Form 10-Q

0001193125-21-240301.txt : 20210809 0001193125-21-240301.hdr.sgml : 20210809 20210809144559 ACCESSION NUMBER: 0001193125-21-240301 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210809 DATE AS OF CHANGE: 20210809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TCW Direct Lending LLC CENTRAL INDEX KEY: 0001603480 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 814-01069 FILM NUMBER: 211156072 BUSINESS ADDRESS: STREET 1: 200 CLARENDON STREET CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 213-244-0000 MAIL ADDRESS: STREET 1: 865 SOUTH FIGUEROA STREET STREET 2: SUITE 1800 CITY: LOS ANGELES STATE: CA ZIP: 90017 FORMER COMPANY: FORMER CONFORMED NAME: TCW Investment Corp. DATE OF NAME CHANGE: 20140324 10-Q 1 d154381d10q.htm FORM 10-Q Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission file number 814-01069

TCW DIRECT LENDING LLC

(Exact Name of Registrant as Specified in Its Charter)


Delaware		46-5327366
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

200 Clarendon Street, Boston, MA		02116
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 936-2275

Not applicable

Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report.

Securities registered pursuant to Section 12(b) of the Act.


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	Not applicable	Not applicable

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-Accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒

As of June 30, 2021, there was no established public market for the Registrant’s common units. The number of the Registrant’s common units outstanding at August 9, 2021 was 20,134,698.

TCW DIRECT LENDING LLC

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2021

Table of Contents


	INDEX	PAGE NO.

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Schedules of Investments as of June 30, 2021 (unaudited) and December 31, 2020		2
	Consolidated Statements of Assets and Liabilities as of June 30, 2021 (unaudited) and December 31, 2020		11
	Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited)		12
	Consolidated Statements of Changes in Members’ Capital for the three and six months ended June 30, 2021 and 2020 (unaudited)		13
	Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)		14
	Notes to Consolidated Financial Statements (unaudited)		15
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		42
Item 4.	Controls and Procedures		42
PART II.	OTHER INFORMATION		43
Item 1.	Legal Proceedings		43
Item 1A.	Risk Factors		43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		43
Item 3.	Defaults Upon Senior Securities		43
Item 4.	Mine Safety Disclosures		43
Item 5.	Other Information		43
Item 6.	Exhibits		44
	SIGNATURES		45

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments (Unaudited)

As of June 30, 2021


Industry	Issuer	Acquisition Date		Investment	% of Net Assets		Par Amount		Maturity Date	Amortized Cost		Fair Value
	DEBT ⁽¹⁾
Distributors
	ASC Acquisition Holdings, LLC ⁽³⁾		08/14/20	Term Loan 9.50% inc PIK (LIBOR + 8.50%, 1.00% Floor, all PIK)		3.9%	$	21,292,720	08/14/25	$	21,292,720	$	21,292,720
	ASC Acquisition Holdings, LLC ^{(2) (3)}		08/14/20	Subordinated Loan 7.00% inc PIK (7.00% Fixed Coupon, all PIK)		1.9%		25,941,282	11/14/25		23,151,200		10,298,689

						5.8%					44,443,920		31,591,409

Diversified Consumer Services
	School Specialty, Inc. ⁽⁴⁾		09/15/20	Term Loan 9.25% inc PIK (LIBOR + 8.00%, 1.25% Floor, 4.00% PIK)		6.5%		35,263,423	09/15/25		35,065,281		35,263,423

						6.5%					35,065,281		35,263,423

Diversified Financial Services
	Guardia LLC^{(2) (3)}		07/02/18	Revolver 8.75% inc PIK (LIBOR + 7.25%, 1.50% Floor, all PIK)		0.5%		10,048,152	07/02/23		2,318,730		2,763,242

						0.5%					2,318,730		2,763,242

Hotels, Restaurants & Leisure
	OTG Management, LLC		10/07/20	Delayed Draw Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)		0.4%		2,279,074	08/26/21		2,279,074		1,946,329
	OTG Management, LLC		10/07/20	Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)		1.1%		6,869,553	08/26/21		6,869,553		5,866,598
	OTG Management, LLC		06/30/16	Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)		9.3%		59,225,430	08/26/21		59,189,996		50,578,517
	OTG Management, LLC		06/30/16	Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)		3.0%		18,776,077	08/26/21		18,770,842		16,034,770
	Ruby Tuesday, Inc. ⁽⁴⁾		02/24/21	Term Loan 13.25% inc PIK (LIBOR + 12.00%, 1.25% Floor, 6.00% PIK)		2.2%		12,114,661	02/24/25		12,114,661		12,114,661

						16.0%					99,224,126		86,540,875

Household Durables
	Cedar Electronics Holdings, Corp. ⁽⁴⁾		05/19/15	Term Loan 9.50% (LIBOR + 8.00%, 1.50% Floor)		3.5%		19,147,847	12/18/23		19,145,599		19,147,847
	Cedar Electronics Holdings, Corp. ⁽⁴⁾		01/30/19	Incremental Term Loan 15.00% inc PIK (15.00% Fixed Coupon, all PIK)		0.6%		3,440,089	12/18/23		3,440,089		3,440,089

						4.1%					22,585,688		22,587,936

Industrial Conglomerates
	H-D Advanced Manufacturing Company		06/30/15	Term Loan 8.50% inc PIK (LIBOR + 7.00%, 1.50% Floor, 6.38% PIK)		13.5%		108,427,970	01/01/23		108,275,837		73,297,308

						13.5%					108,275,837		73,297,308

Internet & Direct Marketing Retail
	Lulu’s Fashion Lounge, LLC		08/28/17	Term Loan 10.50% inc PIK (LIBOR + 9.50%, 1.00% Floor, 2.50% PIK)		2.2%		11,791,496	08/28/22		11,711,504		11,791,496

						2.2%					11,711,504		11,791,496

Metals & Mining
	Pace Industries, Inc. ^{(2) (4)}		06/01/20	HoldCo Term Loan 3.50% inc PIK (LIBOR + 2.00%, 1.50% Floor, all PIK)		14.0%		84,098,877	06/01/40		78,137,869		75,857,187
	Pace Industries, Inc. ⁽⁴⁾		06/01/20	Term Loan 9.75% inc PIK (LIBOR + 8.25%, 1.50% Floor, 2.25% PIK)		9.8%		53,351,233	06/01/25		53,316,932		53,351,233

						23.8%					131,454,801		129,208,420

Pharmaceuticals
	Noramco, LLC		07/01/16	Term Loan 9.38% inc PIK (LIBOR + 8.38%, 1.00% Floor, 0.38% PIK)		9.3%		50,365,409	12/31/23		50,213,802		50,466,140

						9.3%					50,213,802		50,466,140

	Total Debt Investments					81.7%					505,293,689		443,510,249

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments (Unaudited) (Continued)

As of June 30, 2021


Industry	Issuer	Investment	% of Net Assets	Shares		Amortized Cost		Fair Value
	EQUITY
Distributors
	Animal Supply Holdings LLC ^{(2) (3) (5) (9)}	Class A Common	0.0%		224,156	$	1,572,727	$	-

			0.0%				1,572,727		-

Diversified Consumer Services
	School Specialty, Inc. ^{(2) (4) (7) (9)}	Class A Preferred Stock	2.2%		806,264		8,062,637		11,916,578
	School Specialty, Inc. ^{(2) (4) (7) (9)}	Class B Preferred Stock	0.0%		359,474		356,635		-
	School Specialty, Inc. ^{(2) (4) (7) (9)}	Common Stock	0.0%		80,700		53,889		-

			2.2%				8,473,161		11,916,578

Diversified Financial Services
	Carrier & Technology Holdings, LLC ^{(2) (3) (6) (9)}	Common Stock	0.0%		2,143		-		-

			0.0%				-		-

Hotels, Restaurants & Leisure
	RTI Holding Company, LLC ^{(2) (4) (9)}	Class A Units	1.7%		5,475,885		5,133,708		9,214,272
	RTI Holding Company, LLC ^{(2) (4) (9)}	Warrant, expires 2/26/24	0.3%		912,647		-		1,535,711

			2.0%				5,133,708		10,749,983

Household Durables
	Cedar Ultimate Parent, LLC ^{(2) (4) (9)}	Class A Preferred Units	2.8%		9,297,990		9,187,902		15,035,966
	Cedar Ultimate Parent, LLC ^{(2) (4) (9)}	Class E Common Units	0.0%		300,000		-		-
	Cedar Ultimate Parent, LLC ^{(2) (4) (9)}	Class D Preferred Units	0.0%		2,900,000		-		261,000

			2.8%				9,187,902		15,296,966

Investment Funds & Vehicles
	TCW Direct Lending Strategic Ventures^{(2) (4) (8)}	Common membership Interests	0.0%		800		-		-
	TCW Direct Lending Strategic Ventures^(4) (8)	Preferred membership Interests	25.1%		154,400		154,400,000		136,303,948

			25.1%				154,400,000		136,303,948

Metals & Mining
	Pace Industries, Inc. ^{(2) (4) (9)}	Common Stock	0.0%		917,418		2,110,522		-

			0.0%				2,110,522		-

Technologies Hardware, Storage and Peripherals
	Quantum Corporation ⁽²⁾	Common Stock	2.2%		1,766,327		6,481,788		12,169,993

			2.2%				6,481,788		12,169,993

	Total Equity Investments		34.3%				187,359,808		186,437,468

	Total Debt & Equity Investments ⁽¹⁰⁾		116.0%				692,653,497		629,947,717

	Short-term Investments
	U.S. Treasury Bill, Yield 0.05%		92.0%		500,000,000		499,942,265		499,942,265

	Total Short-term Investments		92.0%				499,942,265		499,942,265

	Cash Equivalents
	Fixed Income Clearing Corporation Repo, Yield 0.00%		5.2%		28,487,620		28,487,620		28,487,620

	Total Cash Equivalents		5.2%				28,487,620		28,487,620

	Total Investments (213.3%)					$	1,221,083,382	$	1,158,377,602

	Net unrealized depreciation on unfunded commitments (-0.8%)								(4,374,297)

	Liabilities in Excess of Other Assets (-112.5%)								(610,862,738)

	Net Assets (100.0%)							$	543,140,567

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments (Unaudited) (Continued)

As of June 30, 2021

⁽¹⁾	Certain debt investments are subject to contractual restrictions on resale, such as approval of the agent or borrower.

⁽²⁾	Non-income producing.

⁽³⁾

As defined in the Investment Company Act of 1940, the investment is deemed to be an “affiliated person” of the Company because the Company owns, either directly or indirectly, between 5% and 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2020 and June 30, 2021 along with transactions during the period ended June 30, 2021 in these affiliated investments are as follows:


Name of Investment	Fair Value at 12/31/2020		Gross Addition ^(a)		Gross Reduction ^(b)		Realized Gains (Losses)		Net Change in Unrealized Appreciation/ Depreciation		Fair Value at June 30, 2021		Interest/Dividend/ Other income
Animal Supply Holdings LLC Class A Common	$	-	$	-	$	-	$	-	$	-	$	-	$	-
ASC Acquisition Holdings LLC Term Loan - 9.50%		20,398,360		992,692		(98,332)		-		-		21,292,720		1,203,518
ASC Acquisition Holdings LLC Term Loan - 7.00%		9,617,957		-		(275,367)		-		956,099		10,298,689		(271,935)
Carrier & Technology, LLC Common Stock		-		-		-		-		-		-		-
Carrier & Technology Holdings, LLC Term Loan—11.75%		-		231,173		(1,369,948)		(41,407,285)		42,546,060		-		231,174
Guardia LLC (fka Carrier & Technology, LLC) Revolver - 8.75%		5,782,424		293,635		(282,857)		(7,361,653)		4,331,693		2,763,242		68,403
Guardia LLC (fka Carrier & Technology Solutions, LLC) Term loan—8.75%		-		669,509		-		(10,057,378)		9,387,869		-		421,861

Total Non-Controlled Affiliated Investments	$	35,798,741	$	2,187,009	$	(2,026,504)	$	(58,826,316)	$	57,221,721	$	34,354,651	$	1,653,021

^(a)

Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

^(b)

Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

⁽⁴⁾

As defined in the Investment Company Act of 1940, the investment is deemed to be a “controlled person” of the Company because the Company owns, either directly or indirectly, 25% or more of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2020 and June 30, 2021 along with transactions during the period ended June 30, 2021 in these controlled investments are as follows:


Name of Investment	Fair Value at 12/31/2020		Gross Addition ^(a)		Gross Reduction ^(b)		Realized Gains (Losses)		Net Change in Unrealized Appreciation/ Depreciation		Fair Value at June 30, 2021		Interest/Dividend/ Other income
Cedar Electronics Holdings, Corp Incremental Term Loan - 15.00%	$	3,177,284	$	262,805	$	-	$	-	$	-	$	3,440,089	$	280,063
Cedar Electronics Holdings, Corp Term Loan - 9.50%		20,795,847		700		(1,648,000)		-		(700)		19,147,847		1,092,246
Cedar Ultimate Parent, LLC Class A Preferred Unit		9,598,036		-		-		-		5,437,930		15,035,966		-
Cedar Ultimate Parent, LLC Class D Preferred Unit		-		-		-		-		261,000		261,000		-
Cedar Ultimate Parent, LLC Class E Preferred Unit		-		-		-		-		-		-		-
Pace Industries, Inc. Common Stock		-		-		-		-		-		-		-
Pace Industries, Inc. Term Loan - 3.50%		66,352,141		-		(19,165)		-		9,524,211		75,857,187		8,230
Pace Industries, Inc. Term Loan - 9.75%		52,749,501		606,071		-		-		(4,339)		53,351,233		2,821,902
RT Holdings Parent, LLC Class A Unit		-		5,133,708		-		-		4,080,564		9,214,272		-
RT Holdings Parent, LLC Warrant		-		-		-		-		1,535,711		1,535,711		-
Ruby Tuesday Operations, LLC Term Loan - 13.25%		-		14,867,126		(2,752,465)		-		-		12,114,661		658,234
School Specialty, Inc. Common Stock		-		-		-		-		-		-		-
School Specialty, Inc. Preferred Stock A		4,386,075		-		-		-		7,530,503		11,916,578		-
School Specialty, Inc. Preferred Stock B		-		-		-		-		-		-		-
School Specialty, Inc. Term Loan - 9.25%		34,562,488		724,269		-		-		(23,334)		35,263,423		1,752,796
TCW Direct Lending Strategic Ventures LLC Common Membership Interests		-		-		-		-		-		-		-
TCW Direct Lending Strategic Ventures LLC Preferred Membership Interests		138,889,888		-		(10,800,000)		-		8,214,060		136,303,948		5,600,000

Total Controlled Affiliated Investments	$	330,511,260	$	21,594,679	$	(15,219,630)	$	-	$	36,555,606	$	373,441,915	$	12,213,471

^(a)

Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

^(b)

Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

⁽⁵⁾	Holding of Animal Supply Holdings, LLC Class A units are held through TCW DL ASH LLC, a special purpose vehicle.

⁽⁶⁾	Holdings of Carrier & Technology Holdings, LLC common stock are held through TCW DL CTH LLC, a special purpose vehicle.

⁽⁷⁾	Holdings of School Specialty, Inc. Class A & B preferred stock and common stock are held through TCW DL SSP LLC, a special purpose vehicle.

⁽⁸⁾

The investment is not a qualifying asset as defined in Section 55(a) under the Investment Company Act of 1940, as amended. A business development company may not acquire an asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. As of June 30, 2021, $136,303,948 or 11.7% of the Company’s total assets were represented by “non-qualifying assets.”

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments (Unaudited) (Continued)

As of June 30, 2021

⁽⁹⁾

All or a portion of such security was acquired in a transaction exempt from registration under the Securities Act of 1933, and may be deemed “restricted securities” under the Securities Act. As of June 30, 2021, the aggregate fair value of these securities was $37,963,527, or 3.3% of the Company’s total assets.

⁽¹⁰⁾

The fair value of the Quantum Corporation Common Stock held by the Company is based on the quoted market price of the issuer’s stock as of June 30, 2021. Such common stock is considered to be a Level 1 security within the Fair Value Hierarchy. Otherwise, the fair value of each debt and equity investment was determined using significant unobservable inputs and such investments are considered to be Level 3 within the Fair Value Hierarchy. See Note 3 “Investment Valuations and Fair Value Measurements.”

LIBOR - London Interbank Offered Rate, generally 1-Month or 3-Month

PRIME - Prime Rate

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $16,987,739 and $80,003,090, respectively, for the period ended June 30, 2021. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments.


Geographic Breakdown of Portfolio
United States	100	%

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments

As of December 31, 2020


Industry	Issuer	Acquisition Date		Investment	% of Net Assets		Par Amount		Maturity Date		Amortized Cost		Fair Value
	Debt (1)
Distributors
	ASC Acquisition Holdings, LLC(2)(3)		08/14/20	Term Loan - 7.00% inc. PIK (7.00% Fixed Coupon, all PIK)		1.7%	$	25,046,760		08/03/25	$	23,426,565	$	9,617,957
	ASC Acquisition Holdings, LLC(3)		08/14/20	Term Loan - 9.50% inc. PIK (LIBOR + 8.50%, 1.00% Floor, 9.5% PIK)		3.6%		20,398,360		08/03/25		20,398,360		20,398,360

						5.3%		45,445,120				43,824,925		30,016,317

Diversified Consumer Services
	School Specialty, Inc.(4)		09/15/20	Term Loan - 9.25% inc. PIK (LIBOR + 8.00%, 1.25% Floor, 4.00% PIK)		6.1%		34,562,488		09/15/25		34,341,012		34,562,488

						6.1%		34,562,488				34,341,012		34,562,488

Diversified Financial Services
	Carrier & Technology Holdings, LLC(2)(3)		07/02/18	Term Loan - 11.75% inc. PIK (11.75%, Fixed Coupon, all PIK)		0.0%		46,908,147		07/02/23		42,546,059		—
	Guardia LLC (fka Carrier & Technology Solutions, LLC)(2)(3)		07/02/18	Revolver - 8.75% inc. PIK (LIBOR + 7.25%, 1.50% Floor, all PIK)		1.0%		9,669,605		07/02/23		9,669,605		5,782,424
	Guardia LLC (fka Carrier & Technology Solutions, LLC)(2)(3)		07/02/18	Term Loan - 8.75% inc. PIK (LIBOR + 7.25%, 1.50% Floor, all PIK)		0.0%		11,087,550		07/02/23		9,387,868		—

						1.0%		20,757,155				19,057,473		5,782,424

						1.0%		67,665,302				61,603,532		5,782,424

Hotels, Restaurants & Leisure
	OTG Management, LLC		10/07/20	Incremental Delayed Draw Term Loan - 10.00% inc. PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)		1.3%		9,102,189		08/26/21		9,102,189		7,299,956
	OTG Management, LLC		06/30/16	Term Loan - 10.00% inc. PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)		10.9%		77,605,399		08/26/21		77,432,408		62,239,530

						12.2%		86,707,588				86,534,597		69,539,486

	Ruby Tuesday, Inc.		10/09/20	DIP Term Loan -11.00% (LIBOR + 10.00%, 1.00% Floor)		0.3%		1,836,034		03/08/21		1,836,034		1,836,034
	Ruby Tuesday, Inc.		12/21/17	Term Loan - 11.00% inc. PIK (LIBOR + 10.0%, 1.00% Floor, 2.00% PIK)		1.7%		9,647,259		12/21/22		9,466,906		9,647,259

						2.0%		11,483,293				11,302,940		11,483,293

						14.2%		98,190,881				97,837,537		81,022,779

Household Durables
	Cedar Electronics Holdings, Corp.(4)		01/30/19	Incremental Term Loan - 15.00% inc. PIK (15.00%, Fixed Coupon, all PIK)		0.5%		3,177,284		12/18/23		3,177,284		3,177,284
	Cedar Electronics Holdings, Corp.(4)		05/19/15	Term Loan 9.50% (LIBOR + 8.00%, 1.50% Floor)		3.7%		20,795,847		12/18/23		20,792,899		20,795,847

						4.2%		23,973,131				23,970,183		23,973,131

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020


Industry	Issuer	Acquisition Date		Investment	% of Net Assets			Par Amount		Maturity Date		Amortized Cost		Fair Value
Industrial Conglomerates
	H-D Advanced Manufacturing Company		06/30/15	First Lien Last Out Term Loan - 8.50% inc. PIK (LIBOR + 7.00%, 1.50% Floor, All PIK)		12.8	%	$	108,376,477		01/01/23	$	108,166,430	$	72,612,240

