CMFN CM Financial Inc

Explanatory Note

This statement on Schedule 13D (this “Schedule 13D”) is being filed to report beneficial ownership of certain shares of common stock, par value $0.001 per share (the “Common Stock”) of Investcorp Credit Management BDC, Inc., a Maryland corporation (the “Issuer”).  On June 26, 2019, as previously reported by the Issuer and as described below, Investcorp BDC Holdings Limited (“IBDC”) and Investcorp Credit Management US LLC (“ICM”) entered into certain arrangements with the Issuer and its stockholders as a result of which IBDC and ICM may be beneficial owners (within the meaning of Rule 13d-1 under the Exchange Act) of certain shares of the Issuer’s common stock.

This Schedule 13D is filed by (i)  IBDC, (ii) ICM, (iii)  SIPCO Holdings Limited (“SIPCO”), a Cayman Islands company and (iv) Investcorp S.A., a Cayman Islands company (“Investcorp,” and together with IBDC, ICM and SIPCO, the “Reporting Persons”).  SIPCO and Investcorp expressly disclaim status as a “group” with the other Reporting Persons for purposes of this Schedule 13D.  All percentages reported herein are calculated based upon 13,625,533 shares of Common Stock outstanding as of September 17, 2019, as reported in the Issuer’s Preliminary Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on September 17, 2019.

Item 1. Security and Issuer

(a)  This Schedule 13D relates to the Common Stock of the Issuer.

(b)  The principal executive office of the Issuer is located at 65 East 55th Street, 15th Floor, New York, NY 10022.

Item 2. Identity and Background

For information with respect to the identity and background of each director or general partner and executive officer, as applicable, of the Reporting Persons, see Schedule 1 attached hereto.

(a)  The persons and entities filing this Schedule 13D are:

(b)  The address of the principal place of business of:

(c)  The principal business of:

(d)  During the last five years, none of the Reporting Persons has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)  During the last five years, none of the Reporting Persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) The Citizenship or Place of Organization for the Reporting Persons is:

Item 3. Source and Amount of Funds or Other Consideration

As of the date of this filing, IBDC has used approximately $19,000 of contributions from its members to acquire Common Stock of the Issuer.  In the future, the Reporting Persons may use funds derived from contributions to their members to acquire Common Stock.

Item 4. Purpose of Transaction

The Reporting Persons entered into the Agreements to facilitate their business and for investment purposes.  The Reporting Persons intend to maintain the existing business relationships between ICM and the Issuer.  The information in Item 6 is incorporated by reference herein.  Except as described in this Schedule 13D, none of the Reporting Persons or, to the best of their knowledge, any of the persons listed in Schedule 1 to this Schedule 13D, none of the Reporting Persons have a present plan or proposal that relates to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of the Issuer

(a), (b)  See cover page for IBDC.  As of the date hereof, IBDC owns 2,920 shares of Common Stock purchased in open market transactions.  As described in Item 6, IBDC has agreed: (i) to purchase from the Issuer in a private placement transaction 680,985 newly issued shares of Common Stock at the most recently determined net asset value per share of the Common Stock at the time of purchase, subject to adjustments, (ii) to purchase in open market transactions 680,985 shares of Common Stock prior to August 30, 2021 and (iii)  if IBDC does not own at least 10% of the Common Stock before August 30, 2021, IBDC has agreed to purchase from the Issuer, and the Issuer has agreed to issue and sell, the remaining balance at a price per share equal to the greater of the then-current net asset value per share and the market price of the Common Stock on Nasdaq.

See cover pages for ICM, SIPCO and Investcorp.  Any Common Stock shown as being beneficially owned by ICM, SIPCO or Investcorp is the same Common Stock listed as being beneficially owned by IBDC.  As a result of the arrangements described in Item 6, the Reporting Persons may be deemed to be part of a group with the Cyrus Funds (as defined below) and part of a group with Stifel (as defined below) and, as a result, may be deemed to beneficially own or have voting or dispositive power over shares of Common Stock owned by each of them, aggregating to 6,000,004 shares of Common Stock, representing approximately 44.0% of outstanding Common Stock, representing.

ICM is an affiliate of IBDC.  Investcorp is the indirect parent corporation of the general partners of certain investment funds that indirectly own IBDC and ICM.  SIPCO may be deemed to control Investcorp through its ownership of a majority of the stock of a company that indirectly owns a majority of Investcorp.  Investcorp and SIPCO may be deemed to share beneficial ownership, voting and dispositive power over any Common Stock beneficially owned by IBDC or ICM.

(c) None of the Reporting Persons has effected any transaction in shares of Common Stock during the past 60 days, except as otherwise disclosed in this Schedule 13D, including on Schedule A hereto.

The information provided and incorporated by reference in Item 3 and Item 6 is hereby incorporated by reference in this Item 5.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The descriptions below of the SPA, Voting Agreements and ROFO Agreements (each as defined below below) are intended as a summary only and each is qualified in its entirety by reference to copies of such agreements filed as exhibits to this Schedule 13D and incorporated by reference herein.  The information provided and incorporated by reference in Items 3, 4 and 5 is hereby incorporated by reference herein.  Other than as described in this Schedule 13D, to the best of the Reporting Persons’ knowledge, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer.

