Main Street Capital Corp (MAIN) 2024 Q4 法說會逐字稿

Greetings, and welcome to the Main Street Capital fourth quarter earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce Zach Vaughan. Thank you. You may begin. .

大家好，歡迎參加 Main Street Capital 第四季度財報電話會議。（操作員指示）提醒一下，本次會議正在錄音。現在我很高興介紹扎克·沃恩。謝謝。你可以開始了。。

Thank you, operator, and good morning, everyone. Thank you for joining us for Main Street Capital Corporation's fourth quarter 2024 earnings conference call. Joining me today with prepared comments are Dwayne Hyzak, Chief Executive Officer; David Magdol, President and Chief Investment Officer; and Ryan Nelson, Chief Financial Officer. Also participating in the Q&A portion of the call are Jessie Morris, Chief Operating Officer; and Nick Meserve, Managing Director and Head of Main Street's Private Credit Investment Group.

謝謝接線員，大家早安。感謝您參加 Main Street Capital Corporation 2024 年第四季財報電話會議。今天與我一起發表準備好的評論的還有執行長 Dwayne Hyzak；總裁兼首席投資長 David Magdol；以及財務長Ryan Nelson。營運長 Jessie Morris 也參與了電話會議的問答部分；以及 Main Street 私人信貸投資集團董事總經理兼主管 Nick Meserve。

Main Street issued a press release yesterday afternoon that details the company's fourth quarter and full year 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 March 7.

Main Street 昨天下午發布了一份新聞稿，詳細介紹了該公司第四季度和全年的財務和營運業績。文件可至本公司網站 mainstcapital.com 的投資者關係部分查閱。今天的電話會議重播將在通話結束後一小時開始提供，並將持續到 3 月 7 日。

Information on how to access the replay was included in yesterday's release. 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, February 28, 2025, and therefore you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.

昨天的發布中包含了有關如何存取重播的資訊。我們也建議您，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存取。請注意，本次通話中報告的資訊僅截至今天（2025 年 2 月 28 日），因此請注意，在重播或閱讀記錄時，時間敏感資訊可能不再準確。

Today's call will contain forward-looking statements. Many 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, 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。許多前瞻性陳述可以透過預期、相信、期望、打算、將、應該、可能或類似的表達來識別。這些聲明是基於管理層截至本次電話會議召開之日的估計、假設和預測，並且不保證未來的表現。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所述的因素，實際結果可能與這些聲明中表達或暗示的結果有重大差異，這些因素可在公司網站或 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 investment income, or DNII. DNII is net investment income, or NII, as determined in accordance with US generally accepted accounting principles or GAAP, excluding the impact of noncash compensation expenses. Management believes that presenting DNII and the related per share amount are useful and appropriate supplemental disclosures for analyzing Main Street's financial performance.

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，管理層將討論非公認會計準則財務指標，包括可分配投資收益或 DNII。DNII 是根據美國公認會計原則或 GAAP 確定的淨投資收益或 NII，不包括非現金薪資費用的影響。管理層認為，呈現 DNII 和相關每股金額對於分析 Main Street 的財務表現是有用且適當的補充揭露。

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. Through additional key performance indicators that management will be discussing on this call, our 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 as ROE as the net increase in net assets resulting from operations divided by the average quarterly total net assets.

非現金補償費用不會對結算後的 Main Street 造成淨現金影響。請參閱昨天的新聞稿，以了解這些非公認會計準則指標與最直接可比較的公認會計準則財務指標的對照表。透過管理階層將在本次電話會議上討論的其他關鍵績效指標、我們的淨資產價值或 NAV 和股本回報率或 ROE。NAV 定義為總資產減去總負債，也是以每股報告。Main Street 將 ROE 定義為經營活動產生的淨資產淨增加額除以季度平均總淨資產。

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.

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，尚未經過獨立核實。

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

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

Thanks, Zach. Good morning, everyone, and thank you for joining us. We appreciate your participation on this morning's call, and we hope that everyone is doing well. On today's call, I will provide my usual updates regarding our performance in the fourth quarter, while also providing a few updates on our performance for the full year. I will also provide updates on our asset management activities, our recent dividend declarations, our expectations for dividends going forward, our recent investment activities and current investment pipeline and several other noteworthy updates.

謝謝，扎克。大家早安，感謝大家的收看。我們感謝您參加今天早上的電話會議，我們希望每個人都一切順利。在今天的電話會議上，我將像往常一樣更新我們第四季的業績，同時也會更新一些我們全年的業績。我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、我們最近的投資活動和當前的投資管道以及其他一些值得注意的更新。

Following my comments, David and Ryan will provide additional comments regarding our investment strategies, investment portfolio, financial results, capital structure and liquidity and our expectations for the first quarter of 2025, after which we'll be happy to take your questions. We are extremely pleased with our fourth quarter results, which closed another great year for Main Street as highlighted by a record, annualized return on equity of 25.4% for the quarter.

在我發表評論之後，David 和 Ryan 將就我們的投資策略、投資組合、財務表現、資本結構和流動性以及我們對 2025 年第一季的預期提供進一步評論，之後我們很樂意回答您的問題。我們對第四季的業績感到非常滿意，這為 Main Street 又一個輝煌的一年畫上了句號，本季的年化股本回報率創下了 25.4% 的歷史記錄。

Our positive performance in all four quarters for the year resulted in a return on equity of 19.4% for the full year, strong levels of NII per share and DNII per share to fund our record level of annual shareholder dividends and a new record for NAV per share for the tenth consecutive quarter. We believe that these continued strong results demonstrate the sustainable strength of our overall platform, the benefits of our differentiated and diversified investment strategies, the unique contributions of our asset management business, and the continued underlying overall strength and quality of our portfolio companies.

我們全年四個季度的積極表現，使全年股本回報率達到 19.4%，每股 NII 和每股 DNII 水平強勁，為我們創紀錄的年度股東分紅提供資金，並連續第十個季度創下每股 NAV 的新紀錄。我們相信，這些持續強勁的業績證明了我們整體平台的可持續實力、我們差異化和多元化投資策略的優勢、我們資產管理業務的獨特貢獻以及我們投資組合公司持續的整體實力和品質。

Our continued positive performance allowed us to increase our total dividends paid to our shareholders in the fourth quarter by 6% over the prior year resulting in an 11% increase for the full year. This allowed us to continue our trend of increasing the dividends paid to our shareholders over the last few years. We'll also continue to generate DNII per share, which exceeds the total dividends paid to our shareholders.

我們持續的良好表現使我們第四季向股東支付的股利總額較上年同期增加 6%，全年股利增加 11%。這使我們能夠延續過去幾年增加向股東支付股利的趨勢。我們也將繼續產生每股 DNII，這將超過支付給股東的總股息。

We continue to be encouraged by the favorable overall performance of the companies and our diversified lower middle market and private loan investment portfolios and remain confident that these strategies together with the benefits of our asset management business, our significant available liquidity and our cost-efficient operating structure will allow us to continue to deliver superior results for our shareholders in the future.

我們繼續受到公司良好整體表現和我們多元化的中低端市場和私人貸款投資組合的鼓舞，並仍然相信這些策略加上我們的資產管理業務的優勢、我們大量的可用流動性和我們具有成本效益的營運結構將使我們能夠在未來繼續為我們的股東提供卓越的業績。

These positive results, combined with our favorable outlook for the first quarter, resulted in our recommendations to our Board of Directors for our most recent dividend announcements, which I will discuss in more detail later.

這些積極的結果，加上我們對第一季的良好展望，促使我們向董事會提出了最近的股息公告建議，我將在稍後詳細討論。

Our NAV per share increased in the quarter, primarily due to the impact of net fair value increases in our investment portfolio, including the benefit in the quarter from the largest realized gain in our firm's history and the continued benefits from our asset management business.

我們的每股淨值在本季度有所增加，這主要歸因於我們投資組合的淨公允價值增加的影響，包括本季度公司歷史上最大的已實現收益帶來的收益以及我們資產管理業務的持續收益。

Ryan will discuss our NAV per share increase in more detail. The continued favorable performance of the majority of our lower middle market portfolio companies resulted in another quarter of strong dividend income contributions and significant net fair value appreciation in our lower middle market equity investments.

Ryan 將更詳細地討論我們的每股資產淨值的成長。我們投資組合中大多數中低端市場公司持續保持良好的表現，帶動我們的中低端市場股權投資再度實現強勁的股息收入貢獻和淨公允價值的大幅升值。

The realized gain that I referenced was a $54 million realized gain on the exit of our equity investment in Pearl Meyer, which we believe is a great example of the unique benefits of our lower middle market investment strategy, and which resulted in significant benefits from Main Street and our Pearl Meyer management team partners.