						12.8	%		108,376,477				108,166,430		72,612,240

Information Technology Services
	ENA Holding Corporation		05/06/16	First Lien Term Loan -10.00% inc. PIK (LIBOR + 9.25%, 0.75% Floor, 4.75% PIK)		7.3	%		41,682,875		05/06/21		41,613,205		41,307,729
	ENA Holding Corporation		05/06/16	Revolver - 10.00% inc. PIK (LIBOR + 9.25%, 0.75% Floor, 4.75% PIK)		1.4	%		8,150,861		05/06/21		8,150,861		8,077,503

						8.7	%		49,833,736				49,764,066		49,385,232

Internet & Direct Marketing Retail
	Lulu’s Fashion Lounge, LLC		08/28/17	First Lien Term Loan - 10.50% inc. PIK (LIBOR + 9.50%, 1.00% Floor, 2.50% PIK)		2.1	%		12,194,025		08/28/22		12,074,279		12,047,697

						2.1	%		12,194,025				12,074,279		12,047,697

Metals & Mining
	Pace Industries, Inc.(2)(4)		06/01/20	HoldCo Term Loan - 3.50% inc. PIK (LIBOR + 2.00%, 1.50% Floor, all PIK)		11.6	%		82,630,313		06/01/40		78,157,034		66,352,141
	Pace Industries, Inc.(4)		06/01/20	Opco Term Loan - 9.75% inc. PIK (LIBOR + 8.25%, 1.50% Floor, 2.25% PIK)		9.3	%		52,749,501		06/01/25		52,710,862		52,749,501

						20.9	%		135,379,814				130,867,896		119,101,642

Pharmaceuticals
	Noramco, LLC		07/01/16	Senior Term Loan - 9.38% inc. PIK (LIBOR + 8.38%, 1.00% Floor, 0.38% PIK)		8.4	%		50,315,714		12/31/23		50,133,886		47,548,349

						8.4	%		50,315,714				50,133,886		47,548,349

	Total Debt Investments					83.7	%						612,583,746		476,052,299


	Equity								Shares
Distributors
	Animal Supply Holdings, LLC(2)(3)(5)(8)			Class A Common		0.0	%		224,156				1,572,726		—

						0.0	%		224,156				1,572,726		—

Diversified Consumer Services
	School Specialty, Inc.(2)(4)(8)			Class A Preferred Stock		0.8	%		806,264				8,062,637		4,386,075
	School Specialty, Inc.(2)(4)(8)			Class B Preferred Stock		0.0	%		359,474				356,635		—
	School Specialty, Inc.(2)(4)(8)			Common Stock		0.0	%		80,700				53,889		—

						0.8	%		1,246,438				8,473,161		4,386,075

Diversified Financial Services
	Carrier & Technology Holdings, LLC(2)(3)(6)			Common Stock		0.0	%		2,143				—		—

						0.0	%		2,143				—		—

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020


Industry	Issuer	Investment	% of Net Assets		Shares		Amortized Cost		Fair Value
Hotels, Restaurants & Leisure
	RTI Holding Company, LLC (an affiliate of Ruby Tuesday, Inc.)(2)(8)	Warrant, expires 12/21/27		0.0%		1,470,632	$	1,379,747	$	—

				0.0%		1,470,632		1,379,747		—

Household Durables
	Cedar Ultimate Parent LLC(2)(4)(8)	Class A Preferred Units		1.7%		9,297,990		9,187,900		9,598,036
	Cedar Ultimate Parent LLC(2)(4)(8)	Class D Preferred Units		0.0%		2,900,000		—		—
	Cedar Ultimate Parent LLC(2)(4)(8)	Class E Common Units		0.0%		300,000		—		—

				1.7%		12,497,990		9,187,900		9,598,036

Investment Funds & Vehicles
	TCW Direct Lending Strategic Ventures LLC(2)(4)(7)	Common membership interests		0.0%		800		—		—
	TCW Direct Lending Strategic Ventures LLC(4)(7)	Preferred membership interests		24.4%		165,200		165,200,000		138,889,888

				24.4%		166,000		165,200,000		138,889,888

Metals & Mining
	Pace Industries, Inc.(2)(4)(8)	Common Stock		0.0%		917,418		2,110,522		—

				0.0%		917,418		2,110,522		—

Technologies Hardware, Storage and Peripherals
	Quantum Corporation(2)(3)	Common Stock		2.9%		2,670,416		9,799,470		16,342,946

				2.9%		2,670,416		9,799,470		16,342,946

	Total Equity Investments			29.8%				197,723,526		169,216,945

	Total Debt & Equity Investments(9)			113.5%			$	810,307,272	$	645,269,244

	Cash Equivalents
	Blackrock Liquidity Funds, Yield 0.01%			4.8%		27,031,770		27,031,770		27,031,770
	U.S. Treasury Bill, Yield 0.08%			105.5%		600,000,000		599,747,833		599,747,832

				110.3%		627,031,770		626,779,603		626,779,602

	Total Cash Equivalents			110.3%			$	626,779,603	$	626,779,602

	Total Investments 223.8%						$	1,437,086,875	$	1,272,048,846

	Net unrealized depreciation on unfunded commitments (0.1%)								$	(713,058	)

	Liabilities in Excess of Other Assets (123.7%)								$	(703,060,436	)

	Net Assets 100.0%								$	568,275,352

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $153,637,845 and $416,887,805, respectively, for the period ended December 31, 2020. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments.

(1)	Certain debt investments are subject to contractual restrictions on resale, such as approval of the agent or borrower.

(2)	Non-income producing.

(3)

As defined in the Investment Company Act of 1940, the investment is deemed to be an “affiliated person” of the Company because the Company owns, either directly or indirectly, between 5% and 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2019 and December 31, 2020 along with transactions during the year ended December 31, 2020 in these affiliated investments are as follows:


												Net Change in
	Fair Value at								Realized			Unrealized			Fair Value at		Interest/
	December 31,		Gross			Gross			Gains			Appreciation/			December 31,		Dividend/
Name of Investment	2019		Additions^(a)			Reductions^(b)			(Losses)			Depreciation			2020		Other income
Animal Supply Holdings, LLC Class A Common	$	—	$	1,572,727		$	—		$	(708,537	)	$	(864,190	)	$	—	$	15,767
ASC Acquisition Holdings, LLC Term Loan—7.00%		—		23,426,565			—			—			(13,808,608	)		9,617,957		873,444
ASC Acquisition Holdings, LLC Term Loan—9.50%		—		20,398,360			—			—			—			20,398,360		1,503,104
ASC Acquisition Holdings, LLC Term Loan—11.80%		16,973,303		12,091,695			(34,771,688	)		—			5,706,690			—		3,053,968
Carrier & Technology Holdings, LLC Term Loan—11.75%		—		—			—			—			—			—		(417,901	)
Carrier & Technology Holdings, LLC Common Stock		—		—			—			—			—			—		—
Guardia LLC (fka Carrier & Technology Solutions, LLC) Revolver—8.75%		8,494,311		(469,870	)		1,645,164			—			(3,887,181	)		5,782,424		1,649,576
Guardia LLC (fka Carrier & Technology Solutions, LLC) Term loan—8.75%		7,740,609		552,378			(2,819,690	)		—			(5,473,297	)		—		999,895
Quantum Corporation Common Stock		19,814,479		—			—			—			(3,471,533	)		16,342,946		—

Total non-controlled affiliated investments	$	53,022,702	$	57,571,855		$	(35,946,214)		$	(708,537)		$	(21,798,119)		$	52,141,687	$	7,677,853

^(a)	Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

^(b)	Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

TCW DIRECT LENDING LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020

(4)

As defined in the Investment Company Act of 1940, the investment is deemed to be a “controlled person” of the Company because the Company owns, either directly or indirectly, 25% or more of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2019 and December 31, 2020 along with transactions during the year ended December 31, 2020 in these controlled investments are as follows:


											Net Change in
	Fair Value at							Realized			Unrealized			Fair Value at		Interest/
	December 31,		Gross		Gross			Gains			Appreciation/			December 31,		Dividend/
Name of Investment	2019		Additions^(a)		Reductions^(b)			(Losses)			Depreciation			2020		Other income
Cedar Electronics Holdings, Corp. Incremental Term Loan—15.00%	$	2,738,388	$	438,897	$	—		$	—		$	(1	)	$	3,177,284	$	885,745
Cedar Electronics Holdings, Corp. Term Loan—9.50%		19,817,479		1,019,695		—			—			(41,327	)		20,795,847		2,898,179
Cedar Ultimate Parent LLC Class A Preferred Units		1,640,937		—		—			—			7,957,099			9,598,036		—
Cedar Ultimate Parent LLC Class D Preferred Units		—		—		—			—			—			—		—
Cedar Ultimate Parent LLC Class E Common Units		—		—		—			—			—			—		—
Pace Industries, Inc. Common Stock		—		2,110,522		—			—			(2,110,522	)		—		—
Pace Industries, Inc. First Lien Term Loan—12.70%		87,910,865		18,431,418		(110,306,182	)		—			3,963,899			—		8,786,785
Pace Industries, Inc. HoldCo Term Loan—3.50%		—		110,746,735		(32,589,701	)		—			(11,804,893	)		66,352,141		19,164
Pace Industries, Inc. Opco Term Loan—9.75%		—		52,710,862		—			—			38,639			52,749,501		3,344,140
School Specialty, Inc. Class A Preferred Stock		—		8,062,637		—			—			(3,676,562	)		4,386,075		—
School Specialty, Inc. Class B Preferred Stock		—		356,635		—			—			(356,635	)		—		—
School Specialty, Inc. Common Stock		—		59,124		—			(5,235	)		(53,889	)		—		—
School Specialty, Inc. Delayed Draw Term Loan—16.75%		3,768,338		4,400,424		(8,396,541	)		—			227,779			—		718,873
School Specialty, Inc. Term Loan—9.25%		—		34,341,012		—			—			221,476			34,562,488		961,647
School Specialty, Inc. Term Loan A—16.75%		28,294,179		11,202,554		(38,039,495	)		(2,866,190	)		1,408,952			—		5,843,440
School Specialty, Inc. Warrant		124,508		—		—			(124,655	)		147			—		—
TCW Direct Lending Strategic Ventures LLC Common Membership Interests		—		—		—			—			—			—		—
TCW Direct Lending Strategic Ventures LLC Preferred Membership Interests		195,726,195		—		(46,000,000	)		(3	)		(10,836,304	)		138,889,888		22,000,000

Total controlled affiliated investments	$	340,020,889	$	243,880,515	$	(235,331,919)		$	(2,996,083)		$	(15,062,142)		$	330,511,260	$	45,457,973

^(a)	Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

^(b)	Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

(5)	Holding of Animal Supply Holdings, LLC Class A units are held through TCW DL ASH LLC, a special purpose vehicle.

(6)	Holdings of Carrier & Technology Holdings, LLC common stock are held through TCW DL CTH LLC, a special purpose vehicle.

(7)

The investment is not a qualifying asset as defined in Section 55(a) under the Investment Company Act of 1940, as amended. A business development company may not acquire an asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. As of December 31, 2020, $138,889,888 or 10.8% of the Company’s total assets were represented by “non-qualifying assets.”

(8)

All or a portion of such security was acquired in a transaction exempt from registration under the Securities Act of 1933 and may be deemed “restricted securities” under the Securities Act. As of December 31, 2020, the aggregate fair value of these securities was $13,984,111, or 1.1% of the Company’s total assets.

(9)

The fair value of the Quantum Corporation Common Stock held by the Company is based on the quoted market price of the issuer’s stock as of December 31, 2020. Such common stock is considered to be a Level 1 security within the Fair Value Hierarchy. Otherwise, the fair value of each debt and equity investment was determined using significant unobservable inputs and such investments are considered to be Level 3 within the Fair Value Hierarchy. See Note 3 “Investment Valuations and Fair Value Measurements.”

LIBOR - London Interbank Offered Rate, generally 1-Month or 3-Month


Country Breakdown Portfolio
United States	100.0	%

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING LLC

Consolidated Statements of Assets and Liabilities

(Dollar amounts in thousands, except unit data)

June 30, 2021


	As of June 30, 2021 (unaudited)			As of December 31, 2020
Assets
Investments, at fair value
Non-controlled/non-affiliated investments (amortized cost of $263,793 and $319,356, respectively)	$	222,151		$	262,616
Non-controlled affiliated investments (amortized cost of $48,335 and $$116,801, respectively)		34,355			52,142
Controlled affiliated investments (amortized cost of $380,526 and $374,150, respectively)		373,442			330,511
Cash and cash equivalents		31,860			34,802
Short-term investments		499,942			599,748
Interest receivable		1,852			5,360
Deferred financing costs		1,434			1,235
Prepaid and other assets		-			82

Total Assets	$	1,165,036		$	1,286,496


Liabilities
Payable for short-term investments purchased	$	499,942		$	599,748
Credit facility payable		115,250			115,250
Unrealized depreciation on unfunded commitments		4,374			713
Management fees payable		1,420			1,698
Interest and credit facility expense payable		255			457
Directors’ fees payable		135			-
Other accrued expenses and other liabilities		519			355

Total Liabilities	$	621,895		$	718,221


Commitments and Contingencies (Note 5)
Members’ Capital
Common Unitholders’ commitment: (20,134,698 units issued and outstanding)	$	2,013,470		$	2,013,470
Common Unitholders’ undrawn commitment: (20,134,698 units issued and outstanding)		(409,125	)		(409,125	)
Common Unitholders’ return of capital		(921,303	)		(854,503	)
Common Unitholders’ offering costs		(853	)		(853	)
Accumulated Common Unitholders’ tax reclassification		(13,733	)		(13,733	)

Common Unitholders’ capital		668,456			735,256
Accumulated loss		(125,315	)		(166,981	)

Total Members’ Capital	$	543,141		$	568,275

Total Liabilities and Members’ Capital	$	1,165,036		$	1,286,496

Net Asset Value Per Unit (accrual base) (Note 9)	$	47.29		$	48.54

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING LLC

Consolidated Statements of Operations (Unaudited)

(Dollar amounts in thousands, except unit data)

June 30, 2021


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021			2020			2021			2020
Investment Income
Non-controlled/non-affiliated investments:
Interest income⁽¹⁾	$	3,924		$	13,678		$	9,531		$	30,939
Interest income paid-in-kind ⁽¹⁾		2,318			4,839			4,642			9,456
Dividend income		-			21			-			216
Other fee income ⁽¹⁾		7			18			10			76
Non-controlled affiliated investments:
Interest income⁽¹⁾		325			473			579			942
Interest income paid-in-kind ⁽¹⁾		504			467			1,063			931
Other fee income		7			-			11			-
Controlled affiliated investments:
Interest income⁽¹⁾		2,631			1,596			4,772			2,269
Interest income paid-in-kind⁽¹⁾		1,001			588			1,793			692
Dividend income		2,800			-			5,600			-
Other fee income ⁽¹⁾		28			36			48			36

Total investment income		13,545			21,716			28,049			45,557

Expenses
Management fees		1,420			1,935			2,939			3,947
Interest and credit facility expenses		1,148			2,882			2,475			6,316
Administrative fees		200			241			407			490
Professional fees		125			451			291			568
Directors’ fees		86			86			164			164
Other expenses		94			46			218			117

Total expenses		3,073			5,641			6,494			11,602

Net investment income	$	10,472		$	16,075		$	21,555		$	33,955

Net realized and unrealized gain (loss) on investments
Net realized (loss) gain:
Non-controlled/non-affiliated investments	$	457		$	43		$	3,438		$	2,201
Non-controlled affiliated investments		-			-			(58,826	)		-
Net change in unrealized appreciation/depreciation:
Non-controlled/non-affiliated investments⁽¹⁾		(3,192	)		(3,034	)		4,893			(32,495	)
Non-controlled affiliated investments⁽¹⁾		438			1,186			57,222			(15,831	)
Controlled affiliated investments⁽¹⁾		24,977			(21,871	)		36,556			(20,669	)
Net realized (loss) gain on short-term investments		(9	)		-			27			-

Net realized and unrealized gain (loss) on investments	$	22,671		$	(23,676	)	$	43,310		$	(66,794	)

Net increase (decrease) in Members’ Capital from operations	$	33,143		$	(7,601	)	$	64,865		$	(32,839	)

Basic and diluted:
Income (Loss) per unit	$	1.65		$	(0.38	)	$	3.22		$	(1.63	)

⁽¹⁾ Amounts disclosed for the three and six months ended June 30, 2020 have been restated, as described in Note 2.

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING LLC

Consolidated Statements of Changes in Members’ Capital (Unaudited)

(Dollar amounts in thousands, except unit data)

June 30, 2021


	Common Unitholders’ Capital			Accumulated Earnings (Loss)			Total
Members’ Capital at December 31, 2019	$	971,647		$	(97,419	)	$	874,228
Net Increase (Decrease) in Members’ Capital Resulting from Operations:
Net investment income		-			17,880			17,880
Net realized gain on investments		-			2,158			2,158
Net change in unrealized appreciation/depreciation on investments		-			(45,276	)		(45,276	)
Distributions to Members from:
Distributable earnings		-			(69,650	)		(69,650	)
Return of capital		(62,000	)		-			(62,000	)

Total Decrease in Members’ Capital for the three months ended March 31, 2020		(62,000	)		(94,888	)		(156,888	)

Members’ Capital at March 31, 2020	$	909,647		$	(192,307	)	$	717,340

Net Increase (Decrease) in Members’ Capital Resulting from Operations:
Net investment income		-			16,075			16,075
Net realized gain on investments		-			43			43
Net change in unrealized appreciation/depreciation on investments		-			(23,719	)		(23,719	)

Total Decrease in Members’ Capital for the three months ended June 30, 2020		-			(7,601	)		(7,601	)

Members’ Capital at June 30, 2020	$	909,647		$	(199,908	)	$	709,739


Members’ Capital at December 31, 2020	$	735,256		$	(166,981	)	$	568,275
Net Increase (Decrease) in Members’ Capital Resulting from Operations:
Net investment income		-			11,084			11,084
Net realized loss on investments		-			(55,809	)		(55,809	)
Net change in unrealized appreciation/depreciation on investments		-			76,448			76,448
Distributions to Members from:
Distributable earnings		-			(15,000	)		(15,000	)

Total Increase in Members’ Capital for the three months ended March 31, 2021		-			16,723			16,723

Members’ Capital at March 31, 2021	$	735,256		$	(150,258	)	$	584,998

Net Increase in Members’ Capital Resulting from Operations:
Net investment income		-			10,472			10,472
Net realized gain on investments		-			448			448
Net change in unrealized appreciation/depreciation on investments		-			22,223			22,223
Distributions to Members from:
Distributable earnings		-			(8,200	)		(8,200	)

Return of capital		(66,800	)		-			(66,800	)

Total (Decrease) Increase in Members’ Capital for the three months ended June 30, 2021		(66,800	)		24,943			(41,857	)

Members’ Capital at June 30, 2021	$	668,456		$	(125,315	)	$	543,141

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING LLC

Consolidated Statements of Cash Flows (Unaudited)

(Dollar amounts in thousands, except unit data)

June 30, 2021


	For the Six Months Ended June 30,
	2021			2020
Cash Flows from Operating Activities
Net increase (decrease) in net assets resulting from operations	$	64,865		$	(32,839	)
Adjustments to reconcile the net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:
Purchases of investments		(9,490	)		(66,136	)
Purchases of short-term investments		(499,942	)		-
Interest income paid in-kind		(7,498	)		(11,079	)
Proceeds from sales and paydowns of investments		80,003			156,915
Proceeds from sales of short-term investments		599,748			-
Net realized loss (gain) on investments		55,388			(2,201	)
Change in net unrealized appreciation/depreciation on investments		(98,671	)		68,995
Amortization of premium and accretion of discount, net		(749	)		(69	)
Amortization of deferred financing costs		684			972

Increase (decrease) in operating assets and liabilities:
(Increase) decrease in interest receivable		3,508			(5,203	)
(Increase) decrease in prepaid and other assets		82			(97	)
Increase (decrease) in payable for short-term investments purchased		(99,806	)		-
Increase (decrease) in management fees payable		(278	)		(2,094	)
Increase (decrease) in interest and credit facility expense payable		(202	)		767
Increase (decrease) in directors’ fees payable		135			135
Increase (decrease) in other accrued expenses and liabilities		164			206

Net cash provided by operating activities	$	87,941		$	108,272


Cash Flows from Financing Activities
Return of capital	$	(66,800	)	$	(62,000	)
Distributions to Members		(23,200	)		(69,650	)
Deferred financing costs paid		(883	)		(1,913	)
Proceeds from credit facility		-			353,000
Repayments of credit facility		-			(317,065	)

Net cash used in financing activities	$	(90,883	)	$	(97,628	)

Net decrease in cash and cash equivalents	$	(2,942	)	$	10,644
Cash and cash equivalents, beginning of period	$	34,802		$	254,474

Cash and cash equivalents, end of period	$	31,860		$	265,118

Supplemental and non-cash financing activities
Interest expense paid	$	1,785		$	3,653

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except unit data)

June 30, 2021

1. Organization and Basis of Presentation

Organization: TCW Direct Lending LLC (“Company”) was formed as a Delaware corporation on March 20, 2014 and converted to a Delaware limited liability company on April 1, 2014. The Company conducted a private offering of its limited liability company units (the “Common Units”) to investors in reliance on exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”). In addition, the Company may issue preferred units, though it currently has no intention to do so. The Company has engaged TCW Asset Management Company LLC (“TAMCO”), an affiliate of The TCW Group, Inc. (“TCW”) to be its adviser (the “Adviser”). On May 13, 2014 (“Inception Date”), the Company sold and issued 10 Common Units at an aggregate purchase price of $1 to TAMCO.

