis for any modifications.

With respect to the Sub-Advised Funds, the Adviser will generally coordinate with those Funds’ investment advisers and value the Funds’ assets to the extent required by and in accordance with those Funds’ policies and procedures. Participation or Interest in Client Transactions The Adviser, its affiliates, certain of its principals and employees, and/or their family members and related vehicles invest in and alongside certain of the Funds, and/or in one or more classes of CLO securities and additional subordinated notes issued by the CLO Funds, either through a general partner of a Fund, as direct investors in a Fund or otherwise. Advisory Fees and Incentive Allocations assessed on such investments are typically substantially reduced or waived entirely by the Adviser, a Fund or its general partner, as applicable. For further details regarding these arrangements, as well as conflicts of interest presented by them, please see “Conflicts of Interest” below. Investor Due Diligence Information Due in part to the fact that potential investors in a Fund (including a potential purchaser of an interest in a secondary transaction) may ask different questions and request different information, the Adviser provides certain information to one or more prospective investors that it does not provide to all of the prospective or current investors of the Fund. In addition, certain investors in the Funds are strategic investors directly or indirectly into the Adviser, which results in such investors receiving greater or different information regarding the Adviser.

Conflicts of Interest

The Adviser and its affiliates engage in a broad range of activities, including investment activities for their own account, for the Proprietary Fund, as defined and discussed below, and for the account of the Funds and other clients. In the ordinary course of conducting its activities, the interests of a Fund may conflict with the interests of the Adviser, other Funds or their respective affiliates. Certain of these conflicts of interest, as well as a description of how the Adviser addresses such conflicts of interest, can be found below. The discussion below does not describe all conflicts that may arise.

Resolution of Conflicts In the case of all conflicts of interest, the Adviser’s determination as to which factors are relevant, and the resolution of such conflicts, will be made using the Adviser’s best judgment, in its sole discretion. In resolving conflicts, the Adviser considers various factors, including the interests of the applicable Funds with respect to the immediate issue and/or with respect to their longer term courses of dealing. Certain procedures for resolving specific conflicts of interest are set forth below. When conflicts arise, the following factors may mitigate, but will not eliminate, conflicts of interest:

(1) A Fund will not make an investment unless the Adviser believes that such investment is an appropriate investment considered solely from the viewpoint of the applicable Fund. (2) Conflicts of interest will generally be resolved by set procedures contained in the relevant offering and organizational documents of a Fund, if applicable. (3) The Adviser and certain of its affiliates have adopted written policies establishing information “walls” designed to limit communication between business units investing in equity securities and debt securities of companies. These policies restrict the transfer of confidential information between these business units, subject to certain exceptions provided in the policies. These policies establish procedures for communications among employees of different business units to guard against unlawful and inappropriate disclosure of material, nonpublic information. (4) On any issue involving actual conflicts of interest, the Adviser will be guided by its good faith judgment. In addition, certain provisions of a Fund’s organizational documents are designed to protect the interests of investors in situations where conflicts may exist, although these provisions do not eliminate such conflicts. In certain instances, some conflicts of interest may be resolved in a manner adverse to a Fund and its ability to achieve its investment objectives. Potential Conflicts The potential material conflicts of interest encountered by a Fund include those discussed below, although the discussion below does not necessarily describe all of the conflicts that may be faced by a Fund. Other conflicts may be disclosed throughout this brochure and the brochure should be read in its entirety for other conflicts.

Principal Transactions Section 206 of the Advisers Act regulates principal transactions among an investment adviser and its affiliates, on the one hand, and its clients, on the other hand. Very generally, if an adviser (or an affiliate) purchases a security from or sells a security to a client, the adviser must disclose the terms of the transaction to the client and obtain the consent of the client prior to engaging in the principal transaction. In connection with the Adviser’s management of certain of the Funds, and to the extent permitted by law and the Adviser’s or an applicable Fund’s compliance policies and procedures, the Adviser and its affiliates may engage in principal transactions, but will not directly or indirectly receive any commission or other transaction based compensation for effecting such transaction. The Adviser has established certain policies and procedures to comply with the requirements of the Advisers Act and the Investment Company Act as they relate to principal transactions, including, among other things, that disclosures required by Section 206 be made to the applicable Fund regarding any proposed principal transactions and that any required prior consent is received before executing a principal transaction.

