Main Street Capital Corp (MAIN) 2023 Q3 法說會逐字稿

Greetings, and welcome to the Main Street Capital Corporation's Third Quarter Earnings Conference Call. (Operator Instructions). As a reminder, this conference is being recorded.

您好，歡迎參加主街資本公司第三季財報電話會議。 （操作員說明）。提醒一下，本次會議正在錄製中。

It is now my pleasure to introduce your host, Zach Vaughan with Dennard Lascar, Investor Relations. Please go ahead.

現在我很高興向大家介紹主持人 Zach Vaughan 和投資者關係部丹納德拉斯卡 (Dennard Lascar)。請繼續。

Thank you, operator, and good morning, everyone. Thank you for joining us for Main Street Capital Corporation's Third Quarter 2022 (sic) [2023] Earnings Conference Call.

謝謝接線員，大家早安。感謝您參加 Main Street Capital Corporation 2022 年第三季（原文如此）[2023] 收益電話會議。

Joining me today with prepared comments are Dwayne Hyzak, Chief Executive Officer; David Magdol, President and Chief Investment Officer; Jesse Morris, Chief Financial Officer and Chief Operating Officer. Also participating for the Q&A portion of the call is Nick Meserve, Managing Director and Head of Main Street's Private Credit Investment Group.

今天與我一起發表準備好的評論的是執行長 Dwayne Hyzak； David Magdol，總裁兼首席投資長；傑西莫里斯，財務長兼營運長。 Main Street 私人信貸投資集團董事總經理兼負責人 Nick Meserve 也參加了電話會議的問答部分。

Main Street issued a press release yesterday afternoon that details the company's third quarter financial and operating results. This document is available on the Investor Relations section of the company's website at mainstcapital.com. A replay of today's call will be available beginning an hour after the completion of the call and will remain available until November 10. Information on how to access the replay was included in yesterday's release.

Main Street 昨天下午發布了一份新聞稿，詳細介紹了該公司第三季的財務和營運業績。本文件可在公司網站 mainstcapital.com 的投資者關係部分取得。今天的電話會議的重播將在電話會議結束一小時後開始提供，並將持續到 11 月 10 日。有關如何存取重播的資訊已包含在昨天的新聞稿中。

We also advise you that this conference call is being broadcast live through the Internet and can be accessed on the company's home page. Please note that information reported on this call speaks only as of today, November 3, 2023, and therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.

我們也通知您，本次電話會議正在透過網路進行現場直播，您可以在公司主頁上觀看。請注意，本次電話會議報告的資訊僅截至今天（2023 年 11 月 3 日），因此，請注意，時間敏感的資訊在任何重播收聽或文字記錄閱讀時可能不再準確。

Today's call will contain forward-looking statements. Any of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may or similar expressions. These statements are based on management's estimates, assumptions and projections as of the date of this call, and there are no guarantees of future performance. Actual results may differ materially from the results expressed or implied in these statements as a result of risks, uncertainties and other factors, including, but not limited to, the factors set forth in the company's filings with the Securities and Exchange Commission, which can be found on the company's website or at sec.gov.

今天的電話會議將包含前瞻性陳述。任何這些前瞻性陳述都可以透過使用諸如預期、相信、期望、打算、將、應該、可能或類似表達等詞語來識別。這些陳述是基於管理層截至本次電話會議之日的估計、假設和預測，對未來績效不提供任何保證。由於風險、不確定性和其他因素，包括但不限於公司向美國證券交易委員會提交的文件中列出的因素，實際結果可能與這些聲明中明示或暗示的結果有重大差異。可在公司網站或sec.gov 上找到。

Main Street assumes no obligation to update any of these statements unless required by law. During today's call, management will discuss non-GAAP financial measures, including distributable net investment income, or DNII. DNII is net investment income, or NII, as determined in accordance with U.S. Generally Accepted Accounting Principles, or GAAP excluding the impact of noncash compensation expenses. Management believes that presenting DNII and a related per share amount are useful and appropriate supplemental disclosures for analyzing Main Street's financial performance since noncash compensation expenses do not result in a net cash impact to Main Street upon settlement. Please refer to yesterday's press release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures.

除非法律要求，否則 Main Street 不承擔更新任何這些聲明的義務。在今天的電話會議上，管理階層將討論非公認會計準則財務指標，包括可分配淨投資收益（DNII）。 DNII 是淨投資收入 (NII)，根據美國公認會計原則 (GAAP) 確定，不包括非現金補償費用的影響。管理層認為，提供 DNII 和相關每股金額對於分析 Main Street 的財務業績是有用且適當的補充披露，因為非現金補償費用不會在結算時對 Main Street 產生淨現金影響。請參閱昨天的新聞稿，以了解這些非 GAAP 指標與最直接可比較的 GAAP 財務指標的調整表。

Two additional key performance indicators that management will be discussing on this call, are net asset value or NAV and return on equity, or ROE. NAV is defined as total assets minus total liabilities and is also reported on a per share basis. Main Street defines ROE as the net increase in net assets resulting from operations divided by the average quarterly total net assets. Please note that certain information discussed on this call, including information related to portfolio companies, was derived from third-party sources and has not been independently verified.

管理階層將在本次電話會議上討論的另外兩個關鍵績效指標是淨資產價值（NAV）和股本回報率（ROE）。資產淨值定義為總資產減去總負債，也以每股為基礎報告。 Main Street 將 ROE 定義為營運產生的淨資產淨成長除以平均季度總淨資產。請注意，本次電話會議中討論的某些資訊（包括與投資組合公司相關的資訊）來自第三方來源，未經獨立核實。

Now I'll turn the call over to Main Street's CEO, Dwayne Hyzak.

現在我將把電話轉給 Main Street 的執行長 Dwayne Hyzak。

Thanks, Zach. Good morning, everyone, and thank you for joining us today. We appreciate your participation on this morning's call. We hope that everyone is doing well.

謝謝，扎克。大家早安，感謝您今天加入我們。我們感謝您參加今天早上的電話會議。我們希望每個人都做得很好。

On today's call, I'll provide my usual updates regarding our performance in the quarter, while also providing updates on our asset management activities, our recent dividend declarations, our expectations for dividends going forward, our current investment pipeline and several other noteworthy updates. Following my comments, David and Jesse will provide additional comments regarding our investment strategy, investment portfolio, financial results, capital structure and leverage and our expectations for the fourth quarter after which, we'll be happy to take your questions.

在今天的電話會議上，我將提供有關本季度業績的常規更新，同時還將提供有關我們的資產管理活動、我們最近的股息聲明、我們對未來股息的預期、我們當前的投資管道和其他一些值得注意的更新的最新資訊。在我發表評論後，大衛和傑西將就我們的投資策略、投資組合、財務業績、資本結構和槓桿以及我們對第四季度的預期提供更多評論，之後我們將很樂意回答您的問題。

We are pleased with our performance in the third quarter, which was highlighted by an annualized return on equity of 17.9% for the quarter, which increased our return on equity for the trailing 12-month period to 18.2%. Our performance included continued strength in the underlying performance of the majority of our lower middle market and private loan portfolio companies and significant contributions from our asset management business.

我們對第三季的業績感到滿意，該季度的年化股本回報率為 17.9%，這使得我們過去 12 個月的股本回報率增至 18.2%。我們的業績包括大多數中低端市場和私人貸款投資組合公司的基本業績持續強勁，以及我們的資產管理業務的重大貢獻。

We believe these results demonstrate the continued and sustainable strength of our overall platform, the strong current investment income generating capabilities of our existing investment portfolio, and the unique benefits provided by the equity investments in our lower middle market investment portfolio and by our asset management business, both of which also contributed meaningful fair value appreciation in the quarter.

我們相信這些結果證明了我們整體平台的持續和可持續實力，我們現有投資組合強大的當前投資收益產生能力，以及我們中低端市場投資組合中的股權投資和我們的資產管理業務所提供的獨特效益，兩者都為本季的公允價值增值做出了有意義的貢獻。

We are also pleased that our investment pipeline and our lower middle market investment strategy has improved, and we expect higher levels of new lower middle market investment activity over the next few months. This improved investment pipeline together with our conservative liquidity position and capital structure, which we significantly enhanced during the quarter provide us a continued favorable outlook for the fourth quarter.

我們也很高興我們的投資管道和中低階市場投資策略有所改善，我們預計未來幾個月新的中低階市場投資活動將達到更高水準。投資管道的改善以及我們在本季度顯著增強的保守的流動性狀況和資本結構，為我們第四季度提供了持續良好的前景。

Our DNII in the third quarter exceeded the monthly dividends paid to our shareholders by 51% and the total dividends paid to our shareholders by 8%, allowing us to continue to deliver the benefits of our strong results to our shareholders. These positive results and our favorable outlook for the fourth quarter resulted in our recommendations to our Board of Directors for our most recent dividend announcements, which I'll discuss in detail later.

