Background
OFS Management is a Delaware limited liability company that was organized on March 18, 2010.
The sole member and manager of OFS Management is Orchard First Source Asset Management,
LLC (“OFSAM”), a subsidiary of Orchard First Source Asset Management Holdings, LLC
(“OFSAM Holdings”). The principal owner of OFSAM Holdings is OI3, LLC, the owner of
which is The OI3 2019 Trust, through its interest in Orchard Investments, LLC; Richard Ressler
is a Trustee of The OI3 2019 Trust. OFS Management is an affiliated adviser of OFS CLO
Management, LLC, (“OFS CLO Management”), a registered investment adviser organized on
December 15, 2016, and OFS CLO Management II, LLC (“OFS CLO Management II”), a
registered investment adviser organized on August 24, 2022. OFS Management, OFS CLO
Management and OFS CLO Management II (collectively, “OFS Advisors”) share management,
investment and other professionals, advise clients (“OFS Clients”) who invest in similar
investments, have overlapping investment committees, and are subject to a common compliance
program and share a common Chief Compliance Officer (“CCO”). OFS CLO Management and
OFS CLO Management II have filed their own Form ADVs and have their own brochures.
References to OFS CLO Management and/or OFS CLO Management II within this Brochure are
included to describe conflicts of interest related to them and policies and procedures they jointly
adopted with OFS Management.
OFS Management does not have any employees. Most of the persons who provide services to OFS
Management, including most of its investment professionals, are employees of Orchard First
Source Capital, Inc. (“OFSC”), a wholly owned subsidiary (and manager) of OFSAM. Other
persons who provide services to OFS Management, including its CCO, are employees of CIM
Group, LP (“CIM Group”) and its affiliates. Such persons also provide services to: (a) CIM Group
and its SEC-registered investment adviser affiliates (including CIM Capital, LLC (“CIM
Capital”), CIM Capital’s relying advisers, CIM Capital IC Management, LLC (“IC
Management”) and CIM Capital SA Management, LLC (“SA Management”)), which advise
debt infrastructure and real estate funds; and(b) Orchard Capital Corp. (“OCC”), a California
corporation controlled by Mr. Ressler, that provides consulting and advisory services to companies
in which Mr. Ressler invests. All the foregoing services are provided through: (i) a shared services
agreement among OFSC, CIM Group, and OCC, and (ii) a staffing agreement between OFSC and
OFS Management. The same professionals, who service OFS Management, similarly service OFS
CLO Management and OFS CLO Management II through: (i) the shared services agreement; and
(ii) a staff and services agreement between OFSC and each of OFS CLO Management and OFS
CLO Management II (the “Services Agreements”).
OFS Management focuses primarily on investments in middle-market and broadly syndicated U.S.
loans, debt and equity positions in collateralized loan obligations (“CLO”), and structured credit
investments. OFS Management also provides investment advice in publicly traded securities,
specifically corporate fixed income bonds (“corporate bonds”). While OFS Management does
not currently provide investment advice regarding other types of investments, including other types
of debt and equity investments, it may do so in the future. The term “Middle-Market” refers to
companies that may exhibit one or more of the following characteristics: (i) fewer than 2,000
employees; (ii) revenues between $15 million and $300 million; (iii) annual earnings before
interest, taxes, depreciation, and amortization (“EBITDA”) between $5 million and $50 million;
(iv) generally, private companies owned by private equity firms or owners/operators; and (v)
enterprise values between $10 million and $500 million.
OFS Management Clients
OFS Management serves as the investment adviser to two business development companies, OFS
Capital Corporation and Hancock Park Corporate Income, Inc. (each a “BDC” and together, the
“BDCs”), OFS Credit Company, Inc., a registered closed-end fund (a “CEF”, and collectively
with the BDCs, the “Regulated Funds”), and certain separately managed accounts (“SMAs”).
