Michael Gross: Thank you, Shiraz, and thank you to everyone for joining our earnings call this morning. We are pleased to report that SLR Investment Corp.'s fourth quarter results solidified a strong year for the company, showcasing another quarter of broad stability in our portfolio, slow but steady portfolio growth, and a shift to asset-based lending investments with primarily liquid current assets as collateral that are supported by actively monitored borrowing bases. For those who have been following us ...

Management is deliberately reducing exposure to the 'overcrowded' sponsor finance market, citing an oversupply of capital and deteriorating underwriting standards among peers. The portfolio has reached a record 83% allocation to senior secured specialty finance, prioritizing asset-based lending (ABL) with liquid collateral and active borrowing base monitoring. The company maintains an intentional underweighting in the software sector (approximately 2% exposure) to avoid risks associated with technolog ...

Core Insights - Blue Owl Capital Corporation (OBDC) is scheduled to report its fourth-quarter 2025 results on February 18, with earnings estimated at 35 cents per share and revenues at $446.15 million [1] Financial Performance - The fourth-quarter earnings estimate has remained stable over the past 60 days, indicating a 25.5% year-over-year decrease in earnings, while revenues are projected to grow by 13.1% year-over-year [2] - For the full year 2025, the revenue estimate stands at $1.85 billion, reflecting a year-over-year growth of 15.8%, whereas the earnings per share estimate is $1.52, suggesting a decline of 20% from the previous year [3] Earnings Prediction - The model indicates that OBDC has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell), suggesting no clear odds for an earnings beat [4][7] - The consensus estimate for non-controlled, non-affiliated interest income suggests a 16.3% year-over-year growth, while the model projects a 19.8% increase [6] - The total operating expenses for the fourth quarter are estimated to be $260.7 million, reflecting a 24.3% year-over-year growth due to higher management fees and interest expenses [9] Industry Context - Major peers such as SLR Investment Corp. (SLRC), Blackstone Secured Lending Fund (BXSL), and FS KKR Capital Corp. (FSK) are also set to report earnings, providing insights into industry trends [10] - Blackstone Secured is predicted to have an earnings beat with an Earnings ESP of +0.76% and a Zacks Rank of 3, while SLR Investment and FS KKR Capital have uncertain earnings beat prospects with Earnings ESP of 0.00% [12][13]

Core Insights - The article discusses the comparison between closed-end funds (CEFs) and business development companies (BDCs), specifically focusing on Eagle Point Credit Co LLC (ECC) and SLR Investment Corp. (SLRC), which are currently trading at similar discounts [1] Group 1: Company Analysis - Eagle Point Credit Co LLC (ECC) and SLR Investment Corp. (SLRC) are highlighted as two companies of interest due to their comparable trading discounts [1] - The analysis is led by Denislav Iliev, an experienced day trader with over 15 years in the field, who manages a team of 40 analysts [1] Group 2: Investment Strategy - The investment group Trade With Beta, led by Denislav Iliev, focuses on identifying mispriced investments in fixed-income and closed-end funds using straightforward financial logic [1] - The service includes frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [1]

Core Insights - The article analyzes Blackstone Secured Lending's (BXSL) recent performance and compares it with 11 business development company (BDC) peers, focusing on key financial metrics and investment portfolio characteristics [1][2][3]. Group 1: Financial Metrics Analysis - BXSL's net asset value (NAV) per share decreased from $27.33 at the end of Q2 2025 to $27.15 at the end of Q3 2025, reflecting a quarterly decrease of 0.66% [10]. - The economic return for BXSL in Q3 2025 was $0.59 per share or 2.16%, with trailing 12-month and 24-month economic returns of 10.85% and 25.51%, respectively [10][11]. - BXSL's adjusted net investment income (NII) was reported at $0.882 per share for Q3 2025, with a stock price to annualized NII ratio of 8.39x, slightly below the peer average of 9.87x [21][22]. Group 2: Investment Portfolio Composition - As of September 30, 2025, BXSL's investment portfolio consisted of 97% in senior secured first-lien loans and 2% in senior secured second-lien loans, indicating a conservative investment strategy [15][16]. - The fair market value (FMV) versus cost ratio for BXSL was 0.9912x, slightly below the mean of 1.0164x among peers, indicating a minor negative trend [17]. - BXSL had only 0.1% of its portfolio on non-accrual status, which is below the peer average of 2.9%, suggesting a healthier credit profile [18]. Group 3: Comparative Performance - BXSL's cumulative realized loss per share since its IPO was ($0.13), which is more favorable compared to the peer average loss of ($0.89) per share, indicating better long-term performance [19]. - The company had a low exposure of 0.75% to the oil and gas sector, which is below the peer average of 1.45%, reflecting a cautious approach to potential credit risks [20]. - BXSL's stock price as of November 28, 2025, was $27.59, trading at a premium of 1.81% to its estimated current NAV of $27.10, which is more attractive than the peer average premium of 3.65% [25].