Cross Transactions A cross transaction generally refers to a transaction where one client account managed by the Adviser or its affiliates seeks to acquire an investment that another client account of the Adviser seeks to sell. Cross transactions may create conflicts of interest because a Fund is on both sides of the transaction. The Adviser on occasion, and to the extent permitted by applicable law, including the Investment Company Act, and the Adviser’s or an applicable Fund’s compliance policies and procedures, purchases a security or asset for one Fund at the same time as a sale of the same security or asset for another Fund or effects cross transactions between Funds. Such transactions may, for example, be effected to rebalance the positions held by the Funds with a view towards achieving uniform results among certain clients in light of differing cash flows due to subscriptions and redemptions. The valuation of investments transferred between Funds may involve conflicts of interest. Conflicts Related to Purchases and Sales The Adviser, its affiliates, and officers, principals or employees of the Adviser and its affiliates may buy or sell securities or other instruments that the Adviser has recommended to clients. In addition, such officers, principals or employees may buy securities in transactions offered to but rejected by clients. Such transactions are subject to the policies and procedures adopted by the Adviser from time to time. The investment policies, fee arrangements, and other circumstances of these investments may vary from those of the Adviser’s other clients or clients of its affiliates. The Adviser, its affiliates, certain of its principals and employees, and their relatives may invest in and alongside the Funds either through a general partner of a Fund, as direct investors in a Fund or otherwise, and therefore may have additional conflicting interests in connection with these investments. The Adviser, its affiliates, and their employees are prohibited from “front running” (i.e., purchasing a security for a personal account while knowing that a Fund is about to purchase the same security, and then selling the security at a profit upon the rise in the market price following the purchase by the Fund). They are similarly prohibited from engaging in short selling when they have access to confidential information that a Fund is about to sell a particular security. In addition, they are prohibited from “intermarket front running” (e.g., trading in an option for a personal account when a Fund is trading in the underlying security and vice versa). Nevertheless, if the Adviser, its affiliates, and their employees have made large capital investments in or alongside the Funds, such persons may have conflicting interests from such Funds with respect to these investments (for example, with respect to the availability and timing of liquidity). A particular investment may be bought or sold for only one Fund or in different amounts and at different times for one (or more than one) Fund, even though it could have been bought or sold for other Funds at the same time. Likewise, a particular investment may be bought for one or more Funds when one or more other Funds are selling the investment. Conflicts also may arise when a Fund makes investments in conjunction with an investment being made by other Funds or a client of the Adviser’s affiliate, or in a transaction where another Fund or client of such an affiliate has already made an investment. Investment opportunities may be appropriate for Funds and/or clients of the Adviser’s affiliate at the same time, at different or overlapping levels of a portfolio company’s capital structure. Conflicts may arise in determining the terms of investments, particularly where these clients may invest in different types of securities in a single portfolio company. Questions may arise as to whether payment obligations and covenants should be enforced, modified or waived, or whether debt should be refinanced. Decisions about what action should be taken in a troubled situation, including whether or not to enforce claims, whether or not to advocate or initiate a restructuring or liquidation inside or outside of bankruptcy, and the terms of any work out or restructuring may raise conflicts of interest, particularly in Funds and clients of the Adviser’s affiliates that have invested in different securities within the same portfolio company. Certain clients of the Adviser and its affiliates invest in bank debt, loans and securities of or other investments in companies in which other clients of the Adviser or its affiliates hold securities, loans or other investments, including equity securities, which may include a controlling position. In the event that such investments are made by a Fund, the interests of such Fund may be in conflict with the interest of such other Fund or client of the Adviser’s affiliates, particularly in circumstances where the underlying company is facing financial distress. The involvement of such persons at both the equity and debt levels, or in different levels of the debt structure of an issuer, could cause conflicts of interest. In certain circumstances, decisions made with respect to investments held by one Fund or client of the Adviser’s affiliates could adversely affect the investments of another Fund or another client of the Adviser’s affiliates. The involvement of such persons at multiple levels of the capital structure could also inhibit strategic information exchanges among fellow creditors. In certain circumstances, Funds or the clients of the Adviser’s affiliates may be prohibited from exercising voting or other rights, and may be subject to claims by other creditors with respect to the subordination of their interest. If additional capital is necessary as a result of financial or other difficulties, or to finance growth or other opportunities, the Funds may or may not provide such additional capital, and if provided each Fund will supply such additional capital in such amounts, if any, as determined by the Adviser. The Adviser and its affiliates may seek to address these conflicts by adopting policies and procedures, which may include limiting investments by a Fund which produce such conflicts, limiting voting or roles on creditors’ committees, procedures designed to ensure that the teams managing the investments make independent decisions through the enforcement of information barriers and similar procedures, or other procedures in the judgment of the Adviser.

