Main Street Capital Corp (MAIN) 2025 Q1 法說會逐字稿

Greetings, and welcome to Main Street Capital first-quarter 2025 earnings conference call.(Operator instructions). As a reminder, this conference is being recorded.

大家好，歡迎參加 Main Street Capital 2025 年第一季財報電話會議。 （操作員指示）。提醒一下，本次會議正在錄製中。

It is now my pleasure to introduce Zach Vaughan. Thank you. You may begin.

現在我很高興介紹 Zach Vaughan。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 first-quarter 2025 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 is 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 2025 年第一季財報電話會議。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。參與電話會議問答環節的還有 Main Street 私人信貸投資集團董事總經理兼負責人 Nick Meserve。

Main Street issued a press release yesterday afternoon that details the company's first quarter financial and operating results. This document is available on the Investor Relations section of the company's website at mainstcapital.com.

Main Street 昨天下午發布了一份新聞稿，詳細介紹了該公司第一季的財務和營運業績。文件可在公司網站 mainstcapital.com 的投資者關係部分找到。

A replay of today's call will be available beginning an hour after the completion of the call and will remain available until May 16. 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.

今天的電話會議重播將在電話會議結束後一小時開始提供，並將持續提供至 5 月 16 日。昨天的發布中包含了有關如何觀看重播的信息。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。

Please note that information reported on this call speaks only as of today, May 9, 2025, and therefore, you're advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.

請注意，本次通話中報告的資訊僅截至今天（2025 年 5 月 9 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 and projections as of the date of this call, and there are no guarantees of future performance.

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、可能或類似表達來識別。這些聲明是基於管理層截至本次電話會議之日的估計、假設和預測，並不能保證未來的表現。

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 at sec.gov.

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（可在公司網站 sec.gov 上找到），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。

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 US generally accepted accounting principles or GAAP, excluding the impact of noncash compensation expenses.

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。

Management believes that presenting DNII and the related per share amount are useful and appropriate supplemental disclosures for analyzing Main Street's financial performance since noncash compensation expenses did not result in 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.

管理層認為，呈現 DNII 和相關每股金額對於分析 Main Street 的財務表現來說是有用且適當的補充披露，因為非現金薪酬費用在結算時不會對 Main Street 造成淨現金影響。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 財務指標的對帳。

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 NAV. 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資產淨值。請注意，本次電話會議討論的某些資訊（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. We hope that everyone is doing well. On today's call, I will provide my usual updates regarding our performance in the quarter.

謝謝，扎克。大家早安，感謝大家的收看。我們感謝您參加今天上午的電話會議。我們希望每個人都一切順利。在今天的電話會議上，我將照常提供有關我們本季業績的最新消息。

We're also providing 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.

我們還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 strategy, investment portfolio, financial results, capital structure and liquidity and our expectations for the second quarter, after which we'll be happy to take your questions.

在我發表評論之後，David 和 Ryan 將就我們的投資策略、投資組合、財務業績、資本結構和流動性以及我們對第二季度的預期提供進一步的評論，之後我們將很樂意回答您的問題。

We are pleased with our performance in the first quarter, which resulted in an annualized return on equity of 16.5% DNII per share, they continue to exceed the dividends paid to our shareholders and a new record for NAV per share for the 11th consecutive quarter.

我們對第一季的業績感到滿意，年化股本回報率達到每股 16.5% DNII，繼續超過支付給股東的股息，並連續第 11 個季度創下每股淨資產值的新紀錄。

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。

Additionally, we appreciate the continued support we receive from our long-term lender relationships as evidenced by the recent amendments and extensions of both our corporate facility and our SPV credit facility, which Ryan will discuss in more detail. As a result, we continue to maintain very strong liquidity and a conservative leverage profile providing us significant flexibility in the current uncertain market.

此外，我們感謝長期貸款機構給予我們的持續支持，這從我們最近對公司信貸額度和 SPV 信貸額度的修改和延長就可以看出，Ryan 將對此進行更詳細的討論。因此，我們繼續保持非常強勁的流動性和保守的槓桿率，為我們在當前不確定的市場中提供了極大的靈活性。

We continue to be encouraged by the favorable overall performance of the companies in 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 deliver superior results to our shareholders.

我們多元化的中低階市場和私人貸款投資組合中公司整體表現良好，這讓我們感到鼓舞，我們仍然相信，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，將使我們能夠為股東帶來卓越的業績。

And despite the significant current market uncertainty associated with tariffs and geopolitical events, we continue to be confident in the ability of our portfolio companies to successfully navigate the current environment, which David will discuss in more detail. Our favorable results in the first quarter, combined with our positive outlook for the second quarter, resulted in our recommendations to our Board of Directors for our most recent dividend announcements, which I will discuss in more detail later.

儘管當前市場因關稅和地緣政治事件而存在很大的不確定性，但我們仍然相信我們的投資組合公司有能力成功應對當前環境，David 將對此進行更詳細的討論。我們第一季的良好業績，加上我們對第二季的積極展望，促使我們向董事會提出了最近的股息公告建議，稍後我將對此進行更詳細的討論。

Our NAV per share increased in the quarter primarily due to the impact of net fair value increases in our investment portfolio and the accretive impact of our equity issuances, which Ryan will discuss 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.