第三季的 DNII 超過支付給股東的每月股息 51%，超過支付給股東的股息總額 8%，使我們能夠繼續向股東提供強勁業績帶來的好處。這些正面的業績和我們對第四季的良好前景導致我們向董事會推薦了最近的股息公告，我將在稍後詳細討論。

Our NAV per share increased in the quarter due to several factors, including the impact of the fair value increases in our investment portfolio, the accretive impact of our equity issuances in the quarter and our retention of the excess NII per share above our total dividends paid in the quarter. The continued favorable performance of the majority of our lower middle market portfolio companies resulted in another quarter of net fair value appreciation and strong dividend income contributions from our equity investments in this portfolio.

我們的每股資產淨值在本季度有所增長，原因有很多，包括我們的投資組合公允價值增加的影響、本季度股票發行的增值影響以及我們保留高於支付股息總額的每股淨資產淨值在本季度。我們大多數中低端市場投資組合公司的持續良好表現導致淨公允價值又成長了一個季度，並且我們在該投資組合中的股權投資帶來了強勁的股息收入貢獻。

As we look forward to the next few quarters, we remain excited about our expectations for our lower middle market portfolio companies and we expect to see additional fair value appreciation in this portfolio in the future. We are also excited to have several portfolio companies in the advanced stages of strategic acquisitions, which, if successful, would provide the opportunity for additional fair value appreciation in addition to providing us highly attractive incremental investments in these high-performing companies.

當我們展望未來幾季時，我們對中低端市場投資組合公司的預期仍然感到興奮，並且我們預計未來該投資組合的公允價值將進一步升值。我們也很高興有幾家投資組合公司處於策略性收購的高階階段，如果成功，除了為我們提供對這些高績效公司極具吸引力的增量投資之外，還將提供額外的公允價值升值機會。

We've also seen continued progress with the increased potential exit activities for several of our lower middle market portfolio companies that we noted last quarter, and we believe that these activities could lead to favorable realizations over the next few quarters.

我們也看到上個季度我們注意到的幾家中低端市場投資組合公司潛在退出活動的增加不斷取得進展，我們相信這些活動可能會在未來幾季帶來有利的實現。

Our lower middle market investment activity in the third quarter was well below our expectations and goals and was limited to total investments of $20 million in existing portfolio companies. These investments, after repayments we received on several debt investments and return of invested equity capital, resulted in a net decrease in the cost basis of our lower middle market investments of $5 million.

我們第三季的中低階市場投資活動遠低於我們的預期和目標，並且僅限於對現有投資組合公司的總投資 2,000 萬美元。在我們收到多項債務投資的償還和投資股權資本的回報後，這些投資使我們中低端市場投資的成本基礎淨減少了 500 萬美元。

As I previously noted, we expect to have investment activity in our lower middle market strategy over the next few months that is more in line with our normal activities and expectations. We were pleased with our private loan investment activities in the quarter which included total investments of $135 million and investments in 2 new portfolio companies.

正如我之前指出的，我們預計未來幾個月我們的中低端市場策略的投資活動將更符合我們的正常活動和預期。我們對本季的私人貸款投資活動感到滿意，其中包括 1.35 億美元的總投資以及對 2 家新投資組合公司的投資。

After debt repayments, sales of certain investments and a realized loss on our private loan investment during the quarter, our investment activity resulted in a net increase in the cost basis of our private loan investments of $54 million. We've also continued to produce attractive results in our asset management business.

在本季償還債務、出售某些投資以及實現私人貸款投資虧損後，我們的投資活動導致私人貸款投資的成本基礎淨增加 5,400 萬美元。我們的資產管理業務也持續取得令人矚目的業績。

The funds we advised through our External Investment Manager continued to experience favorable performance in the third quarter, resulting in significant incentive fee income for our asset management business for the fourth consecutive quarter, and a significant contribution to our net investment income. We remain excited about our plans for these external funds that we manage as we execute our investment strategies and other strategic initiatives, and we are optimistic about the future performance of the funds and the attractive returns we are providing for the investors of each fund.

我們透過外部投資經理顧問的基金在第三季度繼續表現良好，為我們的資產管理業務連續第四個季度帶來可觀的激勵費收入，並對我們的淨投資收入做出了重大貢獻。我們對在執行投資策略和其他策略舉措時管理的這些外部基金的計劃仍然感到興奮，我們對這些基金的未來表現以及我們為每隻基金的投資者提供的有吸引力的回報感到樂觀。

We also remain optimistic about our strategy for growing our asset management business within our internally managed structure and increasing the contributions from this unique benefit to our Main Street stakeholders.

我們也對在內部管理結構內發展資產管理業務並增加這一獨特利益對我們的主要利害關係人的貢獻的策略保持樂觀。

As part of this growth strategy, we're happy to update that we've made significant progress on our second private loan fund and had our initial closing of equity commitments in September. We look forward to the continued growth of this new fund over the next few quarters. Based upon our results for the third quarter, combined with our favorable outlook in each of our primary investment strategies and for our asset management business, earlier this week, our Board declared a supplemental dividend of $0.275 per share payable in December, representing our ninth consecutive quarterly supplemental dividend.

作為這項成長策略的一部分，我們很高興地宣布，我們在第二隻私人貸款基金方面取得了重大進展，並於 9 月首次完成了股權承諾。我們期待這檔新基金在未來幾季的持續成長。根據我們第三季的業績，結合我們對每項主要投資策略和資產管理業務的良好前景，本週早些時候，我們的董事會宣布12 月份支付每股0.275 美元的補充股息，這是我們連續第九次派發股息季度補充股息。

Our Board also declared another increase to our regular monthly dividends for the first quarter of 2024 to $0.24 per share payable in each of January, February and March, representing a 6.7% increase from the first quarter of 2023 and representing our fifth increase to our monthly dividends in the last 6 quarters. The supplemental dividend for December is a result of our strong performance in the third quarter, which resulted in DNII per share which exceeded our regular monthly dividends paid during the quarter by $0.35 or 51%.

我們的董事會也宣布將2024 年第一季的定期月度股息再次上調至1 月、2 月和3 月支付的每股0.24 美元，較2023 年第一季成長6.7%，也是我們每月第五次上調股息。過去 6 個季度的股息。 12 月的補充股息是我們第三季強勁業績的結果，這導致每股 DNII 比我們在該季度支付的定期月度股息高出 0.35 美元，即 51%。

The December supplemental dividend will result in total supplemental dividends paid during the trailing 12-month period of $0.95 per share representing an additional 35% paid to our shareholders in excess of our regular monthly dividends and resulting in a current yield we are providing to our shareholders of approximately 10%.

12 月的補充股息將使過去12 個月期間支付的補充股息總額達到每股0.95 美元，相當於向我們的股東支付超出我們每月定期股息的額外35%，從而形成我們向股東提供的當前收益率約10%。

After the multiple recent increases to our monthly dividend and the significant supplemental dividend, our DNII per share for the third quarter still exceeded our total dividends paid by $0.075 per share or 8%. We are pleased to be able to deliver the significant additional value to our shareholders while still conservatively maintaining a portion of our excess earnings to support our capital structure and investment portfolio against the risk that exists from the current economic uncertainties and to further enhance the growth of our NAV per share.

在最近多次增加每月股息和大幅補充股息之後，我們第三季的每股 DNII 仍超過我們支付的股息總額，即每股 0.075 美元，即 8%。我們很高興能夠為股東帶來顯著的額外價值，同時仍保守地保留部分超額收益，以支持我們的資本結構和投資組合，應對當前經濟不確定性所存在的風險，並進一步促進增長我們的每股資產淨值。

We currently expect to recommend that our Board continue to declare future supplemental dividends to the extent DNII significantly exceeds the regular monthly dividends paid in future quarters and we maintain a stable to positive NAV. Based upon our expectations for continued favorable performance in the fourth quarter, we currently anticipate proposing an additional supplemental dividend payable in the first quarter of 2024.

目前，我們預計建議董事會繼續宣布未來的補充股息，前提是 DNII 顯著超過未來季度支付的每月定期股息，並且我們保持穩定至正的資產淨值。基於我們對第四季持續良好業績的預期，我們目前預計提議在 2024 年第一季額外支付補充股利。

Now turning to our current investment pipeline. As of today, I'd characterize our lower middle market investment pipeline as average. Despite the current broad economic uncertainty, we expect to continue to be active in our lower middle market strategy. Consistent with our experience in prior periods of broad economic uncertainty, we believe the unique and flexible financing solutions we can provide to lower middle market companies and their owners and management teams and our differentiated long-term to permanent holding periods should be an even more attractive solution in the current environment and should result in very attractive investment opportunities.