Stock Purchase and Transaction Agreement

As previously announced by the Issuer, on June 26, 2019, the Issuer entered into a Stock Purchase and Transaction Agreement (the “SPA”) by and between the Company and IBDC, an affiliate of ICM. The SPA was entered into simultaneously with ICM’s entrance into a definitive interest purchase agreement to acquire a majority ownership interest in CM Investment Partners LLC (the “Adviser”), the investment adviser to the Company.

The transactions contemplated by the SPA closed on August 30, 2019, at which time ICM and the Issuer entered into a new advisory agreement (the “Advisory Agreement”), pursuant to which the Adviser acts as investment adviser to the Issuer, and a new administration agreement, pursuant to which the Adviser acts as the Issuer’s administrator.

Voting Agreements

ICM has entered into separate Voting Agreement (collectively, the “Voting Agreements”) with (i) certain funds managed by Cyrus Capital Partners, L.P. (the “Cyrus Funds”) and (ii) Stifel Venture Corp. (“Stifel”).  The Voting Agreements provide that the counterparties will participate in stockholder meetings and vote Common Stock owned by them on the date of the agreements (i) against, or otherwise not in favor of, electing one or more nominees to the Issuer’s Board proposed by a stockholder of the Issuer in connection with a proxy contest, (ii) against, or otherwise not in favor of, terminating the Advisory Agreement or approving any investment advisory agreement between the Issuer and any adviser other than ICM and (iii) in favor of renewing or approving the Advisory Agreement.  Each Voting Agreement provides that such voting arrangements will terminate upon the earliest of (i) ICM no longer serving as the investment adviser to the Issuer, (ii) IBDC and its affiliates no longer owning, in the aggregate, at least 50% of the equity interests in ICM, (iii) the Cyrus Funds (along with its affiliates) or Stifel (along with its affiliates), as applicable, owning less than 7.5% of the Common Stock, (iv) the date, if any, on which Michael C. Mauer is no longer the Co-Chief Investment Officer of ICM due to his termination without cause by ICM and (v) August 30, 2021 (the period prior to such determination, the “Restricted Voting Period”).

The Voting Agreements also provide that the Cyrus Funds and Stifel, respectively, shall not call a special meeting of stockholders to elect, remove or replace directors, to terminate the Advisory Agreement or to vote on any investment advisory agreement between the Issuer and any adviser other than ICM, nor will they grant any proxies or powers of attorney with respect to their Common Stock.  This Agreement shall terminate upon the earlier of (a) the date of termination of the SPA in accordance with its terms, (b) the date on which the parties agree in writing to terminate the Voting Agreement, (c) the expiration of the Restricted Voting Period and (d) the entry into a definitive agreement between the parties pursuant to which IBDC acquires all of the counterparty’s Common Stock.

Right of First Offer Agreements

On August 30, 2019, IBDC entered into separate Right of First Offer Agreements (collectively, the “ROFO Agreements”) with (i) the Cyrus Funds and (ii) Stifel.  The ROFO Agreements provided that the Cyrus Funds and Stifel, as applicable, shall not sell, transfer, pledge, hypothecate, gift, bequest, devise, assign or otherwise dispose of Common Stock owned by them on the date of the agreements, unless pursuant to a permitted transfer or as set forth below.  Each ROFO Agreement provides that such arrangements will terminate upon the earliest of (i) ICM no longer serving as the investment adviser to the Issuer, (ii) IBDC and its affiliates no longer owning, in the aggregate, at least 50% of the equity interests in ICM, (iii) the Cyrus Funds (along with its affiliates) or Stifel (along with its affiliates), as applicable, owning less than 10% of the Common Stock and (iv) December 26, 2020 (the period prior to such determination, the “ROFO Period”).

If the Cyrus Funds or Stifel, as applicable, proposes to sell its Common Stock during the ROFO Period, it must provide notice to IBDC of the terms of the proposed sale at least three business days prior to the good faith estimate of the desired sale date.  IBDC may then purchase any or all of the Common Stock proposed to be sold, subject to certain minimum purchase amounts.  The foregoing right of first offer will not apply to the following permitted transfers: (i) transfer to affiliates that agree to be bound by the applicable ROFO Agreement, (ii) repurchases by the Issuer, (iii) certain sales pursuant to an effective registration statement and (iv) certain transfers pursuant to Rule 144 under the Securities Act of 1933.

Item 7. Material to Be Filed as Exhibits

Trade Date	Entity	Purchase or Sale		Quantity				Weighted Average Price			Price Ranges
10/2/19	ICM	Purchase			2,000			$	6.5475		$6.45 – $6.64
10/3/19	ICM	Purchase			920			$	6.5040		$6.48 – $6.515

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: October 4, 2019

The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of the filing person), evidence of the representative’s authority to sign on behalf of such person shall be filed with the statement:  provided, however, that a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature.

Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (See 18 U.S.C. 1001)

SCHEDULE I

SCHEDULE I

INVESTCORP S.A.
DIRECTORS

INVESTCORP S.A.

EXECUTIVE OFFICERS

SIPCO HOLDINGS LIMITED
DIRECTORS

SIPCO HOLDINGS LIMITED
EXECUTIVE OFFICERS

INVESTCORP BDC HOLDINGS LIMITED
MANAGERS

INVESTCORP BDC HOLDINGS LIMITED
OFFICERS

INVESTCORP CREDIT MANAGEMENT US LLC
MANAGERS

INVESTCORP CREDIT MANAGEMENT US LLC
OFFICERS