Mount Logan Capital Inc. 8-K

What Happened
Mount Logan Capital Inc. (MLCI) filed an 8‑K on December 29, 2025 providing a business update following its September 12, 2025 business combination with 180 Degree Capital Corp. (TURN) and disclosing an ongoing investigation into misconduct by a former employee of its adviser, ML Management. The company said it has integrated the TURN team into its Asset Management and Insurance Solutions businesses, is reallocating equity from the TURN transaction to grow fee‑based businesses, and plans an expected tender offer. Separately, ML Management ended its relationship with the implicated employee, has repaid about $690,000 (including interest) to one portfolio company, and is investigating additional potential misappropriation and fee reimbursements.

Key Details

• Business combination closed: September 12, 2025; legacy TURN public portfolio reduced from six to three positions and appreciated by ~$2 million as of December 26, 2025.
• Legacy TURN investments (excluding SNCR subject to a voting agreement) represent less than 3% of Mount Logan’s GAAP equity value as of September 30, 2025; management expects to exit remaining TURN positions by end of H1 2026.
• Capital redeployment priorities: expected tender offer, potential future tenders/repurchases, funding Ability Insurance Company for new annuities, supporting Asset Management growth (new funds, retail distribution, opportunistic acquisitions) and increasing Fee Related Earnings (FRE) and Spread Related Earnings (SRE).
• Misconduct investigation (disclosed October 2025): $690,000 repaid to one portfolio company; up to $180,000 more under review; potential fee repayments to the fund believed to be at most $1.35 million (currently estimated to be less). Matter was self‑reported to the SEC and remedial steps are underway.

Why It Matters
This filing signals Mount Logan’s strategic shift to redeploy TURN equity into permanent/semi‑permanent capital vehicles (e.g., Ability, BCIC, SOFIX) to grow recurring fee income and support a planned tender offer—items material to shareholders focused on capital allocation and recurring earnings. The employee misconduct disclosed may have a modest near‑term financial impact (repayments and potential fee reimbursements cited), but the company characterizes the issue as isolated, has taken remedial actions, and is pursuing recovery; the investigation is ongoing and could affect future results. Investors should note the forward‑looking statements and that timing, tender details, and final remediation costs remain uncertain.