Investments by more than one client of the Adviser or its affiliates in a portfolio company may also raise the risk of using assets of a client of the Adviser or its affiliates to support positions taken by other clients of the Adviser or its affiliates. The Adviser and its affiliates will attempt to resolve any such conflicts in good faith, but there can be no assurance that such conflicts of interest or actions taken by the Adviser or its affiliates in respect of other Funds will not have an adverse effect on the investments made by a Fund. There can be no assurance that the return of a Fund participating in a transaction would be equal to and not less than another Fund participating in the same transaction or that it would have been as favorable as it would have been had such conflict not existed. Conflicts of interest related to investments by other Funds or funds managed by the Adviser’s affiliates may result in a Fund limiting its participation in certain attractive investment opportunities. Allocations Each Fund may pursue investment opportunities similar to those pursued by another Fund or by clients of the Adviser’s affiliates. The Adviser and its affiliates currently advise and manage, and expect that they will in the future advise and manage, other Funds which are additional investment accounts and pooled investment funds, including hedge funds, private equity funds, single investor funds, sector specific, asset class specific or geographic specific private investment funds, including registered investment companies or business development companies, for which an investment to be made by the Fund is also appropriate. To the extent an investment opportunity is suitable for multiple funds, such investment will be allocated between such funds as determined by the Adviser in its good faith judgment and in accordance with the organizational documents of the relevant Funds and subject to applicable legal, tax, regulatory and other considerations. Allocation decisions can raise conflicts, for example, if the Funds or a client of the Adviser’s affiliates have different fee structures. Furthermore, the Adviser, its affiliates, certain of its principals and employees, and their relatives may invest in and alongside the Funds, either through a general partner of a Fund, as direct investors in a Fund or otherwise, and may therefore participate indirectly in investments made by the Funds in which they invest. Such interests will vary Fund by Fund and may create an incentive to allocate particularly attractive investment opportunities to the Fund in which such personnel hold a greater interest. Subject to applicable investment objectives, guidelines and the Funds’ governing documents, the Adviser and its affiliates generally allocate investment opportunities on a pro rata based on the capital of each vehicle available for investment, or in some other manner that the Adviser determines is fair and equitable. With respect to the Funds, current available capital may include, in the Adviser’s discretion, anticipated, target or available leverage, unsettled trades, unfunded commitments, and uncalled capital. Limited opportunities eligible for more than one strategy are generally allocated proportionately as between strategies based on relative desired allocation for the applicable strategy, or in some other fair and equitable manner as determined by the Adviser. In addition, certain investment opportunities may be allocated on a non-pro-rata basis using certain factors such as risk factors or risk tolerances and/or diversification, Fund investment restrictions, tax considerations, currency or other exposures, current portfolio composition (including current cash available), strategies, whether a Fund has an existing investment in the portfolio company, as well as the Fund’s phase in its life cycle (for example, certain opportunities may be over-allocated or under-allocated to a Fund during the beginning or the end of its investment cycle), tax or regulatory restrictions applicable to the Fund, the supply or demand of an investment opportunity at a given price level, the level of transaction costs involved in making the investment relative to the amount of capital the Fund has available for the investment, issuer, sector and geographic diversification, and certain other factors. In particular, the Adviser has in the past and currently intends in the future in certain circumstances to over-allocate certain instruments to certain client accounts (in particular, CLOs) during an initial period at the beginning of such clients’ investment cycle. Such allocations may reduce the supply of such instruments available to other client accounts. Allocations based on the relative desired allocation for the applicable strategy may create an incentive for portfolio managers to seek excess allocations for certain limited opportunities. Allocation decisions can raise conflicts, for example, if certain Funds have different fee structures, or because certain legal and regulatory restrictions under the Advisers Act may prevent a Fund from receiving allocations of investment opportunities also held by or allocable to registered investment companies or business development companies advised or managed by the Adviser or its affiliates. Notwithstanding the foregoing, in certain circumstances as determined by the Adviser in its sole discretion, a Fund that would otherwise receive an allocation under the policies and principles set forth above will not receive such allocation if it would result in an allocation of a de minimis amount. Furthermore, there can be no assurance that the application of the policies and principles set out above will result in a Fund participating in all investment opportunities that fall within its investment objectives. Moreover, BDCA Adviser, LLC (“BDCA Adviser”) and Franklin BSP Capital Advisers LLC (“Franklin BSP”) operate separately with respect to their allocation policies and are subject to certain information wall policies and procedures, such that investment opportunities that BDCA Adviser and Franklin BSP source, respectively, subject to their own separate allocation policies, procedures and obligations and not the allocation policies, procedures and obligations of the others. From time to time, the Adviser may also determine to refer the allocation of certain investment opportunities to the Adviser’s Allocation Committee (the “Allocation Committee”). The Allocation Committee makes recommendations as to the allocation of investment and disposition opportunities among the Adviser’s clients, with the intention of fostering fair and equitable allocation over time. The Allocation Committee consists of senior officers of appropriate departments of the Adviser. The appropriate allocation between the Funds of expenses and fees generated in the course of evaluating and making investments which are not consummated, such as out-of-pocket fees associated with due diligence, attorney fees and the fees of other professionals, will be determined by the Adviser and its affiliates in their good faith judgment. In addition, to the extent the Adviser has discretion over approving a secondary transfer of interests in a Fund, or is asked to identify potential purchasers in a secondary transfer, the Adviser will do so in its sole discretion, and is permitted to take into account a variety of factors, including but not limited to its own interests including: the Adviser’s evaluation of the financial resources of the potential purchaser, including its ability to meet capital contribution obligations; the Adviser’s perception of its past experiences and relationships with the potential purchaser, including its belief that the potential purchaser would help establish, recognize, strengthen and/or cultivate relationships that may provide indirectly longer-term benefits to current or future funds and/or the Adviser and the expected amount of negotiations required in connection with a potential purchaser’s investment; whether the potential purchaser would subject the Adviser, a Fund, or their affiliates to legal, regulatory, reporting, public relations, media or other burdens; requirements in the applicable Fund’s organizational documents; a purchaser’s potential investment into a Fund managed or advised by the Adviser (including any commitment to a future fund); and such other facts as it deems appropriate under the circumstances in exercising such discretion. Any intra-Fund allocations will be done in accordance with the organizational documents for such entities, and these allocations are generally expected to be made on a pro rata basis. Nevertheless, the Adviser and its affiliates furnish investment management and advisory services to numerous Funds and accounts and the Adviser and its affiliates may, consistent with applicable law, make investment recommendations to other Funds or accounts (including accounts which are private funds or separately managed accounts which have management fees and performance fees or allocations at higher or varying rates paid to the Adviser or one or more of its affiliates, or in which portfolio managers or other personnel of the Adviser have a personal interest in the receipt of such fees or have personal investments), which may be the same as or different from thos e made to a particular Fund and may cause conflicts of interest in the allocation of investment opportunities. In addition, conflicts of interest or legal or regulatory requirements, including those related to the Investment Company Act, applicable to certain Funds may result in the Adviser and its affiliates limiting a Fund’s or client’s participation (or the Fund or client being unable to participate) in certain attractive investment opportunities. See Item 6. “Performance-Based Fees” above. From time to time in connection with a co-investment opportunity the Adviser or its affiliates may facilitate such co-investment and it or an affiliate may serve as the general partner or equivalent of a co-investment vehicle. The Adviser will determine if the amount of an investment opportunity exceeds the amount the Adviser determines would be appropriate for the Funds (after taking into account any portion of the opportunity allocated by contract to certain participants in the applicable deal, such as co- sponsors, consultants and advisers to the Adviser and/or the Funds or management teams of the applicable portfolio company, certain strategic investors and other investors whose allocation is determined by the Adviser to be in the best interest of the applicable Fund), and any such excess may be offered to one or more co-investors pursuant to the procedures included in such Funds’ organizational documents/side letter agreements. The Adviser may, in its sole discretion, offer co- investment opportunities to one or more partner of a Fund or third parties. In general, (i) no partner will have a right to participate in any co-investment opportunity, (ii) decisions regarding whether and to whom to offer co-investment opportunities, as well as the applicable terms on which a co- investment is made, are made in the sole discretion of the Adviser or its related persons considering such factors as the Adviser may consider relevant, (iii) co-investment opportunities are typically offered to some and not to other investors in the Funds, in the sole discretion of the Adviser or its related persons, which may include affiliates of or investors in the Adviser and its related persons, and investors may be offered a smaller amount of co-investment opportunities than originally requested, (iv) certain persons other than investors in the Funds (e.g., third parties) rather than one or more investors in a Fund, may be offered co-investment opportunities, in the sole discretion of the Adviser or its related persons, and (v) co-investors may purchase their interests in a portfolio company at the same time as the Funds or may purchase their interests from the applicable Funds after such Funds have consummated their investment in the portfolio company (also known as a post-closing sell down or transfer). Notwithstanding the foregoing, the Adviser has entered into certain agreements to provide co- investment rights to certain third parties. The Adviser will allocate available co-investment opportunities among any such other parties as it may in its sole discretion determine (including, without limitation, another fund, affiliates of the Adviser (and/or their respective family members), and any person or entity who the Adviser believes will be of benefit to the co-investment, the Fund, or another fund or who may provide a strategic, sourcing or similar benefit to the investment, Fund, another fund, the Adviser, or one or more of their respective affiliates due to industry expertise or otherwise, including finders, senior advisors, originators and/or consultants of the Fund (and may also organize one or more entities to invest in the Fund or to co-invest alongside the Fund to facilitate personal investments by such persons or entities)). Co-investments may be committed and/or consummated before or after the time that the Fund makes its commitment or acquires the investment. In the event of a post-closing sell down, the Fund will bear the risk that any or all of the excess portion of such investment may not be sold or may only be sold on unattractive terms. The Fund may, in certain circumstances, bear the entire amount of any break-up fee or other fees, costs and expenses related to such investment, hold a larger portion than expected in such investment, or may realize lower-than-expected returns from such investment. The Fund may also borrow to fund the portion of an investment that it intends to sell to co-investors. The Fund will also bear the risk that any co-investors acquiring an interest in an investment after the closing of such investment may acquire such interest on terms that may not reflect the then-current value of such investment. In the case of a post-closing sell down, the Adviser may decide to charge (or may decide not to charge) a co-investor interest costs in addition to cost for the time period between the closing of the Fund’s investment in a portfolio company and the date of the transfer of interests in such portfolio company to the applicable co-investor. In certain circumstances, the Adviser may receive compensation from a third party for a co-investment opportunity. Additionally, non-binding acknowledgements of interest in co-investment opportunities are not investment allocation requirements and do not require the Adviser to notify the recipients of such acknowledgements if there is a co-investment opportunity. In certain cases, a co-investment vehicle, or other similar vehicle established to facilitate the investment by investors to invest alongside the Fund, may be formed in connection with the consummation of a transaction. In the event a co-investment vehicle is created, the investors in such co-investment vehicle will typically bear all expenses related to its organization and formation and other expenses incurred solely for the benefit of the co-investment vehicle. As a general matter, no co-investor will bear dead deal costs or break-up fees until they are contractually committed to invest in the prospective investment and, furthermore, unless any co-investors otherwise agree, the applicable Funds will bear the entire amount of any break-up fee or broken deal expense or other fees, costs and expenses related to an investment that is not consummated. Management of the Funds The Adviser manages a number of Funds that have investment objectives similar to each other. The Adviser expects in the future to establish one or more additional investment funds with investment objectives substantially similar to, or different from, those of the current Funds. Allocation of available investment opportunities between the Funds and any such investment fund could give rise to conflicts of interest. See “Allocations” above. Certain officers and employees of the Adviser who invest in or alongside the Funds may have different interests from the Fund with respect to such investments (for example, with respect to the availability and timing of liquidity). The Adviser may give advice or take actions with respect to, the investments of one or more Fund that may not be given or taken with respect to other Funds with similar investment programs, objectives or strategies. As a result, Funds with similar strategies may not hold the same securities or achieve the same performance. In addition, a Fund may not be able to invest through the same investment vehicles, or have access to similar credit or utilize similar investment strategies as another Fund. These differences may result in variations with respect to price, leverage and associated costs of a particular investment opportunity. In addition, it is expected that employees of the Adviser responsible for managing a particular Fund will have responsibilities with respect to other Funds and funds managed by the Adviser’s affiliates, including funds that it expects to establish in the future. Conflicts of interest may arise in allocating time, services or functions of these employees among Funds and funds managed by the Adviser’s affiliates. See also the Adviser’s response to the section entitled “Other Potential Conflicts” below, which describes other activities undertaken by employees of the Adviser.