現在轉向我們目前的投資管道。截至今天，我將我們的中低端市場投資管道描述為平均水平。儘管當前經濟存在廣泛的不確定性，但我們預計將繼續積極實施中低端市場策略。與我們在之前廣泛的經濟不確定性時期的經驗相一致，我們相信，我們可以為中低端市場公司及其所有者和管理團隊提供的獨特而靈活的融資解決方案，以及我們差異化的長期到永久持有期應該更具吸引力當前環境下的解決方案，應該會帶來非常有吸引力的投資機會。

We are excited about these new investment opportunities, and we expect our current pipeline will be helpful as we work to maintain our positive momentum from the recent quarters in the future. We also continue to be very pleased with the performance of our private credit team and the significant growth they have provided for our private loan portfolio and our asset management business. And as of today, I would also characterize our private loan investment pipeline as average.

我們對這些新的投資機會感到興奮，我們預計當前的管道將有助於我們在未來努力保持最近幾季的積極勢頭。我們也對私人信貸團隊的表現以及他們為我們的私人貸款組合和資產管理業務帶來的顯著增長感到非常滿意。截至今天，我還將我們的私人貸款投資管道描述為平均水平。

With that, I will turn the call over to David.

這樣，我就把電話轉給大衛。

Thanks, Dwayne, and good morning, everyone. As Dwayne highlighted in his remarks, we believe our strong third quarter financial results continue to demonstrate the strength of Main Street's platform, our differentiated investment approach and our unique operating model. We are pleased to report that the overall operating performance for most of our portfolio companies continue to be positive, which contributed to our attractive third quarter financial results.

謝謝，德韋恩，大家早安。正如 Dwayne 在演講中所強調的那樣，我們相信我們強勁的第三季財務業績繼續證明了 Main Street 平台的實力、我們差異化的投資方法和獨特的營運模式。我們很高興地報告，我們大多數投資組合公司的整體經營業績繼續保持樂觀，這為我們第三季的財務表現帶來了吸引力。

As we have discussed in the past, the largest portion of our investment portfolio and the primary driver of our long-term success has been and continues to be our focus on the underserved lower middle market and specifically, our strategy of investing in both the debt and equity in lower middle market companies. Our view on the attractiveness of investing in the lower middle market remains unchanged and we expect this to continue to be our primary area of focus in the future.

正如我們過去所討論的，我們投資組合的最大部分和我們長期成功的主要驅動力一直是並將繼續是我們對服務不足的中低端市場的關注，特別是我們投資於債務的戰略以及中低端市場公司的股權。我們對投資中低端市場吸引力的看法保持不變，我們預計這將繼續成為我們未來的主要關注領域。

Each quarter, we try to highlight key aspects of our investment strategy and differentiated approach. For today's call, we thought it would be useful to spend some time on the support we provide to our lower middle market portfolio companies. In addition to our normal ongoing activities to support our lower middle market portfolio companies, we specifically want to highlight an annual event we host for the leaders of our lower middle market portfolio companies, our seventh Annual Main Street President's Meeting. For those of you who are not familiar with our President's Meeting, it is an annual event Main Street hosts for which we invite our lower middle market portfolio company leaders to Austin for a 2-day event to network and relationship build, share best practices, learn from each other and benefit from being part of Main Street's portfolio.

每個季度，我們都會努力強調我們投資策略和差異化方法的關鍵方面。在今天的電話會議中，我們認為花一些時間為中低端市場投資組合公司提供支援會很有用。除了支持中低端市場投資組合公司的正常持續活動外，我們特別想強調我們為中低端市場投資組合公司的領導人舉辦的年度活動，即我們的第七屆年度大街總裁會議。對於那些不熟悉我們總裁會議的人來說，這是由大街主辦的年度活動，我們邀請我們的中低端市場投資組合公司領導人到奧斯汀參加為期2 天的活動，以建立網絡和關係，分享最佳實踐，互相學習，並從成為 Main Street 產品組合的一部分中受益。

Based on post-event feedback we receive from our lower portfolio company executives, the event is highly valued by the participants, and the event improves each year as we refine our agenda based on the feedback we received. Topics covered in the most recent meeting included sales generation techniques, executive coaching and culture building, cybersecurity best practices, operational optimization and industry-oriented breakout groups.

根據我們從投資組合公司下級高階主管收到的活動後回饋，參與者高度重視活動，並且隨著我們根據收到的回饋完善議程，活動每年都在改進。最近一次會議涵蓋的主題包括銷售生成技術、高階主管培訓和文化建設、網路安全最佳實踐、營運優化和麵向產業的分組討論。

When Main Street went public 16 years ago, we could not have imagined we would be able to bring such a large and high-caliber group of leaders and build this type of collaborative community event, which brings robust benefits to our portfolio companies. As a result of this annual event, our portfolio companies have done business together, referred business to each other, utilize each other's operational resources and made friendships that are invaluable.

16年前，當Main Street上市時，我們無法想像我們能夠擁有如此龐大、高素質的領導團隊，並建立這種類型的協作社區活動，這為我們的投資組合公司帶來了巨大的效益。透過這次年度活動，我們的投資組合公司共同開展業務、互相推薦業務、利用彼此的營運資源並建立了寶貴的友誼。

To provide more context, one panel we received very positive feedback on this year was focused on best practices for optimizing your operations. Panel was comprised of a peer group of our lower middle market portfolio company leaders who led a discussion on lean manufacturing techniques, the use of KPIs throughout their operations, effective incentive compensation programs and top-grading talent. Another valuable topic we covered was best practices for defining effective B2B sales strategies for an organization.

為了提供更多背景信息，我們今年收到了非常積極的反饋，其中一個小組重點討論了優化運營的最佳實踐。小組由我們的中低端市場投資組合公司領導者組成的同行小組組成，他們主持了關於精益製造技術、在整個運營過程中 KPI 的使用、有效的激勵薪酬計劃和頂級人才的討論。我們討論的另一個有價值的主題是為組織定義有效的 B2B 銷售策略的最佳實踐。

For this session, we had an industry expert present on how to bring clarity and purpose to a selling organization. Presentation explored how to gain better insights in the customer needs, creating a shared vision on a company selling proposition and how to proactively guide a prospective customer through the buying process. The engagement from the audience for both presentations was robust and led to several post-event discussions, including the sharing of key third-party resources and operating best practices that we believe will ultimately improve the financial results and operating performance for our portfolio companies.

在本次會議上，我們邀請了一位行業專家介紹如何為銷售組織帶來清晰度和目的。示範探討如何更了解客戶需求，就公司銷售主張建立共同願景，以及如何主動引導潛在客戶完成購買流程。兩場演講的觀眾參與度都很高，並引發了多次會後討論，包括分享關鍵的第三方資源和營運最佳實踐，我們相信這些最終將改善我們投資組合公司的財務表現和營運績效。

Given our focus on the lower middle market strategy and the unique benefits it can provide we are excited to bring together the key leadership from our lower middle market portfolio companies in this highly effective Annual President's Meeting and event, in addition to certain other Main Street programs where we can provide value. And selfishly for our benefit at Main Street, we always leave this event very excited about the quality of the individuals leading our lower middle market portfolio companies and the future value creation we can expect they and their teams can generate for a mutual benefit in the future. We left this year's event even more excited than ever.

鑑於我們對中低端市場策略的關注及其可以提供的獨特優勢，除了某些其他主流計劃外，我們很高興能夠在這次高效的年度總裁會議和活動中匯集低端市場投資組合公司的主要領導階層我們可以提供價值的地方。為了我們在大街上的自私利益，我們總是在結束這次活動時對領導我們中低端市場投資組合公司的個人的素質以及我們可以期望他們和他們的團隊在未來互惠互利所創造的未來價值感到非常興奮。我們離開今年的活動比以往任何時候都更加興奮。

Now turning to the overall composition and results from our investment portfolio. As of September 30, we continue to maintain a highly diversified portfolio with investments in 195 companies spanning across more than 50 industries, across our lower middle market, private loan and middle market portfolios. Our largest portfolio company represented 3.2% of total investment portfolio fair value at quarter end and 3.7% of our total investment income for the last 12 months. Majority of our portfolio investments continue to represent less than 1% of our income and our assets.