The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company has also elected to be treated for U.S. federal income tax purposes as a Regulated Investment Company (a “RIC”) under Subchapter M of the U.S Internal Revenue Code of 1986, as amended (the “Code”) for the taxable year ending December 31, 2015 and subsequent years. The Company is required to meet the minimum distribution and other requirements for RIC qualification and as a BDC and a RIC, the Company is required to comply with certain regulatory requirements.

The Company has wholly-owned subsidiaries, each of which is a Delaware limited liability company designed to hold an equity investment of the Company. Most recently in 2020, the Company established TCW DL SSP LLC, also a Delaware limited liability company, also designed to hold an equity investment of the Company.

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Term: The initial term of the Company continued until the sixth anniversary of the Initial Closing Date (as defined below), September 14, 2020. The Company may extend the term for two additional one-year periods upon written notice to the holders of the Common Units and holders of preferred units, if any, (collectively the “Unitholders” or “Members”) at least 90 days prior to the expiration of the term or the end of the first one-year period. Thereafter, the term may be extended for successive one-year periods, with the vote or consent of a supermajority in interest of the holders of the Common Units. On April 30, 2021, the Company’s Board of Directors approved the second one year extension of the Company’s term from September 14, 2021 to September 14, 2022.

Commitment Period: The Commitment Period commenced on September 19, 2014 (the “Initial Closing Date”) and ended on September 19, 2017, the third anniversary of the Initial Closing Date. In accordance with the Company’s Limited Liability Company Agreement, the Company may complete investment transactions that were significantly in process as of the end of the Commitment Period and which the Company reasonably expects to be consummated prior to 90 days subsequent to the expiration date of the Commitment Period. The Company may also effect follow-on investments up to an aggregate maximum of 10% of Capital Commitments (as defined below), provided that any such follow-on investment to be made after the third anniversary of the expiration of the Commitment Period shall require the prior consent of a majority in interest of the Common Unitholders.

In October 2020, the Company’s Members approved a proposal to allow the Company to make pre-identified follow-on investments in specific portfolio companies as well as their holding companies, subsidiaries, successors or other affiliates, up to an aggregate maximum of 10% of Capital Commitments.

Capital Commitments: On September 19, 2014 (“the Initial Closing Date”), the Company began accepting subscription agreements from investors for the private sale of its Common Units. On March 19, 2015, the Company completed its final private placement of its Common Units. Subscription agreements with commitments (“Commitments”) from investors (each a “Common Unitholder”) totaling $2,013,470 for the purchase of Common Units were accepted. Each Common Unitholder is obligated to contribute capital equal to their Commitment and each Unit’s Commitment obligation is $100.00 per unit. The amount of capital that remains to be drawn down and contributed is referred to as an “Undrawn Commitment”.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

1. Organization and Basis of Presentation (Continued)

The commitment amount funded does not include amounts contributed in anticipation of a potential investment that the Company did not consummate and therefore returned to the Members’ as unused capital. As of June 30, 2021, aggregate Commitments, Undrawn Commitments, the percentage of Commitments funded and the number of subscribed for Units of the Company were as follows:


	Commitments		Undrawn Commitments		% of Commitments Funded		Units
Common Unitholder	$	2,013,470	$	409,125		79.7%		20,134,698

Recallable Amount: A Common Unitholder may be required to re-contribute amounts distributed equal to 75% of the principal amount or the cost portion of any Portfolio Investment that is fully repaid to or otherwise fully recouped by the Company within one year of the Company’s investment. The Recallable Amount is excluded from the calculation of the accrual based net asset value.

The Recallable Amount as of June 30, 2021 was $100,875.

2. Significant Accounting Policies

Basis of Presentation: The consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies (“ASC 946”). The Company has consolidated the results of its wholly owned subsidiary in its consolidated financial statements in accordance with ASC 946.

Use of Estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities at the date of the financial statements, (ii) the reported amounts of income and expenses during the years presented and (iii) disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates, and such differences could be material.

Investments: The Company measures the value of its investments in accordance with ASC Topic 820, Fair Value Measurements and Disclosure (“ASC 820”). Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, the Company considers its principal market to be the market that has the greatest volume and level of activity.

Transactions: The Company records investment transactions on the trade date. The Company considers trade date for investments not traded on a recognizable exchange, or traded in the over-the-counter markets, to be the date on which the Company receives legal or contractual title to the asset and bears the risk of loss.

Income Recognition: Interest income is recorded on an accrual basis unless doubtful of collection or the related investment is in default. Realized gains and losses on investments are recorded on a specific identification basis. The Company typically receives a fee in the form of a discount to the purchase price at the time it funds an investment in a loan. The discount is accreted to interest income over the life of the respective loan, using the effective-interest method assuming there are no questions as to collectability, and reflected in the amortized cost basis of the investment. Ongoing facility, commitment or other additional fees including prepayment fees, consent fees and forbearance fees are recognized immediately when earned as income.

The Company has entered into certain intercreditor agreements that entitle the Company to the “last out” tranche of first lien secured loans, whereby the “first out” tranche will receive priority as to the “last out” tranche with respect to payments of principal, interest, and any other amounts due thereunder. In certain cases, the Company may receive a higher interest rate than the contractual stated interest rate as disclosed on the Company’s Consolidated Schedule of Investments.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

2. Significant Accounting Policies (Continued)

Certain investments have an unfunded loan commitment for a delayed draw term loan or revolving credit. The Company earns an unused commitment fee on the unfunded commitment during the commitment period. The expiration date of the commitment period may be earlier than the maturity date of the investment stated above. See Note 5—Commitments and Contingencies.

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection.

Deferred Financing Costs: Deferred financing costs incurred by the Company in connection with the revolving credit facility, including arrangement fees, upfront fees and legal fees, are amortized on a straight-line basis over the term of the revolving credit facility.

Organization and Offering Costs: Costs incurred to organize the Company totaling $665 were expensed as incurred. Offering costs totaling $853 were accumulated and charged directly to Members’ Capital on March 19, 2015, the end of the period during which Common Units were offered (the “Closing Period”). The Company did not bear more than an amount equal to 10 basis points of the aggregate capital commitments of the Company for organization and offering expenses.

Cash and Cash Equivalents: The Company considers all investments with a maturity of three months or less at the time of acquisition to be cash equivalents. As of June 30, 2021, cash and cash equivalents is comprised of demand deposits and highly liquid investments with maturities of three months or less. Cash equivalents are carried at amortized costs which approximates fair value and are classified as Level 1 in the GAAP valuation hierarchy.

Income Taxes: So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. Federal income taxes on any ordinary income or capital gains that it distributes at least annually to its Members as dividends. Rather, any tax liability related to income earned and distributed by the Company represents obligations of the Company’s Members and will not be reflected in the consolidated financial statements of the Company.

Recent Accounting Pronouncements: In March 2020, the FASB issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated financial statements.

Correction of Affiliates Disclosure: Subsequent to the issuance of the Company’s consolidated financial statements as of and for the three and six months ended June 30, 2020, management identified certain disclosures required by Article 6 of Regulation S-X relating to income from non-affiliates versus affiliates that should have been separately disclosed in the Company’s Consolidated Statement of Operations for the three and six months ended June 30, 2020, which are included as comparative periods in the Company’s consolidated financial statement as of and for the three and six months ended June 30, 2021.

The resulting adjustments to the comparative period presented had no impact on the Company’s Net Asset Values (“NAVs”), Net increase in Members’ Capital from operations, or Distributions to Members. The adjustments also had no impact on any of the disclosures appearing on the Company’s Financial Highlights. The adjustments pertain solely to investment income and net change in unrealized appreciation/depreciation from non-controlled/non-affiliated investments to non-controlled affiliated investments and controlled affiliated investments on the Company’s Consolidated Statements of Operations.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

2. Significant Accounting Policies (Continued)

The following table summarizes the effect of the adjustments on the Company’s Consolidated Statements of Operations for the three months ended June 30, 2020:


	For the Three Months Ended June 30, 2020
	As Previously Reported			Total Adjustment			As Corrected
Consolidated Statement of Operations
Non-controlled/non-affiliated investments:
Interest income	$	15,747		$	(2,069	)	$	13,678
Interest income paid-in-kind		5,894			(1,055	)		4,839
Other fee income		54			(36	)		18
Non-controlled affiliated investments:
Interest income		-			473			473
Interest income paid-in-kind		-			467			467
Controlled affiliated investments:
Interest income		-			1,596			1,596
Interest income paid-in-kind		-			588			588
Other fee income		-			36			36

Net change in unrealized appreciation/depreciation:
Non-controlled/non-affiliated investments		(27,962	)		24,928			(3,034	)
Non-controlled affiliated investments		-			1,186			1,186
Controlled affiliated investments		4,243			(26,114	)		(21,871	)

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

2. Significant Accounting Policies (Continued)

The following table summarizes the effect of the adjustments on the Company’s Consolidated Statements of Operations for the six months ended June 30, 2020:


	For the Six Months Ended June 30, 2020
	As Previously Reported			Total Adjustment			As Corrected
Consolidated Statement of Operations
Non-controlled/non-affiliated investments:
Interest income	$	34,150		$	(3,211	)	$	30,939
Interest income paid-in-kind		11,079			(1,623	)		9,456
Other fee income		112			(36	)		76
Non-controlled affiliated investments:
Interest income		-			942			942
Interest income paid-in-kind		-			931			931
Controlled affiliated investments:
Interest income		-			2,269			2,269
Interest income paid-in-kind		-			692			692
Other fee income		-			36			36

Net change in unrealized appreciation/depreciation:
Non-controlled/non-affiliated investments		(74,630	)		42,135			(32,495	)
Non-controlled affiliated investments		-			(15,831	)		(15,831	)
Controlled affiliated investments		5,635			(26,304	)		(20,669	)

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

3. Investment Valuations and Fair Value Measurements

Investments at Fair Value: Investments held by the Company are valued at fair value. Fair value is generally determined on the basis of last reported sales prices or official closing prices on the primary exchange in which each security trades, or if no sales are reported, generally based on the midpoint of the valuation range obtained for debt investments from a quotation reporting system, established market makers or pricing service.

Investments for which market quotes are not readily available or are not considered reliable are valued at fair value and approved by the Board based on similar instruments, internal assumptions and the weighting of the best available pricing inputs.

Fair Value Hierarchy: Assets and liabilities are classified into three levels by the Company based on valuation inputs used to determine fair value:

Level 1 values are based on unadjusted quoted market prices in active markets for identical assets.

Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs.

Level 3 values are based on significant unobservable inputs that reflect the Company’s determination of assumptions that market participants might reasonably use in valuing the assets.

Categorization within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation levels are not necessarily an indication of the risk associated with investing in those securities.

Level 1 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:

Equity, (Level 1), includes common stock valued at the closing price on the primary exchange in which the security trades.

Level 3 Assets (Investments): The following valuation techniques and significant inputs are used to determine the fair value of investments in private debt and equity for which reliable market quotations are not available. Some of the inputs are independently observable however, a significant portion of the inputs and the internal assumptions applied are unobservable.

Debt, (Level 3), include investments in privately originated senior secured debt. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. A discounted cash flow approach incorporating a weighted average cost of capital is generally used to determine fair value or, in some cases, an enterprise value waterfall method. Valuation may also include a shadow rating method. Standard pricing inputs include but are not limited to the financial health of the issuer, place in the capital structure, value of other issuer debt, credit, industry, and market risk and events.

Equity, (Level 3), includes common stock, preferred stock and warrants. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. A market approach is generally used to determine fair value. Pricing inputs include, but are not limited to, financial health and relevant business developments of the issuer; EBITDA; market multiples of comparable companies; comparable market transactions and recent trades or transactions; issuer, industry and market events; and contractual or legal restrictions on the sale of the security. When a Black-Scholes pricing model is used it follows the income approach. The pricing model takes into account the contract terms as well as multiple inputs, including: time value, implied volatility, equity prices and interest rates. A liquidity discount based on current market expectations, future events, minority ownership position and the period management reasonably expects to hold the investment may be applied.

Pricing inputs and weightings applied to determine value require subjective determination. Accordingly, valuations do not necessarily represent the amounts that may eventually be realized from sales or other dispositions of investments.

Net Asset Value (“NAV”) (Investment Funds and Vehicles): Equity investments in affiliated investment fund (Strategic Ventures) are valued based on the NAV reported by the investment fund. Investments held by the affiliated fund include debt investments in privately originated senior secured debt. Such investments held by the affiliated fund are valued using the same methods, approach and standards applied above to debt investments held by the Company. The Company’s ability to withdraw from the fund is subject to restrictions. The term of the fund will continue until June 5, 2021 unless dissolved earlier or extended for two additional one-year periods by the Company, in its full discretion. The Company can further extend the term of the fund for additional one-year periods, upon notice to and consent from the fund’s management committee. On February 25, 2021, Company extended the fund’s term one additional year, until June 5, 2022. The Company is entitled to income and principal distributed by the fund.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

3. Investment Valuations and Fair Value Measurements (Continued)

The following is a summary by major security type of the fair valuations according to inputs used in valuing investments listed in the Consolidated Schedule of Investments as of June 30, 2021:


Investments	Level 1		Level 2		Level 3		NAV		Total
Debt	$	—	$	—	$	443,510	$	—	$	443,510
Equity		12,170		—		37,964		—		50,134
Investment Funds & Vehicles ⁽¹⁾		—		—		—		136,304		136,304
Short- term investments		499,942		—		—		—		499,942
Cash equivalents		28,488		—		—		—		28,488

Total	$	540,600	$	—	$	481,474	$	136,304	$	1,158,378

⁽¹⁾

Includes equity investments in Strategic Ventures. In accordance with ASC Topic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

The following is a summary by major security type of the fair valuations according to inputs used in valuing investments listed in the Consolidated Schedule of Investments as of December 31, 2020:


Investments	Level 1		Level 2		Level 3		NAV		Total
Debt	$	—	$	—	$	476,052	$	—	$	476,052
Equity		16,343		—		13,984		—		30,327
Investment Funds & Vehicles ⁽¹⁾		—		—		—		138,890		138,890
Short- term investments		599,748		—		—		—		599,748
Cash equivalents		27,032		—		—		—		27,032

Total	$	643,123	$	—	$	490,036	$	138,890	$	1,272,049

⁽¹⁾

The following tables provide a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the three and six months ended June 30, 2021:


	Debt			Equity		Total
Balance, April 1, 2021	$	490,154		$	21,721	$	511,875
Purchases, including payments received in-kind		3,907			—		3,907
Sales and paydowns of investments		(57,744	)		—		(57,744	)
Amortization of premium and accretion of discount, net		261			—		261
Net realized losses		—			—		—
Net change in unrealized appreciation/depreciation		6,932			16,243		23,175

Balance, June 30, 2021	$	443,510		$	37,964	$	481,474

Change in net unrealized appreciation/depreciation in investments held as of June 30, 2021	$	6,552		$	16,243	$	22,795

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

3. Investment Valuations and Fair Value Measurements (Continued)


	Debt			Equity			Total
Balance, January 1, 2021	$	476,052		$	13,984		$	490,036
Purchases, including payments received in-kind		22,394			5,134			27,528
Sales and paydowns of investments		(72,012	)		—			(72,012	)
Amortization of premium and accretion of discount, net		749			—			749
Net realized losses		(58,421	)		(1,380	)		(59,801	)
Net change in unrealized appreciation/depreciation		74,748			20,226			94,974

Balance, June 30, 2021	$	443,510		$	37,964		$	481,474

Change in net unrealized appreciation/depreciation in investments held as of June 30, 2021	$	22,614		$	18,846		$	41,460

The following tables provide a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the three and six months ended June 30, 2020:


	Debt			Equity			Total
Balance, April 1, 2020	$	716,719		$	8,994		$	725,713
Purchases, including payments received in-kind		52,702			419			53,121
Sales and paydowns of investments		(90,203	)		—			(90,203	)
Amortization of premium and accretion of discount, net		751			—			751
Net realized gains		43			—			43
Net change in unrealized appreciation/depreciation		(26,631	)		(3,686	)		(30,317	)

Balance, June 30, 2020	$	653,381		$	5,727		$	659,108

Change in net unrealized appreciation/depreciation in investments held as of June 30, 2020	$	(30,371	)	$	(3,268	)	$	(33,639	)


	Debt			Equity			Total
Balance, January 1, 2020	$	752,242		$	10,822		$	763,064
Purchases, including payments received in-kind		76,796			419			77,215
Sales and paydowns of investments		(118,515	)		—			(118,515	)
Amortization of premium and accretion of discount, net		69			—			69
Net realized gains		2,201			—			2,201
Net change in unrealized appreciation/depreciation		(59,412	)		(5,514	)		(64,926	)

Balance, June 30, 2020	$	653,381		$	5,727		$	659,108

Change in net unrealized appreciation/depreciation in investments held as of June 30, 2020	$	(62,088	)	$	(4,971	)	$	(67,059	)

The Company did not have any transfers between levels during the three and six months ended June 30, 2021 and 2020.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

3. Investment Valuations and Fair Value Measurements (Continued)

Level 3 Valuation and Quantitative Information: The following table summarizes the valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of June 30, 2021.

Investment Type

Fair Value

Valuation

Technique

Unobservable Input

Range

Weighted

Average*

Impact to
Valuation if
Input
Increases

Debt

62,258

Income Method

Discount Rate

8.8% to 11.0%

10.0%

Decrease

Debt

151,796

Market Method

EBITDA Multiple

6.3x to 7.8x

N/A

Increase

Debt

2,763

Market Method

Indicative Bid

26.1% to 29.0%

N/A

Increase

Debt

226,693

Market Method

EBITDA Multiple

2.5x to 18.0x

N/A

Increase

Revenue Multiple

0.2x to 1.8x

N/A

Increase

Equity

15,297

Market Method

EBITDA Multiple

6.3x to 7.8x

N/A

Increase

Equity

—

Market Method

Indicative Bid

0.0% to 0.0%

N/A

Increase

Equity

22,667

Market Method

EBITDA Multiple

2.5x to 8.8x

N/A

Increase

Equity

Revenue Multiple

0.2x to 0.3x

N/A

Increase

*	Weighted based on fair value

The following table summarizes the valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of December 31, 2020.

Investment Type

Fair Value

Valuation

Technique

Unobservable

Input

Range

Weighted

Average*

Impact to

Valuation if

Input

Increases

Debt

108,981

Income Method

Discount Rate

10.6% to 14.0%

12.2%

Decrease

Debt

143,075

Market Method

EBITDA Multiple

5.8x to 8.0x

N/A

Increase

Debt

72,612

Market Method

Revenue Multiple

1.2x to 1.4x

N/A

Increase

Debt

17,266

Market Method

Indicative Bid

0.0% to 100.0%

86.6%

Increase

Debt

99,556

Market Method

EBITDA Multiple

Revenue Multiple

5.3x to 9.5x

0.2x to 1.6x

N/A

Increase

Debt

34,562

Income Method

Discount Rate

22.0% to 24.0%

N/A

Decrease

Equity

—

Market Method

EBITDA Multiple

Revenue Multiple

Indicative Bid

3.5x to 4.5x

0.2x to 0.4x

0.0% to 0.0%

N/A

Increase

Equity

9,598

Market Method

EBITDA Multiple

5.8x to 8.0x

N/A

Increase

Equity

—

Market Method

EBITDA Multiple

Revenue Multiple

5.3x to 6.3x

0.2x to 0.2x

N/A

Increase

Equity

4,386

Income Method

Market Method

Discount Rate

EBITDA Multiple

Revenue Multiple

22.0% to 24.0%

3.5x to 4.5x

0.2x to 0.4x

N/A

Decrease

Increase

*	Weighted based on fair value

Unless noted, the Company generally utilizes the midpoint of a valuation range provided by an external, independent valuation firm.