Follow-on Investments An additional investment made by a Fund in an existing portfolio company presents a conflict of interest, including the terms of any new financing as well as the allocation of the investment opportunities in the case of follow-on investments by one Fund in a portfolio company in which another Fund or client of the Adviser’s affiliate has previously invested. In addition, a Fund may participate in relevering and recapitalization transactions involving a portfolio company in which another Fund or client of the Adviser’s affiliate has already invested or will invest. Conflicts of interest may arise, including determinations of whether existing investors are being cashed out at a price that is higher or lower than market value and whether new investors are paying too high or too low a price for the company or purchasing securities with terms that are more or less favorable than the prevailing market terms. Related Services Certain affiliates of the Adviser perform Related Services for, and receive fees from, actual or prospective portfolio companies, other investment vehicles of the Funds, or the Funds. Such fees will be in addition to the management fee and Incentive Allocation paid by such Fund to the Adviser. These fees may create a conflict of interest because the amounts of these fees may be substantial and the Funds and their investors may not have an interest in these fees. In many cases, with respect to the implementation of such arrangements, there is not an independent third- party involved on behalf of the relevant portfolio company. Therefore, a conflict of interest may exist in the determination of any such fees and other related terms in the applicable agreement with the portfolio company. Please see Item 5 “Fees and Compensation” for additional information regarding Related Services fees. Diverse Membership The investors in the Funds include U.S. taxable and tax-exempt entities, and institutions from jurisdictions outside of the United States. Such investors may have conflicting investment, tax and other interests with respect to their investments in a Fund. The conflicting interests among the investors may relate to or arise from, among other things, the nature of investments made by a Fund, the structuring of the acquisition of investments and the timing of the disposition of investments, as well as the structure of a Fund and its associated parallel funds. As a consequence, conflicts of interest may arise in connection with decisions made by the Adviser, including with respect to the nature or structuring of investments, that may be more beneficial for one investor than for another investor, especially with respect to investors’ individual tax situations. In selecting and structuring investments appropriate for a Fund, the Adviser will consider the investment and tax objectives of the applicable Fund and the investors as a whole, not the investment, tax or other objectives of any investor individually.