我提到的已實現收益是我們在退出 Pearl Meyer 的股權投資時實現的 5,400 萬美元收益，我們認為這是我們中低端市場投資策略獨特優勢的一個很好的例子，並且為 Main Street 和我們的 Pearl Meyer 管理團隊合作夥伴帶來了巨大利益。

The benefits for Main Street included significant dividend income, fair value appreciation and the realized gain resulting in best-in-class returns on our equity investment in addition to the attractive interest income provided by our debt investments.

Main Street 的收益包括可觀的股息收入、公允價值升值和已實現收益，從而為我們股權投資帶來了一流的回報，此外還有債務投資帶來的可觀的利息收入。

This highly attractive investment also has one of the biggest benefits we provide to our portfolio companies through our lower middle market investment strategy, which is the ability of our portfolio companies to execute significant growth through acquisitions with the acquisitions funded 100% by debt financing from Main Street, thereby allowing the management team to execute significant value creation without experienced solution of their existing ownership percentage.

這項極具吸引力的投資也具有我們透過中低端市場投資策略為投資組合公司提供的最大優勢之一，即我們的投資組合公司能夠透過收購實現顯著成長，而這些收購的資金 100％ 來自 Main Street 的債務融資，從而使管理團隊無需對現有所有權百分比進行經驗豐富的解決方案即可創造重大價值。

We continue these types of value-creating activities in the fourth quarter and are excited about the follow-on investments we made to finance strategic acquisitions by three of our high-performing lower middle market portfolio companies, each of which were funded by follow-on debt investments by mainstream for a total of over $36 million of incremental debt investments in these portfolio companies.

我們將在第四季度繼續進行此類價值創造活動，並對我們為三家高績效中低端市場投資組合公司的策略性收購進行的後續投資感到興奮，每家公司的後續債務投資均由主流資本的後續債務投資提供資金，對這些投資組合公司的增量債務投資總計超過 3600 萬美元。

We expect that these follow-on investments will provide the opportunity for additional future fair value appreciation in addition to providing us the highly attractive incremental debt investments in these high-performing portfolio companies.

我們預計，這些後續投資除了為我們提供對這些高績效投資組合公司的極具吸引力的增量債務投資之外，還將為未來額外的公允價值升值提供機會。

Consistent with my comments over the last few quarters, we also continue to see increased interest from potential buyers in certain portfolio companies that could lead to favorable realizations over the next few quarters, further highlighting the strength and quality of our portfolio companies.

與我過去幾季的評論一致，我們也看到潛在買家對某些投資組合公司的興趣日益濃厚，這可能會在未來幾季帶來有利的回報，進一步凸顯我們投資組合公司的實力和品質。

Our lower middle market investment activity in the fourth quarter included total investments of $168 million, including investments totaling $116 million in two new portfolio companies, which together with the elevated repayment activity in the quarter, primarily due to the Pearl Meyer exit resulted in a net increase in our lower middle market investments of $11 million.

我們在第四季的中低階市場投資活動包括總投資 1.68 億美元，其中包括對兩家新投資組合公司的投資總額 1.16 億美元，加上本季還款活動的增加（主要由於 Pearl Meyer 的退出），導致我們在中低階市場投資的淨增加額為 1,100 萬美元。

Our private loan investment activities in the quarter included total investments of $108 million, which after repayments and other investment activity resulted in a net increase in our private loan investments of $7 million. We've also continued to produce favorable results in our asset management business. The funds we advised through our external investment manager continued to experience favorable performance in the fourth quarter, resulting in significant incentive fee income for our asset management business for the ninth consecutive quarter and together with our recurrent management fees, a significant contribution to our net investment income.

我們本季的私人貸款投資活動包括總投資 1.08 億美元，扣除還款和其他投資活動後，我們的私人貸款投資淨增加 700 萬美元。我們的資產管理業務也持續取得良好績效。我們透過外部投資經理提供諮詢的基金在第四季度繼續表現良好，連續九個季度為我們的資產管理業務帶來了可觀的激勵費收入，加上我們的經常性管理費，為我們的淨投資收入做出了重大貢獻。

We also benefited from significant fair value appreciation in the value of our external investment manager due to a combination of the continued increase in fee income, growth in assets under management and broader market-based drivers. We remain excited about our plans for the external funds that we manage as we execute our investment strategies and explore other strategic initiatives, and we are optimistic about the future performance of the funds and the attractive returns we are providing to the investors of each fund and about our strategy for growing our asset management business within our internally managed structure.

由於費用收入持續增加、管理資產成長以及更廣泛的市場驅動因素等因素，我們也受惠於外部投資經理價值的大幅公允價值升值。在執行投資策略和探索其他策略舉措的同時，我們對所管理的外部基金的計劃感到興奮，我們對這些基金的未來表現以及我們為每個基金的投資者提供的可觀回報以及我們在內部管理結構內發展資產管理業務的戰略感到樂觀。

As part of our efforts to grow our asset management business, we are very pleased that in late January, MSC Income Fund, a BDC advised by our external investment manager and our largest asset management business initiative successfully completed a listing on the New York Stock Exchange and a public equity offering in which the fund raised net equity proceeds of $91 million.

作為我們努力發展資產管理業務的一部分，我們非常高興地看到，1 月底，由我們的外部投資經理提供諮詢的 BDC 和我們最大的資產管理業務計劃 MSC Income Fund 成功在紐約證券交易所上市並進行了公開發行股票，該基金籌集了 9100 萬美元的淨股權收益。

We are very pleased with the listing and equity offering, which resulted in the fund being able to accelerate the timing and increase the size of the offering. We are very excited about our future plans for MSC Income Fund and believe that the fund's listing and equity offering along with the transition of its investment strategy and investment portfolio to be solely focused on core investing with Main Street and our private loan investment strategy provides fund the ability to continue to provide its shareholders with a very attractive source of recurring dividend income and attractive total shareholder returns and also provides significant future benefits to Main Street through the opportunity to grow the asset management fees that our external investment manager receives from the fund as it executes its growth plans.

我們對此次上市和股票發行感到非常滿意，這使得該基金能夠加快發行時間並增加發行規模。我們對 MSC 收入基金的未來計劃感到非常興奮，並相信該基金的上市和股票發行以及其投資策略和投資組合的轉變，完全專注於與 Main Street 進行核心投資，我們的私人貸款投資策略使基金能夠繼續為其股東提供非常有吸引力的經常性股息收入來源和有吸引力的總股東回報，並且通過增加我們的外部投資經理在執行增長計劃時從未來增長

Based upon our results for the fourth 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 $0.30 per share payable in March, representing our 14 consecutive quarterly supplemental dividend and regular monthly dividends for the second quarter of 2025 of $0.25 per share payable in each of April, May and June, representing a 4% increase from the second quarter of 2024.

根據我們第四季度的業績，結合我們對每項主要投資策略和資產管理業務的樂觀前景，本週早些時候，我們的董事會宣佈於 3 月份支付每股 0.30 美元的補充股息，這是我們連續 14 次季度補充股息，2025 年第二季度的定期月度股息為每股 0.25 美元，分別於 4 月、5 月和 6 月支付，比第二季度增長 4%。

The supplemental dividend for March as a result of our strong performance in the fourth quarter, and will result in total supplemental dividends paid during the trailing 12-month period of $1.20 per share, representing an additional 41% paid to our shareholders in excess of our regular monthly dividends. We currently expect to recommend that our Board continues to declare future supplemental dividends to the extent DNII significantly exceeds our regular monthly dividends paid in future quarters, and we maintain a stable-to-positive NAV.

3 月的補充股息是我們第四季度強勁表現的結果，將導致過去 12 個月期間支付的補充股息總額為每股 1.20 美元，比我們每月的常規股息額外支付給股東的股息高出 41%。我們目前預計將建議董事會繼續宣布未來的補充股息，只要 DNII 大大超過我們未來幾季支付的定期月度股息，並且我們保持穩定至正的資產淨值。

Based upon our expectations for continued favorable performance in the first quarter, we currently anticipate proposing an additional supplemental dividend payable in June 2025.

根據我們對第一季持續保持良好表現的預期，我們目前預計將於 2025 年 6 月支付額外的補充股利。

Now turning to our current investment pipeline. As of today, I would characterize our lower middle market investment pipeline as average, with several new investments scheduled to close before quarter end. We believe that the unique and flexible financing solutions that we can provide to lower middle market companies and their owners and management teams and our differentiated long-term to permanent holding periods represent an attractive solution to the needs of many lower middle market companies.

現在來談談我們目前的投資管道。截至今天，我認為我們的中低階市場投資管道處於平均水平，其中幾項新的投資計畫將於本季末前完成。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獨特、靈活的融資解決方案，以及我們差異化的長期至永久持有期，可以滿足許多中低端市場公司的需求。

And despite the current broad economic uncertainty, we are confident in our expectations for favorable lower middle market investment activity over the next few months. 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.

儘管目前存在廣泛的經濟不確定性，但我們對未來幾個月中低端市場投資活動的有利預期充滿信心。我們也繼續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，我還將把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.

