Company Overview - Monroe Capital is a diversified private credit solutions provider with $19.4 billion in AUM as of October 1, 2024[2] - The firm has invested $46 billion in capital since its founding in 2004[3] - Monroe Capital has a large team, including over 250 total employees and 110+ investment professionals across 10 offices[3] Portfolio Highlights - The total investments of Monroe Capital Corporation are $474.3 million[14] - Approximately 80% of the portfolio assets are in first lien loans[13, 14] - The portfolio consists of 94 unique issuers[14] - The average effective yield of the portfolio is 11%[14] - The portfolio mark is 93.9%[14] Financial Performance - The Net Asset Value per Share (NAVPS) is $9.18[14] - The NAV Yield is 10.9%[14] - The Annualized Dividend Yield is 12.3%[14]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2024 was $6,200,000 or $0.29 per share, a slight decrease from $6,600,000 or $0.31 per share in the previous quarter [4][17] - NAV as of 12/31/2024 was $191,800,000 or $8.85 per share, down from $198,900,000 or $9.18 per share as of 09/30/2024, representing a 3.6% decline [4][18] - The weighted average effective yield on the portfolio's debt and preferred equity was 10.2%, down from 11% in the previous quarter [18] Business Line Data and Key Metrics Changes - The investment portfolio totaled $457,000,000 at year-end, a decrease from $474,300,000 at the end of the previous quarter, consisting of debt and equity investments in 91 portfolio companies, down from 94 [12] - In 2024, the company invested $30,400,000 in seven new portfolio companies and $57,600,000 in existing portfolio companies [14] - Total investment income for Q4 2024 was $14,000,000, down from $15,700,000 in Q3 2024, primarily due to a decline in interest rates [20] Market Data and Key Metrics Changes - Middle market direct lending M&A volumes in Q4 2024 were the strongest since Q4 2021, leading to an 85% year-over-year increase in sponsored direct lending volumes for 2024 [12][13] - Private credit middle market deal issuance was 2.9 times greater than syndicated deal lending in 2024, with delayed draw term loan fundings 2.4 times greater than in 2023 [13] Company Strategy and Development Direction - The company plans to focus on growing the portfolio and addressing legacy portfolio issues, indicating a shift towards more offensive strategies in 2025 [30][31] - The strategic partnership with the Wendell Group is expected to close in Q1 2025, with Wendell committing $1,000,000,000 of new seed capital to support investment strategies [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the favorable market outlook and the potential for a sustainable deal environment throughout 2025, driven by lower interest rates and increased M&A activity [8][9] - The company is committed to maintaining a predominantly first lien portfolio and leveraging its credit experience and rigorous underwriting standards [26] Other Important Information - The company reported a net loss on the portfolio for Q4 2024 of $7,700,000, primarily due to unrealized mark-to-market losses [23] - Total expenses for Q4 2024 were $8,000,000, down from $9,200,000 in Q3 2024, mainly due to lower interest and debt financing expenses [22] Q&A Session Summary Question: Strategy to grow earnings and portfolio given recent contractions - Management indicated plans to clean up legacy portfolio issues and is hopeful for growth in 2025 [30][31] Question: Resolution of long-standing non-accrual investments - Management is actively working on non-accrual investments and hopes to make progress in 2025 [33][34] Question: Consideration of swapping bank credit facilities for other debt structures - Management acknowledged the consideration but emphasized strong interest from financial institutions in providing capital for diversified middle market portfolios [36][40]