Side Letter Agreements; Advisory Committee Rights The Adviser enters into side letter arrangements with certain investors in certain of the Funds providing such investors with different or preferential rights or terms, including but not limited to (i) different or preferential fee structures, (ii) other preferential economic rights, (iii) information and reporting rights, (iv) excuse or exclusion rights, (v) waiver of certain confidentiality provisions, (vi) co-investment rights, (vii) liquidity or transfer rights, (viii) certain rights or terms necessary in light of particular legal, (ix) regulatory or policy requirements of a particular investor, (x) additional obligations and restrictions with respect to structuring particular investments in light of the legal and regulatory considerations applicable to a particular investor and (xi) veto rights. Except as otherwise agreed with an investor, the Adviser (or applicable General Partner) is not required to disclose the terms of side letter arrangements to other investors in the same Fund. Many of the Funds have established an advisory committee, consisting of representatives of investors. A conflict of interest may exist when some, but not all limited partners are permitted to designate a member to the advisory committee. The advisory committee may also have the ability to approve conflicts of interests with respect to the Adviser and the applicable Fund, which could be disadvantageous to certain investors, including those investors who do not designate a member to the advisory committee. Representatives of the advisory committee may have various business, equity participation, and other relationships with the Adviser and its partners, employees and affiliates, including ownership interests in the Adviser and its affiliated investment advisers. These relationships may influence the decisions made by such members of the advisory committee. In addition, members of one Fund’s advisory committee may also be members of another Fund’s advisory committee or the advisory committee of an unaffiliated fund or otherwise have an economic interest that causes them to have a conflicting interest with that of the applicable Fund. In such instances, a conflict of interest exists because the Funds on which such overlapping advisory committee members serve may have conflicting interests and such advisory committee members may be requested to provide their consent with respect to such conflicts of interest and will not recuse themselves from any such vote. Investments by Employees Subject to applicable regulatory restrictions, certain employees of the Adviser are permitted to invest directly or indirectly in certain Funds. Such investors may be in possession of information relating to such Funds that is not available to other Fund investors. It is expected that, if such investments are made, the size and nature of these investments will change over time without notice to the Fund investors. Investments by the senior management and key employees in certain Funds could incentivize such employees to increase or decrease the risk profile of such Fund. The Adviser shall treat any Fund into which an employee is invested the same as all other Funds as is required by the Adviser’s fiduciary duty.

Proprietary Fund Certain key employees, along with family and friends of such employees, of the Adviser make and hold investments in a private proprietary fund (“Proprietary Fund”) advised by the Adviser. Investments by the Proprietary Fund may include, without limitation, control and non-control equity and other investments in public and private companies. Proprietary Fund investments are, at the time of investment, in the Adviser’s reasonable discretion and determination generally, (a) not appropriate for investment by any Fund (although such investments may have originally been considered for investment by one or more Funds and subsequently determined to be not appropriate for investment by such Funds) and (b) not in conflict with or contrary to the interests of any Fund and the Adviser’s duties and obligations to such Funds. The management and operation of the Proprietary Fund does not take a substantial amount of time of the Adviser, or any employee of the Adviser, away from the management of the Funds.

In making determinations about investment suitability and the investment activities of the Proprietary Fund, the Adviser considers a wide variety of factors, including, without limitation, the investment strategies of the Funds, the return parameters of the Funds; the size, industry and other terms with respect to the proposed investments; risk factors and/or reputational considerations applicable to the Funds and the Adviser’s fiduciary duties and other contractual obligations to the Funds and the Funds’ investors. However, there are potential conflicts of interest that could arise from the activities of the Proprietary Fund separate and apart from the activities of the Adviser, as described below. Certain conflicts of interest could arise in connection with the management and operation of the Proprietary Fund. Although the Adviser considers any such potential conflicts prior to investing Proprietary Fund assets, no assurances can be made that all conflicts will be identifiable or fully considered at the time such approval, if any, is granted. For example, although the Proprietary Fund will be prohibited from investing in entities that at the time of acquisition are, or reasonably could be expected to become, directly competitive with Funds, such investments may be in entities that subsequently become competitive with the Funds. However, while the Adviser may take actions in respect of the Proprietary Fund that it considers to be in the best interests of the Proprietary Fund, the Adviser’s policies require that no action will be permitted to be taken unless the Adviser believes in good faith that such action is not in conflict with or contrary to the interests of the Funds. Notwithstanding the foregoing, there can be no assurance that conflicts between the interests of the Proprietary Fund and the Funds will not arise. In the event of such conflict, the Adviser will seek to resolve such conflict in a fair and equitable manner consistent with its duties to the Funds and the Adviser’s policies and procedures. Further, while the investments of the Proprietary Fund are generally unsuitable for the Funds, the Proprietary Fund may, from time to time, invest in investments held by a Fund. In such event, any investments shall be allocated according to the investment allocation policy of the Adviser in place at the time.