說完這些，我會把電話轉給大衛。

Thanks, Dwayne, and good morning, everyone. Each year-end provides a good opportunity to look back at our history and highlight the results of our unique and diversified investment strategies and discuss how these strategies have enabled us to deliver highly attractive returns to our shareholders over an extended period of time.

謝謝，德韋恩，大家早安。每年年底都是一個很好的機會來回顧我們的歷史，強調我們獨特和多元化投資策略的成果，並討論這些策略如何使我們能夠在較長時期內為股東帶來極具吸引力的回報。

Since our IPO in 2007, we have increased our monthly dividend per share by 127%, we've declared cumulative total dividends to our shareholders of almost $45 per share or approximately 3 times our IPO price of $15 per share.

自 2007 年首次公開募股以來，我們已將每月每股股息提高了 127%，我們向股東宣布的累計股息總額已接近每股 45 美元，約為每股 15 美元 IPO 價格的三倍。

Our total return to shareholders since our IPO calculated using our stock price as of yesterday's close, and assuming reinvestment of all dividends received since our IPO was 16 times money invested. This compares favorably to the 4.4 times money invested for the S&P 500 over the same period of time and is significantly higher when compared to other BDCs.

我們自首次公開募股以來給股東的總回報是使用我們昨日收盤時的股價計算的，並假設自首次公開募股以來收到的所有股息再投資是投資金額的16倍。這與同期標準普爾 500 指數 4.4 倍的投資額相比具有優勢，而且與其他 BDC 相比，投資金額要高得多。

As we previously discussed, we believe that the primary drivers of our long-term success have been and will continue to be our focus on making both debt and equity investments in the underserved lower middle market, our private credit investment activities for the benefit of our stakeholders and for the clients of our Asset Management business, our internally managed structure, which allows us to maintain an industry-leading cost structure and the strong alignment of interest between our employees and our shareholders as a result of our team's meaningful stock ownership.

正如我們之前所討論的，我們相信我們長期成功的主要驅動力一直是並將繼續是我們對在服務不足的中低端市場進行債務和股權投資的關注、我們的私人信貸投資活動，以造福我們的利益相關者和資產管理業務的客戶、我們的內部管理結構，這使我們能夠保持行業領先的成本結構，並且由於我們團隊的有意義的股權，我們的員工和股東之間的利益保持緊密的股權，我們的員工和股東之間的利益保持緊密的股權，我們的員工和股東之間的利益。

Most notably and uniquely, our lower middle market strategy provides attractive leverage points and income yield on our first lien debt investment while also creating a true partnership with the management teams and other equity owners of our portfolio companies through our flexible and highly aligned equity ownership structures.

最值得一提和獨特的是，我們的中低端市場策略為我們的第一留置權債務投資提供了有吸引力的槓桿點和收益，同時透過我們靈活且高度一致的股權結構與我們的投資組合公司的管理團隊和其他股權所有者建立了真正的合作夥伴關係。

This approach provides us significant downside protection through our first lien debt investment and preferred equity position while still providing the benefits of significant upside potential through our equity investments.

這種方法透過我們的第一留置權債務投資和優先股部位為我們提供顯著的下行保護，同時仍透過我們的股權投資提供顯著的上行潛力的好處。

Main Street's long-term historical track record of investing in the lower middle market, coupled with our view that market continues to be underserved, gives us confidence that we will be able to continue to find attractive, new investment opportunities in this primary area of investment focus for our business.

Main Street 長期投資中低端市場的歷史記錄，加上我們認為該市場仍然服務不足的觀點，使我們相信，我們將能夠繼續在我們業務的這一主要投資重點領域找到有吸引力的新投資機會。

Our ability to provide highly customized and differentiated capital solutions for the predominantly family-owned businesses that exist in the lower middle market has been and continues to be a strong differentiator for us.

我們能夠為中低端市場中以家族企業為主的企業提供高度客製化、差異化的資本解決方案，這一直是、並將繼續成為我們強大的差異化因素。

In 2024, Main Street invested $466 million in our lower middle market strategy, $228 million of this capital was deployed in seven new lower middle market platform companies with the remaining $238 million, predominantly representing follow-on investments in existing and well-performing lower middle market companies.

2024 年，Main Street 向我們的中低端市場策略投資了 4.66 億美元，其中 2.28 億美元部署在七家新的中低端市場平台公司，剩餘的 2.38 億美元主要用於對現有的、表現良好的中低端市場公司的後續投資。

Consistent with our comments in prior quarters, the majority of these follow-on investments were made to support growth strategies in some of our highest-performing portfolio companies, which makes this aspect of our lower middle market investment activity very exciting for us.

與我們前幾季的評論一致，這些後續投資中的大部分都是為了支持我們一些表現最好的投資組合公司的成長策略，這使得我們對中低端市場投資活動的這一方面感到非常興奮。

Our follow-on investments are typically used to support multiple objectives, including acquisitions, product or geographic expansion opportunities and recapitalization transactions. Most importantly, these follow-on investments are made in support of proven management teams that we believe represent significantly less investment risk when compared to providing capital to new investment portfolio companies.

我們的後續投資通常用於支援多個目標，包括收購、產品或地理擴張機會和資本重組交易。最重要的是，這些後續投資是為了支持經驗豐富的管理團隊而進行的，我們認為，與向新投資組合公司提供資金相比，這些後續投資的風險要小得多。

Since we are significant equity owners in our lower middle market companies, we also benefit from participating alongside the proven manager in these businesses as they strive to achieve meaningful equity value creation.

由於我們是中低端市場公司的重要股權所有者，因此，我們也受益於與這些企業中經驗豐富的經理人一起參與，努力實現有意義的股權價值創造。

As we've stated in the past, as our lower middle market portfolio companies perform over time, they naturally deleverage the free cash flow generated from operations. This allows us, along with our lower middle market portfolio management team partners to benefit from a larger portion of the portfolio company's cash flow after debt service, which can be available for distribution to the equity owners.

正如我們過去所說的那樣，隨著我們的中低端市場投資組合公司隨著時間的推移而表現良好，它們自然會降低營運產生的自由現金流的槓桿率。這樣，我們以及我們的中低端市場投資組合管理團隊合作夥伴就可以從投資組合公司償還債務後的更大一部分現金流中受益，這些現金流可以分配給股權所有者。

Given the strength and quality of our lower middle market portfolio and the long-term holding period for many of our companies, we expect dividend income to continue to be a significant contributor to our results in 2025 and in the future.

鑑於我們中低階市場投資組合的實力和質量，以及我們許多公司的長期持有期，我們預計股息收入將繼續成為我們 2025 年及未來業績的重要貢獻者。

Additionally, this deleveraging, coupled with the attractive overall strong operating results from our lower middle market portfolio companies, allowed us to achieve $120 million in net fair value increases in 2024 for a lower middle market portfolio, including the largest realized gain in our firm's history.

此外，這種去槓桿化，再加上我們中低端市場投資組合公司整體強勁的經營業績，使我們在 2024 年實現了中低端市場投資組合淨公允價值增長 1.2 億美元，其中包括我們公司歷史上最大的已實現收益。

The benefit from realized gains on our lower middle market equity investments is unique to us among our BDC peers and provides the opportunity to offset losses, which will naturally incur when investing in noninvestment-grade asset classes.

在 BDC 同業中，我們從中低端市場股票投資中獲得的已實現收益是獨一無二的，並且為我們提供了抵消損失的機會，而投資非投資級資產類別時自然會產生損失。

As our lower middle market equity investments perform, they also provide us the opportunity for unrealized appreciation, which allows us to continue to grow our -- (technical difficulty), which is an opportunity that the investment strategies of other BDCs simply do not have.

隨著我們的中低端市場股權投資表現良好，它們也為我們提供了未實現增值的機會，這使我們能夠繼續增加我們的 — — （技術難度），這是其他 BDC 的投資策略根本沒有的機會。

A great example of a lower middle market equity investment that highlights the benefits of our unique investment strategy was the exit from our portfolio company, Pearl Meyer, that Dwayne mentioned in his remarks. We completed the exit in our investment in Pearl Meyer in the fourth quarter, which resulted in a realized gain of $54 million.

德韋恩在演講中提到的退出投資組合公司 Pearl Meyer 就是一個很好的例子，它凸顯了我們獨特投資策略的優勢。我們在第四季完成了對 Pearl Meyer 的投資退出，實現收益 5,400 萬美元。

In addition to the realized gain achieved upon exit, Pearl Meyer also distributed total dividends to us at $32 million over the lifetime of our investment. As a result, on a cumulative basis, since our initial investment in April 2020 and taking the realized gain in dividends into consideration, we realized an annual internal rate of return of 69% and 7.7 times money invested return on our equity investment, including all debt and equity investments in Pearl Meyer, Mainstreet realized an IRR of 33%.