現在轉向我們投資組合的整體組成和結果。截至 9 月 30 日，我們繼續保持高度多元化的投資組合，投資於 50 多個行業的 195 家公司，涵蓋中低端市場、私人貸款和中端市場投資組合。我們最大的投資組合公司佔季末總投資組合公允價值的 3.2%，佔過去 12 個月總投資收入的 3.7%。我們的大部分投資組合仍然占我們收入和資產的不到 1%。

Despite the increases in benchmark interest rates, the vast majority of our lower middle market, private loan and middle market portfolio companies have interest rate and debt service coverage ratios calculated on a pro forma basis with the current interest rates as of October 1, greater than 1x, and we continue to be confident in their ability to service their debt obligations today and in the future.

儘管基準利率有所上升，但我們絕大多數中低端市場、私人貸款和中端市場投資組合公司的利率和償債覆蓋率均按預計計算，截至 10 月 1 日的當前利率高於1x，我們仍然對他們今天和未來償還債務的能力充滿信心。

In addition, and as a reminder, our lower middle market portfolio companies are predominantly fixed rate debt investments and therefore, are not impacted by fluctuations in market index rates. Our investment activity in the third quarter included total investments in our lower middle market portfolio companies of $20 million, which after aggregate repayments on debt investments and return of invested equity capital, resulted in a net decrease in our lower middle market portfolio of $5 million.

此外，提醒一下，我們的中低端市場投資組合公司主要是固定利率債務投資，因此不受市場指數利率波動的影響。我們第三季的投資活動包括對中低端市場投資組合公司的總投資為 2,000 萬美元，在償還債務投資和投資股本資本回報後，導致我們中低端市場投資組合淨減少 500 萬美元。

Base of lower middle market originations this quarter was slower than we expect to achieve in any given quarterly period of time. That said, our origination volume can be lumpy in the lower middle market. And to reiterate what Dwayne mentioned in his opening remarks, as of today, we would characterize our current lower middle market pipeline as average.

本季中低端市場的起始基數比我們預期在任何特定季度期間實現的要慢。也就是說，我們在中低階市場的首發量可能不穩定。重申德韋恩在開場白中提到的內容，截至今天，我們將當前的中低端市場管道描述為平均水平。

We look forward to making press announcements in the fourth quarter about some exciting new investments that we are currently in the process of completing. Driven by the capabilities and relationships of our private credit team, we also completed $135 million in total private loan investments, which after aggregate repayments of debt investments and sale of several private loan portfolio investments, resulted in a net increase in our private loan portfolio of $54 million.

我們期待在第四季度就我們目前正在完成的一些令人興奮的新投資發布新聞公告。在我們私人信貸團隊的能力和關係的推動下，我們還完成了 1.35 億美元的私人貸款投資總額，在償還債務投資和出售多項私人貸款組合投資後，我們的私人貸款投資組合淨增加了5400萬美元。

Finally, during the quarter, we had a net decrease in our middle market portfolio of $11 million as we continue to deemphasize this strategy. At the end of the third quarter, our lower middle market portfolio included investments in 79 companies, representing approximately $2.2 billion of fair value, which is 28% above our cost basis. We had investments in 89 companies in our private loan portfolio, representing $1.5 billion of fair value.

最後，在本季度，隨著我們繼續淡化這一策略，我們的中間市場投資組合淨減少了 1,100 萬美元。截至第三季末，我們的中低階市場投資組合包括對 79 家公司的投資，公允價值約為 22 億美元，比我們的成本基礎高出 28%。我們的私人貸款組合投資了 89 家公司，公允價值達 15 億美元。

In our middle market portfolio, we had investments in 27 companies, representing $291 million of fair value. The total investment portfolio at fair value at quarter end was 113% of the related cost basis. Additional details on our investment portfolio at quarter end are included in the press release that we issued yesterday.

在我們的中間市場投資組合中，我們投資了 27 家公司，公允價值為 2.91 億美元。季末以公允價值計算的投資組合總額為相關成本基礎的113%。有關我們季度末投資組合的更多詳細信息，請參閱我們昨天發布的新聞稿。

In summary, Main Street's investment portfolio continues to perform at a high level and deliver on our long-term results and goals.

總而言之，Main Street 的投資組合繼續保持高水準表現，並實現了我們的長期業績和目標。

With that, I will turn the call over to Jesse to cover our financial results, capital structure and liquidity position.

接下來，我將把電話轉給傑西，介紹我們的財務表現、資本結構和流動性狀況。

Thank you, David. As Dwayne and David mentioned, we are pleased with our operating results for the third quarter. Our total investment income for the third quarter was $123.2 million representing an increase of $24.9 million or 25% for the third quarter of 2022 and a decrease of $4.3 million or 3.4% from the second quarter of 2023.

謝謝你，大衛。正如 Dwayne 和 David 所提到的，我們對第三季的經營業績感到滿意。我們第三季的總投資收入為 1.232 億美元，較 2022 年第三季增加 2,490 萬美元，成長 25%，較 2023 年第二季減少 430 萬美元，成長 3.4%。

As we highlighted in our earnings release, total investment income for the third quarter did not include meaningful levels of dividends and accelerated prepayment or other activity that are considered less consistent or nonrecurring. In the aggregate, these items were $4.6 million below the average of the prior 4 quarters, comparable to the third quarter of last year and were $6.1 million lower than the second quarter of 2023.

正如我們在收益報告中所強調的那樣，第三季的總投資收入不包括有意義的股息水準和加速預付款或其他被認為不太一致或非經常性的活動。總的來說，這些項目比前 4 季的平均值低 460 萬美元，與去年第三季相當，比 2023 年第二季低 610 萬美元。

Interest income increased by $24.4 million or 32% over a year ago and $2.1 million or 2.2% over the second quarter. The increase in interest income over the second quarter was driven primarily by increases in benchmark index rates and net investment activity, partially offset by reduced accelerated OID income and the impact of an increase in nonaccrual investments. The increase in interest income over the prior year was driven primarily by increases in benchmark index rates and net investment activity.

利息收入較去年同期增加 2,440 萬美元，或 32%，較第二季增加 210 萬美元，成長 2.2%。第二季利息收入的成長主要是由基準指數利率和淨投資活動的成長所推動的，但部分被加速OID收入的減少和非應計投資增加的影響所抵銷。利息收入較前一年增加的主要原因是基準指數利率和淨投資活動的增加。

Dividend income increased by $1.8 million or 9.1% over a year ago. Dividend income decreased by $4.4 million or 17% from the second quarter, largely from a reduction in elevated nonrecurring dividend income. Fee income decreased $1.3 million from a year ago and $2 million from the second quarter, driven by reduced closing fees resulting from lower investment activity in our lower middle market portfolio in the quarter.

股息收入比一年前增加 180 萬美元，即 9.1%。股息收入較第二季減少 440 萬美元，即 17%，主要是由於非經常性股息收入增加所致。費用收入較去年同期減少 130 萬美元，較第二季減少 200 萬美元，原因是本季中低端市場投資組合投資活動減少，導致結算費用減少。

Our operating expenses increased by $5.1 million over a year ago, largely driven by increases in interest expense and compensation-related expenses, partially offset by an increase in expenses allocated to the External Investment Manager. Interest expense increased by $5.2 million over the prior year, driven primarily by increases in benchmark index rates and from the addition of new debt obligations at higher interest rates, partially offset by a decrease in average outstanding borrowings.

我們的營運費用比一年前增加了 510 萬美元，主要是由於利息費用和薪酬相關費用的增加，部分被分配給外部投資經理的費用增加所抵消。利息支出比前一年增加了 520 萬美元，主要是由於基準指數利率上升以及以更高利率增加新債務所致，但部分被平均未償借款減少所抵消。

Cash compensation expenses increased by $1 million over a year ago, driven by increased base compensation rates increased cash incentive compensation accruals as a result of our positive operating performance, the increased head count to support our growing investment portfolio and asset management activities. Noncash compensation expenses increased by $0.7 million from a year ago, including increases in share-based incentive compensation and deferred compensation expenses.

現金薪酬支出比一年前增加了100 萬美元，這是由於我們積極的經營業績、增加了員工人數以支持我們不斷增長的投資組合和資產管理活動，從而增加了基本薪酬率，增加了應計現金激勵薪酬。非現金薪酬支出較去年同期增加 70 萬美元，其中包括股權激勵薪酬和遞延薪酬支出的增加。

Ratio of our total operating expenses, excluding interest expense, as a percentage of our average total assets was 1.3% for the quarter on an annualized basis and 1.4% for the trailing 12-month period and continues to be amongst the lowest in our industry.

以年化計算，本季我們的總營運費用（不包括利息費用）佔平均總資產的比例為 1.3%，過去 12 個月為 1.4%，繼續處於行業最低水準。

Our External Investment Manager contributed $7.6 million to our net investment income during the quarter, an increase of $2.6 million from a year ago and a decrease of $1 million from the second quarter. External Investment Manager earned $2.6 million in incentive fees during the quarter as a result of the positive performance of the assets under management and ended the quarter with total assets under management of $1.5 billion.

