Third Point Private Capital Income Fund No-Action Letter on Investment Company Act Section 18 and Section 61(a)

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Third Point Private Capital Income Fund

April 16, 2026 Investment Company Act of 1940 – Section 18(a)(2)(A), (B), and (E) and Section 61(a)

April 16, 2026

RESPONSE OF THE OFFICE OF CHIEF COUNSEL

DIVISION OF INVESTMENT MANAGEMENT

Your letter, dated April 16, 2026, requests our assurance that we would not recommend enforcement action to the Securities and Exchange Commission (the “Commission”) under Sections 18(a)(2)(A), (B), and (E) of the Investment Company Act of 1940, as amended (the “1940 Act”), as modified by Section 61(a) of the 1940 Act, if Third Point Private Capital Income Fund (the “Fund”), a closed‑end management investment company (a “CEF”) formed as a statutory trust under the laws of the State of Delaware that intends to elect to be regulated as a business development company (a “BDC”), issues certain preferred shares (the “Seed Shares”) to one or more affiliates of Third Point LLC (“Third Point”) (each, a “Seed Investor”), and subsequently repurchases such Seed Shares pursuant to their terms, as described below. You request that our assurance equally apply to a registered CEF subject to Section 18(a) of the 1940 Act.

Background

In your letter and in discussions with Commission staff, you have represented the following:

• The Fund has filed a registration statement on Form 10 to register its common shares of beneficial interest (the “Common Shares”) under the Securities Exchange Act of 1934, as amended, and intends to elect to be regulated as a BDC under the 1940 Act prior to commencement of operations.
• Third Point Private Capital LLC, an affiliate of Third Point, will serve as the investment adviser to the Fund.
• The Fund does not presently intend to seek a listing of its shares on any national securities exchange, and will not seek such a listing (i) prior to the twenty-four month anniversary of the initial issuance of any Seed Shares, or (ii) while any Seed Shares remain outstanding.
• The Seed Investors are expected to include one or more persons who may be deemed to be “affiliated persons” of Third Point or the Fund within the scope of Section 2(a)(3) of the 1940 Act.
• The Seed Shares will be designated as a class of preferred shares but, except as noted in your letter, will have the same terms as the Fund’s Common Shares. All Seed Shares will be issued at the same fixed price per Seed Share for cash, which will be equal to the initial offering price of the Fund’s Common Shares (the “Original Purchase Price”). A Seed Investor will only purchase Seed Shares for cash. The Fund will not acquire assets from an affiliated person of the Fund within the scope of Section 2(a)(3) of the 1940 Act, or affiliated persons of such persons, until the Seed Shares have been fully repurchased and no further Seed Shares will be issued, except for purchases permitted by Rule 17a-7 under the 1940 Act or Section 57(f) of the 1940 Act, as applicable.
• The Seed Shares will have the same voting rights as the Common Shares, except that, as required by the 1940 Act, for so long as any Seed Shares remain outstanding, the holders of such Seed Shares will have the exclusive right to elect two trustees on the Fund’s five member Board of Trustees.
• Each Seed Share shall be entitled to receive a quarterly dividend equal to the greater of (i) a fixed percentage return based on the Original Purchase Price (the “Floor Rate”) or (ii) the actual per‑share cash distribution declared and paid on each of the Fund’s Common Shares for the same period. In the case that the Common Shares receive a dividend more frequently than quarterly, each Seed Share will then be entitled to receive a dividend on the same schedule as the Common Shares.
• The Seed Shares shall not have any liquidation preference relative to the Common Shares. Upon any liquidation of the Fund, each Seed Share shall be entitled to receive the lesser of (i) its Original Purchase Price and (ii) the per‑share amount distributed to each of the Fund’s Common Shares.
• Once Seed Shares have been issued, the Fund will be contractually obligated to apply at least 50% of the net proceeds from any subsequent subscriptions for Common Shares made in cash to repurchase any outstanding Seed Shares. Such repurchases will be made at a price per share equal to the Original Purchase Price. In addition, each Seed Share that is repurchased will be entitled to receive an amount equal to accrued but unpaid dividends, calculated at the Floor Rate through the date of such repurchase. The Fund will not otherwise repurchase any of the Seed Shares.
• If any Seed Shares remain outstanding on the date that is thirty‑six months after their initial issuance, the Fund will cease offering new Common Shares, cease originating new investments other than pursuant to existing contractual or follow‑on commitments and thereafter proceed to distribute proceeds from the disposition of existing portfolio investments until the Fund has been fully liquidated. Analysis

Section 18 of the 1940 Act governs registered investment companies’ capital structures. Section 18(a)(2) of the 1940 Act provides that a registered CEF may not issue any class of senior security representing stock unless, among other things:

• immediately after issuance, such class of senior security will have an “asset coverage of at least 200 percent.”
• the CEF prohibits the declaration of any dividend (except a dividend payable in common stock of the issuer) or any other distribution where such class of senior security does not have asset coverage of at least 200%, after deducting the amount of such dividend or distribution when declared; and

• such class of senior security will have “complete priority over any other class as to distribution of assets and payment of dividends, which dividends shall be cumulative.”
  Section 61(a) of the 1940 Act, in turn, makes Section 18 applicable to a BDC to the same extent as if it were a registered CEF, except as specified therein.