The Adviser has adopted policies and procedures to prevent and/or mitigate the actual and potential conflicts of interest that arise from the investment activities of the Proprietary Fund. These policies and procedures include (i) the factors to be considered and the procedures to be followed in the analysis of such investment opportunities, (ii) the methods to be used to identify, monitor and control any actual or potential conflicts of interest such investment activity may generate with respect to the Funds, (iii) the periodic monitoring of such outside activities to determine, among other things, whether a change in such outside investment activities or investments could give rise to a conflict of interest and (iv) how any such conflicts are to be both reported and resolved. Advisory Affiliates Benefit Street is affiliated with BSP CLO Management LLC, BDCA Adviser, LLC and Franklin BSP, investment advisers registered with, or pending registration with, the SEC (collectively the “Affiliates”). The Affiliates and their relying advisers generally focus primarily on different investment strategies than the Adviser. However, clients of the Adviser and the Affiliates may invest in the same portfolio companies, including in the same security or in different securities of such a portfolio company.

In the ordinary course of conducting its activities, interests of the Adviser’s clients may therefore conflict with the interests of the Affiliate’s clients. Please see the Adviser’s response in the sections entitled “Conflicts Related to Purchases and Sales” and “Allocations” above for more information. Other than the Affiliates, the other investment adviser affiliates of the Adviser do not have their own clients.

The Adviser is a subsidiary of Franklin Resources, Inc., a global investment management organization (together with its affiliated advisers (but excluding the Adviser), referred to in this section as “Franklin Templeton”). Clients of the Adviser and/or Franklin Templeton may invest in the same portfolio companies, including in the same security or other instrument or in different securities of or instruments issued by a portfolio company and Franklin Templeton has no obligation to inform the Adviser or the Funds of any such investments or offer such investments to the Funds. In the ordinary course of conducting the Funds’ activities, interests of the Funds may therefore conflict with the interests of other clients of the Adviser and/or Franklin Templeton. In addition, as a diversified financial services organization, Franklin Templeton and its affiliates engage in a broad spectrum of activities including financial, advisory, investment and other activities where their interests may conflict with the interests of the Funds. Certain Funds authorize the advisory committee to resolve and give consent to certain transactions and conflicts of interest on behalf of the Fund, including certain transactions or conflicts requiring consent of a client of a registered investment adviser under the Advisers Act. Any such consent shall be binding on the Funds. Franklin Templeton may provide investment advisory services and other services to clients and receive fees for such services in connection with transactions in which those clients may have interests that conflict with those of the Funds. Franklin Templeton may also give advice to clients that may cause them to take actions adverse to the Fund’s investments. In addition, Franklin Templeton may have relationships with clients seeking to invest in an existing portfolio company of the Funds or clients that compete with an existing portfolio company of the Funds. Further, although it is not expected, it is possible that Franklin Templeton could create investment vehicles in the future that may compete with the Funds for investment opportunities. Franklin Templeton will have no obligation to forego or share such investment opportunities with the Funds, and investments made by Franklin Templeton in such opportunities could preclude the Funds from investing in such opportunities.

In connection with its advisory business, Franklin Templeton may come into possession of information that could potentially limit the ability of the Funds to engage in potential transactions. In order to avoid such limitation, the Adviser intends to control the flow of such information, such as by erecting information barriers to restrict the transfer of such information between the Adviser and Franklin Templeton. In the event that an information barrier designed to protect the Funds is breached (including inadvertently), changed or removed, the Funds will likely face the same restrictions on its investment activities as it would have faced had the information barrier not been established in the first place or face restrictions resulting from such changes to the information barrier, as the case may be. The Adviser will generally not rely on the expertise of Franklin Templeton and its investment professionals and will not share such investment professionals in managing and/or advising the Fund.

Conflicts Relating to the Related Persons and the Adviser The Adviser generally may, in its discretion, contract with any related person of the Adviser to perform services for the Adviser in connection with its provision of services to the Funds. When engaging a related person to provide such services, the Adviser may have an incentive to recommend the related person even if another person may be more qualified to provide the applicable services and/or can provide such services at a lesser cost.

The Adviser generally may, in its discretion, recommend to a Fund that it contract for services with (i) a related person of the Adviser or (ii) an entity with which the Adviser or its affiliates or a member of their personnel has a relationship or from which the Adviser or its affiliates or a member of their personnel otherwise derives financial or other benefit. When making such a recommendation, the Adviser may, because of its financial or other business interest, have an incentive to recommend the related or other person even if another person is more qualified to provide the applicable services and/or can provide such services at a lesser cost. Conflicts Related to Fee Structure Because the Funds’ management fee may be based upon the value of investor’s capital accounts or net asset value, to the extent that the valuation of such assets is determined or influenced by the Adviser or its affiliates, this may create a conflict of interest. The fact that the Incentive Allocation received by the Adviser or its affiliates from certain of the Funds is based on the performance of the Funds also creates an incentive for the Adviser to cause the Funds to make investments that are more speculative than would be the case in the absence of performance-based compensation. However, this incentive is tempered somewhat by loss carry forward provisions with respect to the Adviser’s receipt of Incentive Allocation from certain of the Funds.

Fund Level Borrowing The Funds from time-to-time borrow funds or enter into other financing arrangements for various reasons, including to pay fund expenses, to pay management fees, to make or facilitate new or follow-on investments, to make payments under hedging transactions, to cover any shortfall resulting from an investor’s default or exclusion or to fund capital contributions at the closing of an investment. If a Fund borrows in lieu of calling capital to fund the acquisition of an investment, the borrowing would be used for all limited partners in such Fund on a pro rata basis, including the general partner. In addition, fund facilities for certain Funds are available to provide borrowed funds directly to the portfolio investments of such Funds, in which case such borrowed funds would be guaranteed by such Funds.