本季我們的每股淨資產價值有所增加，這主要歸因於我們投資組合的淨公允價值增加的影響以及我們股票發行的增值影響，Ryan 將對此進行更詳細的討論。我們投資組合中大多數中低端市場公司持續良好的表現，使得我們的中低端市場股權投資又一個季度實現了強勁的股息收入貢獻和顯著的淨公允價值升值。

Over the last few quarters, we have commented about the increased interest we have been receiving from potential buyers in certain lower middle market portfolio companies. We are pleased to announce that yesterday, we closed the exit of our investments in one of our portfolio companies Heritage Vet Partners had a realized gain of over $55 million and a meaningful premium to our March 31 fair value.

在過去的幾個季度中，我們評論說，某些中低端市場投資組合公司的潛在買家對我們產生了越來越大的興趣。我們很高興地宣布，昨天，我們完成了對我們投資組合公司之一 Heritage Vet Partners 的投資退出，實現了超過 5500 萬美元的收益，並且比我們 3 月 31 日的公允價值有顯著溢價。

Similar to the significant realized gain we recognized in the fourth quarter of 2024, and on the exit of our equity investment in Pearl Meyer, we believe our investment in Heritage Vet Partners is another great example of the highly unique benefits of our lower middle market investment strategy, which resulted in significant benefits for both Main Street in our Heritage management team partners.

與我們在 2024 年第四季度實現的巨額收益以及退出 Pearl Meyer 的股權投資類似，我們相信，我們對 Heritage Vet Partners 的投資是我們中低端市場投資策略的獨特優勢的另一個很好的例子，這為我們的 Heritage 管理團隊合作夥伴和 Main Street 帶來了巨大的利益。

The benefits from 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 opportunity to back this best-in-class management team by funding all of their growth initiatives with follow-on Main Street debt investments, which provided us highly attractive interest income. We look forward to sharing additional details on this realization in the near future.

Main Street 帶來的收益包括可觀的股息收入、公允價值升值和已實現收益，從而使我們的股權投資獲得一流的回報。除了有機會透過後續的 Main Street 債務投資為這支一流的管理團隊的所有成長計劃提供資金外，這還為我們提供了極具吸引力的利息收入。我們期待在不久的將來分享有關這項實現的更多細節。

Now turning back to the first quarter. Our lower middle market investment activity resulted in a net increase in our lower middle market investments of $57 million, and our private loan investment activity resulted in a net increase in our private loan investments of $26 million, which David will discuss in greater detail. Given our conservative capital structure and strong liquidity position, we remain very well positioned to continue the future growth of our investment portfolio, and we are excited about the current opportunities we are seeing in our lower middle market investment strategy. We've also continued to produce positive results in our asset management business.

現在回到第一季。我們的中低階市場投資活動導致我們的中低端市場投資淨增加 5,700 萬美元，我們的私人貸款投資活動導致我們的私人貸款投資淨增加 2,600 萬美元，David 將對此進行更詳細的討論。鑑於我們保守的資本結構和強大的流動性狀況，我們仍然處於非常有利的位置，可以繼續實現投資組合的未來成長，並且我們對我們在中低端市場投資策略中看到的當前機會感到興奮。我們的資產管理業務也持續取得正面成果。

The funds we advised through our external investment manager continued to experience favorable performance in the first quarter resulting in significant incentive fee income for our asset management business for the tenth consecutive quarter and together with our recurring base management fees, a significant contribution to our net investment income.

我們透過外部投資經理提供諮詢的基金在第一季繼續表現良好，連續第十個季度為我們的資產管理業務帶來了可觀的激勵費收入，加上我們的經常性基本管理費，為我們的淨投資收入做出了重大貢獻。

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.

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，我們對基金的未來表現和我們為每個基金的投資者提供的誘人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 MSC Income Fund, a BDC advised by our external investment manager and our largest asset management business client has been successful in growing its investment portfolio with a portion of the liquidity obtained through its listing on the New York Stock Exchange and its public equity offering in January.

作為我們擴大資產管理業務努力的一部分，我們非常高興的是，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客戶 MSC Income Fund 已成功利用其在紐約證券交易所上市和 1 月份公開發行股票所獲得的部分流動性擴大了其投資組合。

We are also pleased with the fund's favorable performance in the first quarter. We remain excited about the opportunity for significant future benefits to both the fund shareholders and our asset management business from the listing and equity offering. Based upon our results for the first 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 June, representing our 15th consecutive quarterly supplemental dividend, and an increase in our regular monthly dividends for the fourth quarter of 2025 to [$0.255] per share.

我們也對該基金第一季的良好表現感到滿意。我們仍然對上市和股票發行將為基金股東和我們的資產管理業務帶來巨大未來利益的機會感到興奮。根據我們第一季的業績，結合我們對每項主要投資策略和資產管理業務的樂觀展望，本週早些時候，董事會宣布將於 6 月派發每股 0.30 美元的補充股息，這是我們連續第 15 個季度派發補充股息，並將 2025 年第四季度的定期月度股息增加至每股 [0.255 美元]。

The third quarter regular monthly dividends are payable in each of July, August and September, and represent a 4% increase from the regular monthly dividends paid in the third quarter of 2024. The supplemental dividend for June is a result of our strong performance in the first quarter, and will result in total supplemental dividends paid during the trailing 12-month period of $1.20 per share, representing an additional 40% paid to our shareholders in excess of our regular monthly dividends, and a current total yield we are providing to our shareholders of approximately 8%.