4. Agreements and Related Party Transactions

Advisory Agreement: On September 15, 2014, the Company entered into an Investment Advisory and Management Agreement (the “Advisory Agreement”) with the Adviser, its registered investment adviser under the Investment Advisers Act of 1940, as amended. The Advisory Agreement was approved by the Board at an in-person meeting. Unless earlier terminated, the Advisory Agreement will remain in effect for a period of two years and will remain in effect from year to year thereafter if approved annually

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

by (i) the vote of the Board, or by the vote of a majority of our outstanding voting securities, and (ii) the vote of a majority of the independent directors of the Board. On August 10, 2020, the Company’s Board reapproved the Advisory Agreement.

Management Fee: Pursuant to the Advisory Agreement, and subject to the overall supervision of the Board, the Adviser will manage the Company’s day-to-day operations and provide investment advisory services to the Company. The Company will pay to the Adviser, quarterly in advance, a management fee (the “Management Fee”) calculated as follows: (i) for the period starting on the initial closing date and ending on the earlier of (A) the last day of the calendar quarter during which the Commitment Period (as defined below) ends or (B) the last day of the calendar quarter during which the Adviser or an affiliate thereof begins to accrue a management fee with respect to a successor fund, 0.375% (i.e., 1.50% per annum) of the aggregate commitments determined as of the end of the Closing Period, and (ii) for each calendar quarter thereafter during the term of the Company (but not beyond the tenth anniversary of the initial closing date), 0.1875% (i.e., 0.75% per annum) of the aggregate cost basis (whether acquired by the Company with contributions from members, other Company funds or borrowings) of all portfolio investments that have not been sold, distributed to the members, or written off for tax purposes (but reduced by any portion of such cost basis that has been written down to reflect a permanent impairment of value of any portfolio investment), determined in each case as of the first day of such calendar quarter. The Management Fee in respect of the Closing Period will be calculated as if all capital commitments of the Company were made on the initial closing date, regardless of when Common Units were actually funded. The actual payment of the Management Fee with respect to the Closing Period will not be made prior to the first day of the first full calendar quarter following the end of the Closing Period. The “Commitment Period” of the Company will begin on the initial closing date and end on the earlier of (a) three years from the initial closing date and (b) the date on which the undrawn Commitment of each Common Unit has been reduced to zero. While the Management Fee will accrue from the initial closing date, the Adviser intends to defer payment of such fees to the extent that such fees cannot be paid from interest and fee income generated by the Company’s investments.

For the three and six months ended June 30, 2021, Management Fees incurred were $1,420 and $2,939, respectively, of which $1,420 remained payable as of June 30, 2021. For the three and six months ended June 30, 2020, Management Fees incurred amounted to $1,935 and $3,947, respectively, of which $0 remained payable at June 30, 2020.

Transaction and Other Fees: Any (i) transaction, advisory, consulting, management, monitoring, directors’ or similar fees, (ii) closing, investment banking, finders’, transaction or similar fees, (iii) commitment, breakup or topping fees or litigation proceeds and (iv) other fee or payment of services performed or to be performed with respect to an investment or proposed investment received from or with respect to Portfolio Companies or prospective Portfolio Companies in connection with the Company’s activities will be will be the property of the Company. Since inception, the Company received $2,615 in such fees, none of which were during three and six months ended June 30, 2021 and 2020.

Incentive Fee: In addition, the Adviser will receive an incentive fee (the “Incentive Fee”) as follows:

(a) First, no Incentive Fee will be owed until the Common Unitholders have collectively received cumulative distributions pursuant to this clause (a) equal to their aggregate capital contributions in respect of all Common Units;

(b) Second, no Incentive Fee will be owed until the Common Unitholders have collectively received cumulative distributions equal to a 9% internal rate of return on their aggregate capital contributions in respect of all Common Units (the “Hurdle”);

(c) Third, the Adviser will be entitled to an Incentive Fee out of 100% of additional amounts otherwise distributable to Common Unitholders until such time as the cumulative Incentive Fee paid to the Adviser is equal to 20% of the sum of (i) the amount by which the Hurdle exceeds the aggregate capital contributions of the Common Unitholders in respect of all Common Units and (ii) the amount of Incentive Fee being paid to the Adviser pursuant to this clause (c); and

(d) Thereafter, the Adviser will be entitled to an Incentive Fee equal to 20% of additional amounts otherwise distributable to Unitholders, with the remaining 80% distributed to the Unitholders.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

4. Agreements and Related Party Transactions (Continued)

The Incentive Fee will be calculated on a cumulative basis and the amount of the Incentive Fee payable in connection with any distribution (or deemed distribution) will be determined and, if applicable, paid in accordance with the foregoing formula each time amounts are to be distributed to the Unitholders.

If the Advisory Agreement terminates early for any reason other than (i) the Adviser voluntarily terminating the agreement or (ii) our terminating the agreement for cause (as set out in the Advisory Agreement), we will be required to pay the Adviser a final incentive fee payment (the “Final Incentive Fee Payment”). The Final Incentive Fee Payment will be calculated as of the date the Advisory Agreement is so terminated and will equal the amount of Incentive Fee that would be payable to the Adviser if (A) all our investments were liquidated for their current value (but without taking into account any unrealized appreciation of any portfolio investment), and any unamortized deferred portfolio investment-related fees would be deemed accelerated, (B) the proceeds from such liquidation were used to pay all our outstanding liabilities, and (C) the remainder were distributed to Unitholders and paid as Incentive Fee in accordance with the “waterfall” (i.e., clauses (a) through (d)) described above for determining the amount of the Incentive Fee. We will make the Final Incentive Fee Payment in cash on or immediately following the date the Advisory Agreement is so terminated. The Adviser Return Obligation (defined below) will not apply in connection with a Final Incentive Fee Payment.

No Incentive Fees were incurred during the three and six months ended June 30, 2021 and 2020.

Administration Agreement: On September 15, 2014, the Company entered into the Administration Agreement with the Adviser under which the Adviser (or one or more delegated service providers) will oversee the maintenance of our financial records and otherwise assist on the Company’s compliance with regulations applicable to a BDC under the 1940 Act, and a RIC under the Code, to prepare reports to our Members, monitor the payment of our expenses and the performance of other administrative or professional service providers, and generally provide us with administrative and back office support. The Company will reimburse the Administrator for expenses incurred by it on behalf of the Company in performing its obligations under the Administration Agreement. Amounts paid pursuant to the Administration Agreement are subject to the annual cap on Company Expenses (as defined below), as described more fully below.

The Company, and indirectly the Unitholders, will bear (including by reimbursing the Adviser or Administrator) all other costs and expenses of its operations, administration and transactions, including, without limitation, organizational and offering expenses, management fees, costs of reporting required under applicable securities laws, legal fees of the Company’s counsel and accounting fees. However, the Company will not bear (a) more than an amount equal to 10 basis points of the aggregate capital commitments of the Company for organization and offering expenses in connection with the offering of Common Units through the Closing Period and (b) more than an amount equal to 12.5 basis points of the aggregate Commitments of the Company per annum (pro-rated for partial years) for its costs and expenses other than ordinary operating expenses (“Company Expenses”), including amounts paid to the Administrator under the Administration Agreement and reimbursement of expenses to the Adviser. All expenses that the Company will not bear will be borne by the Adviser or its affiliates. Notwithstanding the foregoing, the cap on Company Expenses does not apply to payments of the Management Fee, Incentive Fee, organizational and offering expenses (which are subject to the separate cap), amounts payable in connection with the Company’s borrowings (including interest, bank fees, legal fees and other transactional expenses related to any borrowing or borrowing facility and similar costs), costs and expenses relating to the liquidation of the Company, taxes, or extraordinary expenses (such as litigation expenses and indemnification payments).

TCW Direct Lending Strategic Ventures LLC: On June 5, 2015, the Company, together with an affiliate of Security Benefit Corporation and accounts managed by Oak Hill Advisors, L.P., entered into an Amended and Restated Limited Liability Company Agreement (the “Agreement”) to become members of TCW Direct Lending Strategic Ventures LLC (“Strategic Ventures”). Strategic Ventures focuses primarily on making senior secured floating rate loans to middle-market borrowers. The Agreement was effective June 5, 2015. The Company’s investment in Strategic Ventures is restricted from redemption until the termination of Strategic Ventures.

The Company’s capital commitment is $481,600, representing approximately 80% of the preferred and common equity ownership of Strategic Ventures, with the third-party investors representing the remaining capital commitments and preferred and common equity ownership. A portion of the Company’s capital commitment was satisfied by the contribution of two loans to Strategic Ventures. Strategic Ventures also entered into a revolving credit facility to finance a portion of certain eligible investments on June 5, 2015. On April 30, 2021, Strategic Ventures’ revolving credit facility was terminated.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

5. Commitments and Contingencies

The Company had the following unfunded commitments and unrealized depreciation by investment as of June 30, 2021 and December 31, 2020:


		June 30, 2021				December 31, 2020
Unfunded Commitments	Maturity/ Expiration	Amount		Unrealized Depreciation		Amount		Unrealized Depreciation
Guardia LLC (fka Carrier & Technology Solutions, LLC)	July 2023	$	313	$	227	$	1,769	$	713
H-D Advanced Manufacturing Company	July 2021		12,800		4,147		—		—
Ruby Tuesday, Inc.	February 2025		6,824		—		—		—
Ruby Tuesday, Inc.	March 2021		—		—		4,941		—

Total		$	19,937	$	4,374	$	6,710	$	713

The Company’s total capital commitment to its underlying investment in Strategic Ventures is $481,600. As of June 30, 2021 and December 31, 2020, the Company’s unfunded commitment to Strategic Ventures is $219,646.

From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of June 30, 2021, management is not aware of any pending or threatened litigation.

In the normal course of business, the Company enters into contracts which provide a variety of representations and warranties, and that provide general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.

6. Members’ Capital

During the three and six months ended June 30, 2021 and 2020, the Company did not sell or issue any Common Units. The activity for the three and six months ended June 30, 2021 and 2020 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Units at beginning of period		20,134,698		20,134,698		20,134,698		20,134,698

Units issued and committed at end of period		20,134,698		20,134,698		20,134,698		20,134,698

The Company did not process any deemed distributions and re-contributions during the three and six months ended June 30, 2021 and 2020.

7. Credit Facility

The Company has a secured revolving credit agreement (the “Credit Agreement”) with Natixis, New York Branch (“Natixis”) as administrative agent and committed lender. The Credit Agreement provides for a revolving credit line of up to $750,000 (the “Maximum Commitment”) (the “Credit Facility”), subject to the lesser of the “Borrowing Base” assets or the Maximum Commitment (the “Available Commitment”). The Borrowing Base assets generally equal the sum of (a) a percentage of certain eligible investments in a controlled account, (b) a percentage of unfunded commitments from certain eligible investors in the Company and (c) cash in a controlled account. The Credit Agreement is generally secured by the Borrowing Base assets.

On April 10, 2017, the Company and Natixis entered into a Third Amended and Restated Revolving Credit Agreement. Under the Third Amended and Restated Revolving Credit Agreement borrowings bear interest at a rate equal to either the (a) adjusted eurodollar rate calculated in a customary manner plus 2.35%, (b) commercial paper rate plus 2.35%, or (c) a base rate calculated in a customary manner (using the higher of the Federal Funds Rate plus 0.50%, the Prime Rate and the Floating LIBOR Rate plus 1.00%) plus 1.35%.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

Moreover, the Credit Agreement’s stated maturity date was extended from November 10, 2017 to April 10, 2020. The Credit Facility may be terminated, and any outstanding amounts thereunder may become due and payable, should the Company fail to satisfy certain covenants. As of June 30, 2021, the Company was in compliance with such covenants.

On April 6, 2020, the Company entered into a First Amendment to the Third Amended and Restated Revolving Credit Agreement (the “Amended Credit Agreement”), by and among the Company, as borrower, and Natixis, New York Branch, as administrative agent and the lenders party thereto. The Amended Credit Agreement provides for a revolving credit line of up to $375,000 (with an option for the Company to increase this amount to $450,000 subject to consent of the lenders and satisfaction of certain other conditions), subject to the available borrowing base, which is generally the sum of (a) a percentage of certain eligible investments, (b) a percentage of remaining unfunded commitments from certain eligible investors in the Company and (c) cash in a controlled account. The Amended Credit Agreement is generally secured by the unfunded commitments (together with the recallable amounts) of the Company’s investors, portfolio investments and substantially all other assets of the Company. The stated maturity date of the Amended Credit Agreement was April 9, 2021, which date (subject to the satisfaction of certain conditions) could have been extended by the Company for up to an additional 364 days. Borrowings under the Amended Credit Agreement bore interest at a rate equal to either (a) adjusted eurodollar rate calculated in a customary manner plus 2.50%, (b) commercial paper rate plus 2.50%, or (c) a base rate calculated in a customary manner (which will never be less than the adjusted eurodollar rate plus 1.00%) plus 1.50%, provided however in each case the commercial paper rate and the eurocurrency rate shall have a floor of 1.00%.

On May 27, 2020, the Company entered into a Lender Group Joinder Agreement pursuant to which Zions Bancorporation, N.A. d/b/a California Bank & Trust was added as a committed lender (with a commitment of $25,000) under the Amended Credit Agreement. Concurrently therewith, the Company elected to increase the size of its revolving credit line under the Amended Credit Agreement to $400,000. On December 29, 2020, the Company elected to permanently decrease the size of its revolving credit line under the Amended Credit Agreement to $177,000.

On April 6, 2021, the Company entered into a Third Amendment to the Amended Credit Agreement (the “Third Amended Credit Agreement”). The Third Amended Credit Agreement provides for a revolving credit line of up to $177,000, subject to the available borrowing base, which is generally a percentage of remaining unfunded commitments from certain eligible investors in the Company. The Third Amended Credit Agreement is generally secured by the unfunded commitments (together with the recallable amounts) of the Company’s investors. The stated maturity date of the Third Amended Credit Agreement is April 8, 2022, which (subject to the satisfaction of certain conditions) may be extended by the Company for up to an additional 364 days. Borrowings under the Third Amended Credit Agreement bear interest at a rate equal to either (a) adjusted eurodollar rate calculated in a customary manner plus 1.95%, (b) commercial paper rate plus 1.95%, or (c) a base rate calculated in a customary manner (which will never be less than the adjusted eurodollar rate plus 1.00%) plus 0.95%, provided however in each case the CP Rate and the Eurocurrency Rate shall have a floor of 0.00%.

As of June 30, 2021 and December 31, 2020, the Available Commitment under the Amended Credit Agreement was $177,000.

As of June 30, 2021 and December 31, 2020, the amounts outstanding under the Credit Facility were $115,250. The carrying amount of the Credit Facility, which is categorized as Level 2 within the fair value hierarchy as of June 30, 2021 and December 31, 2020, approximates its fair value. Valuation techniques and significant inputs used to determine fair value include Company details; credit, market and liquidity risk and events; financial health of the Company; place in the capital structure; interest rate; and terms and conditions of the Credit Facility. The Company incurred financing costs of $10,123 in connection with the April 10, 2017 Third Amended and Restated Revolving Credit Agreement. The Company also incurred additional financing costs of $1,848 in connection with the Amended Credit Agreement on April 6, 2020 and May 27, 2020 as well as an additional $883 in connection with the April 6, 2021 Third Amended Credit Agreement. The Company recorded these costs as deferred financing costs on its Consolidated Statements of Asset and Liabilities and the costs are being amortized over the life of the Credit Facility. As of June 30, 2021 and December 31, 2020, $1,434 and $1,235, respectively, of such prepaid deferred financing costs had yet to be amortized.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

7. Credit Facility (Continued)

The summary information regarding the Credit Facility for the three and six months ended June 30, 2021 and 2020 was as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Credit facility interest expense	$	625		$	2,466		$	1,634		$	4,381
Undrawn commitment fees		62			110			124			930
Administrative fees		17			17			33			33
Amortization of deferred financing costs		444			289			684			972

Total	$	1,148		$	2,882		$	2,475		$	6,316

Weighted average interest rate		2.18	%		3.59	%		2.86	%		3.70	%
Average outstanding balance		115,250			275,975			115,250			238,101

On December 31, 2019, the Company’s ratio of aggregate fair value of all eligible portfolio assets (as defined in the Credit Agreement) to the principal amount outstanding (“Ratio of Eligible Portfolio Assets”) fell below 150%, which triggered a mandatory prepayment provision in the Credit Agreement requiring the Company to utilize all cash receipts attributable to the eligible portfolio assets as a prepayment to the outstanding principal obligation, within five days of collecting such cash receipts, until such a time when the Ratio of Eligible Portfolio Assets exceeds 150%. The Company’s Ratio of Eligible Portfolio Assets exceeded 150% on January 10, 2020 through March 26, 2020. On March 27, 2020, the Company’s Ratio of Eligible Portfolio Assets fell below 150%. However, in connection with the Amended Credit Agreement executed on April 6, 2020, the mandatory repayment was waived by Natixis. The Company’s Ratio of Eligible Portfolio Assets has exceeded 150% since April 6, 2020.

8. Income Taxes

The Company has elected to be treated as a BDC under the 1940 Act and has elected to be treated as a RIC under the Code. So long as the Company maintains its status as a RIC, it will generally not pay corporate-level U.S. Federal income or excise taxes on any ordinary income or capital gains that it distributes at least annually to its common unitholders as dividends. The Company elected to be taxed as a RIC in 2015. The Company evaluates tax positions taken or expected to be taken in the course of preparing its financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reversed and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof.

Federal Income Taxes: It is the policy of the Company to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and distribute all of its net taxable income and any net realized gains on investments to its shareholders. Therefore, no federal income tax provision is required

As of June 30, 2021 and December 31, 2020, the Company’s aggregate investment unrealized appreciation and depreciation for federal income tax purposes were as follows:


	June 30, 2021			December 31, 2020
Cost of investments for federal income tax purposes	$	1,192,597		$	1,401,101
Unrealized appreciation	$	22,279		$	7,397
Unrealized depreciation	$	(89,359	)	$	(145,449	)
Net unrealized depreciation on investments	$	(67,080	)	$	(138,052	)

The Company did not have any unrecognized tax benefits at December 31, 2020, nor were there any increases or decreases in unrecognized tax benefits for the period then ended; and therefore no interest or penalties were accrued. The Company is subject to examination by U.S. federal and state tax authorities regarding returns filed for the prior three and four years, respectively.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

9. Financial Highlights

Selected data for a unit outstanding throughout the six months ended June 30, 2021 and 2020 is presented below. The accrual base Net Asset Value is calculated by subtracting the per unit loss from investment operations from the beginning Net Asset Value per unit and reflects all units issued and outstanding.


	For the Six Months Ended June 30,
	2021			2020
Net Asset Value Per Unit (accrual base), Beginning of Period	$	48.54		$	63.74
Income from Investment Operations:
Net investment income⁽¹⁾		1.07			1.69
Net realized and unrealized gain (loss)		2.15			(3.32	)

Total from investment operations		3.22			(1.63	)
Less Distributions:
From net investment income		(1.15	)		(3.46	)
Return of capital		(3.32	)		(3.08	)

Total distributions⁽²⁾		(4.47	)		(6.54	)

Net Asset Value Per Unit (accrual base), End of Period	$	47.29		$	55.57

Common Unitholder Total Return⁽³⁾⁽⁴⁾		11.37	%		(4.19	)%

Common Unitholder IRR⁽⁵⁾		7.98	%		6.93	%

Ratios and Supplemental Data
Members’ Capital, end of period	$	543,141		$	709,739
Units outstanding, end of period		20,134,698			20,134,698
Ratios based on average net assets of Members’ Capital:
Ratio of total expenses to average net assets⁽⁶⁾		2.33	%		2.95	%
Ratio of financing cost to average net assets⁽⁴⁾		0.44	%		0.80	%
Ratio of net investment income to average net assets⁽⁶⁾		7.72	%		8.64	%
Credit facility payable	$	115,250		$	400,000
Asset coverage ratio		5.71			2.77
Portfolio turnover rate⁽⁴⁾		1.49	%		7.31	%

⁽¹⁾	Per unit data was calculated using the number of Common Units issued and outstanding as of June 30, 2021 and 2020.

⁽²⁾	Includes distributions which have an offsetting capital re-contribution (“deemed distributions”). Excludes return of unused capital.