除了退出時實現的收益外，Pearl Meyer 還在我們投資期間向我們派發了總計 3,200 萬美元的股息。因此，自 2020 年 4 月首次投資以來，累計起來，考慮到股息的已實現收益，我們實現了 69% 的年內部收益率和 7.7 倍的股權投資回報率，包括對 Pearl Meyer 的所有債務和股權投資，Mainstreet 實現了 33% 的內部收益率。

The last important area, I'd like to cover regarding our 2024 accomplishments, are the impressive contributions that our private credit team delivered during the year. Our private credit team continued to execute on our strategy to dedicate significant resources towards growing the private loan segment of our business, which we believe provides a very attractive risk-adjusted return for us and for the clients of our Asset Management business.

關於我們 2024 年的成就，我想談的最後一個重要領域是我們的私人信貸團隊在這一年中做出的令人矚目的貢獻。我們的私人信貸團隊繼續執行我們的策略，投入大量資源來發展我們業務的私人貸款部門，我們相信這將為我們和我們的資產管理業務的客戶帶來非常有吸引力的風險調整回報。

During 2024, we completed gross investments of approximately $900 million in our private loan strategy and grew the cost basis of our private loan investment portfolio by $449 million. As a result of these investment activities, our private loan portfolio represented 46% of our total investments at cost at year-end, and our middle market portfolio declined to represent less than 5% of our total investment at cost.

2024 年，我們在私人貸款策略中完成了約 9 億美元的總投資，並將私人貸款投資組合的成本基礎增加了 4.49 億美元。由於這些投資活動，截至年底，我們的私人貸款組合占我們總投資成本的 46%，而中型市場組合占我們總投資成本的 5% 以下。

As Dwayne discussed earlier, our private loan capabilities are also the primary driver of our strategic objective to continue to grow our asset management business. As of December 31, we had investments in 190 portfolio companies spanning across numerous industries and end markets.

正如 Dwayne 先前所討論的，我們的私人貸款能力也是我們繼續發展資產管理業務的策略目標的主要驅動力。截至 12 月 31 日，我們已投資 190 家公司，涉及眾多產業和終端市場。

Our largest portfolio company, excluding the external investment manager, represented only 3.3% of our total investment income for the year and only 3.8% of our total investment portfolio fair value at year-end. The majority of our portfolio investments represented less than 1% of our income and our assets.

我們最大的投資組合公司（不包括外部投資經理）僅占我們當年總投資收入的 3.3%，僅占我們年底總投資組合公允價值的 3.8%。我們的大部分投資組合占我們的收入和資產的不到 1%。

Now turning to our investment activity in the fourth quarter. We made total investments in our lower middle market portfolio of $168 million, including investments of $116 million in two new lower middle market portfolio companies, which after aggregate repayments on debt investments, return of invested equity capital from several equity investments and a decrease in the cost basis due to realized losses on certain portfolio investments resulted in a net increase in our lower middle market portfolio of $11 million.

現在來談談我們第四季的投資活動。我們對中低階市場投資組合的總投資為 1.68 億美元，其中包括對兩家新的中低端市場投資組合公司的 1.16 億美元投資，在累計償還債務投資、從幾項股權投資中返還投資股本以及由於某些投資組合已實現損失導致成本基礎下降後，我們的中低端市場投資組合的淨增加值為 1,100 萬美元。

During the quarter, we also completed $108 million in total private loan investments, which after aggregate repayments of debt investments and a decrease in cost basis due to realized losses on several portfolio investments resulted in a net increase in our private loan portfolio of $7 million. At year-end, our lower middle market portfolio included investments in 84 companies, representing $2.5 billion at fair value, which is 29% above our related cost basis.

在本季度，我們還完成了 1.08 億美元的私人貸款投資，在累計償還債務投資以及由於幾項投資組合實現損失導致成本基礎下降後，我們的私人貸款投資組合淨增加了 700 萬美元。截至年底，我們的中低階市場投資組合包括對 84 家公司的投資，以公允價值計算為 25 億美元，比我們的相關成本基礎高出 29%。

We had investments in 91 companies in our private loan portfolio, representing $1.9 billion of fair value. The total investment portfolio at fair value at year-end was 16% above our related cost basis. Additional details on our investment portfolio at year-end are included in the press release that we issued yesterday.

我們的私人貸款組合中投資了 91 家公司，公允價值達 19 億美元。以公允價值計算，年底投資組合總額比我們的相關成本基礎高出 16%。有關我們年底投資組合的更多詳細資訊已包含在我們昨天發布的新聞稿中。

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

說完這些，我將把電話轉給瑞安，討論我們的財務表現、資本結構和流動性狀況。

Thank you, David. To echo Dwayne and David's comments, we are pleased with our operating results for the fourth quarter, which included a number of quarterly records and capped a year in which Main Street achieved records for net investment income and distributable net investment income and net asset value per share.

謝謝你，大衛。與 Dwayne 和 David 的評論相呼應，我們對第四季度的經營業績感到滿意，其中包括多項季度記錄，並創下了 Main Street 在淨投資收益、可分配淨投資收益和每股淨資產價值方面的記錄。

Our total investment income for the fourth quarter was $140.4 million, increasing by $11.1 million or 8.6% over the fourth quarter of 2023 and by $3.6 million or 2.6% from the third quarter of 2024. The positive momentum we experienced during the first three quarters continued into the fourth quarter and culminated in a year with strong levels of interest, dividend and fee income, which again demonstrated the continued strength of our differentiated investment in asset management strategies.

我們第四季的總投資收入為 1.404 億美元，比 2023 年第四季增加 1,110 萬美元或 8.6%，比 2024 年第三季增加 360 萬美元或 2.6%。前三個季度的積極勢頭延續到了第四季度，並在全年達到了利息、股息和費用收入強勁的水平，這再次證明了我們資產管理策略差異化投資的持續強勁。

Interest income increased by $9.3 million from a year ago and decreased $0.6 million when compared to the third quarter. The increase over the prior year was driven primarily by the impact of increased net investment activity over last year, partially offset by the impact of an increase in investments on nonaccrual status and a decrease in interest rates on our floating rate debt investments, primarily resulting from decreases in benchmark index rates.

利息收入較去年同期增加了 930 萬美元，較第三季減少了 60 萬美元。與前一年相比的成長主要歸因於去年淨投資活動增加的影響，但部分被非應計狀態投資增加以及浮動利率債務投資利率下降的影響所抵消，後者主要由於基準指數利率下降。

The decrease from the third quarter was primarily driven by the impact of decreases in interest rates, our floating rate debt investments partially offset by an increase in net investment activity. Dividend income increased by $0.7 million or 3.1% when compared to a year ago, including a $0.2 million increase in unusual or nonrecurring dividends and increased by $1.3 million or 5.5% from the third quarter, including a $0.3 million increase in unusual or nonrecurring dividends.

第三季的下降主要受利率下降的影響，我們的浮動利率債務投資部分被淨投資活動的增加所抵銷。與去年同期相比，股息收入增加了 70 萬美元或 3.1%，其中不尋常或非經常性股息增加了 20 萬美元；與第三季度相比，股息收入增加了 130 萬美元或 5.5%，其中不尋常或非經常性股息增加了 30 萬美元。

The increases in dividend income are a result of the continued underlying strength of our portfolio companies. Fee income increased by $1.1 million or 23.3% from a year ago and increased by $2.9 million or 96.6% from the third quarter of 2024. The increase in fee income from the prior year was primarily driven by higher closing fees on new and follow-on investments, partially offset by a decrease from accelerated amortization and an exit prepayment and amendment fees driven by investment activity.

股息收入的增加得益於我們投資組合公司持續強勁的發展勢頭。費用收入比去年同期增加了 110 萬美元，即 23.3%，比 2024 年第三季增加了 290 萬美元，即 96.6%。費用收入較前一年增加的主要原因是新投資和後續投資的結算費用增加，但部分被加速攤銷和投資活動推動的退出預付款及修改費用的減少所抵消。

The increase in fee income over the third quarter was primarily driven by higher closing fees on new and follow-on investments during the fourth quarter and increased prepayment and amendment fees driven by investment activity. Prepayment and other fee income considered nonrecurring decreased by $0.2 million compared to a year ago and increased by [$1.2 million] (technical difficulty) compared to the third quarter of 2024.

第三季費用收入的成長主要由於第四季新投資和後續投資的結算費用增加，以及投資活動推動的預付款和修改費用增加。預付款和其他被視為非經常性費用的收入與去年同期相比減少了 0.2 百萬美元，與 2024 年第三季相比增加了 [1.2 百萬美元]（技術難度）。

The fourth quarter included reduced levels of income considered less consistent or nonrecurring in nature in comparison to the fourth quarter of 2023 and elevated levels of income considered less consistent or nonrecurring in nature in comparison to the third quarter of 2024, including dividends from our equity investments and accelerated prepayment, repricing and other activity related to our debt investments.