第三季定期月度股息將於 7 月、8 月和 9 月支付，比 2024 年第三季支付的定期月度股息增加 4%。6 月的補充股息是我們第一季強勁表現的結果，並將導致過去 12 個月期間支付的補充股息總額為每股 1.20 美元，相當於向股東支付的股息比我們每月的常規股息多 40%，而我們目前向股東提供的總收益率約為 8%。

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

我們目前預計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。根據我們對第二季度持續良好表現的預期，我們目前預計將於 9 月派發額外的補充股息。

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 targeted 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.

現在談談我們目前的投資管道。截至今天，我認為我們的中低端市場投資管道處於平均水平，其中有幾項新投資計劃在本季末之前完成。我們相信，我們能夠為中低端市場公司及其所有者和管理團隊提供獨特而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，為滿足許多中低端市場公司的需求提供了有吸引力的解決方案。

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 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 characterize our private loan investment pipeline as average.

儘管當前經濟普遍存在不確定性，但我們對未來幾個月中低端市場投資活動的良好預期充滿信心。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滿意。截至今天，我認為我們的私人貸款投資管道處於平均水平。

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. As Dwayne highlighted in his remarks, we believe that our strong first 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 continues to be positive, which contributed to our attractive first quarter financial results.

謝謝，德韋恩，大家早安。正如德韋恩在演講中所強調的那樣，我們相信，我們強勁的第一季財務業績繼續證明了 Main Street 平台的實力、我們的差異化投資方式和我們獨特的營運模式。我們很高興地報告，我們投資組合中的大多數公司的整體經營業績繼續保持良好，這有助於我們取得可觀的第一季財務表現。

Due to the heightened level of concern and uncertainty in the market regarding the potential negative impacts from tariffs and consistent with our practices in other times of heightened market uncertainty, we have been and remain in regular contact with our lower middle market portfolio companies to support them and discuss the proactive actions they are taking to address the current implications and potential challenges in the current market.

由於市場對關稅可能帶來的負面影響的擔憂和不確定性不斷增加，並且與我們在市場不確定性加劇的其他時期的做法一致，我們一直並將繼續與我們的中低端市場投資組合公司保持定期聯繫，為他們提供支持並討論他們為應對當前市場的影響和潛在挑戰而採取的主動行動。

To date, we've seen limited negative impact on the overall portfolio, and we believe that our relationships with best-in-class managers and partners at the lower middle market portfolio companies along with our intentionally highly diversified investment strategy and portfolio will continue to serve us well as it has over the past two decades during times of market disruption. Each quarter, we try to highlight key different aspects of our investment strategy and differentiated approach that allow us to consistently produce best-in-class results.

到目前為止，我們看到整體投資組合受到的負面影響有限，我們相信，我們與中低端市場投資組合公司的一流管理人員和合作夥伴的關係，以及我們有意高度多元化的投資策略和投資組合，將繼續為我們提供良好的服務，就像過去二十年市場動盪時期一樣。每個季度，我們都試圖強調投資策略和差異化方法的不同關鍵方面，以使我們能夠持續產生一流的業績。

For today's call, I'm going to spend some time discussing our private loan investment strategy which is the second largest part of our investment portfolio and is the primary driver of our asset management business. We believe this is a particularly timely topic given the recent public listing of MSC Income Fund which focuses all of its new investment activities on investments in our private loan investment strategy.

在今天的電話會議上，我將花一些時間討論我們的私人貸款投資策略，這是我們投資組合的第二大部分，也是我們資產管理業務的主要驅動力。我們認為，鑑於 MSC Income Fund 最近公開上市，這是一個特別及時的話題，該基金將其所有新的投資活動都集中在我們的私人貸款投資策略上的投資上。

Over the last several years, we have grown the size and capabilities of our private loan investment team significantly. This has resulted in significant growth of our private loan investments, both on Main Street's balance sheet and to the third-party advisory clients that we manage through the external manager.

在過去的幾年中，我們的私人貸款投資團隊的規模和能力顯著擴大。這導致我們的私人貸款投資大幅成長，無論是在 Main Street 的資產負債表上，還是在我們透過外部經理管理的第三方諮詢客戶上。

As a reminder, our private loan strategy targets investments in the senior secured debt of private equity-sponsored businesses. These investments are primarily originated by our internal investment professionals through strategic relationships they cultivate and maintain with a select group of private equity firms and their capital markets intermediaries.

提醒一下，我們的私人貸款策略的目標是投資私募股權支持企業的優先擔保債務。這些投資主要由我們的內部投資專家透過與精選的私募股權公司及其資本市場中介機構建立和維持的策略關係發起。

Our private loan investments are typically first lien debt investments with attractive yield profiles and favorable terms. As of quarter end, 99.9% of our private loan secured debt investments were first lien loans and 97% bore interest at floating interest rates, which had an attractive weighted average yield of 11.4%.

我們的私人貸款投資通常是具有誘人的收益率和優惠條款的優先留置權債務投資。截至季末，我們 99.9% 的私人貸款擔保債務投資為第一留置權貸款，97% 按浮動利率計息，加權平均收益率為 11.4%，頗具吸引力。

Most of our private credit peers focus on the larger upper middle market part of the leveraged loan market. We intentionally focus on the smaller end of the market where we believe the opportunity exists for us to lead or co-lead the vast majority of our private loan investments, and whereby we are able to directly manage the due diligence process, loan documentation and post-investment lender interactions with the borrower.

我們的大多數私人信貸同業都專注於槓桿貸款市場中較大的中上層市場部分。我們有意專注於較小的市場，我們相信我們有機會領導或共同領導絕大多數私人貸款投資，並且我們能夠直接管理盡職調查流程、貸款文件以及投資後貸方與借款人的互動。

We believe our niche focus on the smaller end of the market is less competitive and allows us to earn more attractive risk-adjusted returns for Main Street's investors and for the investors in the funds we manage. Main Street has also benefited from our ability to utilize our private loan investment strategy to grow our asset management business.