• You have represented that the Fund has elected to be subject to the 150 percent asset coverage requirement permitted under Section 61(a)(2) of the 1940 Act, including with respect to the issuance of senior securities which are stock, such as the Seed Shares.

• Section 18(h) defines “asset coverage” of a class of senior security representing stock as the ratio of the value of the issuer’s total assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness of such issuer plus the aggregate of the involuntary liquidation preference of such class of senior security representing stock.

• Section 18(h) also provides that the “involuntary liquidation preference” of a class of senior security representing stock is the amount to which such class of senior security would be entitled upon involuntary liquidation of the issuer in preference to a security junior to it.
  You contend that, given the absence of a liquidation preference for the Seed Shares over the Common Shares, and the lack of any additional voting rights for the Seed Shares, the Seed Shares could be viewed as not having any priority over the Common Shares as required by Section 18(a)(2)(E). However, you note that if the quarterly distribution of the Common Shares were to fall below the Floor Rate, the Seed Shares would have a preference with respect to that difference.

You state that although the Seed Shares will be designated as a class of preferred shares, and thus will be treated as senior securities which are stock for purposes of Section 18(a)(2), as modified by Section 61(a), they carry no involuntary liquidation preference over the Fund’s Common Shares. You represent that in the event of a liquidation of the Fund, the Seed Shares would never be entitled to receive more than, and may receive less than, each Common Share. Therefore, you contend that the Seed Shares do not carry any “involuntary liquidation preference” within the meaning of Section 18(h).

You also assert that the conditional repurchase obligation associated with the Seed Shares should also not be viewed as the equivalent of an “involuntary liquidation preference” under Section 18(h). Among other things, you note that such repurchases are limited to the net proceeds of new subscriptions and do not apply in the event of a liquidation.

In furtherance of your request, you contend that the Seed Shares do not raise the concerns underlying the 1940 Act (e.g., concerns about excessive borrowing and the issuance of excessive amounts of senior securities that heighten the speculative character of common equity, as well as the risks when investment companies operate without adequate capital reserves, addressed in Section 1(b) of the 1940 Act) because they are repurchased on a limited basis only in connection with new capital and impose no ongoing repayment obligation. You further contend that the Seed Shares do not resemble the “preference stock” or “excessive borrowing” that Section 18 was intended to address.

Based on the facts and representations made in your letter, we would not recommend enforcement action to the Commission under Sections 18(a)(2)(A), (B), and (E) of the 1940 Act, as modified by Section 61(a) of the 1940 Act, if the Fund issues Seed Shares to Seed Investors, and subsequently repurchases such Seed Shares, as described in your letter; provided that no BDC or registered CEF may rely on our no-action position if it: [1]

• owns assets, or accepts investments, prior to (i) the filing of its election to be regulated as a BDC under the 1940 Act or (ii) its registration as an investment company under the 1940 Act, as applicable; or
• receives assets as part of a reorganization involving another entity at, or around, the time of such election or registration. We confirm that our no-action position equally applies to a registered CEF subject to Section 18(a) of the 1940 Act.

Additionally, our position is only available where:

• Seed Investors purchase Seed Shares solely in cash; and
• a BDC or registered CEF will not acquire assets from (i) an affiliated person of the BDC or registered CEF within the scope of Section 2(a)(3) of the 1940 Act, or (ii) an affiliated person of such an affiliated person, until the Seed Shares have been fully repurchased following the BDC or registered CEF’s final offering of Seed Shares, except for purchases permitted by Rule 17a-7 under the 1940 Act or Section 57(f) of the 1940 Act, as applicable. Our letter provides our position on enforcement action only and does not provide any legal conclusions on the issues presented. Because our position is based on all of the facts and representations made in your letter, you should note that any different facts or circumstances might require a different conclusion. This letter reflects the views of the staff of the Division of Investment Management. It is not a rule, regulation, or statement of the Commission, and the Commission has neither approved nor disapproved its content. This letter, like all staff statements, has no legal force or effect; it does not alter or amend applicable law, and it creates no new or additional obligations for any person.

Christopher D. Carlson
Senior Counsel

[1] For the avoidance of doubt, we are not providing any assurance under Section 18 with respect to such a BDC or registered CEF.

Last Reviewed or Updated: April 16, 2026

Resources

• Incoming Letter