與 2023 年第四季相比，第四季度被視為不太一致或非經常性的收入水平有所下降，與 2024 年第三季度相比，被視為不太一致或非經常性的收入水平有所上升，其中包括來自我們的股權投資的股息以及與我們的債務投資相關的加速預付款、重新定價和其他活動。

In the aggregate, these items totaled $3.7 million and were $1.3 million or $0.02 per share lower compared to the average of the prior four quarters, were $1.6 million or $0.02 per share lower than such items in the fourth quarter of 2023 and $1.5 million or $0.02 per share higher than the third quarter of 2024.

總計這些項目總額為 370 萬美元，比前四個季度的平均水平低 130 萬美元或每股 0.02 美元，比 2023 年第四季度的此類項目低 160 萬美元或每股 0.02 美元，比 2024 年第三季度高 150 萬美元或每股 0.02 美元。

Our operating expenses increased by $10.9 million over the fourth quarter of 2023, largely driven by increases in interest rate expense and compensation-related expenses, partially offset by an increase in expenses allocated to the external investment.

我們的營運費用在 2023 年第四季增加了 1,090 萬美元，主要是由於利率費用和薪酬相關費用的增加，但部分被分配給外部投資的費用增加所抵消。

The increase in interest expense from a year ago was primarily driven by an increase in average borrowings to fund a portion of growth of our investment portfolio, an increase in the weighted average rate on our debt obligations. The 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 for the year and continues to be among the lowest in our industry.

與去年同期相比，利息支出的增加主要是由於為支持我們投資組合的部分成長而增加的平均借款，以及我們的債務加權平均利率的增加。我們的總營運費用（不包括利息支出）占我們平均總資產的百分比按年率計算為本季 [1.3%]，並且繼續保持行業最低水準。

Our external investment manager contributed $8.7 million to our net investment income during the fourth quarter, representing a decrease of $0.5 million from the same quarter a year ago, which resulted in a total of $34.3 million for the year, representing an increase of $1 million or 3% over the prior year. The manager earned $3.4 million in incentive fees during the quarter and $13.7 million for the year, representing a decrease of $0.5 million and an increase of $0.3 million, respectively, over the same period in the prior year.

我們的外部投資經理在第四季度為我們的淨投資收入貢獻了 870 萬美元，比去年同期減少 50 萬美元，全年總額達到 3,430 萬美元，比上年增加 100 萬美元或 3%。該經理本季的激勵費用為 340 萬美元，全年的激勵費用為 1,370 萬美元，比去年同期分別減少 50 萬美元和增加 30 萬美元。

The manager ended the quarter with total assets under management of $1.6 billion.

截至本季末，該經理管理的總資產為 16 億美元。

During the quarter, we recorded a net fair value appreciation, including net realized gains and net unrealized appreciation on the investment portfolio of $80.8 million. This increase was driven by net fair value appreciation in our lower middle market portfolio and our external investment manager, partially offset by net fair value depreciation in our private loan portfolio and certain of our other portfolio investments.

在本季度，我們記錄了淨公允價值增值，包括投資組合的淨已實現收益和淨未實現增值 8,080 萬美元。這一增長主要得益於我們的中低端市場投資組合和外部投資經理的淨公允價值升值，但部分被我們的私人貸款投資組合和某些其他投資組合的淨公允價值貶值所抵消。

The net fair value appreciation in our lower middle market portfolio was largely driven by the continued positive performance of certain of our portfolio companies. The net fair value depreciation in our private loan portfolio was driven by the impact of specific portfolio company underperformance, partially offset by decreases in market spreads.

我們的中低階市場投資組合的淨公允價值升值主要得益於某些投資組合公司持續的良好表現。我們的私人貸款組合的淨公允價值貶值是由特定投資組合公司績效不佳的影響所致，但被市場利差的下降部分抵銷。

The fair value appreciation of our external investment manager was a result of a combination of increases in the valuation multiples of publicly traded peers, which we use as one of the benchmarks for valuation purposes, and an increase in the fee income generated by the external investment manager.

我們的外部投資經理的公允價值升值是由於上市公司同業的估值倍數增加（我們將其作為估值基準之一）和外部投資經理產生的費用收入增加等多種因素共同作用的結果。

We ended the fourth quarter with investments on nonaccrual status, comprising approximately 0.9% of the total investment portfolio at fair value and approximately 3.5% at cost. Net asset value, or NAV, increased by $1.08 per share over the third quarter and by $2.45 or 8.4% when compared to a year ago to a record NAV per share of $31.65 at year-end.

截至第四季度，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 0.9%，以成本計算約佔 3.5%。淨資產價值（NAV）在第三季每股增加了 1.08 美元，與去年同期相比增加了 2.45 美元或 8.4%，年底每股淨資產價值達到創紀錄的 31.65 美元。

Our regulatory debt-to-equity leverage calculated as total debt, excluding our SBIC debentures divided by net asset value was 0.64 times and our regulatory asset coverage was 2.56 times, and these ratios continue to be more conservative than our long-term target ranges of 0.8 times to 0.9 times and 2.1 times to 2.25 times, respectively. Given our current liquidity position, we were less active during the fourth quarter in our at the market or ATM program, raising net proceeds of $8.9 million from equity issuances.

我們的監管債務與股權槓桿率（計算方法為總債務（不包括我們的 SBIC 債券）除以淨資產價值）為 0.64 倍，我們的監管資產覆蓋率為 2.56 倍，這些比率仍然比我們的長期目標範圍（分別為 0.8 倍至 0.9 倍和 2.1 倍至 2.25 倍）更為保守。鑑於我們目前的流動性狀況，我們在第四季度的市場或 ATM 計劃中不太活躍，透過發行股票籌集了 890 萬美元的淨收益。

After giving effect to the capital activities in 2024, we entered 2025 with strong liquidity, including cash and availability under our credit facilities in excess of $1.4 billion with on near-term debt maturity of $150 million in December of 2025.

在 2024 年實現資本活動之後，我們進入 2025 年時將擁有強大的流動性，包括現金和信貸額度下的可用資金超過 14 億美元，2025 年 12 月到期的近期債務為 1.5 億美元。

We continue to believe that our conservative leverage, strong liquidity and continued access to capital are significant strengths that have proven to benefit us historically and have us well positioned for the future, allowing us to continue to execute our attractive investment strategies.

我們始終相信，我們保守的槓桿率、強大的流動性和持續的資本獲取能力是重要的優勢，這些優勢已被證明在歷史上使我們受益，並使我們在未來處於有利地位，使我們能夠繼續執行有吸引力的投資策略。

As discussed last quarter, with this current level of liquidity, we currently expect to fund our new net investment activity in 2025 through a greater portion of debt financing. And as such, we would expect leverage to continue to increase during this time to be closer to our long-term stated targets. However, we expect to continue to operate throughout the year at leverage levels more conservative than our long-term targets.

正如上個季度所討論的那樣，在目前的流動性水平下，我們目前預計將透過更大比例的債務融資來為我們 2025 年的新淨投資活動提供資金。因此，我們預計槓桿率在此期間將繼續增加，以更接近我們長期設定的目標。然而，我們預計全年將繼續以比長期目標更保守的槓桿水平運作。

Coming back to our operating results. As a result of our strong performance for the quarter and year, our return on equity for the fourth quarter was 25.4% on an annualized basis and 19.4% for the year. DNII per share for the quarter of $1.08 decrease from DNII per share for the fourth quarter of last year by $0.04 or 3.6% and exceeded DNII per share for the third quarter by $0.02 per share or 1.9%.

回到我們的經營績效。由於我們本季和全年的強勁表現，我們第四季的股本回報率按年率計算為 25.4%，全年為 19.4%。本季每股 DNII 為 1.08 美元，較去年第四季每股 DNII 下降 0.04 美元或 3.6%，較第三季每股 DNII 高出 0.02 美元或 1.9%。

The combined impact of certain investment income considered less consistent and nonrecurring in nature on a per share basis was $0.02 per share below the average of the last four quarters, $0.02 per share below the same quarter a year ago and $0.02 per share above the third quarter. For the year, these items were $0.05 per share below 2023 levels.

對每股而言，某些被認為不太一致和非經常性的投資收益的綜合影響為每股比過去四個季度的平均水平低 0.02 美元，比去年同期低 0.02 美元，比第三季度高 0.02 美元。就今年而言，這些項目的每股價格比 2023 年的水平低 0.05 美元。

Looking forward, we expect headwinds on top line earnings related to the decrease in floating market index rates. But given the strength of our underlying portfolio, we expect another strong earnings quarter in the first quarter of 2025, with expected DNII of at least $1.05 per share with potential for upside driven by portfolio investment activities during the quarter. And we would also expect that we would recommend to our Board that it declare another supplemental dividend in the second quarter.