我們的外部投資經理在本季為我們的淨投資收入貢獻了 760 萬美元，比去年同期增加了 260 萬美元，比第二季減少了 100 萬美元。由於管理資產的積極表現，外部投資經理在本季賺取了 260 萬美元的獎勵費，本季結束時管理的總資產達到 15 億美元。

During the quarter, we recognized net fair value appreciation, including net realized gains and net unrealized appreciation on the investment portfolio of $27.7 million. This increase was driven by $24.2 million of net fair value appreciation on our lower middle market portfolio, resulting from the continued positive performance of certain of our portfolio companies, $12.2 million appreciation in our External Investment Manager, driven by increased revenues and an increase in peer multiples, $4.1 million net fair value appreciation in our middle market portfolio as a result of the increases in quoted market prices and specific company performance improvements. This appreciation was partially offset by net fair value depreciation of $14 million in our private loan portfolio, largely due to the underperformance of certain portfolio companies.

本季度，我們確認投資組合的淨公允價值增值，包括已實現淨收益和未實現淨增值 2,770 萬美元。這一增長是由我們的中低端市場投資組合淨公允價值增值2,420 萬美元推動的，這是由於我們的某些投資組合公司的持續積極業績，以及我們的外部投資經理的增值1,220 萬美元，這是由收入增加和同業成長推動的由於市場報價的上漲和具體公司業績的改善，我們的中間市場投資組合的淨公允價值增值了 410 萬美元。這種升值被我們私人貸款組合中 1,400 萬美元的淨公允價值貶值所部分抵消，這主要是由於某些投資組合公司的表現不佳。

We ended the third quarter with investments on nonaccrual status, comprising approximately 1.0% of the total investment portfolio at fair value and approximately 3.1% of cost. NAV per share increased by $0.64 or 2.3% over the second quarter and by $2.39 or 9.2% when compared to a year ago, to a record $28.33 at September 30, 2023.

第三季末，我們的投資處於非應計狀態，以公允價值計算，約佔總投資組合的 1.0%，約佔成本的 3.1%。截至 2023 年 9 月 30 日，每股資產淨值較第二季成長 0.64 美元，即 2.3%，較去年同期成長 2.39 美元，即 9.2%，達到創紀錄的 28.33 美元。

We continue to believe that our conservative leverage, strong liquidity and continued access to capital are significant strengths that have us well-positioned for the future. Regulatory debt to equity leverage calculated as total debt, excluding our SBIC debentures, divided by net asset value, was 0.7 and our regulatory asset coverage ratio was 2.5 at quarter end. Both ratios are intentionally more conservative than our target ranges of 0.8 to 0.9 and 2.1 to 2.25 respectively. We continue to be active during the quarter with our at-the-market or ATM program, raising a net $81 million from equity issuances.

我們仍然相信，我們保守的槓桿率、強大的流動性和持續獲得資本的能力是我們為未來做好準備的重要優勢。截至季末，監管債務股本槓桿率以總債務（不包括 SBIC 債券）除以資產淨值計算，為 0.7，監管資產覆蓋率為 2.5。這兩個比率分別比我們的目標範圍 0.8 至 0.9 和 2.1 至 2.25 更保守。本季我們繼續積極開展市場或 ATM 計劃，透過股票發行淨籌集 8,100 萬美元。

We ended the quarter with strong liquidity, including cash and availability under our credit facilities of $834 million. In addition, in October, we expanded the commitments on our SVB facility by $175 million to $430 million, increasing our current liquidity to over $1 billion. We believe this provides us with ample liquidity to continue to pursue attractive investment opportunities for the remainder of 2023 and into 2024, while continuing to maintain a conservative leverage profile and significant capital structure flexibility.

本季結束時，我們擁有強勁的流動性，包括現金和信貸額度下的可用資金 8.34 億美元。此外，10 月份，我們將 SVB 融資承諾額增加了 1.75 億美元，達到 4.3 億美元，將我們目前的流動性增加到超過 10 億美元。我們相信，這為我們提供了充足的流動性，可以在 2023 年剩餘時間和 2024 年繼續尋求有吸引力的投資機會，同時繼續保持保守的槓桿狀況和顯著的資本結構靈活性。

As Dwayne indicated, our operating performance resulted in a return on equity for the quarter of 17.9% on an annualized basis, and 18.2% for the trailing 12-month period. All of these are above our long-term targets, and we continue to believe that these will represent strong results compared to the industry. The NII per share for the quarter was $1.04 per share, a decrease of $0.08 or 7% from the second quarter and an increase of $0.16 or 18% over the same period a year ago.

正如 Dwayne 指出的那樣，我們的經營業績使得本季的年化股本回報率為 17.9%，過去 12 個月期間的股本回報率為 18.2%。所有這些都高於我們的長期目標，我們仍然相信，與行業相比，這些將代表強勁的業績。本季每股 NII 為 1.04 美元，較第二季下降 0.08 美元，或 7%，比去年同期成長 0.16 美元，即 18%。

As I mentioned earlier, the combined impact of certain investment income considered less consistent or nonrecurring in nature is not significant in the third quarter, and was $0.08 per share below the second quarter, $0.06 per share below the average of the last 4 quarters, was consistent with the same quarter a year ago. DNII per share exceeded the total regular monthly dividends per share paid to our shareholders in the third quarter by $0.35 or 51% and our total dividends per share by $0.075 or 8%.

正如我之前提到的，某些被認為不太一致或非經常性的投資收益的綜合影響在第三季度並不顯著，每股比第二季度低0.08 美元，比過去4 個季度的平均水平低0.06 美元。與一年前同季度一致。每股 DNII 超出第三季支付給股東的每股定期每月股息總額 0.35 美元或 51%，超出每股股息總額 0.075 美元或 8%。

As Dwayne mentioned, given the strength of our operating results and the outlook for 2023, our Board approved a supplemental dividend of $0.275 per share payable in December 2023, our ninth consecutive quarterly supplemental dividend. Total monthly and supplemental dividends declared for the fourth quarter of 2023 are $0.98 per share representing a 1.6% increase over the total dividends paid in the third quarter and a 29% increase over the total dividend stated in the fourth quarter last year.

正如 Dwayne 所提到的，鑑於我們強勁的經營業績和 2023 年的前景，我們的董事會批准了 2023 年 12 月支付的每股 0.275 美元的補充股息，這是我們連續第九次季度補充股息。 2023 年第四季宣布的月度股息和補充股息總額為每股 0.98 美元，比第三季支付的股息總額增加 1.6%，比去年第四季的股息總額增加 29%。

Additionally, given the continued momentum of our operating results, our Board also approved an increase to our monthly dividend to $0.24 per share for the first quarter of 2024. The third consecutive quarterly increase to our regular monthly dividends.

此外，鑑於我們經營業績的持續成長勢頭，我們的董事會還批准將 2024 年第一季的每月股息增加至每股 0.24 美元。這是我們連續第三個季度增加定期每月股息。

Looking forward, given the strength of our underlying portfolio, we expect continued strong performance in the fourth quarter of 2023, with expected DNII per share of at least $1.04, with the opportunity to significantly exceed this amount, driven by the level of dividend income and portfolio investment activities during the quarter.

展望未來，鑑於我們基礎投資組合的實力，我們預計 2023 年第四季將繼續保持強勁表現，預計每股 DNII 至少為 1.04 美元，在股息收入水平和本季度的投資組合投資活動。

With that, I will now turn the call back over to the operator so we can take any questions.

現在，我將把電話轉回給接線員，以便我們回答任何問題。

(Operator Instructions). First question comes from Bryce Rowe with B. Riley Securities.

（操作員說明）。第一個問題來自 B. Riley Securities 的 Bryce Rowe。

Thanks. Wanted to, Dwayne, first just kind of ask about your comments around the more muted, lower middle market portfolio growth in the third quarter and then prospects for some improvement in portfolio activity, lower middle market portfolio activity. What's driving the increased pipeline? If you could comment on that?

謝謝。德韋恩，首先想問您對第三季中低端市場投資組合成長的看法，然後是投資組合活動、中低端市場投資組合活動的一些改善的前景。是什麼推動了管線的增加？您能否對此發表評論？

Bryce, thanks for the question. Thanks for joining us today. I would say when you look at the lower middle market, and you've heard us say this in the past, we find that part of our market or our investment strategies by far the most attractive, but the negative about the market is it can be lumpy. And in the third quarter, we had some of that lumpiness come through. We had a number of transactions we were working on that for one reason or another, did not make it through to a closing.

