Silver Point Specialty Lending Fund – BDC Investigation
The White Law Group is reviewing recent developments involving Silver Point Specialty Lending Fund, a non-traded business development company (BDC), following the fund’s announcement of a 1-for-2 reverse share split approved by its board of trustees. Corporate actions like reverse splits can raise important questions for investors, particularly when combined with declining net asset value (NAV), leverage, and limited liquidity.
Silver Point Specialty Lending Fund Approves 1-for-2 Reverse Share Split
According to a January 11, 2026 report, the board of trustees of Silver Point Specialty Lending Fund approved and implemented a reverse share split that reduced the number of outstanding common shares by half. Every two shares were combined into one, reducing outstanding shares from approximately 42.48 million to 21.24 million.
While the fund stated that the reverse split did not change investors’ ownership percentages, voting rights, or par value, reverse splits in non-traded investments are often viewed by investors as a cosmetic adjustment rather than a sign of improved fundamentals.
As of September 30, 2025:
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NAV per share was $14.53, down from $14.70 year-over-year
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Aggregate NAV totaled $545.9 million
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Total assets were approximately $1.06 billion
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Total liabilities were $510.9 million, including $485.4 million in principal debt
The fund reported $14.2 million in net investment income for Q3 2025 and maintained a debt-to-equity ratio of approximately 0.89x, indicating significant leverage.
Monthly Distributions Continue After Share Consolidation
Following the reverse split, the board declared a monthly distribution of $0.25 per share, payable around January 30, 2026, to shareholders of record as of December 31, 2025. While continued distributions may appear reassuring, investors should understand that distributions are not guaranteed and may include return of capital, particularly in leveraged, non-traded structures.
Leadership Changes and Expanded Borrowing Capacity
The announcement follows additional changes at the fund:
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Anthony DiNello assumed the roles of trustee, board chair, and CEO after the resignation of Edward Mulé in December 2025
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Mulé remains the fund’s portfolio manager
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The fund increased its credit facility from $100 million to $250 million, increasing borrowing capacity and potential risk exposure
Silver Point Specialty Lending Fund is managed by Silver Point Capital and invests in first-lien, second-lien, subordinated debt, equity, and real estate-related investments, primarily in middle-market companies.
Risks of Investing in Non-Traded BDCs
Non-traded BDCs like Silver Point Specialty Lending Fund carry unique and often misunderstood risks, including:
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Illiquidity – Shares are not publicly traded and may be difficult or impossible to sell
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Leverage Risk – High debt levels can amplify losses during market downturns
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Valuation Uncertainty – NAV is not determined by a public market and may lag economic reality
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Distribution Risk – Payments may be funded by borrowing or return of investor capital
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Complex Structures – Reverse splits, credit facility expansions, and internal valuations can obscure performance
These risks are particularly concerning for retirees or conservative investors seeking income preservation.
Broker Due Diligence and Suitability Obligations
Broker-dealers and financial advisors have a duty to conduct reasonable due diligence and ensure that recommendations are suitable for their clients. This includes evaluating:
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Liquidity needs and time horizon
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Risk tolerance and net worth
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Concentration in alternative investments
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Whether the investor understood the risks of non-traded BDCs
Failures in broker due diligence or unsuitable recommendations may give rise to investor claims.
FINRA Arbitration and Investor Recovery Options
Investors who suffered losses in Silver Point Specialty Lending Fund may have the right to pursue claims through FINRA arbitration, the primary forum for resolving disputes between investors and brokerage firms. Claims may involve:
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Unsuitable investment recommendations
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Misrepresentations or omissions
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Failure to disclose risks, leverage, or liquidity constraints
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Inadequate supervision by brokerage firms
Contact The White Law Group
If you are concerned about your investment in Silver Point Specialty Lending Fund, you may be able to file a FINRA arbitration claim.
For a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
Frequently Asked Questions (FAQs)
What does a reverse share split mean for Silver Point Specialty Lending Fund investors?
A reverse share split reduces the number of shares outstanding while increasing the per-share value proportionally. While ownership percentages remain the same, reverse splits may signal challenges related to valuation, leverage, or fund structure.
Are non-traded BDCs considered high-risk investments?
Yes. Non-traded BDCs are typically high-risk due to illiquidity, leverage, valuation uncertainty, and reliance on debt-financed distributions.
Can investors recover losses through FINRA arbitration?
Potentially. Investors may pursue FINRA arbitration claims if their broker failed to conduct proper due diligence, made unsuitable recommendations, or misrepresented the risks of the investment.
Last modified: January 12, 2026