展望未來，我們預期浮動市場指數利率下降將對營業利潤造成不利影響。但鑑於我們基礎投資組合的實力，我們預計 2025 年第一季將再次出現強勁的盈利季度，預計 DNII 至少為每股 1.05 美元，並且在本季度的投資組合投資活動推動下具有上漲潛力。我們也預計將向董事會建議在第二季再次宣布補充股息。

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

說完這些，我現在將電話轉回給接線員，以便我們回答任何問題。

(Operator Instructions) Robert Dodd, Raymond James. (Operator Instructions)

（操作員指示）羅伯特·多德、雷蒙德·詹姆斯。（操作員指令）

I am self-muted. I apologize. Congratulations on the quarter and [Pearl Meyer], in particular. Just segueing from that, can you give us any color on exposure in the portfolio to potential tariff issues or government efficiency initiatives? I mean it's not their first rodeo with tariffs and that did pretty well before, but can you just give us any thoughts on that given the economic environment and what's coming out of DC at the moment?

我已自我靜音。我很抱歉。對本季取得的成績表示祝賀，特別是對 Pearl Meyer 表示祝賀。順著這個主題，您能否為我們介紹一下投資組合中潛在的關稅問題或政府效率措施的影響？我的意思是，這不是他們第一次在關稅問題上大展身手，而且之前他們也確實表現不錯，但考慮到目前的經濟環境和華盛頓的情況，你能否給我們談談你對此的看法？

Sure, Robert. We're happy to do that. Thanks for the question. I'd say on the tariff topic, clearly, we're in some very interesting comments here. And I think our view is that if the tariffs are implemented and maintained the way that they're being discussed right now, that there's many businesses and industries in the US that are going to have some issues or some exposure just given the global nature of the business world today. .

當然，羅伯特。我們很樂意這麼做。謝謝你的提問。我想說，關於關稅問題，顯然我們在這裡有一些非常有趣的評論。我認為，我們的觀點是，如果關稅按照現在討論的方式實施和維持，那麼考慮到當今商業世界的全球化性質，美國的許多企業和行業將面臨一些問題或風險。。

And I'd say, when you look at our portfolio, actually, we're no different. There are certain companies in our portfolio that will definitely have an impact. But as you probably heard us say in the past, we do have a very, very diverse portfolio. We think that's a benefit in all periods. We think it would also be a benefit when you look at the potential impact of tariffs going forward.

我想說，當你看看我們的投資組合時，實際上，我們沒有什麼不同。我們投資組合中的某些公司肯定會產生影響。但正如您過去可能聽我們說過的那樣，我們的投資組合確實非常非常多樣化。我們認為這在各個時期都是有益的。我們認為，當你考慮未來關稅的潛在影響時，這也將是一個好處。

We also look at the companies that we have -- as you've heard us say in the past, particularly in the lower middle market, these are largely US domestic-focused businesses, both customers and vendors. You're going to be more focused from a US domestic standpoint. So while we will be impacted, if we compare our expected impacts to the broader US economy, we do think that our impact will be less. So not that we won't be impacted, but we think it will be a favorable comparison relative to other parts of the US economy.

我們也會關注我們擁有的公司——正如您過去聽到我們所說的，特別是在中低端市場，這些公司主要是以美國國內為中心的企業，包括客戶和供應商。你會更加關注美國國內的情況。因此，雖然我們會受到影響，但如果我們將預期的影響與整個美國經濟進行比較，我們確實認為我們的影響會較小。因此，這並不是說我們不會受到影響，但我們認為與美國經濟的其他部分相比，這將是一個有利的比較。

But despite that view, as I think you'd probably expect, I'd say we have been and we are actively working with our portfolio companies to make sure that they're being diligent in looking at their plans or playbooks to deal with the issues that could come about. As you just said in your comments, they dealt with this kind of thing before, both with COVID-19, supply chain issues and then tariffs historically and then more recently, the kind of high inflation period.

但儘管如此，我想你可能也想到，我想說的是，我們一直在積極與我們的投資組合公司合作，以確保他們認真研究他們的計劃或劇本，以應對可能出現的問題。正如您剛才在評論中所說的那樣，他們以前就處理過這種事情，包括新冠肺炎疫情、供應鏈問題，以及歷史上的關稅，以及最近的高通膨時期。

So we think that our companies and their management teams have dealt with these types of issues in the past. And when we look at our performance since COVID, we think they've done a really good job of dealing with the uncertainty that has existed in a number of different fronts, and we would be hopeful that they can continue to navigate things in a positive manner. But we are clearly focused on it, spending time on it. We'll continue to focus on that, with our management teams and our companies.

因此我們認為，我們的公司及其管理團隊過去已經處理過此類問題。當我們回顧我們自新冠疫情以來的表現時，我們認為他們在處理存在於多個不同方面的不確定性方面做得非常好，我們希望他們能夠繼續以積極的方式駕馭事態。但我們顯然專注於此，並花了很多時間。我們、我們的管理團隊和公司將繼續關注這一點。

You've heard us also say this before, but one of the things we've always loved about the lower middle market is that we do think we have best-in-class management team. I think we've proven that over the last 5 to 10 years, with the performance in the lower middle market. So these are great operators. They're also very, very much aligned with us, much more focused on their equity ownership position as opposed to just a paycheck or a bonus.

您以前也聽過我們這麼說，但我們一直喜歡中低階市場的原因之一是，我們確實認為我們擁有一流的管理團隊。我認為，我們在過去5到10年中已經在中低端市場的表現中證明了這一點。這些都是很棒的操作員。他們也與我們非常一致，更加關注他們的股權狀況，而不僅僅是薪水或獎金。

So we think that they manage their businesses in a very productive manner. And because of the size of the companies, when they execute a plan that plan can actually have an impact very, very quickly. So we think those are all positive. So I think it will be interesting to see how this plays out, not just for us but for the more broad US economy, but I think we feel that we're in good shape relative to others and are confident in the ability of our teams to manage it.

因此我們認為他們以非常有效率的方式管理他們的業務。而且由於公司規模較大，當他們執行一項計劃時，該計劃實際上可以非常迅速地產生影響。因此我們認為這些都是正面的。因此，我認為看看這件事如何發展將會很有趣，不僅對我們，而且對更廣泛的美國經濟也是如此，但我認為我們覺得我們相對於其他人而言處於良好狀態，並且對我們團隊管理它的能力充滿信心。

On your second -- your question or topic about the impacts from a government efficiency standpoint, I'd say, we have some limited exposure there. There's a couple of companies that we can think of that have significant exposure. And obviously, we're -- just like we are on the tariff topic, we're talking to those companies and those management teams frequently to one, stay up to date on what's going on, but also you do what we can to help them plan and navigate it.

關於您的第二個問題或主題，即從政府效率的角度產生的影響，我想說，我們在這方面的接觸有限。我們認為有幾家公司具有較大的曝光率。顯然，就像我們在關稅問題上一樣，我們正在與這些公司和管理團隊頻繁溝通，一方面，隨時了解最新情況，另一方面，我們也盡我們所能，幫助他們規劃和應對。

One of those companies, I would say, has a lot more impact. The other one, I think, is actually continuing to do exceptionally well. And we think despite what's going on from a federal efficiency standpoint, we expect they'll continue to do well. But we think we have a limited exposure on that front when you look at the portfolio we have.

我想說，其中有一家公司的影響力要大得多。我認為，另外一個實際上繼續表現優異。我們認為，不管從聯邦效率的角度來看發生了什麼，我們預計他們將繼續表現良好。但當您查看我們的投資組合時，我們認為我們在這方面的風險敞口有限。

One more, still tied to DC. That's obviously the best -- can you hear me?

再來一個，仍然與 DC 相關。這顯然是最好的——你能聽到我說話嗎？

Yes, we can hear you. -- Yes, Robert, can you hear us?

是的，我們能聽到你的聲音。 ——是的，羅伯特，你聽得到我們說話嗎？

Right. Just on [taxes], right? There is a perspective -- I can hear you, yes now. There's potential that capital gains taxes come down maybe this year, maybe next year, who knows? Is -- are you hearing anything from -- on the front of new platform acquisitions where -- is there any slowdown in expected activity as people are like waiting for clarity on taxes?

正確的。只涉及稅收，對吧？有一個觀點——我可以聽到你的聲音，是的，現在。資本利得稅有可能在今年下降，也可能是明年，誰知道呢？您是否聽到有關新平台收購方面的任何消息？由於人們正在等待稅收政策的明確，預期活動是否會放緩？

Because obviously, a lot of these entrepreneurs that potentially have pretty significant tax exposure if they sell their business, depending on a variety of factors. But is that entering anybody's mind at the moment? Or is that just not a big deal?