布萊斯，謝謝你的提問。感謝您今天加入我們。我想說，當你看看中低端市場時，你過去聽過我們這樣說過，我們發現我們的部分市場或我們的投資策略迄今為止最具吸引力，但市場的負面影響是它可以呈塊狀。在第三季度，我們遇到了一些困難。我們正在進行許多交易，但由於某種原因，未能完成。

So that resulted in the muted activity in the quarter. We continue to be -- have a favorable view -- optimistic view about our expectations long term for the lower middle market. I think we try to give guidance in our comments that you should expect to see some near-term investment activity as well as more normal investment activity over the next couple of months as you look at us closing out the fourth quarter and moving into the first quarter. So not anything from our standpoint to be overly concerned about, but it was a lower-than-expected amount of investment activity originations in the third quarter specifically.

這導致了本季的活動低迷。我們對中低端市場的長期預期仍然持樂觀態度。 I think we try to give guidance in our comments that you should expect to see some near-term investment activity as well as more normal investment activity over the next couple of months as you look at us closing out the fourth quarter and moving into the first四分之一.因此，從我們的角度來看，沒有什麼值得過度擔心的，但具體來說，第三季的投資活動發起量低於預期。

And you also kind of commented on potential exit activity within the lower middle market portfolio picking up here, what's driving that? Is it M&A? Is it kind of idiosyncratic based on a lower middle market portfolio company owner seeking liquidity. Just curious on that.

您也評論了中低端市場投資組合中潛在的退出活動，這是什麼推動的？是併購嗎？對於尋求流動性的中低端市場投資組合公司所有者來說，這是否有點特殊？只是對此感到好奇。

Yes, I'd say, Bryce, it would be more of the latter. It would be -- things that are specific to the individual portfolio company. As you've heard us say in the past, and you can see it in our results, both in the dividend income that our lower middle market companies are producing as well as the free -- the fair value increases that we're having, the companies are performing at a high level. So when you look at that type of performance, they will attract interest from third parties that could lead them to explore an exit opportunity or there could be other activities specific to the portfolio company or to its existing ownership, its management team that lead them to take a look at it and exit.

是的，我想說，布萊斯，更多的是後者。這將是針對各個投資組合公司的特定事物。正如您過去聽到我們所說的那樣，您可以在我們的業績中看到這一點，無論是我們中低端市場公司產生的股息收入還是我們所擁有的免費公允價值增加，這些公司的表現都處於高水準。因此，當你觀察這種類型的績效時，他們會吸引第三方的興趣，這可能會導致他們探索退出機會，或者可能存在針對投資組合公司或其現有所有權、管理團隊的其他活動，導致他們看一下然後退出。

So I'd say there's nothing specific that applies to all the opportunities. But as we started noting last quarter and I wanted to reiterate this quarter, we are seeing more activity there, and we do expect that a number of those initiatives or those activities could result in some favorable exits over the next couple of months.

所以我想說，沒有什麼具體的東西適用於所有的機會。但正如我們在上個季度開始注意到的那樣，我想在本季度重申，我們看到那裡有更多的活動，我們確實預計其中一些舉措或活動可能會在未來幾個月內帶來一些有利的退出。

Got, okay, and one last one for me. On the closing of the second private loan fund. Can you help size that up for us?

明白了，好吧，還有最後一張給我。關於第二期民間借貸基金的交割。您能幫我們確定一下尺寸嗎？

Sure, Bryce. So when you look at it, our goal is that our second private fund would be larger than the first. Just as a reminder, the first one was $100 million of equity. You can effectively double that with levers to get to $200 million to $215 million total portfolio size. We, with our first closing here, were successful in closing with about $65 million of equity capital. We're going to continue to raise capital in that fund going forward just like we would have done on the first fund.

當然，布萊斯。因此，當你看到它時，我們的目標是我們的第二個私募基金將比第一個更大。提醒一下，第一個是 1 億美元的股本。您可以透過槓桿有效地將其翻倍，使總投資組合規模達到 2 億至 2.15 億美元。我們在這裡完成了首次交割，並成功獲得了約 6500 萬美元的股本。我們將繼續在該基金中籌集資金，就像我們對第一個基金所做的那樣。

So we hope that the fund long-term will end up being greater than $100 million, but the process will play out over the next couple of quarters and kind of determine how much success we are with the sizes on the equity commitments. And then just like Fund 1, our plan is to put leverage in place that will effectively double the assets relative to equity by the use of a debt or leverage facility.

因此，我們希望該基金的長期規模最終將超過 1 億美元，但這一過程將在接下來的幾個季度中展開，並在某種程度上決定我們在股權承諾規模方面取得多大成功。然後，就像基金 1 一樣，我們的計劃是利用槓桿，透過使用債務或槓桿工具，有效地將資產相對於股本翻倍。

Next question, Robert Dodd with Raymond James.

下一個問題是羅伯特·多德和雷蒙德·詹姆斯。

Congrats on the quarter. When you look -- your comments about some of the deals not closing in the quarter. I mean you said there wasn't anything you were concerned about. But was there any kind of a theme? Was it final due diligence kind of sell-through or people matching up the ask on the price. So any kind of color you can give us on what the trigger points were on the ones that sell flew?

恭喜本季。當您查看時，您對本季度未完成的一些交易的評論。我的意思是你說沒有什麼你擔心的。但有什麼主題嗎？這是最終的盡職調查，是一種銷售，還是人們匹配價格的要價。那麼，您可以提供我們任何顏色來說明那些銷售飛行的觸發點是什麼嗎？

Sure, Robert. I'll give some color, then I'll let David add on anything that he has from his perspective. But I'd say it wasn't anything consistent across the transactions that didn't make it across the finish line. But as you've heard us say in the past, we're dealing with individuals, not institutions in terms of the counterparty of those transactions. And they can and will have stuff that changes on their side from a personal standpoint.

當然，羅伯特。我會給一些顏色，然後我會讓大衛從他的角度添加他所擁有的任何內容。但我想說的是，在未能衝過終點線的交易中，沒有任何一致的東西。但正如您過去聽到我們所說的那樣，就這些交易的對手方而言，我們是在與個人打交道，而不是與機構打交道。從個人角度來看，他們可以而且將會有一些改變。

In my view of one of the transactions that's exactly what it was. He had a view of what a transaction -- a desirable transaction would be. And I'd say that view over time changed as we went through our process. The other difficulties we've had. No big surprise, I think to people, we continue to be very disciplined in our underwriting approach, not anything different than what we've done in the past, but we always maintain a very disciplined approach. And in this current environment, when you look at the economic uncertainty, whether it's actual historical results as we go through due diligence or if it's the visibility to the future expectations and future results, you're seeing more volatility.

在我看來，其中一筆交易正是如此。他對什麼是一筆交易──一筆理想的交易有自己的看法。我想說，隨著時間的推移，隨著我們經歷我們的流程，這種觀點改變了。我們遇到的其他困難。我認為對人們來說這並不奇怪，我們在承保方法上仍然非常嚴格，與我們過去所做的沒有任何不同，但我們始終保持非常嚴格的方法。在當前環境下，當你審視經濟不確定性時，無論是我們進行盡職調查時的實際歷史結果，還是對未來預期和未來結果的可見性，你都會看到更多的波動性。

And as we go through the diligence process, we have to deal with that volatility in terms of how we value and structure the final transaction, and that could lead the transaction not to move forward. So those would be the 2 examples I'd point to.

當我們完成盡職調查過程時，我們必須在如何評估和建立最終交易方面應對這種波動，這可能會導致交易無法繼續進行。這就是我要指出的兩個例子。

I'll let David add any additional comments he has on his side.

我會讓大衛添加他自己的任何其他評論。

Robert, we're always conscious of our origination budget and (inaudible) closings. In this quarter, we had some lumpiness. A couple of the examples where one had a safety issue that came up during our diligence. Another one had some financial diligence relative to historical and projections that ultimately, we couldn't get comfortable underwriting to. So when we see those things, while we're anxious to have closings and put more assets on the books, we're just going to be disciplined about making sure we're making good prudent investments like we have historically, and that leads to some quarters that are lumpier than others. Nothing to take away as far as themes.

羅伯特，我們始終關注我們的初始預算和（聽不清楚）結帳。在本季度，我們遇到了一些困難。在我們的盡職調查過程中出現了一些安全問題的例子。另一家公司進行了一些與歷史和預測相關的財務調查，但最終我們無法放心地承保。因此，當我們看到這些事情時，雖然我們渴望關閉並將更多資產記入賬簿，但我們只會自律以確保我們像歷史上那樣進行良好的審慎投資，這會導致有些地方比其他地方更凹凸不平。就主題而言，沒有什麼可帶走的。

Got it, got it. This one is kind of a -- sort of -- what are you hearing preliminarily, if anything, on budget outlooks for '24. Obviously, these are smaller, if I'd asked you this 10 years ago, I don't think most of your portfolio companies have budget, so to speak, but they have been much more vigorous over the years in terms of encouraging those kind of those processes. So are you hearing anything on that front about 2024 more moderate, more of the same? Anything that's coming through so far?