Core Insights - The article analyzes Blackstone Secured Lending's (BXSL) recent performance and compares it with 11 business development company (BDC) peers, focusing on key financial metrics and investment portfolio characteristics [1][2][3]. Group 1: Financial Metrics Analysis - BXSL's net asset value (NAV) per share decreased from $27.33 at the end of Q2 2025 to $27.15 at the end of Q3 2025, reflecting a quarterly decrease of 0.66% [10]. - The economic return for BXSL in Q3 2025 was $0.59 per share, or 2.16%, with trailing 12-month and 24-month economic returns of 10.85% and 25.51%, respectively [10][11]. - BXSL's adjusted net investment income (NII) for Q3 2025 was $0.882 per share, with a stock price to annualized NII ratio of 8.39x, which is below the peer average of 9.87x [21][25]. Group 2: Investment Portfolio Composition - As of September 30, 2025, BXSL's investment portfolio consisted of 97% in senior secured first-lien loans and 2% in second-lien loans, indicating a conservative investment strategy [15][16]. - The fair market value (FMV) versus cost ratio for BXSL was 0.9912x, slightly below the mean of 1.0164x among peers, indicating a minor negative trend [17]. - BXSL had only 0.1% of its portfolio on non-accrual status, which is below the peer average of 2.9%, suggesting a healthier credit profile [18]. Group 3: Comparative Performance - BXSL's cumulative realized loss per share since its IPO was ($0.13), which is more favorable compared to the peer average loss of ($0.89) [19]. - The company has a low exposure to the oil and gas sector, with only 0.75% of its portfolio in this area, which is below the peer average of 1.45% [20]. - BXSL's performance metrics indicate it continues to outperform many of its BDC peers, particularly in terms of adjusted NII and non-accrual percentages [27].

Healthcare - ImmunityBio (IBRX) is considered a speculative buy for aggressive investors, with significant upside potential driven by its lead therapy and promising early data from the t-haNK program [4] - UnitedHealth (UNH) is trading below its intrinsic value with a projected 20% upside, focusing on aggressive repricing of plans, expanding value-based care, and implementing AI to improve margins and operational efficiency [4] Financials - SLR Investment (SLRC) offers an attractive ~11% dividend yield, trades below book value, and is noted for its conservative leverage and above-average cash holdings among BDC peers [6] - Brighthouse Financial (BHF) is undervalued at 0.33x adjusted book value per share, with strong fundamentals highlighted by record annuity sales, robust capital ratios, and aggressive buybacks, indicating potential for 30-50%+ upside [6] - Upstart (UPST) is seen as having overly prudent guidance, with growth not fully priced in, supported by its AI-driven underwriting and rising conversion rates [7]

Core 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]

Group 1 - The article discusses the psychological impact of promotional discounts on consumer behavior, using Best Buy's 20% off promotion for the latest iPhone as an example of how such offers can generate significant interest and rush among consumers [1] - Rida Morwa, a seasoned investment and commercial banker with over 35 years of experience, leads the Investing Group High Dividend Opportunities, focusing on high-yield investment strategies and sustainable income [1] - The service provided by Rida Morwa includes a model portfolio with buy/sell alerts, preferred and baby bond portfolios for conservative investors, and regular market updates, emphasizing community and education in investment [1] Group 2 - The article mentions that any recommendations made are closely monitored, with buy and sell alerts exclusive to members of the service [3] - It is noted that past performance does not guarantee future results, and no specific investment advice is provided for individual investors [4]

Core Insights - SLR Capital Partners is expanding its Specialty Finance platform by appointing Mac Fowle as President of Asset-Based Lending, responding to rising demand for flexible financing solutions [1][3] Company Overview - SLR Capital Partners, founded in 2006, operates as a diversified middle market private credit solutions platform, primarily investing in U.S. middle market companies through various forms of secured loans [5] - The firm manages public and private business development companies, private credit funds, and separately managed accounts, including SLR Investment Corp. [5] Leadership and Expertise - Mac Fowle brings over 20 years of experience in the Asset-Based Lending industry, previously serving as Global Head of ABL at J.P. Morgan Commercial Banking [2][3] - Fowle's role will focus on expanding SLR's ABL capabilities, complementing the existing leadership team of industry veterans [2][4] Strategic Goals - The appointment of Fowle is seen as a significant milestone in SLR's growth, aimed at enhancing offerings to borrowers and sponsors while ensuring attractive risk-adjusted returns for investors [4] - SLR's existing ABL franchise provides a strong foundation for future expansion in the asset-based lending market [4]