⁽³⁾

The Total Return for the six months ended June 30, 2021 and 2020 was calculated by taking the net investment income of the Company for the period divided by the weighted average capital contributions from the Members during the period. The return does not reflect sales load and is net of management fees and expenses.

⁽⁴⁾	Not annualized.

⁽⁵⁾

The Internal Rate of Return (IRR) since inception for the Common Unitholders, after management fees, financing costs and operating expenses is 7.98% through June 30, 2021. The IRR is computed based on cash flow due dates contained in notices to Members (contributions from and distributions to the Common Unitholders) and the net assets (residual value) of the Members’ Capital account at period end. The IRR is calculated based on the fair value of investments using principles and methods in accordance with GAAP and does not necessarily represent the amounts that may be realized from sales or other dispositions. Accordingly, the return may vary significantly upon realization.

⁽⁶⁾	Annualized.

TCW DIRECT LENDING LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except unit data)

June 30, 2021

10. Subsequent Events

The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no subsequent events that require recognition or disclosure in these consolidated financial statements other than those described below.

On August 9, 2021, the Company’s Board reapproved the Advisory Agreement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report on Form 10-Q. Some of the statements in this report (including in the following discussion) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or future performance or financial condition of TCW Direct Lending LLC. For simplicity, this report uses the terms “Company,” “we,” “us,” and “our” to include TCW Direct Lending LLC and where appropriate in the context, its wholly-owned subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve substantial risks and uncertainties. These forward- looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation:

•

our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our and their respective objectives as a result of the current COVID-19 pandemic;

•

an economic downturn, including as a result of the current COVID-19 pandemic, could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

•

a contraction of available credit, including as a result of the current COVID-19 pandemic, could impair our lending and investment activities;

•

interest rate volatility could affect our results, particularly in light of our use of leverage as part of our investment strategy;

•

our future operating results;

•

our contractual arrangements and relationships with third parties;

•

the ability of our portfolio companies to achieve their financial and other business objectives and the impact of the COVID-19 pandemic thereon;

•

competition with other entities and our affiliates for investment opportunities;

•

the impact of changing market conditions and lending standards on our ability to compete with other industry participants, including other business development companies, private and public funds, individual and institutional investors, and financial institutions for investment opportunities;

•

uncertainty surrounding the impact of the current COVID-19 pandemic on the financial stability of the United States and global economies;

•

the social, geopolitical, financial, trade and legal implications of the trade and cooperation agreement arising from Brexit, as well as future agreements between the United Kingdom and various countries in the European Union;

•

pandemics or other serious public health events, such as the ongoing global outbreak of COVID-19;

•

an inability to replicate the historical success of any previously launched fund managed by the private credit team of our investment adviser, TCW Asset Management Company LLC (the “Adviser”);

•

the speculative and illiquid nature of our investments;

•

the use of borrowed money to finance a portion of our investments;

•

the adequacy of our financing sources and working capital;

•

the costs associated with being an entity registered with the Securities and Exchange Commission (“SEC”);

•

the loss of key personnel;

•

the timing of cash flows, if any, from the operations of our portfolio companies;

•

the ability of the Adviser to locate suitable investments for us and to monitor and administer our investments;

•

the ability of the TCW Group, Inc. and its subsidiaries to attract and retain highly talented professionals that can provide services to the Adviser in its capacity as our investment adviser and administrator;

•

our ability to qualify and maintain our qualification as a regulated investment company, or “RIC,” under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended, or the “Code,” and as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”) and the related tax implications;

•

the effect of legal, tax and regulatory changes; and

•

the other risks, uncertainties and other factors we identify under “Part I—Item 1A. Risk Factors” in our Form 10-K filed with the SEC on March 22, 2021.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, some of those assumptions are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, the forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 (as amended, the “1934 Act”), which preclude civil liability or certain forward-looking statements, do not apply to the forward-looking statements in this report because we are an investment company.

Overview

We were formed on April 1, 2014 as a limited liability company under the laws of the State of Delaware. We have filed an election to be regulated as a BDC under the 1940 Act. We have also elected to be treated for U.S. federal income tax purposes as a RIC under the Code for the taxable year ending December 31, 2015 and subsequent years. We are required to continue to meet the minimum distribution and other requirements for RIC qualification. As such, we are required to comply with various regulatory requirements, such as the requirement to invest at least 70% of our assets in “qualifying assets,” source of income limitations, asset diversification requirements, and the requirement to distribute annually at least 90% of our taxable income and tax-exempt interest.

Each investor was required to enter into a subscription agreement in connection with its Commitment (a “Subscription Agreement”). Under the terms of the subscription agreements, the Company may generally draw down all or any portion of the undrawn commitment with respect to each Common Unit upon at least ten business days’ prior written notice to the Common Unitholders. Investors have entered into subscription agreements for 20,134,698 Common Units of the Company issued and outstanding representing a total of $2.013 billion of committed capital.

We have several wholly-owned subsidiaries, each of which is a Delaware limited liability company designed to hold an equity investment of ours. Most recently in 2020, we established TCW DL SSP LLC, also a Delaware limited liability company, also designed to hold an equity investment ours.

Revenues

We generate revenues in the form of interest income and capital appreciation by providing private capital to middle market companies operating in a broad range of industries primarily in the United States. As our investment period has ended, we will not originate new loans, but may increase credit facilities to existing borrowers or affiliates. The historical investment philosophy, strategy and approach of the private credit team of the Adviser (the “Private Credit Team” fka the “Direct Lending Team”) has generally not involved the use of payment-in-kind (“PIK”) interest, which represents contractual interest accrued and added to the loan balance that generally becomes due at maturity, or similar arrangements. Although the Private Credit Team generally did not originate a significant amount of investments for us with PIK interest features, from time to time we made, and currently have, investments that contain such features. We have investments with PIK interest features in certain circumstances involving debt restructurings or work-outs of current investments. Our highly negotiated private investments may include senior secured loans, unsecured senior loans, subordinated and mezzanine loans, convertible securities, equity securities, and equity-linked securities such as options and warrants. However, historically, our investment bias has been towards adjustable-rate, senior secured loans. We do not anticipate a secondary market developing for our private investments.

We are primarily focused on investing in senior secured debt obligations, although there may be occasions where the investment may be unsecured. We also consider an equity investment as the primary security, in combination with a debt obligation, or as a part of total return strategy. Our investments are in corporations, partnerships or other business entities. Additionally, in certain circumstances, we may co-invest with other investors and/or strategic partners through indirect investments in portfolio companies through a joint venture vehicle, partnership or other special purpose vehicle (each, an “Investment Vehicle”). While we invest primarily in U.S. companies, there are certain instances where we invested in companies domiciled elsewhere.

Expenses

We do not currently have any employees and do not expect to have any employees. Services necessary for our business are provided through the Administration Agreement and the Advisory Agreement.

We will bear (including by reimbursing the Adviser or Administrator) all costs and expenses of our operations, administration and transactions, including, without limitation, organizational and offering expenses, management fees, costs of reporting required under applicable securities laws, legal fees of our counsel and accounting fees. However, we will not bear (a) more than an amount equal to 10 basis points of the aggregate Commitments for organization and offering expenses in connection with the offering of Common Units through the Closing Period and (b) more than an amount equal to 12.5 basis points of the aggregate Commitments per annum (pro-rated for partial years) for our Operating Expenses, including amounts paid to the Administrator under the Administration Agreement and reimbursement of expenses to the Adviser and its affiliates. Notwithstanding the foregoing, the cap on Operating Expenses does not apply to payments of the Management Fee, Incentive Fee, organizational and offering expenses (which are subject to the separate cap described above), amounts payable in connection with our borrowings (including interest, bank fees, legal fees and other transactional expenses related to any borrowing or borrowing facility and similar costs), costs and expenses relating to our liquidation of the Company, taxes, or extraordinary expenses (such as litigation expenses and indemnification payments to either the Adviser or the Administrator). All expenses that we will not bear will be borne by the Adviser or its affiliates.

Critical Accounting Policies and Estimates

Investments which we hold for which market quotes are not readily available or are not considered reliable are valued at fair value and approved by our Board of Directors based on similar instruments, internal assumptions and the weighting of the best available pricing inputs.

Fair Value Hierarchy: Assets and liabilities are classified by us into three levels based on valuation inputs used to determine fair value.

Level 1 values are based on unadjusted quoted market prices in active markets for identical assets.

Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs.

Level 3 values are based on significant unobservable inputs that reflect our determination of assumptions that market participants might reasonably use in valuing the assets.

Level 1 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:

Equity, (Level 1), includes common stock valued at the closing price on the primary exchange in which the security trades.

Level 3 Assets (Investments): The following valuation techniques and significant inputs are used to determine the fair value of investments in private debt for which reliable market quotations are not available. Some of the inputs are independently observable; however, a significant portion of the inputs and the internal assumptions applied are unobservable.

Equity, (Level 3), includes common stock, preferred stock and warrants. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. A market approach is generally used to determine fair value. Pricing inputs include, but are not limited to, financial health and relevant business developments of the issuer; EBITDA; market multiples of comparable companies; comparable market transactions and recent trades or transactions; issuer, industry and market events; and contractual or legal restrictions on the sale of the security. A liquidity discount based on current market expectations, future events, minority ownership position and the period management reasonably expects to hold the investment may be applied.

Net Asset Value (“NAV”) (Investment Funds and Vehicles): Equity investments in affiliated investment fund (TCW Strategic Ventures) are valued based on the net asset value reported by the investment fund. Investments held by the affiliated fund include debt investments in privately originated senior secured debt. Such investments held by the affiliated fund are valued using the same methods, approach and standards applied above to debt investments held by the Company. The Company’s ability to withdraw from the fund is subject to restrictions. The term of the fund will continue until June 5, 2021 unless dissolved earlier or extended for two additional one-year periods by the Company, in its full discretion. The Company can further extend the term of the fund for additional one-year periods, upon notice to and consent from the funds management committee. On February 25, 2021, Company extended the fund’s term one additional year, until June 5, 2022. The Company is entitled to income and principal distributed by the fund. The Company is entitled to income and principal distributed by the fund.

Investment Activity

As of June 30, 2021, our portfolio consisted of debt and equity investments in 10 and eight portfolio companies, respectively, including TCW Strategic Ventures. Based on fair values as of June 30, 2021, our portfolio was comprised of 70.4% debt investments which were primarily senior secured, first lien term loans and 29.6% equity investments, which were primarily common and preferred stocks; warrants; and our common and preferred membership interests in TCW Strategic Ventures. Debt investments in three portfolio companies were on non-accrual status as of June 30, 2021, representing 14.1% and 15.0% of our portfolio’s fair value and cost, respectively.

As of December 31, 2020, our portfolio consisted of debt and equity investments in 11 and eight portfolio companies, respectively, including TCW Strategic Ventures. Based on fair values as of December 31, 2020, our portfolio was comprised of 73.8% debt investments which were primarily senior secured, first lien term loans and 26.2% equity investments, which were primarily common and preferred stocks; warrants; and our common and preferred membership interests in TCW Strategic Ventures. Debt investments in three portfolio companies were on non-accrual status as of December 31, 2020, representing 12.7% and 20.1% of our portfolio’s fair value and cost, respectively.

The table below describes our debt and equity investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets by industry as of June 30, 2021:


Industry	Percent of Total Investments
Investment Funds & Vehicles		22%
Metals & Mining		21%
Hotels, Restaurants & Leisure		15%
Industrial Conglomerates		12%
Pharmaceuticals		8%
Diversified Consumer Services		7%
Household Durables		6%
Distributors		5%
Technologies Hardware, Storage and Peripherals		2%
Internet & Direct Marketing Retail		2%
Diversified Financial Services		0%

Total		100%

Interest income, including interest income paid-in-kind, was $10.7 million and $21.6 million, for the three months ended June 30, 2021 and 2020, respectively. During the three months ended June 30, 2021 and 2020, we also earned $2.8 million and $21 thousand, respectively, of dividend income; as well as $42 thousand and $0.1 million, respectively, of other fee income for administration fees.

Interest income, including interest income paid-in-kind, was $22.4 million and $45.2 million, for the six months ended June 30, 2021 and 2020, respectively. During the six months ended June 30, 2021 and 2020, we also earned $5.6 million and $0.2 million, respectively, of dividend income; as well as $0.1 million of other fee income for administration fees for both periods.

Results of Operations

Our operating results for the three and six months ended June 30, 2021 and 2020 were as follows (dollar amounts in thousands):


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021			2020			2021			2020
Total investment income	$	13,545		$	21,716		$	28,049		$	45,557
Net expenses		3,073			5,641			6,494			11,602

Net investment income		10,472			16,075			21,555			33,955
Net realized (loss) gain on investments		457			43			(55,388	)		2,201
Net change in unrealized appreciation/depreciation on investments		22,223			(23,719	)		98,671			(68,995	)
Net realized gain on short-term investments		(9	)		-			27			-

Net increase (decrease) in Members’ Capital from operations	$	33,143		$	(7,601	)	$	64,865		$	(32,839	)

Total investment income

Total investment income for the three months ended June 30, 2021 and 2020 was $13.5 million and $21.7 million, respectively, and included interest income (including interest income paid-in-kind) of $10.7 million and $21.6 million, respectively. Total investment income for the three months ended June 30, 2021 and 2020 included dividend income of $2.8 million and $21 thousand, respectively, as well as $42 thousand and $0.1 million, respectively, of other income.

Total investment income for the six months ended June 30, 2021 and 2020 was $28.0 million and $45.6 million, respectively, and included interest income (including interest income paid-in-kind) of $22.4 million and $45.2 million, respectively. Total investment income for the six months ended June 30, 2021 and 2020 included dividend income of $5.6 million and $0.2 million, respectively, as well as other income of $0.1 million for both periods.

The decreases in total investment income during the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020, respectively, were primarily due to the decrease in interest income and interest income paid-in-kind during the three and six months ended June 30, 2021, compared to the three and six months ended June 30, 2020, respectively, commensurate with the decrease in the number of our debt investments. As of June 30, 2020, our portfolio included debt investments in 18 portfolio companies, whereas as of June 30, 2021, our portfolio included debt investments in 10 portfolio companies.

Net investment income

Net investment income for the three months ended June 30, 2021 and 2020 was $10.5 million and $16.1 million, respectively. Net investment income for the six months ended June 30, 2021 and 2020 was $21.6 million and $34.0 million, respectively.

The decreases in net investment income during the three and six months ended June 30, 2021 versus the three and six months ended June 30, 2020, respectively, were primarily due to lower total investment income (as previously described) partially offset by lower total expenses.

Expenses for the three and six months ended June 30, 2021 and 2020 were as follows (dollar amounts in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Expenses
Management fees	$	1,420	$	1,935	$	2,939	$	3,947
Interest and credit facility expenses		1,148		2,882		2,475		6,316
Administrative fees		200		241		407		490
Professional fees		125		451		291		568
Directors’ fees		86		86		164		164
Other expenses		94		46		218		117

Total expenses	$	3,073	$	5,641	$	6,494	$	11,602

Our total expenses for the three months ended June 30, 2021 and 2020 were $3.1 million and $5.6 million, respectively. Our total expenses included management fees attributed to the Adviser of $1.4 million and $1.9 million for the three months ended June 30, 2021 and 2020, respectively.

Our total expenses for the six months ended June 30, 2021 and 2020 were $6.5 million and $11.6 million, respectively. Our total expenses included management fees attributed to the Adviser of $2.9 million and $3.9 million for the six months ended June 30, 2021 and 2020, respectively.

The decreases in total operating expenses during the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020, respectively, were primarily due to lower interest and credit facility expenses driven by our lower average outstanding debt balance during the three and six months ended June 30, 2021, in addition to lower undrawn commitment fees, resulting from lower undrawn balances coupled with a lower interest rate on undrawn balances. Lastly, management fees also decreased during the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020, respectively, resulting from the overall decrease in our investment portfolio’s size.

Net realized (loss) gain on investments

Our net realized gain on investments for the three months ended June 30, 2021 and 2020 was $0.5 million and $43 thousand, respectively. Our net realized gain on investments during the three months ended June 30, 2021 was entirely attributable to the partial disposition of our Quantum Corp. common stock.

Our net realized gain investments during the three months ended June 30, 2020 was primarily attributable to our term loan to Help at Home, LLC.

Our net realized (loss) gain on investments for the six months ended June 30, 2021 and 2020 was ($55.4) million and $2.2 million, respectively. Our net realized loss on investments during the six months ended June 30, 2021 was attributable to a permanent impairment that we took on our term loan to Carrier & Technology Holdings, LLC and our term loan and revolver to Guardia LLC, which resulted in an aggregate realized loss of $58.8 million. Of the $58.8 million of aggregate realized loss, $56.5 million were from unrealized depreciation recognized in prior periods and $2.3 million were additional losses taken during the current period. We also recognized a realized loss of $1.4 million on the partial disposition of our warrants to RTI Holding Company, LLC. These realized losses were partially offset by $4.4 million of realized gains on the partial disposition of our Quantum Corp. common stock.

Our net realized gain on investments during the six months ended June 30, 2020 was primarily due to the disposition of our term loans to Bumble Bee Holdings, Inc. which resulted in a realized gain of $2.1 million. We did not recognize any realized losses during the six months ended June 30, 2020.

Net change in unrealized appreciation/depreciation on investments

Our net change in unrealized appreciation/depreciation on investments for the three months ended June 30, 2021 and 2020 was $22.2 million and ($23.7) million, respectively. Our net change in unrealized appreciation/depreciation for the three months ended June 30, 2021 was primarily attributable to the following investments (dollar amounts in thousands):


Issuer	Investment	Change in Unrealized Appreciation/ Depreciation
School Specialty, Inc.	Preferred Stock	$	7,498
TCW Strategic Ventures	Preferred Membership Interests		5,215
Cedar Ultimate Parent LLC	Preferred Stock		4,383
RTI Holding Company, LLC	Class A Units		3,738
Pace Industries, Inc.	Term Loan		3,532
Noramco, LLC	Term Loan		1,445
ASC Acquisition Holdings, LLC	Term Loan		1,143
Quantum Corporation	Common Stock		(2,942	)
H-D Advanced Manufacturing Company	Term Loan		(3,407	)
All others	Various		1,618

Net change in unrealized appreciation/depreciation		$	22,223

Our net change in unrealized appreciation/depreciation for the three months ended June 30, 2020 was primarily attributable to the following investments (dollar amounts in thousands):


Issuer	Investment	Change in Unrealized Appreciation/ Depreciation
H-D Advanced Manufacturing Company	Term Loan	$	(19,491)
ASC Acquisition Holdings, LLC	Term Loans		(7,110)
Pace Industries, Inc.	Term Loans		(4,079)
Verus Financial, LLC	Common Stock		(1,761)
Cedar Ultimate Parent LLC	Preferred Stock		(1,406)
Guardia LLC (fka Carrier & Technology Solutions, LLC)	Term Loan		(776)
Guardia LLC (fka Carrier & Technology Solutions, LLC)	Revolver		(554)
Noramco, LLC	Term Loan		4,867
TCW Strategic Ventures	Preferred Membership Interests		4,243
Quantum Corporation	Common Stock		2,430
Harvest Hill Beverage Company	Term Loan		1,276
All others	Various		(1,358)

Net change in unrealized appreciation/depreciation		$	(23,719)

Our net change in unrealized appreciation/depreciation during the three months ended June 30, 2020 was affected by significant business disruptions and various other consequences experienced by our portfolio companies due to the uncertainty and economic volatility caused by COVID-19, in addition to other business conditions unique to our respective issuers.

Our net change in unrealized appreciation/depreciation on investments for the six months ended June 30, 2021 and 2020 was $98.7 million and ($69.0) million, respectively. Our net change in unrealized appreciation/depreciation for the six months ended June 30, 2021 was primarily attributable to the following investments (dollar amounts in thousands):


Issuer	Investment	Change in Unrealized Appreciation/ Depreciation
Carrier & Technology Holdings, LLC	Term Loan	$	42,546	*
Pace Industries, Inc.	Term Loan		9,520
Guardia LLC	Term Loan		9,387	*
TCW Strategic Ventures	Preferred Membership Interests		8,214
School Specialty, Inc.	Preferred Stock		7,531
Cedar Ultimate Parent LLC	Preferred Stock		5,699
Guardia LLC	Revolver		4,816	*
RTI Holding Company, LLC	Class A Units		4,081
OTG Management, LLC	Term Loan		4,312
Noramco, LLC	Term Loan		2,838
RTI Holding Company, LLC	Warrants		1,536
RTI Holding Company, LLC	Warrants		1,380	*
H-D Advanced Manufacturing Company	Revolver		(4,147	)
All others	Various		958

Net change in unrealized appreciation/depreciation		$	98,671

*	Includes reversals of previously recognized unrealized depreciation (appreciation). Recognized as realized (gains) losses and/or accelerated original issue discount during the six months ended June 30, 2021.

