Financial Data and Key Metrics Changes - Adjusted net investment income for Q3 2024 was 6.6millionor0.31 per share, a nominal decrease from 6.7millionlastquarter,remainingstableonapersharebasis[8][19]−NAVasofSeptember30,2024,was198.9 million or 9.18pershare,slightlydownfrom199.3 million or 9.20pershareasofJune30,2024,primarilyduetonetunrealizedlosses[8][21]−Debt−to−equityleveragedecreasedfrom1.54timesatJune30,2024,to1.50timesatSeptember30,2024,drivenbypayoffsandinvestmentsales[9]BusinessLineDataandKeyMetricsChanges−Investmentportfoliototaled474.3 million, an 11.5milliondecreasefrom485.8 million at the end of the last quarter, consisting of debt and equity investments in 94 portfolio companies [14] - Incremental investments in existing portfolio companies accounted for nearly 60% of investment activity during the quarter [16] - Received three full payoffs aggregating to 11.4millionandincurredpartialpaydownstotaling26 million [17] Market Data and Key Metrics Changes - Middle market loan volumes rose, with M&A volumes up 43% year-over-year and LBO lending volume up 52% compared to the last quarter [15] - Delayed draw term loan funded volumes increased by 62% compared to Q3 2023, indicating a more active deal environment [15] Company Strategy and Development Direction - The company announced a strategic partnership with the Wendel Group, which will purchase a majority ownership interest and commit 1billioninnewseedcapital[12]−Focusonselectivelyredeployingcapitalfrompayoffsintoaccretiveinvestmentopportunitiesandincumbentportfoliocompanies[28]−Thepartnershipisexpectedtoenhancethecompany′sinvestmentstrategiesanddiversifyitsofferings[12][36]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheabilitytonavigatemarketchallengesandmaximizeoutcomesforshareholders[24]−Thecompanyanticipatesamoreactivedealenvironmentinthemiddlemarketthrough2024andinto2025,supportedbyprivateequitymanagersbenefitingfromlowerinterestrates[16][30]−ThestrategicpartnershipwithWendelisexpectedtoprovidesignificantnewinvestmentopportunitiesandenhancethecompany′soverallplatform[30]OtherImportantInformation−Theweightedaverageeffectiveyieldontheportfolio′sdebtandpreferredequityinvestmentswas119.2 million, a slight increase from 9.1millioninthepreviousquarter,butdecreasedby200,000 when excluding incentive fee limitations [25] Q&A Session Summary Question: Focus on expense control - A participant suggested that the company should focus on containing operating expenses to positively impact share price [32] Question: Wendel partnership and BDC impact - Inquiry about whether new strategies from the Wendel partnership would diversify the BDC's lending strategies [35] - Management confirmed that MRCC would benefit from additional strategies that are synergistic and would create diversification [36] Question: Manager support for MRCC - A question regarding the expectation of continued support from the manager in terms of fee waivers if necessary [37] - Management affirmed a history of being investor-friendly and supportive of MRCC [38]