明白了，明白了。這是一種——某種程度上——你初步聽到的關於 24 年預算前景的消息（如果有的話）。顯然，這些規模較小，如果我在 10 年前問你這個問題，我認為你的大多數投資組合公司都沒有預算，可以這麼說，但多年來，他們在鼓勵這些公司方面更加積極。這些過程。那麼，您是否聽過 2024 年的任何更溫和、更相似的內容？到目前為止有什麼進展嗎？

Sure, Robert. As you said, our companies -- all of them will go through some level of budgeting process for the next year, most of them we'll go through a multiyear outlook or expectation planning process. Most of our companies are likely right in the middle of that process for 2024 today. So we don't really have information to point you coming out of those budget -- 2024 budget discussions.

當然，羅伯特。正如您所說，我們的公司—所有這些公司都將在明年經歷一定程度的預算流程，其中大多數我們將經歷多年展望或預期規劃流程。今天，我們的大多數公司可能正處於 2024 年這一進程的中間。因此，我們確實沒有資訊可以告訴您如何進行 2024 年預算討論。

But what I would point you to, and David talked about this in his comments, not specifically the 2024 expectations, but the fact that we just hosted our President's meeting for our lower middle market companies. And the data point I would give you is that coming out of that meeting, the overall mood-sentiment expectations from the group broadly is very positive. I mean companies are doing well despite all the challenges and all the headwinds that you hear about in the broader business community or just the overall economy these companies are doing well, and they're concerned about the same uncertainties that everybody else is.

但我想向你們指出的是，大衛在評論中談到了這一點，不是具體的 2024 年預期，而是我們剛剛為中低端市場公司舉辦了總裁會議這一事實。我要給你們的數據點是，從那次會議之後，整個團體的整體情緒預期是非常正面的。我的意思是，儘管你在更廣泛的商界或整體經濟中聽到的所有挑戰和逆風，公司都表現良好，但他們與其他人一樣擔心同樣的不確定性。

But if you look at their expectations in terms of discussions with customers and their ability to drive operational improvements or efficiencies and manage all the parts of their business that drive value. I would say that they all have a fairly optimistic view, which is why we look at it and we always leave that meeting very, very encouraged. But I'd say this year, we left the meeting may be more encouraged than we had in the past.

但如果你從與客戶討論的角度來看他們的期望，以及他們推動營運改善或效率以及管理推動價值的所有業務部分的能力。我想說，他們都抱持著相當樂觀的看法，這就是為什麼我們會看待這個問題，並且在會議結束時我們總是非常非常受鼓舞。但我想說，今年，我們離開會議時可能會比過去更加受到鼓舞。

And again, I'll let David, if he has any comments he wants to add, as a response there in terms of what we heard from President's meeting.

再說一遍，如果大衛有任何意見想要補充，我會讓他根據我們從總統會議上聽到的內容回應。

I'd say the only thing that is always interesting to talk to our portfolio company execs about is there are specific drivers within each industry, because we have so many industries represented, it is a -- generally what you're hearing in the economy probably overlays with our portfolio of companies. The great news is that because they're small, they can be nimble and react quickly to the changes that they're seeing. So there was a lot of discussion with those that might have some headwinds in their industry, what they're doing proactively to position themselves and others are still seeing good, robust activity and capitalizing on that.

我想說，與我們的投資組合公司高管談論的唯一一件有趣的事情是，每個行業都有特定的驅動因素，因為我們代表瞭如此多的行業，這通常是您在經濟中聽到的可能與我們的公司投資組合重疊。好消息是，由於它們很小，因此可以靈活地對所看到的變化做出快速反應。因此，與那些在行業中可能遇到一些阻力的人進行了很多討論，他們正在積極採取哪些措施來定位自己，而其他人仍然看到良好、強勁的活動並利用這一點。

And I really appreciate the color and congratulations on the (inaudible) this quarter.

我真的很欣賞這個季度的顏色和祝賀（聽不清楚）。

Next question, Mark Hughes with Truist Securities.

下一個問題是來自 Truist Securities 的 Mark Hughes。

The incentive fee income from the fund management business, I think, up nicely year-over-year. What -- is that at a reasonable run rate? Was there something unusually good this quarter? Or is this kind of -- if the market stays in a particular group, this will be a decent run rate for you?

我認為，來自基金管理業務的激勵費收入較去年同期成長良好。什麼－運轉速度合理嗎？這個季度有什麼異常好的事情嗎？或者是這樣的——如果市場停留在一個特定的群體中，這對你來說將是一個不錯的運作率？

Sure, Mark. If you look at our asset management business, one of the things that I would remind the group is that, that business, from an investment strategy standpoint is primarily focused on our private loan strategy. So when you look at Main Street's results, you can kind of read through to the results that we're seeing in the funds or the clients we have on the asset management business. So if you look at our results at Main Street in this quarter, you did not see a lot of nonrecurring unusual onetime items. It was, from our perspective, a very clean quarter from that perspective.

當然，馬克。如果你看看我們的資產管理業務，我要提醒集團的一件事是，從投資策略的角度來看，該業務主要集中在我們的私人貸款策略上。因此，當您查看主街的表現時，您可以仔細閱讀我們在基金或資產管理業務客戶中看到的結果。因此，如果您查看本季度 Main Street 的業績，您不會看到很多非重複性異常一次性項目。從我們的角度來看，這是一個非常乾淨的季度。

So I would say that you should expect the results that we had in our asset management business would follow the same nature of income and earnings. So when we look at the third quarter, the incentive fees were down a little bit from the second quarter, but we feel like it's a really good base level of incentive fees, assuming the market continues to perform the way it has and we don't see degradation or issues across the portfolio, which we're not seeing today.

所以我想說，你應該預期我們的資產管理業務的結果將遵循收入和收益的相同性質。因此，當我們看到第三季度時，激勵費用比第二季度略有下降，但我們認為這是一個非常好的激勵費用基本水平，假設市場繼續按照現有方式運行，而我們沒有這樣做。我們今天沒有看到整個投資組合的退化或問題。

So we feel really good about the quarter, and we feel good about -- what that means from a look-through standpoint into the incentive fees, we're getting off the asset management business.

因此，我們對這個季度感覺非常好，而且我們感覺很好——從激勵費用的角度來看，這意味著我們正在擺脫資產管理業務。

And then did you give any indication of kind of the underlying EBITDA or revenue growth for your portfolio of companies, the lower middle market company?

然後，您是否給出了您的公司投資組合（中低端市場公司）的基本 EBITDA 或收入成長類型？

We didn't, Mark. That's not a stat that we typically publish.

我們沒有，馬克。這不是我們通常發布的統計數據。

I think you -- I'm not sure whether you were touching on your pipeline in terms of potential new investments, but I think you would also suggested that the sheer opportunity for fair value appreciation through maybe some divesting activity that was elevated. Could you talk a little bit more about that? What needs to happen for that to come through?

我認為你——我不確定你是否在潛在的新投資方面觸及了你的管道，但我認為你也會建議透過可能增加的一些剝離活動來實現公允價值升值的純粹機會。能多談談嗎？需要做什麼才能實現這個目標？

Sure, Mark. If you look broadly at our changes in fair value, both in this quarter and I'd say for the last couple of quarters, we're seeing the results of a number of companies that are just performing at a high level, specifically in the lower middle market. Some of those companies have completed acquisitions over the last 12 or 18 months, as you may recall us saying in prior quarters and those acquisitions have been integrated well. They're performing well. They're realizing the synergies, and you're seeing the results of those strategic valuable acquisitions come through the company's quarterly results and then you see it come through our fair value. So that would be a big driver.

當然，馬克。如果你廣泛地觀察我們的公允價值變化，無論是本季度還是過去幾個季度，我們都會看到許多公司的業績表現處於高水平，特別是在中低端市場。其中一些公司在過去 12 或 18 個月內完成了收購，正如您可能還記得我們在前幾個季度說過的那樣，而這些收購已經得到了很好的整合。他們表現得很好。他們正在實現協同效應，你可以透過公司的季度業績看到這些具有策略價值的收購的結果，然後你可以透過我們的公允價值看到它。所以這將是一個很大的推動力。

When you look at the exit activity, I would say one thing from our perspective, which we may not control the outcome because we're just one of the equity owners, we're not -- we don't own control or drive all the final decisions of these individual or middle market portfolio companies. But in general, if we're going to be motivated or inclined to sell, it's likely going to be at a premium to our fair value. Otherwise, all things being equal, we're likely going to be more inclined to hold the investment. We have permanent capital.

