SLR Investment (US:SLRC) Yahoo Finance·2025-11-05 16:22Core Insights - SLR Investment Corp reported stable third-quarter results, with net investment income of $0.40 per share and net income of $0.43 per share, reflecting a 9.4% annualized return on equity [1][17] - The company's net asset value per share increased slightly to $18.21 as of September 30, 2025, remaining approximately flat year over year [1][14] - SLR's multi-strategy approach to private credit investing has allowed it to maintain stability in its portfolio amid rising credit risks and competitive market conditions [5][38] Financial Performance - The company originated $447 million in new investments during the third quarter, a 12.7% increase year over year, while repayments totaled $419 million [4][5] - Gross investment income for the quarter was $57 million, up from $53.9 million in the previous quarter, with net expenses rising to $35.4 million [16][17] - The net increase in net assets resulting from operations was $23.3 million for the quarter, compared to $24.2 million in the prior quarter [17] Portfolio Composition - Approximately 93% of third-quarter originations were in specialty finance, reflecting a shift towards strategies that offer better risk-adjusted returns [10][19] - As of September 30, 2025, 83% of the loan portfolio consisted of specialty finance investments, with cash flow loans representing only 15.3% [11][12] - The comprehensive portfolio totaled approximately $3.3 billion, with 98.2% consisting of senior secured loans [22] Market Conditions and Strategy - The company is focusing on asset-based lending (ABL) due to strong demand from borrowers seeking liquidity solutions amid uncertain economic conditions [8][24] - SLR's ABL portfolio totaled over $1.4 billion, representing 44% of the total portfolio, with a weighted average yield of 13.4% [25][26] - The company has made significant investments in personnel and infrastructure to enhance its ABL capabilities, hiring over 100 new employees in the past two years [9][46] Risk Management - SLR has adopted a more discerning approach to cash flow lending to safeguard performance in a high-interest rate environment [6][39] - The weighted average investment risk rating of the portfolio was under two, indicating a low-risk profile, with 99.5% of the portfolio performing on a cost basis [23] - The company emphasizes rigorous underwriting and active monitoring to mitigate risks associated with asset-backed lending [20][21]