Although borrowings by a Fund has the potential to enhance overall returns that exceed such Fund’s cost of funds, such borrowings increase the potential exposure of such Fund to a particular investment above the level that a Fund would typically have had an investment been limited to equity. Any such borrowings will further diminish returns (or increase losses on capital) to the extent overall returns are less than a Fund’s cost of funds. In addition, borrowings by a Fund are secured by capital commitments made by Fund investors to such Fund as well as by a Fund’s assets and the documentation relating to such borrowings provides that during the continuance of a default under such borrowings, the interests of the investors may be subordinated to such Fund- level borrowing. Moreover, tax-exempt investors should note that the use of leverage by a Fund may cause the realization of “unrelated business taxable income.” To the extent a Fund uses borrowed funds in advance or in lieu of capital contributions or a portfolio company borrows funds directly through such Fund facility, such Fund’s investors generally make correspondingly later capital contributions. As a result, a Fund’s use of borrowed funds will impact the calculation of net performance metrics (to the extent that they measure investor cash flows) and may make net IRR calculations higher than it otherwise would be without fund-level borrowing and can impact the carried interest a Fund’s general partner receives, as these calculations generally depend on the amount and timing of capital contributions as well as the level of the organizational structure at which such borrowed funds are borrowed or deployed. In addition, where a portfolio company borrows funds directly through a Fund facility, the applicable Funds may charge the portfolio company borrower higher interest rates than the interest rate such Funds pay pursuant to such financing facility, among other things, to help offset origination and other facility costs. Transactions with Affiliates Conflicts may also arise in connection with loans or other assets originated by one Fund and sold to another Fund. It may be difficult to determine the value of the loans or other assets transferred to the buying Fund and hence the consideration due to the selling Fund whenever the buying Fund may buy the loans or other assets. The valuation of loans or other assets that may be transferred between Funds involves inherent conflicts of interest for the Adviser and there is no guarantee that the Adviser will resolve these conflicts in a manner that will not have an adverse effect on a Fund. Additionally, a selling Fund may not offer all originated loans to a buying Fund and a buying Fund may not accept all such loans that are offered.

Additional conflicts could also arise with respect to the investment of a Fund in CLOs of financing vehicles formed by the Adviser or its affiliates. Investing in CLOs or financing vehicles sponsored by the Adviser or its affiliates would result in certain conflicts, including that the Adviser may have an interest in causing a Fund to provide financing for a CLO or financing vehicle to support its business or financial interests in causing the formation or closing of a CLO. Furthermore, Fund investors should not expect the Adviser to have better information with respect to Adviser-affiliated inves please register to get more info

Although the Funds primarily invest in debt instruments, the Funds from time to time invest in equity securities. The Adviser generally has discretion to determine the broker or dealer to be used and the commission rates to be paid in instances where a broker or dealer is used. Investment advisers, like the Adviser, with the authority to direct client trades are under a duty to obtain “best execution,” with respect to publicly traded securities which the SEC generally describes as a duty to execute securities transactions so that a client’s total costs or proceeds in each transaction are the most favorable under the circumstances. This duty generally begins with a requirement that the Adviser obtain the best price available for publicly traded securities in each transaction. However, in determining whether a particular broker or dealer is likely to provide best execution in a particular transaction, the Adviser need not always pay the lowest possible commission or markup or markdown, but can take into account all factors that it deems relevant to the broker’s or dealer’s execution capability, including,

 price,  the size of the transaction,  the nature of the market for the security,  the amount of the commission,  the timing of the transaction taking into account market prices and trends,  the reputation, experience and financial stability of the broker or dealer,  the broker’s reliability, responsiveness, reputation, execution, clearance, settlement and error correction capabilities,  the broker’s willingness to commit capital,  its access to a particular trading market,  its availability of securities to borrow or short sales,  the value of research it provides, and  the quality of service rendered by the broker or dealer in other transactions.

The Adviser may pay a broker a higher commission rate than another broker might charge if the Adviser determines, after considering the circumstances of the transaction, that the difference in cost is reasonably justified by the quality of the service offered. For accounts over which the Adviser exercises investment discretion, the Adviser may cause the account to pay a higher commission (“pay up”) in recognition of the value of “research services” received by the Adviser from or at the expense of the broker, to the extent such research services assist the Adviser in making investment decisions for discretionary client accounts. Any such soft dollar arrangements will be consistent with Section 28(e) of the Exchange Act, which permits the use of soft dollars in certain circumstances. Where research services also assist the Adviser in performing non- investment decision-making functions (such as accounting, record keeping or administrative services), the Adviser will make a reasonable allocation of the cost of the service according to its use and use brokerage commissions to pay only for the research related component. Services that assist the Adviser solely in its performance of non-research related functions will be paid exclusively by the Adviser

In order to monitor best execution, the Adviser, as well as the Adviser’s compliance group, will periodically monitor broker-dealers to assess the quality of execution of brokerage transactions effected on behalf of the Adviser and each Fund. Aggregation of Trades The Adviser at times, subject to applicable law and the Adviser’s or an applicable Fund’s compliance policies and procedures, aggregates (or bunches) the orders of more than one Fund for the purchase or sale of the same publicly traded security. The Adviser may employ this practice because larger transactions can enable it to obtain better overall prices, including lower commission costs or mark-ups or mark-downs. The Adviser may combine orders on behalf of Funds with orders for other funds for which it or its affiliates have trading authority, or in which it or its affiliates have an economic interest. In such cases, the Adviser and its affiliates generally allocate the publicly traded securities or proceeds arising out of those transactions (and the related transaction expenses) on an average price basis among the various participants on a pro rata basis. When orders for publicly traded securities are not entirely filled, allocation shall be made based upon the Adviser’s procedures for allocation of investment opportunities. Where aggregate trades have been filled during the course of the trading day at different prices, the execution price of the publicly traded securities to each client will, to the extent possible, be the average price of all executions of purchases or sales, as the case may be, for all clients executing such transaction during that day. See the Adviser’s response to Item 11 above for more information regarding conflicts of interest related to investment and trading discretion. please register to get more info

The Adviser performs periodic reviews of client accounts. In no circumstances are client accounts reviewed less than quarterly and when necessary. Senior members of the back office staff in the Operations, Compliance, Finance, and Trading Departments review the client accounts. A review of a client account may be triggered by any suspicious or unusual activity or special circumstances. please register to get more info

For details regarding economic benefits provided to the Adviser by non-clients, including a description of related material conflicts of interest and how they are addressed, please see Item 11 above.