因為很明顯，許多企業家如果出售自己的企業，可能會面臨相當大的稅務風險，這取決於多種因素。但此刻有誰想過這一點嗎？或者這根本不是什麼大問題？

Yes. Robert, I'll give my views, and I'll let David add on if he has any additional comments. But I'd say as we look at the first quarter, and I think you probably heard this from other BDCs or management teams that you've talked to, I think activity both lower middle market and private loan or private credit, it has been a lot slower than we expected it to be.

是的。羅伯特，我會發表我的觀點，如果大衛還有其他評論，我會讓他補充。但我想說，當我們回顧第一季時，我想您可能從其他 BDC 或與您交談過的管理團隊那裡聽說過這一點，我認為中低端市場和私人貸款或私人信貸的活動都比我們預期的要慢得多。

But I don't think it's related to any potential changes from a capital gains rate standpoint. I think there is some reluctance or caution just given everything that's going on in the US economy with the topics that you touched on earlier. So I do think that, that is probably kind of dampened some of the expectations from an M&A standpoint.

但我認為從資本利得稅率的角度來看這與任何潛在變化無關。我認為，考慮到美國經濟的現狀以及您之前談到的話題，人們會有一些不情願或謹慎。因此我確實認為，從併購的角度來看，這可能在一定程度上抑制了預期。

But I don't think I've heard people talking about the capital gain stuff, and David's kind of shaking his head here saying that he hasn't either. So we have not seen that pop up. Obviously, if there was a positive change there. That could be a positive catalyst, but we just haven't -- we haven't heard in the discussions of the companies we've been talking to.

但我認為我沒有聽過人們談論資本利得的事情，大衛在這裡搖頭說他也沒聽過。因此我們沒有看到該彈出視窗。顯然，如果那裡有積極的變化。這可能是一個積極的催化劑，但我們還沒有——我們沒有聽到與我們所交談的公司討論此事。

Kenneth Lee, RBC Capital Markets.

加拿大皇家銀行資本市場 (RBC Capital Markets) 的 Kenneth Lee。

Just one on leverage. So still below target ranges, and it sounds like the expectation is a little bit of conservatism this year. Just wanted to dig into that a little bit more. Is this based on any kind of macro factors? And do you see there being enough origination activity to be able to bring up the leverage meaningfully over the near term?

僅就槓桿而言。因此仍低於目標範圍，聽起來今年的預期有點保守。只是想更深入地探討一下這一點。這是基於某種宏觀因素嗎？您是否認為有足夠的發起活動能夠在短期內顯著提高槓桿？

Yes, Ken. Thanks for the question. I would say that the views we're given on leverage are really -- were -- we entered the year in a pretty significantly underlevered position. I'd say that's driven by a couple of different things. One is less-than-expected investment activity, both on the lower middle market and private loan side of our business as we exited the fourth quarter, and that's continued to be the case, as I said a few minutes ago, as we look at the first couple of months of the year. .

是的，肯。謝謝你的提問。我想說的是，我們對槓桿率的看法實際上是——我們在今年初的槓桿率處於相當低的水平。我認為這是由一些不同的因素造成的。一是，在第四季結束時，無論是中低端市場還是私人貸款業務的投資活動都低於預期，正如我幾分鐘前所說的，回顧今年頭幾個月，這種情況仍然持續。。

But I think Ryan covered this in his prepared comments, but we do expect and are focused on trying to get our leverage up. And the way we're going to do that will be driven by two things. One is just actual investment activity on a net investment activity basis. That's going to be the biggest driver of where we end the year from a leverage standpoint. And then the other side of that is just given where we're at today from a leverage position, we expect to be less active under the ATM.

但我認為瑞安在他準備好的評論中已經涵蓋了這一點，但我們確實期待並專注於努力提高我們的槓桿率。我們實現這一目標的方式將由兩件事決定。一是僅基於淨投資活動的實際投資活動。從槓桿率的角度來看，這將成為我們今年年底的最大驅動因素。另一方面，考慮到我們今天的槓桿狀況，我們預計在 ATM 下的活躍程度會降低。

So as we do grow our investment portfolio and grow our capital structure alongside that, you should expect it to be much more heavily weighted toward the debt capital side of the capital structure.

因此，隨著我們的投資組合和資本結構的擴大，你應該預料到，我們的資本結構將更偏向債務資本方面。

And Ryan, if there's anything else you would add on feel free to add on there.

Ryan，如果您還有什麼要補充的，請隨時添加。

I think that about covers it. I mean one thing I would mention as was -- called out in the prepared remarks was the exit of Pearl Meyer happened at the very end of December and that was a sizable check that was written, which is great for us, but obviously had an impact on those leverage ratios as we hit year-end. So that also has a little bit of interplay there.

我想這就涵蓋了。我的意思是，我想提到的一件事是——在準備好的評論中提到過，Pearl Meyer 的離職發生在 12 月底，那是一張數額巨大的支票，這對我們來說是件好事，但顯然在我們臨近年底時對這些槓桿率產生了影響。所以這也有一點相互作用。

Got you. Very helpful there. And then within the lower mid-market portfolio there, and I think you mentioned in the prepared remarks seeing increasing interest and there could be some potential realization at some point. I wonder if you could just go a little bit more details around that. What's sort of the nature of these kind of discussions? And is the level of interest increasing based on macro factors, regulatory outlook or any other specific factors there?

明白了。非常有幫助。然後在中低階市場投資組合中，我想您在準備好的評論中提到，人們的興趣越來越大，而且在某個時候可能會有一些潛在的實現。我想知道您是否可以更詳細地介紹一下這一點。這類討論的本質是什麼？利息水準的增加是基於宏觀因素、監管前景還是其他任何具體因素？

Yes, Ken, just like we always are, we're going to be a little limited in what we say there. Obviously, if there's activities going on, it's under confidential kind of situation in terms of having a transaction that may be in process that is not public.

是的，肯，就像我們一直以來那樣，我們在那裡所說的內容會稍微有限。顯然，如果有活動正在進行，那麼它就處於保密狀態，即正在進行的交易可能不公開。

But as we said in the past, we think we've got some fantastic companies in our lower middle market portfolio, similar to what you saw with Pearl Meyer. And at some point, those companies may be called on by either a strategic or a large private equity firm because just like we find these companies very attractive, they may also find them attractive, and that may lead to dialogue -- could lead to a process being run by our portfolio company with Main Street's assistance to maximize the value in those transactions.

但正如我們過去所說的那樣，我們認為我們的中低端市場投資組合中有一些出色的公司，類似於 Pearl Meyer 的情況。在某個時候，這些公司可能會受到一家策略或大型私募股權公司的青睞，因為就像我們認為這些公司非常有吸引力一樣，他們也可能覺得這些公司很有吸引力，這可能會引發對話——可能導致我們的投資組合公司在 Main Street 的協助下運行一個流程，以最大化這些交易的價值。

I'd say that's similar to what happened on the on the Pearl Meyer side. We don't mandate anything. As you've heard us say in the past, we absolutely view our relationships with our lower middle market companies and their management teams as partnerships. So it's got to be something that both we and the management team views as an attractive opportunity.

我想說這與 Pearl Meyer 那裡發生的事情類似。我們不強制要求任何事。正如您過去聽到我們所說的那樣，我們絕對將與中低端市場公司及其管理團隊的關係視為合作夥伴關係。因此，我們和管理團隊都認為這是一個有吸引力的機會。

But when that happens, we're going to support them in maximizing the value, and we think we will consistently have really good outcomes in that type of a scenario, just like we had on Pearl Meyer.

但當這種情況發生時，我們將支持他們實現價值最大化，並且我們認為在這種情況下我們將始終取得非常好的結果，就像我們對 Pearl Meyer 所做的那樣。

David, if you want to add anything to that, feel free to add on.

大衛，如果你想添加任何內容，請隨意添加。

I think you covered it.

我想你已經涵蓋它了。

(Operator Instructions) Mark Hughes, Truist Securities.

（操作員指示）Truist Securities 的 Mark Hughes。

Yes. Appreciation in the quarter in the external investment manager. Anything we can anticipate related to the public offering? Or was that appreciation in 4Q already factoring that in?

是的。本季外部投資經理人的評價有所提高。關於此次公開發行，我們可以期待什麼？或者第四季的升值已經將這一因素考慮在內了？

Yes. I would say, Mark, the appreciation in Q4 didn't really have anything to do with the listing and the offering. It was more based upon continued growth with the consistent incentive fees we've been earning and receiving there as well as just the market. We have a number of different factors that go into our valuation approach.

是的。我想說，馬克，第四季的升值實際上與上市和發行沒有任何關係。它更多的是基於持續的成長，以及我們在市場上賺取和收到的持續激勵費用。我們的估值方法考慮了許多不同的因素。

One of those factors, not the only factor, but one of those factors is a publicly traded peer set. And I just think that peer set has been trading exceptionally well, not just in Q4 but for the last couple of quarters, see some benefit there from a valuation approach standpoint.

