Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2025

Note 3—Fair Value of Financial Instruments

Fair value is the amount 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. ASC 820 establishes a fair value hierarchy that prioritizes and ranks the inputs to valuation techniques used in measuring investments at fair value. The hierarchy classifies the inputs used in measuring fair value into three levels as follows:

•

Level 1—Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

•

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

•

Level 3—Unobservable inputs that reflect the Fund’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but are instead derived from particular valuation techniques.

The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level

input that is significant to the fair value measurement in its entirety. The Fund evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

Determination of fair values involves subjective judgments and estimates. Accordingly, the notes to the consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations on the consolidated financial statements.

The following table presents fair value measurements of investments and cash equivalents, by major class, as of September 30, 2025, according to the fair value hierarchy.


	Fair Value Measurements
	Level 1		Level 2		Level 3		Totals
First Lien Senior Secured	$	—	$	8,970	$	772,448	$	781,418
Second Lien Senior Secured		—		7,027		15,579		22,606
Equity		—		—		9,372		9,372
Warrants		—		—		49		49
Cash Equivalents		24,371		—		—		24,371
Total	$	24,371	$	15,997	$	797,448	$	837,816

The following table presents fair value measurements of investments and cash equivalents, by major class, as of December 31, 2024, according to the fair value hierarchy.


	Fair Value Measurements
	Level 1		Level 2		Level 3		Totals
First Lien Senior Secured	$	—	$	—	$	393,203	$	393,203
Equity		—		—		6,065		6,065
Warrants		—		—		—		—
Cash Equivalents		9,471		—		—		9,471
Total	$	9,471	$	—	$	399,268	$	408,739

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the nine months ended September 30, 2025.


	First Lien Senior Secured			Second Lien Senior Secured			Equity			Warrants		Total Investments
Balance as of December 31, 2024	$	393,203		$	—		$	6,065		$	—	$	399,268
Purchases and other adjustments to cost		451,330			25,492			3,393			—		480,215
Sales and repayments		(53,181	)		—			—			—		(53,181	)
Transfers in		—			—			—			—		—
Transfers out		(19,730	)		(9,859	)		—			—		(29,589	)
Net realized gain/ (loss) on investments		(551	)		—			—			—		(551	)
Net change in unrealized gain/ (loss) on investments		271			(63	)		(86	)		49		171
Net accretion of discount on investments		1,106			9			—			—		1,115
Balance as of September 30, 2025	$	772,448		$	15,579		$	9,372		$	49	$	797,448
Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliated company investments still held at September 30, 2025	$	(90	)	$	(23	)	$	(84	)	$	49	$	(148	)

For the nine months ended September 30, 2025, the Fund transferred three broadly syndicated loans from Level 3 to Level 2 due to the increased observability of valuation inputs.

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the nine months ended September 30, 2024.


	First Lien Senior Secured			Equity		Total
Balance as of December 31, 2023	$	18,281		$	—	$	18,281
Purchases and other adjustments to cost		108,475			338		108,813
Sales and repayments		(1,150	)		—		(1,150	)
Net realized gain/ (loss) on investments		7			—		7
Net change in unrealized gain/ (loss) on investments		414			59		473
Net accretion of discount on investments		110			—		110
Balance as of September 30, 2024	$	126,137		$	397	$	126,534
Net change in unrealized gains/(losses) for the period relating to those Level 3 assets that were still held by the Fund at the end of the period:	$	414		$	59	$	473

For the three and nine months ended September 30, 2024, there were no transfers between levels of the fair value hierarchy.

Significant Unobservable Inputs

The following table summarizes the significant unobservable inputs used to value Level 3 investments as of September 30, 2025. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.

          
         Selected Input Range

         Impact to

         Asset Category

         Fair Value

         Primary Valuation Technique

         Unobservable Inputs

         Minimum

         Maximum

         Weighted Average (a)

         Valuation from an Increase in Input (b)

First Lien Senior Secured

11,965

Recent Transaction Price

Recent Transaction Price

N/A

N/A

N/A

Decrease

Equity

1,774

Recent Transaction Price

Recent Transaction Price

N/A

N/A

N/A

Increase

Equity

4,910

Discounted Cash Flow

Discount Rate

19.6

19.6

19.6

Increase

First Lien Senior Secured

759,184

Discounted Cash Flow

Discount Rate

4.9

20.6

9.0

Increase

Second Lien Senior Secured

15,579

Discounted Cash Flow

Discount Rate

11.1

19.5

11.8

Increase

Equity

2,295

Market Comparables

EBITDA Multiple

11.0

14.0

12.9

Increase

First Lien Senior Secured

1,299

Market Comparables

EBITDA Multiple

7.3

8.8

8.0

Increase

Warrant

49

Market Comparables

EBITDA Multiple

11.0

12.0

11.5

Increase

Equity

393

Market Comparables

Revenue Multiple

3.2

4.2

3.7

Increase

Total

797,448

(a)

Weighted averages are calculated based on fair value of investments.

(b)

Represents the directional change in the fair value of the Level 3 investments that could have resulted from an increase in the corresponding inputs as of a period end. A decrease to the unobservable input would have had the opposite effect. Significant changes in these inputs may have resulted in a significantly higher or lower fair value measurement at the period end.

The following table summarizes the significant unobservable inputs used to value Level 3 investments as of December 31, 2024. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.

          
         Selected Input Range

         Impact to

         Asset Category

         Fair Value

         Primary Valuation Technique

         Unobservable Inputs

         Minimum

         Maximum

         Weighted Average (a)

         Valuation from an Increase in Input (b)

First Lien Senior Secured

358,322

Discounted Cash Flow

Discount Rate

8.2

20.3

10.2

Decrease

Equity

4,900

Discounted Cash Flow

Discount Rate

19.6

19.6

19.6

Decrease

First Lien Senior Secured

1,483

Market Comparables

EBITDA Multiple

7.3

8.3

7.8

Increase

Equity

818

Market Comparables

EBITDA Multiple

11.3

15.8

13.6

Increase

Equity

347

Market Comparables

Revenue Multiple

3.3

4.3

3.8

Increase

First Lien Senior Secured

33,398

Recent Transaction Price

Recent Transaction Price

N/A

N/A

N/A

Increase

Total

399,268

(a)

Weighted averages are calculated based on fair value of investments.

(b)

There were no significant changes in valuation approach or technique as of September 30, 2025 and December 31, 2024.

Level 3 inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category include investments in privately held entities where the fair value is based on unobservable inputs.

The income and market approaches were used in the determination of fair value of certain Level 3 assets as of September 30, 2025 and December 31, 2024. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments and any other end of term fees, as applicable. Included in the consideration and selection of discount rates are factors such as risk of default, interest rate risk, and changes in credit quality. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies.

As of September 30, 2025, the Fund had one portfolio investment on a non-accrual status. As of December 31, 2024, the Fund had one portfolio investment on a non-accrual status. Refer to Note 2—Summary of Significant Accounting Policies for additional details regarding the Fund's non-accrual policy.

The following table shows the amortized cost and fair value of the Fund's performing and non-accrual investments as of September 30, 2025 and December 31, 2024.


	September 30, 2025				December 31, 2024
Portfolio Company	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Performing	$	812,308	$	812,779	$	395,825	$	397,785
Non-accrual		647		666		1,918		1,483
Total	$	812,955	$	813,445	$	397,743	$	399,268

For a discussion of the fair value measurement of the Fund's borrowings, refer to Note 6—Borrowings.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

John Hancock Comvest Private Income Fund 10-Q