Our net change in unrealized appreciation/depreciation for the six months ended June 30, 2020 was primarily attributable to the following investments (dollar amounts in thousands):


Issuer	Investment	Change in Unrealized Appreciation/ Depreciation
H-D Advanced Manufacturing Company	Term Loan	$	(21,906)
Pace Industries, Inc.	Term Loan		(18,617)
OTG Management, LLC	Term Loan		(11,433)
Quantum Corporation	Common Stock		(9,507)
Guardia LLC (fka Carrier & Technology Solutions, LLC)	Term Loan		(5,725)
Guardia LLC (fka Carrier & Technology Solutions, LLC)	Revolver		(716)
ASC Acquisition Holdings, LLC	Term Loans		(4,888)
School Specialty. Inc.	Term Loan		(2,290)
Verus Financial, LLC	Common Stock		(2,503)
Cedar Ultimate Parent LLC	Preferred Stock		(1,572)
Challenge Manufacturing Company LLC	Term Loan		(1,148)
TCW Strategic Ventures	Preferred Membership Interests		5,635
Noramco, LLC	Term Loan		9,104
All others	Various		(3,429)

Net change in unrealized appreciation/depreciation		$	(68,995)

Net realized gain on short-term investments

During the three and six months ended June 30, 2021 we earned $27 thousand and $0, respectively, in realized gains from our short-term investments in government treasuries. We did not earn any realized gains from short-term investments in government treasuries during the three and six months ended June 30, 2020 as the strategy to invest in short-term government investments did not begin until the third quarter of fiscal year 2020.

Net increase (decrease) in members’ capital from operations

Our net increase (decrease) in members’ capital from operations during the three months ended June 30, 2021 and 2020 was $33.1 million and ($7.6) million, respectively.

Our net increase (decrease) in members’ capital from operations during the six months ended June 30, 2021 and 2020 was $64.9 million and ($32.8) million, respectively.

The relative net increases in members’ capital from operations during the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020, respectively, were primarily due to net realized and unrealized gains on our investments during the three and six months ended June 30, 2021, compared to net realized and unrealized losses during the three and six months ended June 30, 2020, respectively. These were partially offset by lower net investment income during the three and six months ended June 30, 2021, compared to the three and six months ended June 30, 2020, respectively.

Direct Lending Strategic Ventures LLC

On June 5, 2015, the Company, together with an affiliate of Security Benefit Corporation and accounts managed by Oak Hill Advisors, L.P., entered into an Amended and Restated Limited Liability Company Agreement (the “Agreement”) to become members of TCW Strategic Ventures. TCW Strategic Ventures focuses primarily on making senior secured floating rate loans to middle-market borrowers. The Agreement was effective June 5, 2015. The Company’s capital commitment is $481.6 million, representing approximately 80% of the preferred and common equity ownership of TCW Strategic Ventures, with the third-party investors representing the remaining capital commitments and preferred and common equity ownership. A portion of the Company’s capital commitment was satisfied by the contribution of two loans to TCW Strategic Ventures. TCW Strategic Ventures also entered into a revolving credit facility to finance a portion of certain eligible investments on June 5, 2015. The revolving credit facility is for up to $600 million. TCW Strategic Ventures is managed by a management committee comprised of two members, one appointed by the Company and one appointed by Oak Hill Advisors, L.P. All decisions of the management committee require unanimous approval of its members. Neither the Company, nor the Adviser will receive management fees from this entity. Although the Company owns more than 25% of the voting securities of TCW Strategic Ventures, the Company does not believe that it has control over TCW Strategic Ventures (other than for purposes of the 1940 Act). The Company’s ability to withdraw from the fund is subject to restrictions.

On April 30, 2021, TCW Strategic Ventures’ revolving credit facility was terminated.

Financial Condition, Liquidity and Capital Resources

On March 19, 2015 we completed the final private placement of Common Units. We generate cash from (1) drawing down capital in respect of Common Units, (2) cash flows from investments and operations and (3) borrowings from banks or other lenders.

Our primary use of cash is for (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including expenses, management fees, incentive fees, and any indemnification obligations), (3) debt service of any borrowings and (4) cash distributions to the Common Unitholders.

As of June 30, 2021 and December 31, 2020, aggregate Commitments, Undrawn Commitments and subscribed for Units of the Company are as follows (dollar amounts in thousands):


	June 30, 2021		December 31, 2020
Commitments	$	2,013,470	$	2,013,470
Undrawn commitments	$	409,125	$	409,125
Percentage of commitments funded		79.7%		79.7%
Units		20,134,698		20,134,698

Natixis Credit Agreement

We have a secured revolving credit agreement (the “Credit Agreement”) with Natixis, New York Branch (“Natixis”) as administrative agent and committed lender. The Credit Agreement provides for a revolving credit line of up to $750 million (the “Maximum Commitment”) (the “Credit Facility”), subject to the lesser of the “Borrowing Base” assets or the Maximum Commitment (the “Available Commitment”). The Borrowing Base assets generally equal the sum of (a) a percentage of certain eligible investments in a controlled account, (b) a percentage of unfunded commitments from certain eligible investors in the Company and (c) cash in a controlled account. The Credit Agreement is generally secured by the Borrowing Base assets.

On April 10, 2017, we entered into a Third Amended and Restated Revolving Credit Agreement. Under the April 10, 2017 Credit Agreement borrowings bear interest at a rate equal to either the (a) adjusted eurodollar rate calculated in a customary manner plus 2.35%, (b) commercial paper rate plus 2.35%, or (c) a base rate calculated in a customary manner (using the higher of the Federal Funds Rate plus 0.50%, the Prime Rate and the Floating LIBOR Rate plus 1.00%) plus 1.35%. Moreover, the Credit Agreement’s stated maturity date was extended from November 10, 2017 to April 10, 2020. The Credit Facility may be terminated, and any outstanding amounts thereunder may become due and payable, should the Company fail to satisfy certain covenants. As of June 30, 2021, we were in compliance with such covenants.

On April 6, 2020, we entered into a First Amendment to the Third Amended and Restated Revolving Credit Agreement (the “Amended Credit Agreement”), with Natixis, New York Branch, as administrative agent and the lenders party thereto. The Amended Credit Agreement provides for a revolving credit line of up to $375.0 million (with an option for us to increase this amount to $450.0 million subject to consent of the lenders and satisfaction of certain other conditions), subject to the available borrowing base, which is generally the sum of (a) a percentage of certain eligible investments, (b) a percentage of remaining unfunded commitments from certain eligible investors in the Company and (c) cash in a controlled account. The Amended Credit Agreement is generally secured by the unfunded commitments (together with the recallable amounts) of our investors, portfolio investments and substantially all other assets of the Company. The stated maturity date of the Amended Credit Agreement was April 9, 2021, which date (subject to the satisfaction of certain conditions) could have been extended by the Company for up to an additional 364 days. Borrowings under the Amended Credit Agreement bore interest at a rate equal to either (a) adjusted eurodollar rate calculated in a customary manner plus 2.50%, (b) commercial paper rate plus 2.50%, or (c) a base rate calculated in a customary manner (which will never be less than the adjusted eurodollar rate plus 1.00%) plus 1.50%, provided however in each case the commercial paper rate and the eurocurrency rate shall have a floor of 1.00%.

On May 27, 2020, we entered into a Lender Group Joinder Agreement pursuant to which Zions Bancorporation, N.A. d/b/a California Bank & Trust was added as a committed lender (with a commitment of $25.0 million) under the Amended Credit Agreement. Concurrently therewith, we elected to increase the size of our revolving credit line under the Credit Agreement to $400.0 million. On December 29, 2020, we elected to permanently decrease the size of our revolving credit line under the Credit Agreement to $177.0 million.

On April 6, 2021, we entered into a Third Amendment to the Amended Credit Agreement (the “Third Amended Credit Agreement”). The Third Amended Credit Agreement provides for a revolving credit line of up to $177,000, subject to the available borrowing base, which is generally a percentage of remaining unfunded commitments from certain eligible investors in the Company. The Third Amended Credit Agreement is generally secured by the unfunded commitments (together with the recallable amounts) of the Company’s investors. The stated maturity date of the Third Amended Credit Agreement is April 8, 2022, which (subject to the satisfaction of certain conditions) may be extended by us for up to an additional 364 days. Borrowings under the Third Amended Credit Agreement bear interest at a rate equal to either (a) adjusted eurodollar rate calculated in a customary manner plus 1.95%, (b) commercial paper rate plus 1.95%, or (c) a base rate calculated in a customary manner (which will never be less than the adjusted eurodollar rate plus 1.00%) plus 0.95%, provided however in each case the CP Rate and the Eurocurrency Rate shall have a floor of 0.00%.

As of June 30, 2021 and December 31, 2020, the Available Commitment under the Credit Facility $177.0 million.

As of June 30, 2021 and December 31, 2020 the amounts outstanding under the Credit Facility were $115.3 million. The carrying amount of the Credit Facility, which is categorized as Level 2 within the fair value hierarchy as of June 30, 2021 and December 31, 2020, approximates its fair value. Valuation techniques and significant inputs used to determine fair value include Company details, credit, market and liquidity risk and events, financial health of the Company, place in the capital structure, interest rate and terms and conditions of the Credit Facility. We incurred financing costs of $10.1 million in connection with the April 10, 2017 Third Amended and Restated Revolving Credit Agreement. We also incurred additional financing costs totaling $1.8 million in connection with the Amended Credit Agreement on April 6, 2020 and May 27, 2020 as well as an additional $0.9 million in connection with the April 6, 2021 Third Amended Credit Agreement. We recorded these costs as deferred financing costs on its Consolidated Statements of Asset and Liabilities and the costs are being amortized over the life of the Credit Facility. As of June 30, 2021 and December 31, 2020, $1.4 million and $1.2 million, respectively, of such prepaid deferred financing costs had yet to be amortized.

The summary information regarding the Credit Facility for the three and six months ended June 30, 2021 and 2020 was as follows (dollar amounts in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Credit facility interest expense	$	625		$	2,466		$	1,634		$	4,381
Undrawn commitment fees		62			110			124			930
Administrative fees		17			17			33			33
Amortization of deferred financing costs		444			289			684			972

Total	$	1,148		$	2,882		$	2,475		$	6,316

Weighted average interest rate		2.18	%		3.59	%		2.86	%		3.70	%
Average outstanding balance		115,250			275,975			115,250			238,101

A summary of our contractual payment obligations as of June 30, 2021 and December 31, 2020 is as follows (dollar amounts in thousands):


Revolving Credit Agreement	Total Facility Commitment		Borrowings Outstanding		Available Amount⁽¹⁾
Total Debt Obligations – June 30, 2021	$	177,000	$	115,250	$	61,750
Total Debt Obligations – December 31, 2020	$	177,000	$	115,250	$	61,750

(1)	The amount available considers any limitations related to the debt facility borrowing.

On December 31, 2019, our ratio of aggregate fair value of all eligible portfolio assets (as defined in the Credit Agreement) to the principal amount outstanding (“Ratio of Eligible Portfolio Assets”) fell below 150%, which triggered a mandatory prepayment provision in the Credit Agreement requiring us to utilize all cash receipts attributable to the eligible portfolio assets as a prepayment to the outstanding principal obligation, within five days of collecting such cash receipts, until such a time when the Ratio of Eligible Portfolio Assets exceeds 150%. Our Ratio of Eligible Portfolio Assets exceeded 150% on January 10, 2020 through March 26, 2020. On March 27, 2020, our Ratio of Eligible Portfolio Assets fell below 150%. However, in connection with the First Amendment to the Third Amended and Restated Revolving Credit Agreement executed on April 6, 2020, the mandatory repayment was waived by Natixis. Our Ratio of Eligible Portfolio Assets has exceeded 150% since April 6, 2020.

We had the following unfunded commitments and unrealized losses by investment as of June 30, 2021 and December 31, 2020 (dollar amounts in thousands):


		June 30, 2021				December 31, 2020
Unfunded Commitments	Maturity/ Expiration	Amount		Unrealized Depreciation		Amount		Unrealized Depreciation
Guardia LLC (fka Carrier & Technology Solutions, LLC)	July 2023	$	313	$	227	$	1,769	$	713
H-D Advanced Manufacturing Company	July 2021		12,800		4,147		—		—
Ruby Tuesday, Inc.	February 2025		6,824		—		—		—
Ruby Tuesday, Inc.	March 2021		—		—		4,941		—

Total		$	19,937	$	4,374	$	6,710	$	713

In accordance with our Second Amended and Restated Limited Liability Company Agreement, we may make follow-on investments up to an aggregate maximum of 10% of Capital Commitments (as defined in our Second Amended and Restated Limited Liability Company Agreement), provided that any such follow-on investment to be made after September 19, 2020, the third anniversary of the expiration of our commitment period, shall require the prior consent of a majority in interest of our Common Unitholders.

In October 2020, our Members approved a proposal to allow us to make pre-identified follow-on investments in specific portfolio companies as well as their holding companies, subsidiaries, successors or other affiliates, up to an aggregate maximum of 10% of Capital Commitments.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to financial market risks, including changes in interest rates. At June 30, 2021, 96.9% of our debt investments bore interest based on floating rates, such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate. The interest rates on such investments generally reset by reference to the current market index after one to nine months. At June 30, 2021, the percentage of our floating rate debt investments that bore interest based on an interest rate floor was 96.9%. Floating rate investments subject to a floor generally reset by reference to the current market index after one to nine months only if the index exceeds the floor.

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. We assess our portfolio companies periodically to determine whether such companies will be able to continue making interest payments in the event that interest rates increase. There can be no assurances that the portfolio companies will be able to meet their contractual obligations at any or all levels of increases in interest rates. Based on our June 30, 2021 consolidated balance sheet, the following table shows the annual impact on net investment income (excluding the related incentive compensation impact) of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure (dollar amounts in thousands):


	Interest Income		Interest Expense			Net Investment Income (Loss)
Up 300 basis points	$	11,284	$	3,506		$	7,778
Up 200 basis points		5,663		2,337			3,326
Up 100 basis points		789		1,169			(380	)
Down 100 basis points		-		(117	)		117

Item 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934). Based on that evaluation, our President and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934.

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies.

Item 1A.

Risk Factors

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Sales of unregistered securities

On September 19, 2014, the Company began accepting subscription agreements from investors for the private sale of its Common Units. The Company continued to enter into subscription agreements through the final closing date of March 19, 2015. Under the terms of the subscription agreements, the Company may generally draw down all or any portion of the undrawn commitment with respect to each Common Unit upon at least ten business days’ prior written notice to the Unitholders. The issuance of the Common Units pursuant to these subscription agreements and any draw by the Company under the related Commitments is expected to be exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, and Rule 506(c) of Regulation D thereunder.

Issuer purchases of equity securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6.

Exhibits.

(a) Exhibits


Exhibits

3.1		Certificate of Formation (incorporated by reference to Exhibit 3.1 to a registration on Form 10 filed on April 18, 2014)

3.4		Second Amended and Restated Limited Liability Company Agreement, dated September 19, 2014 (incorporated by reference to Exhibit 3.4 to a filing on Form 10-Q filed on November 7, 2014)

10.1		Investment Advisory and Management Agreement (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on September 25, 2014).

10.2		Administration Agreement dated September 15, 2014, by and between TCW Direct Lending LLC and TCW Asset Management Company (incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on November 7, 2014).

10.6		Final form of the TCW Direct Lending Strategic Ventures LLC Amended and Restated Limited Liability Company Agreement, dated June 5, 2015 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 10, 2015).

10.8		Third Amended and Restated Revolving Credit Agreement, dated April 10, 2017, by and among TCW Direct Lending LLC, as borrower, Natixis, New York Branch, as administrative agent, sole lead arranger and sole book manager, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 14, 2017).

10.10		First Amendment to the Third Amended and Restated Revolving Credit Agreement, dated April 6, 2020, by and among TCW Direct Lending LLC, as borrower, Natixis, New York Branch, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 13, 2020).

10.11		Lender Group Joinder Agreement, dated May 27, 2020 by and among Zions Bancorporation, N.A. d/b/a California Bank & Trust, Natixis, New York Branch (as Administrative Agent) and TCW Direct Lending LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 2, 2020).

10.12		Third Amendment to the Third Amended and Restated Revolving Credit Agreement, dated April 6, 2021, by and among TCW Direct Lending LLC, as borrower, Natixis, New York Branch, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 12, 2021).

31.1*		Certification of President Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2*		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32.1*		Certification of President Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

99.1*		Financial Statements of TCW Direct Lending Strategic Ventures LLC for the three and six months ended June 30, 2021

*	Filed herewith

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	TCW DIRECT LENDING LLC

Date: August 9, 2021	By:	/s/ Richard T. Miller
		Richard T. Miller
		President

Date: August 9, 2021	By:	/s/ James G. Krause
		James G. Krause
		Chief Financial Officer

EX-31.1 2 d154381dex311.htm EX-31.1 EX-31.1

Exhibit 31.1

PRESIDENT CERTIFICATION

I, Richard T. Miller, certify that:

(1)

I have reviewed this quarterly report on Form 10-Q of TCW Direct Lending LLC;

(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 9, 2021	By:	/s/ Richard T. Miller
		Richard T. Miller
		President
		(Principal Executive Officer)

EX-31.2 3 d154381dex312.htm EX-31.2 EX-31.2

Exhibit 31.2

CFO CERTIFICATION

I, James G. Krause, certify that:

(1)

I have reviewed this quarterly report on Form 10-Q of TCW Direct Lending LLC;

(2)

(3)

(4)

(5)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 9, 2021	By:	/s/ James G. Krause
		James G. Krause
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1 4 d154381dex321.htm EX-32.1 EX-32.1

Exhibit 32.1

Certification of President Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

In connection with the quarterly report on Form 10-Q of TCW Direct Lending LLC (the “Company”) for the quarterly period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Richard T. Miller, as President of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Richard T. Miller
Name: Richard T. Miller
Title:		President
Date:		August 9, 2021

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2 5 d154381dex322.htm EX-32.2 EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

In connection with the quarterly report on Form 10-Q of TCW Direct Lending LLC (the “Company”) for the quarterly period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), James G. Krause, as Chief Financial Officer of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ James G. Krause
Name: James G. Krause
Title:		Chief Financial Officer
Date:		August 9, 2021

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-99.1 6 d154381dex991.htm EX-99.1 EX-99.1

TCW Direct Lending Strategic Ventures LLC

Financial Statements

June 30, 2021

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

CONTENTS


	Page(s)

Financial Statements

Schedules of Investments as of June 30, 2021 (unaudited) and December 31, 2020		2-5

Statements of Assets and Liabilities as of June 30, 2021 (unaudited) and December 31, 2020		6

Statements of Operations for the six months ended June 30, 2021 and 2020 (unaudited)		7

Statements of Changes in Members’ Capital for the six months ended June 30, 2021 and 2020 (unaudited)		8

Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)		9

Notes to Financial Statements (unaudited)		10-19

Administration		20

SCHEDULE OF INVESTMENTS

June 30, 2021


Industry	Issuer	Acquisition Date		Investment	% of Members’ Capital	Par Amount		Maturity Date		Amortized Cost		Fair Value


DEBT

Distributors
	ASC Acquisition Holdings, LLC ^{(1) (2)}		08/14/20	Subordinated Loan 7.00% inc PIK (7.00%, Fixed Coupon, all PIK)	4.6%	$	19,724,488		11/14/25	$	17,603,045	$	7,830,622

	ASC Acquisition Holdings, LLC ⁽²⁾		08/14/20	Term Loan 9.50% inc PIK (LIBOR + 8.50%, 1.00% Floor, all PIK)	9.5%		16,189,948		08/14/25		16,189,948		16,189,948

					14.1%						33,792,993		24,020,570

Diversified Consumer Services
	School Specialty, Inc. ⁽²⁾		09/15/20	Term Loan 9.25% inc PIK (LIBOR + 8.00%, 1.25% Floor, 4.00% PIK)	13.1%		22,329,816		09/15/25		22,204,335		22,329,816

Hotels, Restaurants & Leisure
	OTG Management, LLC		10/07/20	Delayed Draw Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)	0.7%		1,298,233		08/26/21		1,298,233		1,108,691

	OTG Management, LLC		10/07/20	Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)	2.0%		3,913,115		08/26/21		3,913,115		3,341,800

	OTG Management, LLC		06/30/16	Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)	5.4%		10,695,449		08/26/21		10,692,429		9,133,913

	OTG Management, LLC		06/30/16	Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)	16.9%		33,736,682		08/26/21		33,716,497		28,811,126

					25.0%						49,620,274		42,395,530

Internet & Direct Marketing Retail
	Lulu’s Fashion Lounge, LLC		08/28/17	Term Loan 10.50% inc PIK (LIBOR + 9.50%, 1.00% Floor, 2.50% PIK)	6.0%		10,256,508		08/28/22		10,186,930		10,256,508

Machinery
	Texas Hydraulics Holdings, Inc.		03/27/18	Term Loan 7.00% (LIBOR + 5.75%, 1.25% Floor)	9.5%		16,267,491		03/27/23		16,182,768		16,267,491

Pharmaceuticals
	Noramco, LLC		07/01/16	Term Loan 9.38% inc PIK (LIBOR + 8.38%, 1.00% Floor, 0.38% PIK)	16.9%		28,722,115		12/31/23		28,605,994		28,779,560

TOTAL DEBT (84.6%)					84.6%						160,593,294		144,049,475

The accompanying notes are an integral part of these financial statements.