我們相信，我們專注於較小市場的利基市場競爭不那麼激烈，並使我們能夠為 Main Street 的投資者和我們管理的基金的投資者賺取更具吸引力的風險調整回報。我們能夠利用私人貸款投資策略來發展資產管理業務，Main Street 也從中受益。

Through our external investment manager, our private loan strategy effectively allows Main Street to leverage our investment professionals time and our platform to benefit from the attractive and highly recurring fee-based income that we received from third-party clients while at the same time, providing highly attractive investment opportunities and returns for those clients.

透過我們的外部投資經理，我們的私人貸款策略有效地使 Main Street 能夠利用我們的投資專業人員的時間和我們的平台，從我們從第三方客戶那裡獲得的有吸引力且高度經常性的收費收入中獲益，同時為這些客戶提供極具吸引力的投資機會和回報。

Now turning to the overall composition of results from our investment portfolio as of March 31, we continue to maintain a highly diversified portfolio with investments in 189 companies spanning across numerous industries and end markets. Our largest portfolio companies, excluding the external investment manager, represented only 3.2% of our total investment income for the trailing 12-month period and 3.7% of our total investment portfolio fair value at quarter end.

現在來看看截至 3 月 31 日我們的投資組合的整體績效組成，我們繼續保持高度多元化的投資組合，投資於 189 家公司，涉及眾多行業和終端市場。我們最大的投資組合公司（不包括外部投資經理）僅占我們過去 12 個月總投資收入的 3.2% 和季度末總投資組合公允價值的 3.7%。

Majority of our portfolio investments represented less than 1% of our income and our assets. Our investment activity in the first quarter included total investments in our lower middle market portfolio of approximately $86 million, including investments of $62 million in two new lower middle market portfolio companies, which after aggregate repayments on debt investments resulted in a net increase in our lower middle market portfolio of $57 million, driven by the capabilities and relationships of our private credit team, we also made $138 million in total private loan investments, which after debt repayments and other investment activity resulted in a net increase in our private loan portfolio of $26 million.

我們的大部分投資組合占我們收入和資產的不到 1%。我們在第一季的投資活動包括對中低端市場投資組合的總投資約 8600 萬美元，其中包括對兩家新的中低端市場投資組合公司的 6200 萬美元投資，在債務投資總償還後，導致我們的中低端市場投資組合淨增加 5700 萬美元，在我們私人信貸團隊的能力和關係的推動下，我們還38 1.億美元的私人貸款總投資，在債務償還和其他投資活動之後，導致我們的私人貸款投資組合淨增加 2,600 萬美元。

At the end of the first quarter, our lower middle market portfolio included investments in 86 companies representing $2.6 billion of fair value, which was 31% above our related cost basis. We had investments in 90 companies in our private loan portfolio, representing $1.9 billion of fair value. The total investment portfolio at fair value at quarter end was 18% above our related cost basis.

截至第一季末，我們的中低階市場投資組合包括對 86 家公司的投資，公允價值為 26 億美元，比我們的相關成本基礎高出 31%。我們的私人貸款組合投資了 90 家公司，公允價值達 19 億美元。季末的公允價值總投資組合比我們的相關成本基礎高出 18%。

In summary, Main Street's investment portfolio continues to perform at a high level and deliver on our long-term goals. Additional details on our investment portfolio at quarter end are included in the press release that we issued yesterday.

總而言之，Main Street 的投資組合繼續保持高水準表現並實現我們的長期目標。我們昨天發布的新聞稿中包含了本季度末投資組合的更多詳細資訊。

With that, I'll 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，讓他介紹我們的財務表現、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 first quarter, which included a new record for NAV per share for the 11th consecutive quarter and favorable levels of NII per share and DNII per share. Our total investment income for the first quarter was $137 million, increasing by $5.4 million or 4.1% over the first quarter of 2024 and decreasing by $3.4 million or 2.4% from the fourth quarter of 2024.

謝謝你，大衛。與 Dwayne 和 David 的評論一致，我們對第一季的經營業績感到滿意，其中包括連續第 11 個季度創下每股資產淨值新高，以及每股 NII 和每股 DNII 的良好水平。我們第一季的總投資收入為 1.37 億美元，比 2024 年第一季增加 540 萬美元（增幅 4.1%），比 2024 年第四季減少 340 萬美元（減 2.4%）。

Interest income decreased by $2.1 million from a year ago and decreased by $11.9 million from the fourth quarter of 2024. The decrease from the prior year was driven primarily 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. Partially offset by the impact of increased net investment activity over last year.

利息收入比去年同期減少 210 萬美元，比 2024 年第四季減少 1,190 萬美元。與前一年相比的下降主要是由於非應計狀態投資增加的影響以及基準指數利率下降導致的浮動利率債務投資利率下降。部分抵銷了去年淨投資活動增加的影響。

The decrease from the fourth quarter was primarily driven by the impact of an increase in investments on nonaccrual status, a decrease in net investment activity and a decrease in interest rates on our floating rate debt investments primarily resulting from decreases in benchmark index rates. Dividend income increased by $13.2 million when compared to a year ago with this increase after a $1.2 million decrease in unusual or nonrecurring dividends, and increased by $11.5 million from the fourth quarter, including a $300,000 increase in unusual or nonrecurring dividends. The increases in dividend income are a result of the continued underlying strength of our lower middle market portfolio companies.