Certain affiliates of the Adviser also provide Related Services to actual or prospective portfolio companies, other investment vehicles of the Funds, or the Funds. Such Related Services are complementary to the investment advisory services provided by the Adviser. Time spent on Related Services varies from investment to investment.

The Adviser from time to time engages one or more persons to act as a placement agent for a Fund or strategies managed by the Adviser, in connection with the offer and sale of interests or formation of accounts to certain prospective investors. Such persons generally will receive a fee in an amount equal to a percentage of the capital commitments for interests in a Fund or strategy or contributions to such Fund or strategy that are accepted by the Fund’s general partner or board of directors with respect to such prospective investors. Such fees will be negotiated individually between the Adviser and such person. please register to get more info

Rule 206(4)-2 promulgated under the Advisers Act (the “Custody Rule”) (and certain related rules and regulations under the Advisers Act) imposes certain obligations on registered investment advisers that have custody or possession of any funds or securities in which any client has any beneficial interest. An investment adviser is deemed to have custody or possession of client funds or securities if the adviser directly or indirectly holds client funds or securities or has the authority to obtain possession of them (regardless of whether the exercise of that authority or ability would be lawful). The Adviser is required to maintain the funds and securities (except for securities that meet the privately offered securities exemption in the Custody Rule) over which they have custody with a qualified custodian. Qualified custodians include banks, brokers, futures commission merchants and certain foreign financial institutions. Rule 206(4)-2 imposes on investment advisers with custody of clients’ funds or securities certain requirements concerning reports to such clients (including underlying investors) and surprise examinations relating to such clients’ funds or securities. However, an adviser need not comply with such requirements with respect to pooled investment vehicles subject to audit and delivery if each pooled investment vehicle: (i) is audited at least annually by an independent public accountant, and (ii) distributes its audited financial statements prepared in accordance with generally accepted accounting principles to their investors, all limited partners, members or other beneficial owners within 120 days (180 days in the applicable case of a fund of fund adviser) of its fiscal year-end. The Adviser relies upon this audit exception. please register to get more info

The Adviser generally has the discretion to determine, without consent of the Funds or the investors in the Funds, the particular securities or instruments to be bought and sold in accordance with the terms and conditions of the applicable organizational documents of and investment advisory or sub-advisory agreement with each Fund and, with respect to the 1940 Act Funds, in accordance with the Funds’ investment policies and restrictions, as provided for from time to time in such Funds’ prospectuses and SAIs. The Adviser will provide investment advice to the Funds, subject to certain limitations and restrictions on the Funds as to diversification and type of permitted investments. Funds will typically make direct investments in companies, although the Adviser has and may, in its discretion, form a special purpose vehicle with respect to particular investments. please register to get more info

As the Funds primarily invest in debt instruments, the Adviser does not normally receive proxies to vote common stock. However, the Adviser has adopted the following proxy voting policies and procedures to address the instances where voting is required.

Where authority to vote proxies has been delegated to the Adviser, it is the Adviser’s fiduciary duty to vote proxies and consents in the best interests of the Funds and the overriding principle of the Adviser’s proxy voting is to maximize the financial interests of the Funds. It is the policy of the Adviser in voting proxies to consider and vote each proposal with the objective of maximizing investment returns for the Funds. The Adviser has established guidelines regarding the voting of proxies on routine, non-routine, corporate governance and social issues. In the event of a conflict, the portfolio manager for each account will advocate in the best interest of the specific client account. In the event the portfolio manager manages conflicting accounts, a designee will be assigned to resolve the conflict between the conflicting accounts. The Adviser may, however, vote in a manner that is contrary to the general guidelines if it believes that it would be in a Fund’s best interest to do so. All proxies, unless voted in accordance with the Adviser’s general guidelines on routine, non- routine, corporate governance and social issues, will require a mandatory conflicts of interest review, which will include consideration of whether the Adviser, any investment professional or other person recommending how to vote and/or the Adviser’s affiliates and their clients has an interest in how the proxy is voted that may present a conflict of interest. The Adviser is not required to vote a proxy if the cost of voting a particular proxy due to special translation, delivery or other requirements would outweigh the benefit of voting for the Fund. Though not common, situations may arise in which more than one Fund invests in the same company or in which a single Fund may invest in the same company but through multiple accounts. In those situations, two or more Funds, or one Fund with different accounts, may be invested in strategies having different investment objectives, investment styles or portfolio managers. As a result, the Adviser may cast different votes on behalf of different Funds or on behalf of the same Fund with different accounts.

The Adviser will retain all books and records relating to its proxy voting activities on behalf of client accounts in accordance with the requirements of Rule 204-2(c)(2) under the Advisers Act. Copies of the Adviser’s proxy voting policies and procedures and relevant proxy logs are available to any client or prospective client by calling Mr. Alexander McMillan at 212-588-6712 or by writing to Mr. McMillan, Chief Compliance Officer, Benefit Street Partners L.L.C., 9 West 57th Street, Suite 4920, New York, New York 10019.

To the extent that it is granted such authority by clients, the Adviser may deal with class action claims on a case-by-case basis. Upon receipt of a claim the Chief Compliance Officer in conjunction with the Chief Operating Officer will determine whether the Adviser should join or otherwise participate in such class action or litigation in light of the relative costs and benefits of doing so. Any proceeds from a class action suit will be allocated among the Funds and any Fund investors currently existing at the time of recovery of such proceeds. please register to get more info

The Adviser does not require or solicit the prepayment of any fees, and does not have any adverse financial condition that is reasonably likely to impair the Adviser’s ability to continuously meet its contractual commitments. The Adviser has not been the subject of a bankruptcy proceeding.
Item 19. Requirements for State -Registered Advisers
The Adviser is not required to register with a state and therefore has nothing to report or disclose in this section. please register to get more info