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

SCHEDULE OF INVESTMENTS (continued)

June 30, 2021


Industry	Issuer	Acquisition Date	Investment	% of Members’ Capital	Shares/ Contracts		Maturity Date	Cost		Fair Value


EQUITY

Distributors
	Animal Supply Holdings LLC ^{(1) (2)}		Class A Common Stock	0.0%		170,438		$	1,195,825	$	-

Diversified Consumer Services

	School Specialty, Inc. ^{(1) (2)}		Common Stock	0.0%		51,000			34,124		-

	School Specialty, Inc. ^{(1) (2)}		Preferred Stock A	4.4%		510,549			5,105,495		7,545,921

	School Specialty, Inc. ^{(1) (2)}		Preferred Stock B	0.0%		227,629			225,831		-

				4.4%					5,365,450		7,545,921


TOTAL EQUITY (4.4%)				4.4%					6,561,275		7,545,921


	Total Portfolio Investments (89.0%) ⁽³⁾			89.0%					167,154,569		151,595,396


	Cash Equivalents (9.4%)
	Fixed Income Clearing Corporation Repo, Yield 0.00%			9.4%		16,061,450			16,061,450		16,061,450

								$	183,216,019	$	167,656,846


	Other Assets in Excess of Other Liabilities (1.6%)										2,723,089


	Members’ Capital (100.0%)									$	170,379,935

⁽¹⁾

Non-income producing

⁽²⁾


									Net Change in
									Unrealized				Interest/
	Fair Value at		Gross		Gross		Realized		Appreciation		Fair Value at		Dividend/
Name of Investments	December 31, 2020		Additions^(a)		Reductions^(b)		Gain (Loss)		(Depreciation)		June 30, 2021		Other income
Animal Supply Holdings, LLC Class A Common Stock	$	-	$	-	$	-	$	-	$	-	$	-	$	-
ASC Acquisition Holdings, LLC Subordinated Loan-7.00%		7,313,025		-		(209,374)		-		726,971		7,830,622		(209,374)
ASC Acquisition Holdings, LLC Term Loan-9.50%		15,509,920		754,795		(74,767)		-		-		16,189,948		909,614
School Specialty, Inc. Common Stock		-		-		-		-		-		-		-
School Specialty, Inc. Preferred Stock A		2,777,389		-		-		-		4,768,532		7,545,921		-
School Specialty, Inc. Preferred Stock B		-		-		-		-		-		-		-
School Specialty, Inc. Term Loan-9.25%		21,885,964		458,629		-		-		(14,777)		22,329,816		1,109,339

Total non-controlled affiliated investments	$	47,486,298	$	1,213,424	$	(284,141)	$	-	$	5,480,726	$	53,896,307	$	1,809,579

^(a)

Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

^(b)

Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

⁽³⁾

The fair value of each non-controlled/non-affiliated investment was determined using significant unobservable inputs and such investment are consider to Level 3 within the Fair Value Hierarchy. See Note 3 “Investment Valuations and Fair Value Measurements.”

LIBOR - London Interbank Offered Rate, generally 1-Month or 3-Month

Geographic Breakdown of Portfolio

United States

100

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $1,888,818 and $31,531,472, respectively, for the period ended June 30, 2021. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments.

The accompanying notes are an integral part of these financial statements.

SCHEDULE OF INVESTMENTS

December 31, 2020


Industry	Issuer	Acquisition Date		Investment	% of Members’ Capital	Par Amount		Maturity Date		Amortized Cost		Fair Value


DEBT

Distributors
	ASC Acquisition Holdings, LLC (2)		08/14/20	Term Loan 9.50% inc PIK (LIBOR + 8.50%, 1.00% Floor, all PIK)	8.9%	$	15,509,920		08/03/25	$	15,509,920	$	15,509,920

	ASC Acquisition Holdings, LLC (1) (2)		08/14/20	Term Loan 7.00% inc PIK (7.00%, Fixed Coupon, all PIK)	4.2%		19,044,337		08/03/25		17,812,420		7,313,025

					13.1%						33,322,340		22,822,945

Diversified Consumer Services
	School Specialty, Inc. (2)		09/15/20	Term Loan 9.25% inc PIK (LIBOR + 8.00%, 1.25% Floor, 4.00% PIK)	12.6%		21,885,964		09/15/25		21,745,706		21,885,964

Hotels, Restaurants & Leisure
	OTG Management, LLC		10/07/20	Incremental Delayed Draw Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)	0.6%		1,293,789		08/26/21		1,293,789		1,037,618
	OTG Management, LLC		10/07/20	Incremental Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)	1.8%		3,891,107		08/26/21		3,891,107		3,120,668
	OTG Management, LLC		06/30/16	Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)	4.9%		10,641,135		08/26/21		10,628,354		8,534,190
	OTG Management, LLC		06/30/16	Term Loan 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 2.00% PIK)	15.5%		33,565,360		08/26/21		33,479,503		26,919,419

					22.8%						49,292,753		39,611,895

Information Technology Services
	ENA Holding Corporation		05/06/16	First Lien Term Loan 10.00% inc PIK (LIBOR + 9.25%, 0.75% Floor, 4.75% PIK)	12.1%		21,086,631		05/06/21		21,051,384		20,895,891
	ENA Holding Corporation		05/06/16	Revolver 10.00% inc PIK (LIBOR + 9.25%, 0.75% Floor, 4.75% PIK)	2.4%		4,123,377		05/06/21		4,123,377		4,086,266

					14.5%						25,174,761		24,982,157

Internet & Direct Marketing Retail
	Lulu’s Fashion Lounge, LLC		08/28/17	First Lien Term Loan 10.50% inc PIK (LIBOR + 9.50%, 1.00% Floor, 2.50% PIK)	6.0%		10,606,637		08/28/22		10,502,480		10,479,358

Machinery

	Texas Hydraulics Holdings, Inc.		03/27/18	Term Loan 7.00% (LIBOR + 5.75%, 1.25% Floor)	12.4%		21,520,472		03/27/23		21,376,393		21,520,472

Pharmaceuticals
	Noramco, LLC		07/01/16	Senior Term Loan 9.38% inc PIK (LIBOR + 8.38%, 1.00% Floor, 0.38% PIK)	15.6%		28,693,775		12/31/23		28,554,507		27,115,618

TOTAL DEBT (97.0%)					97.0%						189,968,940		168,418,409

The accompanying notes are an integral part of these financial statements.

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

SCHEDULE OF INVESTMENTS (continued)

December 31, 2020


Industry	Issuer	Acquisition Date	Investment	% of Members’ Capital		Shares/ Contracts		Maturity Date	Cost		Fair Value


EQUITY

Distributors
	Animal Supply Holdings LLC ^{(1) (2)}		Class A Common Stock		0.0%		170,438		$	1,195,825	$	-

Diversified Consumer Services

	School Specialty, Inc. ^{(1) (2)}		Common Stock		0.0%		51,000			34,124		-

	School Specialty, Inc. ^{(1) (2)}		Preferred Stock A		1.6%		510,549			5,105,495		2,777,389

	School Specialty, Inc. ^{(1) (2)}		Preferred Stock B		0.0%		227,629			225,831		-

				1.6%					5,365,450		2,777,389


TOTAL EQUITY (1.6%)					1.6%					6,561,275		2,777,389


	Total Portfolio Investments (98.6%) ⁽³⁾				98.6%					196,530,215		171,195,798


	Cash Equivalents (5.5%)
	Blackrock Liquidity Funds Fed Fund - Institutional Shares, Yield 0.01%				5.5%		9,618,436			9,618,436		9,618,436

									$	206,148,651	$	180,814,234

	Other Liabilities in Excess of Other Assets (-4.1%)											(7,201,874)


	Members’ Capital (100.0%)										$	173,612,360

⁽¹⁾

Non-income producing

⁽²⁾

As defined in the Investment Company Act of 1940, the investment is deemed to be an “affiliated person” of the Company because the Company owns, either directly or indirectly, between 5% and 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2019 and December 31, 2020 along with transactions during the year ended December 31, 2020 in these affiliated investments are as follows:


									Net Change in
									Unrealized				Interest/
	Fair Value at		Gross		Gross		Realized		Appreciation		Fair Value at		Dividend/
Name of Investments	December 31, 2019		Additions ^(a)		Reductions ^(b)		Gain (Loss)		(Depreciation)		December 31, 2020		Other income
Animal Supply Holdings, LLC Class A Common Stock	$	-	$	1,195,825	$	-	$	(538,610)	$	(657,215)	$	-	$	-
ASC Acquisition Holdings, LLC Term Loan - 11.80%		12,905,674		1,142,408		(18,387,262)		-		4,339,180		-		1,304,380
ASC Acquisition Holdings, LLC Term Loan - 7.00%		-		17,812,420		-		-		(10,499,395)		7,313,025		363,558
ASC Acquisition Holdings, LLC Term Loan - 9.50%		-		15,529,244		(19,324)		-		-		15,509,920		1,121,838
School Specialty, Inc. Common Stock		-		37,439		-		(3,315)		(34,124)		-		-
School Specialty, Inc. Delayed Draw Term Loan - 16.75%		2,386,220		226,058		(2,756,514)		-		144,236		-		224,880
School Specialty, Inc. Preferred Stock A		-		5,105,495		-		-		(2,328,106)		2,777,389		-
School Specialty, Inc. Preferred Stock B		-		225,831		-		-		(225,831)		-		-
School Specialty, Inc. Term Loan - 9.75%		-		21,745,706		-		-		140,258		21,885,964		684,876
School Specialty, Inc. Term Loan A - 16.75%		17,916,690		1,939,811		(18,948,073)		(1,800,617)		892,189		-		1,905,388
School Specialty, Inc. Warrant		78,842		-		-		(78,935)		93		-		-

Total non-controlled affiliated investments	$	33,287,426	$	64,960,237	$	(40,111,173)	$	(2,421,477)	$	(8,228,715)	$	47,486,298	$	5,604,920

^(a)

Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

^(b)

Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

⁽³⁾

LIBOR - London Interbank Offered Rate, generally 1-Month or 3-Month

Geographic Breakdown of Portfolio

United States

100

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $31,240,131 and $234,445,286, respectively, for the period ended December 31, 2020. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments.

The accompanying notes are an integral part of these financial statements.

(Dollar amounts in thousands)

STATEMENTS OF ASSETS AND LIABILITIES


	As of June 30, 2021 (unaudited)		As of December 31, 2020
Assets
Investments, at fair value
Non-controlled/non-affiliated investments (amortized cost of $104,596 and $134,901, respectively)	$	97,699	$	123,710
Non-controlled affiliated investments (amortized cost of $62,559 and $61,629, respectively)		53,896		47,486
Cash and cash equivalents		18,470		16,966
Interest receivable		266		1,270
Prepaid and other assets		128		162

Total Assets	$	170,459	$	189,594


Liabilities
Sub-administrator and custody fees payable	$	67	$	64
Audit fees payable		7		-
Insurance fees payable		5		-
Credit facility payable		-		15,131
Interest and credit facility expenses payable		-		786
Other fees payable		-		1

Total Liabilities	$	79	$	15,982



Members’ Capital	$	170,380	$	173,612


Commitments and Contingencies (Note 8)

Members’ Capital
Preferred members	$	170,380	$	173,612

Members’ Capital	$	170,380	$	173,612



							Noncontrolling
							interest in
	Preferred			Common			consolidated			Members’
Members’ Capital Represented by:	Members			Members			subsidiary fund			Capital

Net contributed capital	$	454,279		$	1,000		$	3,507		$	458,786
Net distributed capital		(477,778	)		(1,000	)		(4,235	)		(483,013	)
Cumulative net income, before organization costs		193,879			704			728			195,311
Organization costs		-			(704	)		-			(704	)

Total Members’ Capital as of June 30, 2021 (Unaudited)	$	170,380		$	-		$	-		$	170,380


							Noncontrolling
							interest in
	Preferred			Common			consolidated			Members’
Members’ Capital Represented by:	Members			Members			subsidiary fund			Capital

Net contributed capital	$	454,279		$	1,000		$	3,507		$	458,786
Net distributed capital		(457,278	)		(1,000	)		(4,235	)		(462,513	)
Cumulative net income, before organization costs		176,611			704			728			178,043
Organization costs		-			(704	)		-			(704	)

Total Members’ Capital as of December 31, 2020	$	173,612		$	-		$	-		$	173,612

The accompanying notes are an integral part of these financial statements.

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

(Dollar amounts in thousands)

STATEMENTS OF OPERATIONS (Unaudited)


	For the Six Months Ended		For the Six Months Ended
	June 30, 2021		June 30, 2020
Investment Income:
Non-controlled/non-affiliated investments:
Interest income	$	5,221	$	17,508
Interest income paid-in-kind		690		652
Fee income		17		72

Non-controlled affiliated investments:
Interest income		611		-
Interest income paid-in-kind		1,199		-

Total investment income		7,738		18,232


Expenses:
Interest and credit facility expenses		281		5,070
Sub-administrator and custody fees		69		141
Audit fees		45		52
Insurance fees		45		49
Valuation fees		27		71
Tax service fee		11		18
Other		1		1

Total expense		479		5,402


Net investment income		7,259		12,830


Net realized and unrealized gain/(loss) on investments
Net realized gain/(loss):
Non-controlled/non-affiliated investments		234		1,944
Net change in unrealized appreciation/(depreciation):
Non-controlled/non-affiliated investments		4,294		(7,730	)
Non-controlled affiliated investments		5,481		-

Net realized and unrealized gain/(loss) on investments		10,009		(5,786	)

Net increase in Members’ Capital from operations	$	17,268	$	7,044


Net increase in Members’ Capital from operations attributable to the Preferred Members from operations	$	17,268	$	7,044

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL (Unaudited)


						For the Six Months Ended
						June 30, 2021

	Preferred Members			Common Members		Noncontrolling interest in consolidated subsidiary fund		Total

Members’ Capital, beginning of period	$	173,612		$	-	$	-	$	173,612
Net increase (decrease) in Members’ Capital resulting from operations:
Net investment income		7,259			-		-		7,259
Net realized gain/(loss) on investments		234			-		-		234
Net change in unrealized appreciation/(depreciation) on investments		9,775			-		-		9,775
Net decrease in Members’ Capital resulting from capital activity:
Distributions to Members		(20,500	)		-		-		(20,500	)
Total decrease in Members’ Capital		(3,232	)		-		-		(3,232	)

Members’ Capital, end of period	$	170,380		$	-	$	-	$	170,380


						For the Six Months Ended
						June 30, 2020

	Preferred Members			Common Members		Noncontrolling interest in consolidated subsidiary fund		Total

Members’ Capital, beginning of period	$	244,658		$	-	$	-	$	244,658

Net increase (decrease) in Members’ Capital resulting from operations:

Net investment income		12,830			-		-		12,830

Net realized gain/(loss) on investments		1,944			-		-		1,944

Net change in unrealized appreciation/(depreciation) on investments		(7,730	)		-		-		(7,730	)

Net decrease in Members’ Capital resulting from capital activity:

Distributions to Members		(48,000	)		-		-		(48,000	)

Total decrease in Members’ Capital		(40,956	)		-		-		(40,956	)

Members’ Capital, end of period	$	203,702		$	-	$	-	$	203,702

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF CASH FLOWS (Unaudited)


	For the Six			For the Six
	Months Ended			Months Ended
	June 30, 2021			June 30, 2020
Cash Flows from Operating Activities
Net increase in members’ capital resulting from operations	$	17,268		$	7,044
Adjustments to reconcile the net increase in members’ capital resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments		-			(13,498	)
Proceeds from sales and paydowns of investments		31,532			46,380
Net realized (gain)/loss on investments		(234	)		(1,944	)
Net change in unrealized (appreciation)/depreciation on investments		(9,775	)		7,730
Interest paid-in-kind		(1,889	)		(652	)
Accretion of discount		(33	)		(464	)
Increase (decrease) in operating assets and liabilities:
(Increase) decrease in interest receivable		1,004			(817	)
(Increase) decrease in prepaid and other assets		34			(130	)
Increase (decrease) in interest and credit facility expenses payable		(786	)		(847	)
Increase (decrease) in sub-administrator and custody fees payable		3			(9	)
Increase (decrease) in audit fees payable		7			18
Increase (decrease) in insurance fees payable		5			-
Increase (decrease) in other fees payable		(1	)		-

Net cash (used in) provided by operating activities		37,135			42,811


Cash Flows from Financing Activities
Distributions to Members		(20,500	)		(48,000	)
Repayments of credit facility		(15,131	)		(15,000	)

Net cash (used in) provided by financing activities		(35,631	)		(63,000	)

Net increase (decrease) in cash		1,504			(20,189	)

Cash and cash equivalents, beginning of period		16,966			66,749

Cash and cash equivalents, end of period	$	18,470		$	46,560


Supplemental disclosure of cash flow information and non-cash financing activities
Credit facility - interest and unused fee paid	$	1,032		$	5,895
Credit facility - administrative fee paid	$	-		$	23
Credit facility - surveillance paid	$	35		$	-

The accompanying notes are an integral part of these financial statements.

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS (Unaudited)

June 30, 2021

1.	ORGANIZATION

Investment Objective: TCW Direct Lending Strategic Ventures LLC (the “Fund”) is a closed-end investment company formed as a Delaware limited liability company for the purpose of investing in corporate senior secured middle-market floating rate loans. Investments may include other loans and securities received as a result of the restructuring, workout or bankruptcy of an existing loan.

Limited Liability Company Agreement: The Amended and Restated Limited Liability Company agreement (the “Agreement”), dated June 5, 2015, was entered into by and among TCW Direct Lending LLC, an affiliated fund (also known as the “BDC”) and two third-party members (the “Third-Party Members”). The BDC and each Third-Party Member own a Preferred Membership Interest (collectively the “Preferred Members”) and a Common Membership Interest (collectively the “Common Members”) (together, the “Members”). The BDC owns 80% of the Preferred and Common Membership Interests and the Third-Party Members own the remaining 20% of Preferred and Common Membership Interests. The initial closing date of the Fund was June 5, 2015 (“Initial Closing Date”).

The Agreement amends and restates the original agreement, dated May 26, 2015 that the BDC entered into as the sole member of the Fund.

Term: The Fund will continue until the sixth anniversary of the Initial Closing Date unless dissolved earlier or extended for two additional one-year periods by the BDC, in its sole discretion upon notice to the Management Committee. Thereafter, the term of the Fund may be extended by the BDC for additional one-year periods, in each case with the prior consent of the Management Committee. On February 25, 2021, the Management Committee approved a one year extension of the term of the Fund to June 5, 2022.

Commitment Period: The Commitment Period commenced on June 5, 2015, the Initial Closing Date, and ended June 5, 2019, the third anniversary of the Initial Closing Date. In accordance with the Fund’s Limited Liability Company Agreement, the Fund may complete investment transactions that were significantly in process as of the end of the Commitment Period and which the Fund reasonably expects to be consummated prior to 90 days subsequent to the expiration date of the Commitment Period. The Fund may also affect follow-on investments in existing portfolio companies.

Management Committee: Pursuant to the Agreement, the management committee of the Fund has exclusive responsibility for the management, policies and control of the Fund. The BDC and one of the two Third-Party Members, collectively, each appointed one voting member of the Management Committee. The Management Committee can act on behalf and in the name of the Fund to implement the objectives of the Fund and exercise any rights and powers the Fund may possess. The Management Committee will authorize portfolio investment activity, transactions between the Fund and the BDC, and other Members and borrowings of the Fund.