與第四季度相比，這一下降主要是由於非應計狀態投資增加、淨投資活動減少以及浮動利率債務投資利率下降（主要由於基準指數利率下降）的影響。與去年同期相比，股息收入增加了 1,320 萬美元，其中非常規或非經常性股息減少了 120 萬美元；與第四季度相比，股息收入增加了 1,150 萬美元，其中非常規或非經常性股息增加了 30 萬美元。股息收入的增加是由於我們的中低端市場投資組合公司持續保持強勁實力。

Fee income decreased by $5.7 million from a year ago and by $3 million from the fourth quarter. The decrease in fee income from the prior year and the fourth quarter was primarily driven by a decrease from exit, prepayment and amendment fees from investment activity and lower closing fees on new and follow-on investments.

費用收入比去年同期減少了 570 萬美元，比第四季減少了 300 萬美元。費用收入較上年和第四季有所減少，主要是因為投資活動的退出費、預付款和修改費減少，以及新投資和後續投資的結算費減少。

Prepayment and other fee income considered nonrecurring decreased by $3.5 million from a year ago and by $1.2 million from the fourth quarter of 2024. The first quarter included reduced levels of income considered less consistent or nonrecurring in nature in comparison to both the fourth -- the first quarter of 2024 and the fourth quarter of 2024, including dividends from our equity investments and accelerated prepayment, repricing and other activity related to our debt investments.

預付款和其他被視為非經常性的費用收入比去年同期減少了 350 萬美元，比 2024 年第四季減少了 120 萬美元。與第四季度（2024 年第一季）和 2024 年第四季相比，第一季的收入水平有所下降，這些收入被認為性質上不太一致或非經常性，其中包括來自股權投資的股息以及與我們的債務投資有關的加速預付款、重新定價和其他活動。

In the aggregate, these items totaled $2.4 million and were $2.2 million or $0.03 per share lower compared to the average of the prior four quarters. $5.2 million or $0.06 per share lower than the first quarter of 2024 and $1.3 million or $0.01 per share lower than the fourth quarter of 2024.

總計這些項目總額為 240 萬美元，與前四個季度的平均值相比，低 220 萬美元或每股 0.03 美元。比 2024 年第一季低 520 萬美元或每股 0.06 美元，比 2024 年第四季低 130 萬美元或每股 0.01 美元。

Our operating expenses increased by $5.4 million over the first quarter of 2024 and decreased by $2.9 million from the fourth quarter. The increase in operating expenses from the prior year was largely driven by increases in interest expense, general and administrative expense and share-based compensation expense, partially offset by a decrease in cash compensation related expenses.

我們的營運費用比 2024 年第一季增加了 540 萬美元，比第四季減少了 290 萬美元。營業費用較上年同期的增加主要是由於利息費用、一般及管理費用和股權激勵費用的增加，但部分被現金激勵相關費用的減少所抵消。

The decrease in operating expenses from the fourth quarter of 2024 was largely driven by decreases in interest expense and compensation-related expenses partially offset by a decrease in expenses allocated to the external investment manager. The increase in interest expense from a year ago was primarily driven by an increase in the weighted average rate on our unsecured debt obligations and an increase in average borrowings to fund a portion of the growth of our investment portfolio.

2024 年第四季以來營業費用的減少主要是由於利息費用和薪酬相關費用的減少，但分配給外部投資經理的費用的減少部分抵消了這一減少。利息支出較上年同期增加，主要是由於無擔保債務的加權平均利率上升，以及為投資組合成長提供部分資金而增加的平均借款。

Partially offset by decreased weighted average interest rate on our credit facilities, resulting from decreases in the benchmark index interest rates. The decrease in interest expense from the fourth quarter of 2024 was primarily driven by a decrease in our average outstanding borrowings and a decrease in the weighted average rate on our credit facilities, resulting from decreases in the benchmark index interest rates.

部分抵銷了基準指數利率下降導致我們的信貸額度加權平均利率下降。2024 年第四季以來利息支出的減少主要是由於基準指數利率下降導致平均未償還借款減少以及信貸額度加權平均利率下降。

The ratio of our total operating expenses, excluding interest expense, as a percentage of our average total assets was 1.2% for the quarter on an annualized basis and 1.3% for the trailing 12-month period and continues to be among the lowest in our industry. Our external investment manager contributed $7.8 million to our net investment income during the first quarter, a decrease of $800,000 from the same quarter a year ago and $900,000 from the fourth quarter of 2024. The manager ended the quarter with total assets under management of $1.6 billion.

我們的總營運費用（不包括利息支出）占我們平均總資產的比例按年率計算為本季度的 1.2%，按過去 ​​12 個月的 1.3% 計算，繼續處於行業最低水平。我們的外部投資經理在第一季為我們的淨投資收入貢獻了 780 萬美元，比去年同期減少 80 萬美元，比 2024 年第四季減少 90 萬美元。本季結束時，該管理公司管理的總資產為 16 億美元。

During the quarter, we recorded net fair value appreciation, including net realized losses and net unrealized depreciation on the investment portfolio of $33.6 million. This increase was driven by net fair value appreciation in our lower middle market investment portfolio, partially offset by net fair value depreciation in our external investment manager, our private loan investment portfolio and middle market investment portfolio.