其中一個因素，不是唯一的因素，但其中一個因素是公開交易的同業集。我認為同業的交易表現一直非常好，不僅在第四季度，而且在過去幾個季度中，從估值方法的角度來看都有一定的好處。

And then when we think about the public offering, just the increase in assets, will that kind of logically trigger more value for the external manager? Or is that still looking at the peer group and other inputs?

然後，當我們考慮公開發行時，僅僅是資產的增加，這是否會在邏輯上為外部經理帶來更多價值？或仍在關注同儕群體和其他投入？

Yes. I think when you look at the changes that happen in conjunction with the listing and offering, the changes are such that the benefit to Main Street or through the external investment manager to Main Street are going to be fairly limited unless there's a significant change to the operating results at MSC Income Fund.

是的。我認為，當您查看與上市和發行相關的變化時，您會發現，除非 MSC Income Fund 的經營業績發生重大變化，否則 Main Street 或透過外部投資經理獲得的利益將相當有限。

What I mean there is we lowered the base management fee. So that change in the percentage will reduce the base management fees we get. We also changed the incentive fee structure to be more consistent with what you see from other externally managed BDCs and those two at consistent operating results would be close to breakeven. The structure was intended to provide MSC Income Fund shareholders additional benefits as we grow and have better performance, both at the net investment income line and the ROE line.

我的意思是我們降低了基本管理費。因此百分比的變化將會減少我們所獲得的基本管理費。我們也改變了激勵費用結構，使其與其他外部管理的 BDC 的狀況更加一致，這兩家公司的一致營運績效將接近收支平衡。這種結構旨在隨著我們的成長和更好業績（無論是在淨投資收益線還是 ROE 線上）為 MSC 收入基金股東提供額外利益。

So if we do that, there will be a lower incentive fee relative to performance. But overall, when you look at the growth of assets and an increasing level of performance, we still think it's a really good outcome for Main Street as well when we look at the relationship that we have with MSC Income Fund.

所以如果我們這麼做的話，相對於績效的激勵費用就會降低。但總體而言，當你看到資產的成長和績效水準的提高時，我們仍然認為，對於 Main Street 來說，以及當我們看我們與 MSC Income Fund 的關係時，這也是一個非常好的結果。

From a regulatory standpoint, Dwayne, I think you've mentioned a time or two you've lost some lending opportunities to local banks. Any prospects you think for looser regulation on banks to get them more active? Would that be a competitive impact for -- hard to see, but any thoughts there?

德韋恩，從監管的角度來看，我想你曾經提到過一兩次你失去了向當地銀行提供貸款的機會。您認為放鬆對銀行的監管是否有可能讓銀行變得更活躍？這會對競爭產生影響嗎？雖然很難看出，但您有什麼看法嗎？

Yes. I'll give a few thoughts and I'll let Nick add on if he has a different view because I think where we see most of the pressure for the last two, three, four years. And from that angle, it's not on the lower middle market side. It's on the private credit side. And I'd say in the last quarter, we had another attractive company performing well.

是的。我會給一些想法，如果尼克有不同的看法，我會讓他補充，因為我認為我們在過去兩、三、四年裡看到了最大的壓力。從這個角度來看，它並不屬於中低階市場。它屬於私人信貸方面。我想說的是，上個季度，我們又有一家表現良好的具有吸引力的公司。

I wouldn't say it was knocking the cover off the ball in terms of their performance versus our original underwriting expectations but a bank came in and took us out of that at a significant reduction in the spread. So you're still seeing some of that. It is very limited.

我不會說他們的表現超出了我們最初的核保預期，但是一家銀行介入並幫助我們擺脫了這種困境，並且利差大幅降低。所以你仍然會看到一些這樣的情況。它非常有限。

But my view would be I would not expect you to see there be being significant enough changes in the banking regulations to change that. I think you'll still see some of that from time to time.

但我的觀點是，我不會期望你看到銀行法規有足夠重大的變化來改變這個現狀。我想你仍會時不時地看到一些這樣的情況。

But I think it's less specific or related to changes in the bank regulatory environment and more a bank decides they want to do something. I can't explain why they do it, but they go out and do something that we think is fairly aggressive, but it's beneficial for the company that they end up giving that loan to.

但我認為這與銀行監管環境的變化不太具體或相關，更多的是銀行決定他們想做某件事。我無法解釋他們為什麼這樣做，但是他們採取的行動我們認為是相當激進的，但這對最終向他們提供貸款的公司有利。

Nick, feel free to add on.

尼克，請隨意補充。

The usual case for that is it's not a fresh LBO. It's a transaction happen maybe 12 or 18 months before and maybe the bank had been a banking partner before the sponsor bought the business. They couldn't get there on the first transaction. Usually, it's either speed or timing and leverage issue. So as the company performs better, a lot of times that regional local bank will step back in again with a lower rate to try to get reinvolved in that business. -- I'd say from a fresh LBO perspective, we don't see them really as competition there.

通常的情況是，這不是新的槓桿收購。這項交易可能發生在 12 或 18 個月前，也許該銀行在發起人收購該業務之前就已經是其銀行合作夥伴了。他們無法在第一次交易時到達那裡。通常，這是速度、時機和槓桿的問題。因此，隨著公司業績的改善，很多時候地區性本地銀行會以較低的利率再次介入，試圖重新參與這項業務。 ——我想說，從新的槓桿收購角度來看，我們並不認為他們是我們真正的競爭對手。

Douglas Harter, UBS.

瑞銀的道格拉斯·哈特。

This is Corey Johnson on for Doug. I just have a question, just sticking with the competition for a second. Just given the success that you've had in your lower middle market strategy on that portfolio. Do you have any -- I guess, what are your thoughts in regards to perhaps concerns on competition regarding other BDCs possibly moving down market or perhaps even imitating the lower middle market strategy. Just what are your thoughts on competition in general.

這是 Corey Johnson 代替 Doug 上場。我只是有個問題，只是想繼續討論比賽。鑑於您在該投資組合中的中低端市場策略所取得的成功。您是否有任何——我想，您對其他 BDC 可能進入低端市場甚至模仿中低端市場策略的競爭擔憂有什麼看法？您對競爭的整體看法是什麼？

Yes. Thanks for the question. I'd say we haven't seen a change there. Definitely not a change from the from the BDC industry in terms of being more competitive with our lower middle market strategy or approach. I think when you look at it, and that's why we have two very distinct and different teams at Main Street, a team that looks like what I expect most BDC's investment team to look like, it's going to be very consistent with what Nick and his team at Main Street do.

是的。謝謝你的提問。我想說我們沒有看到那裡的變化。就我們中低端市場策略或方法的競爭力而言，與 BDC 產業相比絕對不會改變。我認為，當您看到它時，就會明白為什麼我們在 Main Street 擁有兩個截然不同的團隊，這個團隊看起來就像我所期望的大多數 BDC 投資團隊，它將與 Nick 和他的 Main Street 團隊所做的事情非常一致。

They're credit focused. That's their history, that's their experience, and that's their approach. Our lower middle market team is much more a private equity type focus. We're underwriting the transaction the exact same way that a private equity sponsor or fund would or that a strategic acquirer would. And those are just two very different approaches and very distinct skill sets.

他們注重信貸。這是他們的歷史，這是他們的經驗，這是他們的方法。我們的中低階市場團隊更注重私募股權類型。我們承銷交易的方式與私募股權發起人或基金或策略性收購者完全相同。這只是兩種截然不同的方法和截然不同的技能組合。

So we haven't seen anybody trying to come in and duplicate or become competitive with us in our lower middle market strategy. We also don't expect them to, given that dynamic in terms of the differences in the skill set and experience. Could they? They Could. I think over the last 20 years of being in the industry, we have seen some people do it a long time ago, probably 10, 15 years ago, and I'd say that those companies, they're not around anymore, and they did not fare very well because you had kind of lenders or credit guys trying to do private equity, and it just -- it's a totally different skill set

因此，我們還沒有看到任何人試圖進入並複製我們的中低端市場策略或與我們競爭。考慮到技能和經驗上的差異，我們也不期望他們這樣做。可以嗎？他們能夠。我認為，在過去 20 年的行業中，我們看到一些人在很久以前就這麼做了，可能是 10 年、15 年前，我想說的是，那些公司現在已經不復存在了，而且它們的表現也不太好，因為有些貸款人或信貸人員試圖做私募股權，而這只是——這是一套完全不同的技能

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

我們的問答環節到此結束。現在我想將發言權交還給管理階層，請他們發表最後評論。

Thank you very much. And just from our side, just thank you to everyone again for joining us today. and we'll look forward to talking to everyone again in a few months after our first quarter earnings release. Thank you.

非常感謝。就我們而言，再次感謝大家今天的參加。我們期待在第一季財報發布後的幾個月內再次與大家交談。謝謝。

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

女士們、先生們，感謝大家的參與。今天的電話會議到此結束。現在您可以斷開您的線路。祝您有美好的一天。