Administration Agreement: The Fund entered into an Administration Agreement with TCW Asset Management Company LLC (“TAMCO”), dated June 5, 2015 to furnish, or arrange for others to furnish, administrative services necessary for the operation of the Fund. In connection therein, TAMCO, as Administrator retained the services of State Street Bank and Trust Company to assist in providing certain administrative, accounting, operational, investor and financial reporting services for the Fund.

Custody Services Agreement: The Fund entered into a Custody Services Agreement dated June 3, 2015 with State Street Bank and Trust Company to provide custodian services for the Fund.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Capital Commitments: Commitments from the Preferred Members and Preferred Members as Common Members are as follows. The commitment amount funded does not include amounts contributed in anticipation of a potential investment that the Fund did not consummate and therefore returned to the Members’ as unused capital. As of June 30, 2021, aggregate commitments and commitments funded were as follows:


	Committed Capital		Commitments Funded		Percentage Funded
Preferred Membership Interests	$	600,000,000	$	454,279,088		75.7	%
Common Membership Interests		2,000,000		1,000,000		50.0	%


Total	$	602,000,000	$	455,279,088

Recallable Amounts: Each Preferred Member may be required to re-contribute amounts previously distributed equal to 100% of distributions of proceeds during the Commitment Period representing a return of capital contributions made in respect of the Preferred Membership Interest. The recallable amounts as of June 30, 2021 were as follows:

Recallable
Amounts

Recallable
Amounts Funded

Percentage
Funded

Preferred Membership Interests

127,837,000

none

n/a

2.	SIGNIFICANT ACCOUNTING POLICIES

The Fund is an investment company following the accounting and reporting guidance in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) No. 946 Financial Services – Investment Companies.

Basis of Presentation: The Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for investment companies.

These consolidated financial statements include the accounts of the Fund and the Luxembourg Company. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates: The preparation of the accompanying financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting year. Actual results could differ from those estimates.

Investments: The Fund records investment transactions on the trade date. The Fund considers trade date for investments not traded on a recognizable exchange, or traded in the over-the-counter markets, to be the date on which the Fund receives legal or contractual title to the asset and bears the risk of loss.

Income Recognition: Interest and unused commitment fee income are recorded on an accrual basis unless doubtful of collection or the related investment is in default. Realized Gains and losses on investments are recorded on a specific identification basis. Amendment, consent, waiver and forbearance fees received in exchange for a concession that result in a change in yield are recognized immediately when earned as interest income. The Fund typically receives a fee in the form of a discount to the purchase price at the time it funds an investment in a loan. The discount is accreted to interest income over the life of the respective loan, as reported in the Statement of Operations, and reflected in the amortized cost basis of the investment. Discounts associated with a revolver as well as fees associated with a delayed draw that remains unfunded are treated as a discount to the issuers’ term loan. Fee income received from the Advisor that the Advisor received from a portfolio company for services rendered, are recognized immediately as income.

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

June 30, 2021

Cash and Cash Equivalents: The Fund considers cash equivalents to be liquid investments, including money market funds or individual securities purchased with an original maturity of three months or less. Cash and cash equivalents held by the Fund are generally comprised of money market funds and demand deposits, valued at cost, which approximates fair value.

Income Taxes: The Fund is exempt from federal and state income taxes and, consequently, no income tax provision has been made in the accompanying financial statements.

The Fund has invested in numerous jurisdictions and is therefore subject to varying policies and statutory time limitations with respect to examination of tax positions. The Fund reviews and evaluates tax positions in its major jurisdictions and determines whether or not there are uncertain tax positions that require financial statement recognition.

The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as an income tax expense in the Statement of Operations. As of and during the period ended June 30, 2021 and 2020, the Fund did not have a liability for any unrecognized tax benefits, nor did it recognize any interest and penalties related to unrecognized tax benefits.

The Fund is subject to examination by U.S. federal tax authorities for returns filed for the prior three years and by state tax authorities for returns filed for the prior four years.

Recent Accounting Pronouncements: In March 2020, the FASB issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank offered reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. The Fund does not expect the adoption of this ASU to have a material impact on the Fund’s financial statements.

Subsequent Events: The Management Committee evaluated the activity of the Fund through August 9, 2021, the date that the financial statements are available to be issued, and have concluded that no other subsequent events have occurred that would require recognition or disclosure other than those described below.

3.	INVESTMENT VALUATIONS AND FAIR VALUE MEASUREMENTS

Investments at Fair Value: Investments held by the Fund for which market quotes are readily available are valued at fair value. Fair value is generally determined on the basis of last reported sales price or official closing price on the primary exchange in which each security trades, or if no sales are reported, based on the midpoint of the valuation range obtained for debt investments from a quotation reporting system, established market makers or pricing service. Investments held by the Fund for which market quotes are not readily available or market quotations are not considered reliable are valued at fair value by the Management Committee based on similar instruments, internal assumptions and the weighting of the best available pricing inputs.

Fair Value Hierarchy: Assets and liabilities are classified by the Fund based on valuation inputs used to determine fair value into three levels.

Level 1 values are based on unadjusted quoted market prices in active markets for identical assets.

Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Level 3 values are based on significant unobservable inputs that reflect the Fund’s determination of assumptions that market participants might reasonably use in valuing the assets.

The following is a summary by major security type of the fair valuations according to inputs used in valuing investments listed in the Schedule of Investments as of June 30, 2021.


Investments	Level 1		Level 2		Level 3		Total

Debt	$	-	$	-	$	144,049,475	$	144,049,475
Equity		-		-		7,545,921		7,545,921
Cash equivalents		16,061,450		-		-		16,061,450

Total Assets	$	16,061,450	$	-	$	151,595,396	$	167,656,846

The following is a summary by major security type of the fair valuations according to inputs used in valuing investments listed in the Schedule of Investments as of December 31, 2020.


Investments	Level 1		Level 2		Level 3		Total

Debt	$	-	$	-	$	168,418,409	$	168,418,409
Equity		-		-		2,777,389		2,777,389
Cash equivalents		9,618,436		-		-		9,618,436

Total Assets	$	9,618,436	$	-	$	171,195,798	$	180,814,234

The following tables provide a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the period ended June 30, 2021:


	Debt			Equity

Balance at December 31, 2020	$	168,418,409		$	2,777,389

Accreted Discounts		33,165			-
Purchases¹		1,888,818			-
Sales and paydowns		(31,531,472	)		-
Realized gain/(loss)		233,845			-
Change in unrealized appreciation/(depreciation)		5,006,710			4,768,532


Balance at June 30, 2021	$	144,049,475		$	7,545,921


Change in unrealized appreciation/(depreciation) in investments still held as of June 30, 2021	$	5,006,710		$	4,768,532

¹Purchases of Debt include payment in-kind (PIK) interest of $1,888,818.

During the period ended June 30, 2021, the Fund did not have any transfers between levels.

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

June 30, 2021

The following tables provide a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the period ended June 30, 2020:


	Debt			Equity

Balance at December 31, 2019	$	384,203,968		$	78,842

Accreted Discounts		463,729			-
Purchases¹		14,150,006			-
Sales and paydowns		(46,379,250	)		-
Realized gain/(loss)		1,944,372			-
Change in unrealized appreciation/(depreciation)		(7,578,850	)		(78,842	)


Balance at June 30, 2020	$	346,803,975		$	-


Change in unrealized appreciation/(depreciation) in investments still held as of June 30, 2020	$	(6,498,280	)	$	(78,842	)

¹Purchases of Debt include payment in-kind (PIK) $651,676.

During the period ended June 30, 2020, the Fund did not have any transfers between levels.

Level 3 Assets (Investments): The following valuation techniques and significant inputs are used to determine fair value of investments in private debt for which reliable market quotations are not available. Some of the inputs are independently observable however, a significant portion of the inputs and the internal assumptions applied are unobservable.

Equity, (Level 3), includes common stock, preferred stock and warrants. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. A market approach is generally used to determine fair value. Pricing inputs include, but are not limited to, financial health, and relevant business developments of the issuer; EBITDA, market multiples of comparable companies, comparable market transactions and recent trades or transactions; issuer, industry and market events; contractual or legal restrictions on the sale of the security. When a Black-Scholes pricing model is used, the pricing model takes into account the contract terms as well as multiple inputs, including: time value, implied volatility, equity prices and interest rates. A liquidity discount based on current market expectations, future events, minority ownership position and the period management reasonably expects to hold the investment may be applied.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

The following table summarizes by major security type the valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of June 30, 2021.

Investment

Type

Fair Value at
June 30, 2021

Valuation
Technique

Unobservable Input

Range

Weighted Average

Impact to Valuation
from an Increase in
Input

Debt

55,303,559

Income Method

Discount Rate

4.7% to 11.0%

8.5%

Decrease

Debt

88,745,916

Market Method

EBITDA Multiple

5.5x to 18.0x

N/A

Increase

Revenue Multiple

0.2x to 1.8x

N/A

Increase

Total Debt

144,049,475

Equity

7,545,921

Market Method

EBITDA Multiple

5.5x to 8.8x

N/A

Increase

Revenue Multiple

0.2x to 0.3x

N/A

Increase

Total Equity

7,545,921

Total Investment

151,595,396

The following table summarizes by major security type the valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of December 31, 2020.

Investment Type

Fair Value at
December 31, 2020

Valuation
Technique

Unobservable Input

Range

Weighted Average

Impact to
Valuation from an
Increase in Input

Debt

84,097,605

Income Method

Discount Rate

5.8% to 14.0%

10.6%

Decrease

Debt

62,434,840

Market Method

EBITDA Multiple

5.25x to 9.50x

N/A

Increase

Revenue Multiple

0.18x to 1.60x

N/A

Increase

Debt

21,885,964

Income Method

Discount Rate

22.0% to 24.0%

N/A

Decrease

Market Method

EBITDA Multiple

3.50x to 4.50x

N/A

Increase

Revenue Multiple

0.20x to 0.40x

N/A

Increase

Total Debt

168,418,409

Equity

Market Method

EBITDA Multiple

5.25x to 6.25x

N/A

Increase

Revenue Multiple

0.18x to 0.23x

N/A

Increase

Equity

2,777,389

Income Method

Discount Rate

22.0% to 24.0%

N/A

Decrease

Market Method

EBITDA Multiple

3.50x to 4.50x

N/A

Increase

Revenue Multiple

0.20x to 0.40x

N/A

Increase

Total Equity

2,777,389

Total Investment

171,195,798

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

June 30, 2021

4.	ALLOCATIONS AND DISTRIBUTIONS

Allocation of profit and loss: Income, expenses, gains and losses of the Fund are allocated among the Members in such a manner that, at the end of each period, each Member’s capital account is equal to the respective net amount, positive or negative, which would be distributed to such Member if the Fund were to liquidate the assets of the Fund for an amount equal to book value and distribute the proceeds in a manner consistent with the distribution priorities described in the Agreement.

Distribution: Interest, dividends, other cash flow received by the Fund in respect of Portfolio Investments (“Interest Amounts”) and proceeds attributable to the repayment or disposition of Portfolio Investments (“Proceeds”) received by the Fund are distributed by the Fund to the Members to the extent that such Interest Amounts and Proceeds are available to the Fund after the application of the priority of payments stipulated in the Credit Agreement and after taking into account reserves and working capital needs.

Interest Amounts available to the Fund for distribution to the Members will be distributed in the following order and priorities:

First, one-hundred percent (100%) to the Preferred Members in an amount equal to any declared and unpaid dividends on Preferred Membership Interests, which amounts shall be distributed pro rata among the Preferred Members in accordance with their respective entitlements to such dividends.

Second, one-hundred percent (100%) to the payment of Fund expenses; and

Thereafter, one-hundred percent (100%) to the Common Members, which amounts shall be distributed among the Common Members pro rata based on their respective Unreturned Contributions or, if the Unreturned Contributions of the Common Members equal zero, pro rata based on the respective Commitments of such Common Members in their capacities as Preferred Members with respect to Preferred Membership Interest.

Proceeds available to the Fund for distribution to the Members will be distributed in the following order and priorities:

First one-hundred percent (100%) to the Preferred Members in an amount equal to any declared and unpaid dividends on Preferred Membership Interests, which amounts shall be distributed pro rata among the Preferred Members in accordance with their respective entitlements to such dividends,

Second, one-hundred percent (100%) to the Preferred Members pro rata based on, and up to the amount of, their respective Unreturned Contributions; and Thereafter, one-hundred percent (100%) to the Common Members, which amounts shall be distributed among the Common Members pro rata based on their respective Unreturned Contributions or, if the Unreturned Contributions of the Common Members equal zero, pro rata based on the respective Commitments of such Common Members in their capacities as Preferred Members with respect to Preferred Membership Interests.

Preferred Member Dividends: Each Preferred Membership Interest is entitled to quarterly dividends at a rate equal to LIBOR plus 6.50% per annum (subject to a LIBOR floor of 1.5% per annum) of the Unreturned Contributions associated with their Preferred Membership Interest. Dividends are cumulative and paid when declared by the Management Committee.

Unreturned Contributions: With respect to any Member in respect of each class such Member holds, an amount equal to the excess, if any, of (a) the aggregate contributions of such Member over (b) the aggregate amount distributed to such Member from Proceeds (other than amounts paid in respect of dividends to such Member).

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

5.	FUND EXPENSES

The Fund is responsible for all costs and expenses which include organizational expenses, operating expenses; investigative, travel, legal and other transactional expenses incurred with respect to the acquisition, formation, holding and disposition of the Fund’s Portfolio Investments or incurred in connection with Portfolio Investments or transactions not consummated; costs and expenses relating to the liquidation of the Fund; taxes, or extraordinary expenses (such as litigation expenses and indemnification payments to either the Management Committee or the Administrative Agent); valuation-related costs and expenses; and all other costs and expenses of the Fund’s operations, administration and transactions.

Organizational Expenses: Organization expenses will be paid from capital contributions called from the holders of Common Membership Interests. As of June 30, 2021 and December 31, 2020, organization expenses paid inception-to-date total $704,290.

Portfolio Investment Expenses: Expenses related to Portfolio Investments will be paid from capital contributions called from Preferred Membership Interests.

Fund Expenses: Other Fund expenses including those related to unconsummated investments will be paid first from Interest Amounts as provided for in the above Distribution footnote. To the extent that such Interest Amounts are insufficient or unavailable to pay expenses when due, such expenses will be paid from capital contributions called from the holders of Common Membership Interests provided that the aggregate amount called for Fund expenses (including organizational expenses) does not exceed $2 million. To the extent that the foregoing sources of payment are insufficient or unavailable to pay when due, such expenses will be paid from capital contributions called from the Preferred Members.

6.	ADVISER FEE INCOME

Any (i) transaction, advisory, consulting, management, monitoring, directors’ or similar fees, (ii) closing, investment banking, finders’, transaction or similar fees, (iii) commitment, breakup or topping fees or litigation proceeds and (iv) other fee or payment of services performed or to be performed with respect to an investment or proposed investment received from or with respect to Portfolio Companies or prospective Portfolio Companies in connection with the Fund’s activities will be allocated pro rata among the Fund and any other funds or accounts advised by the Adviser participating in such investment and the Fund’s share will be the property of the Fund. Notwithstanding the foregoing, for administrative or other reasons, certain fees described in clauses (i) through (iv) above (including any fees for administrative agent services provided by the Adviser or an affiliate with respect to a particular loan or portfolio of loans made by the Fund) may be paid to the Adviser or the affiliate (rather than directly to the Fund), in which case the amount of such fees (net of any related expenses associated with the generation of such fees borne by the Adviser or such affiliate that have not been and will not be reimbursed by the Portfolio Company) shall be paid to the Fund.

Since inception of the Fund through June 30, 2021 and December 31, 2020 the Adviser was paid directly $1,697,083 and $1,680,211, respectively, of which $16,872 and $107,168 were paid during the period ended June 30, 2021 and the year ended December 31, 2020, respectively. Since Inception of the Fund through June 30, 2021 and December 31, 2020 the Fund has recognized $1,697,083 and $1,680,211, respectively, of these fees.

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

June 30, 2021

7.	REVOLVING CREDIT AGREEMENT

On June 5, 2015, the Fund, as borrower entered into a Credit Facility with Cortland Capital Market Services LLC, as administrative agent and various financial institutions (the “Lending Group”) to make loans (Advances) to the Fund for the purpose of funding eligible investments. Effective August 21, 2015, the Credit Agreement was amended to increase the Credit Facility to $600 million (“Facility Amount”) from $500 million. The Commitment Period to make an Advance ends on the earlier of the end of the (i) Investment Period and (ii) the Facility Maturity Date. The Investment Period ended on June 5, 2018. The Facility Maturity Date is June 4, 2021 and may be extended pursuant to the Credit Agreement or end earlier if the Facility Amount is reduced to zero or the Advances automatically become due and payable. On April 30, 2021, the Fund terminated the Credit Facility and all Advances outstanding were repaid in full.

The lender has a priority interest in the interest, dividends and other cash flow received by the Fund (Interest Amounts) and proceeds attributable to the repayment or disposition of Portfolio Investments (Proceeds) received by the Fund as described in note 4 – distribution of Interest Amounts and distribution of Proceeds.

As of June 30, 2021, there were no Advances outstanding. As of December 31, 2020, there were $15,131,282 in Advances outstanding, which approximated fair value.

Interest was payable at a rate equal to LIBOR plus 3.50% per annum (subject to a LIBOR floor of 1.50%) on the amount of Advances outstanding. The Fund received a rating from an approved rating agency commensurate with the rate of interest paid by the Fund. As of December 31, 2020, the all-in rate of interest was 5.00%.

Whenever the Fund was paid an origination, structuring, or similar upfront fee by the obligor of an eligible investment, the Lending Group was entitled to an origination fee equal to 0.75% of the eligible investment funded with the proceeds of Advances.

The summary information regarding the Credit Facility for the period ended June 30, 2021 and 2020 is as follows (dollar amounts in thousands):


	Six Months Ended June 30,
	2021			2020
Credit facility interest expense		$	246		$	5,047
Unused fees			-			-
Administrative fees			-			23
Origination expense			-			-
Surveillance expense			35			-

Total		$	281		$	5,070

Weighted average interest rate			5.00%			5.20%
Average outstanding balance		$	9,976,669		$	195,203,297

As of June 30, 2021 and December 31, 2020, the Fund has complied with the covenant requirements detailed in the Credit Agreement.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

8.	COMMITMENTS AND CONTINGENCIES

At June 30, 2021, the Fund did not have any unfunded commitments.

At December 31, 2020, the Fund did not have any unfunded commitments.

In the normal course of business, the Fund enters into contracts which provide a variety of representations and warranties, and general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Fund under these arrangements is unknown as it would involve future claims that may be made against the Fund; however, based on the Fund’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Fund has not accrued any liability in connection with such indemnifications.

9.	FINANCIAL HIGHLIGHTS

The following summarizes the Fund’s financial highlights for the period ended June 30, 2021 and 2020:


	Six Months Ended			Six Months Ended
	June 30, 2021			June 30, 2020
	Members			Members
As a percentage of average members’ capital
Net investment income ratio (annualized) ¹		8.46	%		12.04	%

Expense ratios (annualized) ¹
Operating expenses		0.56	%		5.07	%

Total expense ratio		0.56	%		5.07	%

The net investment income and expense ratio are calculated for the Members taken as a whole.

The Internal Rates of Return (IRR) since inception of the Members, after financing costs and other operating expenses are 12.1% and 11.9% through June 30, 2021 and 2020, respectively.

The IRR is computed based on cash flow due dates contained in notices to Members (contributions from and distributions to the Members) and the net assets (residual value) of the Members’ capital account at period end and is calculated for the Members taken as a whole.

The IRR is calculated based on the fair value of investments using principles and methods in accordance with GAAP and does not necessarily represent the amounts that may be realized from sales or other dispositions. Accordingly, the return may vary significantly upon realization.

TCW Direct Lending Strategic Ventures LLC

(A Delaware Limited Liability Company)

June 30, 2021

ADMINISTRATION

ADMINISTRATOR

TCW Asset Management Company

1251 Avenue of the Americas, Suite 4700

New York, NY 10020

(212) 771-4000

PORTFOLIO MANAGER

Richard T. Miller

Group Managing Director

INDEPENDENT AUDITORS

Deloitte & Touche LLP

555 West 5^th Street

Los Angeles, CA 90013

CUSTODIAN

State Street Bank and Trust Company

One Lincoln Street

Boston, MA 02111

SUB-ADMINISTRATOR

State Street Bank and Trust Company

One Lincoln Street

Boston, MA 02111