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損失和淨未實現折舊 3,360 萬美元。這一增長是由我們中低端市場投資組合的淨公允價值升值推動的，但部分被我們外部投資經理、私人貸款投資組合和中端市場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 of our external investment manager was primarily driven by decreases in evaluation multiples of publicly traded peers which we use as one of the benchmarks for valuation purposes.

我們的中低階市場投資組合的淨公允價值升值很大程度上得益於某些投資組合公司的持續良好表現。我們的外部投資經理的淨公允價值貶值主要是由於我們用作估值基準之一的上市公司同業的評估倍數下降所致。

The net fair value depreciation in our private loan portfolio was driven by increases in market spreads partially offset by the impact of specific portfolio company performance. The net fair value depreciation in our middle market portfolio was driven by the impact of specific portfolio company performance. We recognized net realized losses of $29.5 million in the quarter, the realized losses recognized were primarily the result of the exit or restructure of several long-standing underperforming investments, partially offset by a realized gain on the exit of a private loan equity investment.

我們的私人貸款組合的淨公允價值貶值是由市場利差的增加所驅動，但特定投資組合公司績效的影響部分抵銷了這一影響。我們的中型市場投資組合的淨公允價值貶值是由特定投資組合公司績效的影響所驅動的。我們在本季度確認了 2,950 萬美元的淨已實現損失，確認的已實現損失主要是由於退出或重組了幾項長期表現不佳的投資，部分被私人貸款股權投資退出時實現的收益所抵消。

We ended the fourth quarter with investments on nonaccrual status, comprising 1.7% of the total investment portfolio at fair value and approximately 4.5% at cost. Net asset value, or NAV, increased by $0.38 per share over the fourth quarter and by $2.49 or 8.4% when compared to a year ago to a record NAV per share of $32.03 at quarter end.

在第四季結束時，我們的投資處於非應計狀態，以公允價值計算佔總投資組合的 1.7%，以成本計算約佔 4.5%。淨資產價值（NAV）在第四季度每股增加了 0.38 美元，與去年同期相比增加了 2.49 美元或 8.4%，至季末每股淨資產價值達到創紀錄的 32.03 美元。

Our regulatory debt-to-equity leverage calculated as total debt, excluding our SBIC debentures, divided by net asset value was 0.67 times and our regulatory asset coverage was [2.48 times] and 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.

我們的監管債務與股權槓桿率（以不包括 SBIC 債券的總債務除以淨資產價值計算）為 0.67 倍，我們的監管資產覆蓋率為 [2.48 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。

Given our liquidity position, we were less active during the first quarter in our at-the-market or ATM program, raising net proceeds of $5.1 million from equity issuances. In April, we amended our corporate credit facility, decreasing the interest rate by 10 basis points prior to satisfying certain conditions or 22.5 basis points after satisfying certain conditions, increasing our total commitment to $35 million and extending the maturity to April 2030.

鑑於我們的流動性狀況，我們在第一季在市場或 ATM 計劃中的活躍度較低，透過發行股票籌集了 510 萬美元的淨收益。今年 4 月，我們修改了公司信貸安排，在滿足某些條件之前將利率降低 10 個基點，在滿足某些條件之後將利率降低 22.5 個基點，將我們的總承諾增加到 3500 萬美元，並將期限延長至 2030 年 4 月。

Additionally, we also amended our SPV credit facility by decreasing the interest rate by 40 basis points and extending the maturity to September 2030. After giving effect to the capital activities in the first quarter of 2025 and recent credit facility amendments in April 2025, we entered the second quarter with strong liquidity and including cash and availability under our credit facilities in excess of $1.3 billion with only one near-term debt maturity of $150 million in December 2025.

此外，我們也修改了 SPV 信貸安排，將利率降低 40 個基點，並將期限延長至 2030 年 9 月。在實施 2025 年第一季的資本活動和 2025 年 4 月的最新信貸安排修訂後，我們進入第二季度時流動性強勁，包括信貸安排下的現金和可用資金超過 13 億美元，只有一筆 2025 年 12 月到期的 1.5 億美元的近期債務。

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，這些優勢已被歷史證明使我們受益，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 the course of the year. 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為我們在 2025 年的新淨投資活動提供資金，因此，我們預計槓桿率將在今年繼續增加。然而，我們預計全年的營運槓桿水準仍將比我們的長期目標更為保守。

Coming back to our operating results. NII per share for the quarter of $1.07 decreased from DNII per share for the first quarter last year by $0.04 and decreased from the DNII per share for the fourth quarter by $0.01.

回到我們的經營績效。本季每股 NII 為 1.07 美元，較去年第一季每股 DNII 下降 0.04 美元，較第四季每股 DNII 下降 0.01 美元。

Looking forward, we expect headwinds on top line earnings related to the potential decrease in floating market rates and potential tariff impacts. But given the strength of our underlying portfolio we expect favorable earnings in the second quarter of 2025 with expected DNII of at least $1.03 per share, with the potential for upside driven by portfolio investment activity during the quarter and a favorable outcome to the current market uncertainty.

展望未來，我們預期浮動市場利率的潛在下降和潛在的關稅影響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 年第二季的盈利情況良好，預計 DNII 至少為每股 1.03 美元，本季的投資組合活動可能會推動其上漲，並且當前市場不確定性可能會帶來有利結果。

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。

Thank you. We will now be conducting a question and answer session.(Operator instructions)

謝謝。我們現在將進行問答環節。 （操作員指示）

Robert Dodd, Raymond James.