當你審視退出活動時，我會從我們的角度說一件事，我們可能無法控制結果，因為我們只是股權所有者之一，我們不是——我們不擁有控制權或驅動所有這些個人或中間市場投資組合公司的最終決定。但總的來說，如果我們有動力或傾向於出售，價格可能會高於我們的公允價值。否則，在所有條件相同的情況下，我們可能會更傾向於持有投資。我們有永久資本。

Our desire is to have a very, very mature diversified broad portfolio. So all things being equal, if we had control over everything, we would maintain our best companies forever, unless somebody was going to pay us a significant premium to what we think is worth as of today. So that may not directly answer your question, but I think we feel good about where we have our portfolio companies valued overall. We specifically feel good about where we have them valued in the context of them going through an exit or sale process.

我們的願望是擁有一個非常非常成熟的多元化廣泛投資組合。因此，在所有條件相同的情況下，如果我們能夠控制一切，我們將永遠保持我們最好的公司，除非有人向我們支付比我們今天認為的價值高得多的溢價。因此，這可能無法直接回答您的問題，但我認為我們對投資組合公司的整體估值感到滿意。我們特別對他們在退出或出售過程中的估值感到滿意。

(Operator Instructions). Next question comes from Vilas Abraham with UBS.

（操作員說明）。下一個問題來自瑞銀集團的維拉斯·亞伯拉罕。

Maybe just to follow on Mark's question a little bit. On these add-on acquisitions that are driving some of the fair value appreciation through realization of synergies. Is that -- is there momentum for that dynamic going to continue for the foreseeable future? And one of the key drivers here as you think about your fair value marks for the next few quarters?

也許只是為了繼續回答馬克的問題。這些附加收購透過實現協同效應推動了部分公允價值升值。在可預見的未來，這種動態是否有持續下去的動力？當您考慮未來幾季的公允價值標記時，這裡的關鍵驅動因素之一是什麼？

Sure, Vilas. I'll get a couple of comments. I'll let either David or Jesse add on because they're involved in a couple of the companies that are executing acquisition growth strategies. But just to kind of go backwards a little bit if you had been looking at us talking to us 5, 6 years ago, acquisition growth strategies for our portfolio companies while we had some, it was not a significant activity for most of our companies.

當然，維拉斯。我會收到一些評論。我會讓大衛或傑西補充一下，因為他們參與了幾家正在執行收購成長策略的公司。但稍微倒退一下，如果你在五、六年前與我們交談，我們投資組合公司的收購成長策略雖然我們有一些，但對我們大多數公司來說，這並不是一項重要的活動。

It's something that we long had viewed as an opportunity, and we started in our President's meeting 5, 6 years ago, really talking about the opportunity to pursue growth through acquisitions and started educating our companies on how and why they should at least consider it, clearly not forcing them to do it, but at least should consider it, as a result of that and as a result of just the high quality of the companies and management teams that we have in the portfolio over the last couple of years, really COVID was a time period where it really accelerated.

我們長期以來一直將其視為一個機會，我們在五六年前的總裁會議上開始真正談論透過收購追求成長的機會，並開始教育我們的公司如何以及為什麼他們至少應該考慮它，顯然不是強迫他們這樣做，但至少應該考慮這一點，因為這一點以及過去幾年我們投資組合中的公司和管理團隊的高質量，確實是新冠病毒這是一個真正加速的時期。

We started seeing more of our companies embrace acquisition growth opportunities. So when we look at it, we've got a number of companies that, as I said, have been executing those acquisitions, not just closing the acquisition, but integrating and optimizing the synergies, and they've done a fantastic job. And we continue to have some of those same companies continuing to explore additional acquisitions, but we also have a broader group. Some companies that have not executed acquisitions in the past that have very attractive strategic acquisitions that were helping them work through and we hope to have a closing, again, sometime over the next 1 to 3 months.

我們開始看到越來越多的公司擁抱收購成長機會。因此，當我們審視它時，正如我所說，我們有許多公司一直在執行這些收購，不僅完成收購，而且整合和優化協同效應，他們做得非常出色。我們繼續讓其中一些公司繼續探索更多收購，但我們也擁有更廣泛的群體。一些過去沒有執行過收購的公司進行了非常有吸引力的策略性收購，這些收購正在幫助他們完成工作，我們希望在未來 1 到 3 個月的某個時候再次完成收購。

And if we're successful there, we wouldn't execute that acquisition, both for our benefit or for the portfolio company, without the viewpoint that it will be a significant value creator from a fair value standpoint and an ultimate equity valuation if or when that company is ever sold. I know that's a lot there, but I'd say it's just -- we have been and continue to encourage our companies to pursue that, and we've seen really, really good results over the last couple of years from that initiative.

如果我們在那裡取得成功，我們就不會執行該收購，無論是為了我們的利益還是為了投資組合公司，如果沒有這樣的觀點：從公允價值和最終股權估值的角度來看，如果或當該公司曾經出售。我知道這有很多，但我想說的是——我們一直並將繼續鼓勵我們的公司追求這一目標，並且在過去幾年中我們從該舉措中看到了非常非常好的結果。

So I'll just add one thing on the fair value comment. There are 2 big inputs that Dwayne talked about. One are the accretive acquisitions. The second are the exit activities. When we're doing our fair value marks, we're marking them to what we think is a fair value at that moment in time. When we do run a process, the job on a process, if there is an intermediary involved, is to go out there and find the outlier and to get to the top of a range of expected outcomes.

因此，我將在公允價值評論中添加一件事。 Dwayne 談到了兩個重要的投入。一是增值性收購。二是退出活動。當我們進行公允價值標記時，我們將其標記為我們認為當時的公允價值。當我們運行一個流程時，如果涉及中間人，流程的工作就是出去尋找異常值，並達到一系列預期結果的頂部。

As time goes on and we get further through that, and we have incoming calls, we hope to exceed the fair value marks that we have. So when we see activity, we're hopefully able to appreciate and get that outlier type of valuation that also helps, obviously, with the fair value.

隨著時間的推移，我們會進一步解決這個問題，我們會接到來電，我們希望超過我們現有的公允價值標記。因此，當我們看到活動時，我們希望能夠欣賞並獲得異常類型的估值，這顯然也有助於公平價值。

And then that final mark will happen after the transaction closes?

那麼最後的標記會在交易結束後發生嗎？

Yes. At closing, when you see the realized transaction go through the financial statements.

是的。結帳時，當您看到已實現的交易時，請查看財務報表。

Can you guys talk about the -- just a tick up there in nonaccruals for the quarter. Any color around what is happening there with that credit or credits that I think were in the private loan book.

你們能談談本季非應計費用的小幅上漲嗎？我認為私人貸款簿中的信用或信用所發生的事情有任何顏色。

There were 2 that off the top of my head, were private loan, one was middle market. I'd say these are companies that we have been writing down from a fair value standpoint the last couple of quarters as those companies had dealt with specific operating company performance issues to the credit of the sponsors. They continue to be supportive, and we continue to work with the private equity sponsors in each of those transactions and the other participants in the capital structure, but the nonaccrual status and the fair value depreciation that we've recorded just represents the underlying operating performance challenges that those companies have had specifically.

我腦中想到的有兩種，一種是私人貸款，一種是中間市場。我想說的是，過去幾季我們一直從公允價值的角度減記這些公司，因為這些公司已經處理了具體的營運公司業績問題，這歸功於贊助商。他們繼續提供支持，我們繼續與每筆交易中的私募股權發起人以及資本結構中的其他參與者合作，但我們記錄的非應計狀態和公允價值折舊僅代表基本經營業績這些公司具體面臨的挑戰。

So nothing that's systematic or broad-based. It's very, very specific to the operating performance of those companies in this quarter that were moved to nonaccrual.

所以沒有什麼是系統性的或廣泛的基礎。它非常非常具體地針對本季轉為非應計利潤的公司的經營業績。

This concludes our question-and-answer session. I would like to turn the floor back over to management for closing comments.

我們的問答環節到此結束。我想將發言權交還給管理層以徵求結束意見。

I just want to thank everyone again for joining us this morning, and we'll look forward to talking to everyone again in mid-to-late February.

我想再次感謝大家今天早上加入我們，我們期待在二月中下旬再次與大家交談。

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

女士們、先生們，感謝您的參與。今天的電話會議到此結束。您可以斷開線路，度過美好的一天。