Financial Data and Key Metrics Changes - SLR Investment Corporation reported net investment income of $0.40 per share and net income of $0.44 per share for Q2 2025, with NAV per share increasing slightly to $18.19 from $18.16 in Q1 2025 [5][12] - The annualized net investment income returned 10% equity in the quarter, although net investment income per share was $0.01 below the base dividend of $0.41 per share [6] - Gross investment income totaled $53.9 million, up from $53.2 million in the previous quarter, while net expenses increased to $32.3 million from $31.1 million [16] Business Line Data and Key Metrics Changes - The asset-based lending (ABL) portfolio grew to over $1.3 billion, representing approximately 42% of the comprehensive portfolio, with a record $373 million in new ABL originations during the quarter [20][21] - The equipment finance portfolio totaled just over $1 billion, accounting for nearly 33% of the comprehensive portfolio, with a stable credit profile and a weighted average asset level yield of 11.6% [25] - The life sciences portfolio amounted to approximately $215 million, contributing 12% of gross investment income for the quarter, with 75% of the portfolio invested in companies with over twelve months of cash runway [26][27] Market Data and Key Metrics Changes - Approximately 96% of Q2 originations were in specialty finance, reflecting favorable market conditions that provide greater risk-adjusted returns [9] - The company has over $650 million available capital to deploy, positioning it to take advantage of stable or softening economic conditions [11] Company Strategy and Development Direction - The company continues to shift its portfolio towards specialty finance strategies due to their attractive risk-adjusted returns and downside protection [34] - SLR has expanded its origination funnel and broadened sourcing relationships, contributing to increased deal flow and recognition in the market [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the diversified and predominantly asset-backed portfolio's ability to deliver attractive results across economic cycles, despite looming economic uncertainties [34] - The company remains opportunistic and prudent in capital deployment, with a focus on maintaining a diversified investment portfolio [35] Other Important Information - The company declared a Q3 2025 quarterly base distribution of $0.41 per share, payable on September 26, 2025 [17] - SLR's investment grade rating by Fitch, Moody's, and DBRS supports its strong credit quality metrics [13] Q&A Session Summary Question: Impact of new originations on Q2 results - New originations had limited impact on Q2 results due to timing, with average yield on new investments at 11.8% compared to exits at just over 10% [40] Question: Pipeline entering Q3 - The pipeline is geared towards new opportunities, expected to align with traditional activity levels despite seasonal slowdowns [41] Question: Competition in ABL market - No significant new entrants are observed in the ABL market due to the complexity and infrastructure required [42][43] Question: Concerns in sectors or economy - No significant concerns noted, with focus on non-cyclical sectors providing protection against economic headwinds [45] Question: SSLP income and future distributions - The SSLP income is expected to normalize as the portfolio rebuilds, with distributions anticipated to grow accordingly [60][61] Question: Equipment finance portfolio valuation - The decline in fair value is attributed to a strategic pullback on risk, with plans to rebuild the portfolio in the coming quarters [67]