羅伯特多德、雷蒙德詹姆斯。

Hi guys, I appreciate the commentary on the strength of the portfolio companies, but can you be any more explicit maybe on like what tariff exposure you have in the portfolio? I mean, obviously, you don't have like international businesses in there, but is the offshore manufacturing of some parts or anybody who's particularly exposed to imported raw materials or anything like that? Any color you can give us on that front on what the overall kind of feel for the exposure is there.

大家好，我很欣賞您對投資組合公司實力的評論，但您能否更明確地說明您的投資組合中存在哪些關稅風險？我的意思是，顯然，你們那裡沒有國際業務，但是是否有某些零件的離岸製造或任何特別接觸進口原材料的人或類似的東西？您能否就此向我們介紹一下整體曝光的感覺？

Sure, Robert. Good morning and thanks for the question. We've talked about this before in the past. But if we look at our portfolio, I'll split the comments between lower middle market and private loan because we just have more visibility into the lower middle market portfolio companies given our position as a significant equity owner there.

當然，羅伯特。早安，感謝您的提問。我們以前討論過這個問題。但如果我們看一下我們的投資組合，我會將評論分為中低端市場和私人貸款，因為鑑於我們作為中低端市場重要股權所有者的地位，我們對中低端市場投資組合公司有更高的了解。

But most of our companies, particularly in the lower middle market, they are US businesses. They're manufacturing is in the US. They're selling to US customers. They're buying or purchasing from US vendors. So we look at below lower middle market portfolio as a whole and think that we've got some limited exposure there.

但我們大多數的公司，特別是中低端市場的公司，都是美國企業。他們的製造地在美國。他們正在向美國客戶銷售產品。他們正在從美國供應商處購買。因此，我們將中低端市場投資組合作為一個整體來看，並認為我們在那裡的投資有限。

As you would expect us to be doing, and as David, I think, commented in his script, we have been and continue to talk frequently with the management teams of our lower middle market portfolio companies to understand their risk and then help them collectively with us per ways to mitigate that risk. And as we went through that process, our view is that in the lower middle market, somewhere close to a high single-digit percentage.

正如您所期望的，並且我認為正如大衛在他的腳本中所評論的那樣，我們一直並將繼續與我們的中低端市場投資組合公司的管理團隊進行頻繁交談，以了解他們的風險，然後通過各種方式與他們一起幫助他們降低風險。當我們經歷這個過程時，我們的觀點是，在中低端市場，某個地方的百分比接近個位數。

And I give you that number as a percentage based upon looking at the portfolio a couple of different ways, looking at it by our actual portfolio count, look at it on both a cost or fair value basis. So on each of those different metrics, be a high single-digit percentage that we think has meaningful exposure to tariffs. And as you said, we think that the most significant exposure impacts would be from those companies that are directly importing finished goods.

我根據對投資組合的幾種不同看法，以百分比的形式給出這個數字，根據我們的實際投資組合數量，以成本或公允價值為基礎來看待它。因此，在每一個不同的指標上，我們認為較高的個位數百分比對關稅有重大影響。正如您所說，我們認為受影響最嚴重的是那些直接進口成品的公司。

So the good news on that side is we have some exposure there, but it is fairly limited, and we think it's very manageable. When we look at the portfolio more broadly, we would say that there's probably another 10% to 20% that has some level of exposure, and that's not specific to Main Street. We just think that's the result of the global nature of the economy and business today.

因此，這方面的好消息是我們在那裡有一些曝光，但相當有限，而且我們認為這是非常容易管理的。當我們更廣泛地審視投資組合時，我們會說可能還有另外 10% 到 20% 具有一定程度的風險敞口，而且這並不特定於 Main Street。我們只是認為這是當今經濟和商業全球化的結果。

If you're in industrial businesses, manufacturing services related to industrial businesses, you're going to have some exposure. So we look at that and say that those companies have some level of direct or indirect exposure to tariffs.

如果您從事工業企業或與工業企業相關的製造服務，那麼您將會獲得一些曝光機會。因此，我們觀察後發現，這些公司在某種程度上直接或間接地受到關稅影響。

But one of the things that we always look at is that just having exposure to tariffs on its own does not necessarily mean that there's going to be a negative result or impact. It just means that those companies that have that exposure, you have to be taking steps to mitigate it. And that's where we take comfort in the fact that our management teams of our portfolio companies have been through this type of a scenario before.

但我們始終關注的一點是，僅僅受到關稅影響並不一定意味著會產生負面結果或影響。這只是意味著對於那些面臨這種風險的公司，你必須採取措施來減輕它。讓我們感到欣慰的是，我們投資組合公司的管理團隊以前也經歷過這種情況。

If you look back at the COVID-19 pandemic time period and the resulting supply chain issues and inflation that came out of it, they've been through that. So our -- we have the view that our management teams have dealt with this type of a scenario before and we're confident that they're going to do a good job in mitigating the risk, whether that means pushing through price increases or finding alternative sourcing. So we feel pretty good about where we sit, but we do acknowledge that we have some level of exposure there when you look across the portfolio.

如果你回顧一下新冠疫情期間以及由此產生的供應鏈問題和通貨膨脹，你會發現他們已經經歷過這些。因此，我們認為我們的管理團隊以前曾處理過這種情況，我們相信他們會很好地降低風險，無論這意味著提高價格還是尋找替代來源。因此，我們對自己的現狀感到很滿意，但我們也承認，當你縱觀整個投資組合時，我們確實有一定程度的風險敞口。

On the private loan and middle market side, really the private loan side because that's where the remainder of our portfolio really sets outside of lower middle market. I'd say it's similar. Most of these companies are also predominantly US companies. So we think that the risk is a little bit is similar to what we have on the lower middle market side.