OFS Management does not currently serve as an investment adviser or collateral manager to CLOs
but may in the future. OFS Management also serves as sub-adviser to certain affiliated and
unaffiliated pooled investment vehicles (“Sub-Advised Accounts”). OFS Management’s
affiliated advisers, OFS CLO Management and OFS CLO Management II, serve as investment
advisers and collateral managers to various CLOs. In the future, OFS Management may serve
as
investment adviser and/or collateral manager to other funds, including pooled investment vehicles,
to be formed. OFS Management refers to each of the BDCs, OCCI, Sub-Advised Accounts, and
SMAs, together with future advisory Clients, as each a “Client” and collectively as “Clients.”
The BDCs
OFS Capital Corporation (“OFS BDC”) and Hancock Park Corporate Income, Inc. (“HPCI
BDC”) are externally managed, closed-end, non-diversified management investment companies
that have elected to be regulated as business development companies under the Investment
Company Act of 1940, as amended (the “1940 Act”). OFS Management provides tailored
investment advisory services to each of the BDCs pursuant to an investment management
agreement (each, a “BDC Management Agreement” and, collectively, the “BDC Management
Agreements”). As a regulated business development company, each BDC is subject to restrictions
on its investments, including the requirement that it invest primarily in “eligible portfolio
companies,” as defined in the 1940 Act. Based on the recently amended Investment Company
Names Rule, which was effective December 13, 2023, based on the strategy indicated by the fund
name which includes “Corporate Income”, HPCI BDC has updated its governing documents to
describe that it must invest at least 80% of its total assets in (i) floating and fixed rate senior
secured loans, which are comprised of first lien, second lien and unitranche loans of United States
middle-market companies; (ii) broadly syndicated senior secured corporate loans; (iii) unsecured
loans; (iv) collateralized loan obligation debt, subordinated debt, income notes and loan
accumulation facility positions; (v) opportunistic credit investments, including stressed and
distressed credit situations and long/short credit investments; and (vi) warrants and other equity
securities of United States middle-market companies. Each BDC invests in senior secured loans,
which include first lien, second lien, and unitranche loans, as well as subordinated loans and, to a
lesser extent, equity securities, in Middle-Market U.S. companies. Each BDC may also invest in
CLO mezzanine debt, CLO subordinated notes and loan accumulation facility securities.
The CEFs
OFS Credit Company, Inc. (“OCCI”) is a non-diversified, externally managed closed-end
management investment company that has registered as an investment company under the 1940
Act. OFS Management provides tailored investment advisory services to OCCI pursuant to an
investment advisory and management agreement (“OCCI Management Agreement”). As a
registered investment company, OCCI is subject to certain restrictions on its investments,
including the requirement that it invest at least 80% of its total assets in floating rate credit
investments and other structured credit investments including, CLO mezzanine debt, CLO
subordinated notes, loan accumulation facility securities, leveraged loans, high yield bonds,
opportunistic credit investments, and long/short credit investments, and other credit-related
instruments.
The Sub-Advised Accounts
Currently, OFS Management provides tailored investment sub-advisory services to certain
affiliated and unaffiliated assets, pursuant to negotiated sub-advisory agreements (“Sub-Advisory
Agreements”), between OFS Management and an affiliated investment adviser (“Affiliated
Adviser”) and an unaffiliated third-party investment manager (“Primary Adviser”), respectively.
Generally, the various Sub-Advisory investment strategies are to primarily invest in middle market
debt obligations, other debt obligations, debt of U.S. and non-U.S. obligors, high yield bonds, bank
debt, and mezzanine or unsecured debt or equity. The Sub-Advised Accounts are managed on a
discretionary basis. OFS Management expects to enter into additional Sub-Advisory Agreements
in the future.
The SMAs
Currently, OFS Management provides tailored investment advisory services to SMA clients each
pursuant to a negotiated managed account agreement (“SMA Agreements”). The SMA
investment strategies are to primarily invest in middle market debt obligations, other debt
obligations, debt of U.S. and non-U.S. obligors, high yield bonds, bank debt, and mezzanine or
unsecured debt or equity. The SMAs are managed on a discretionary basis. OFS Management
expects to enter into additional SMA arrangements in the future.
Management of Client Assets
As of December 31, 2023, OFS Management managed approximately $2,502,172,065 of
regulatory assets under management on a discretionary basis.