在私人貸款和中端市場方面，實際上是私人貸款方面，因為這是我們投資組合的剩餘部分真正位於中低端市場之外的地方。我想說這很相似。這些公司中的大多數也主要是美國公司。因此，我們認為風險與我們在中低端市場面臨的風險有點類似。

We do take comfort in the fact that we are largely first lien senior secured lenders. So you've got a lot of cushion in the capital structure beneath our position to help us mitigate our risk there and we're actively working with the portfolio of companies and the private equity sponsors similar to the lower middle market to understand what that risk is.

我們確實感到欣慰的是，我們主要是第一留置權優先擔保貸款人。因此，我們在資本結構中擁有很大的緩衝空間，可以幫助我們降低風險，我們正在積極與公司投資組合以及類似於中低端市場的私募股權發起人合作，以了解這種風險。

So when we look at the companies on that side of our portfolio that have meaningful direct exposure. The way we would quantify it is it's a handful of companies. We'll also note that a couple of those companies are already on nonaccrual and or they've had significant fair value depreciation.

因此，當我們查看投資組合中具有重要直接風險敞口的公司時。我們量化的方式是，只有少數幾家公司。我們也要注意到，其中幾家公司已經不再提列應計利潤，或者其公允價值已經大幅貶值。

So when we look at our results from an income standpoint or from an NAV or fair value standpoint. We think the fact that we've already got those are nonaccrual and some fair value depreciation further mitigates the risk to some extent.

因此，當我們從收入角度或淨值或公允價值角度來看待我們的結果時。我們認為，事實上我們已經獲得了這些非應計項目，並且一些公允價值折舊在一定程度上進一步減輕了風險。

So similar to the lower middle market, just because they have the exposure, it doesn't mean that they're going to have significant negative impact. So we look at trying to understand what those companies are doing to mitigate the risk again, either through pushing through price increases or looking for alternative sourcing or other activities to mitigate it.

因此，與中低端市場類似，僅僅因為他們有曝光度，並不意味著他們會產生重大的負面影響。因此，我們試圖了解這些公司正在採取哪些措施來再次降低風險，是透過提高價格還是尋找替代來源或採取其他活動來降低風險。

But while we do have some risk there, we think it is still limited, and we feel good about the the manner in which our management teams and portfolio companies should be able to mitigate that risk. Obviously, if the situation becomes more significant or more negative than it is today or if the time period gets drawn out, obviously, that risk could change in the future. But as we sit here today, I think we feel pretty good about our risk and the steps that our portfolio companies are taking to mitigate it.

不過，儘管我們確實存在一些風險，但我們認為風險仍然有限，而且我們對我們的管理團隊和投資組合公司能夠降低這種風險的方式感到滿意。顯然，如果情況變得比現在更加嚴重或更消極，或者時間延長，那麼未來的風險顯然可能會改變。但今天我們坐在這裡，我認為我們對我們的風險以及我們的投資組合公司為降低風險所採取的措施感到非常滿意。

Thank you for that. Very helpful. On the private loan -- the pipeline, I mean, you characterized it as average. I mean it does seem like that's dealing with slightly larger what sponsor-backed companies. I mean, obviously, we've heard a lot about M&A is muted, et cetera, and maybe getting more so at the moment. So what's -- why is it still average like average it seems good in this environment. So can you give us any color on like why your pipeline there is still kind of average-ish given the amount of volatility and what seems to be pretty muted M&A market right now?

謝謝你。非常有幫助。關於私人貸款——管道，我的意思是，你將其描述為平均水平。我的意思是，這看起來確實像是在處理一些由贊助商支持、規模稍大的公司。我的意思是，顯然，我們已經聽到很多有關併購活動減少等等的消息，而且目前這種情況可能越來越多。那麼——為什麼它仍然像平均水平一樣，在這種環境下看起來不錯。那麼，您能否解釋一下，考慮到目前的波動程度以及併購市場似乎相當低迷，為什麼您的通路仍然處於平均水平？

Sure, Robert. I'll give you a few comments, and I'll let Nick who, as you know, leads our private credit business, I'll let him add on. But I'd say the reason we view it as average today is we've got a large portfolio there and we're seeing a number of those companies that despite the uncertain environment, their businesses are doing well, and they're having opportunities to grow, whether that's acquisition organic, and they're coming to us and they're looking for additional add-on loans or debt investments from us to help them facilitate that growth. So I think that's part of the reason we have it at average.

當然，羅伯特。我會給你一些評論，我會讓尼克（如你所知，他領導我們的私人信貸業務）補充。但我想說，我們今天將其視為平均水平的原因是，我們在那裡擁有大量投資組合，我們看到許多公司儘管面臨不確定的環境，但他們的業務表現良好，並且擁有增長機會，無論是通過有機收購，他們來到我們這裡，尋求額外的附加貸款或債務投資，以幫助他們促進增長。所以我認為這也是我們將其保持在平均水平的原因之一。

We're also continuing to see a number of new -- kind of new investment opportunities that we think despite the current uncertain environment, we think they're underwritten correctly they're priced correctly and all things being equal, if the transaction closes, we'll continue to find those opportunities attractive from a new portfolio standpoint.

我們也繼續看到許多新的投資機會，儘管當前環境不確定，但我們認為這些機會承保正確，定價正確，並且在所有條件相同的情況下，如果交易完成，我們將繼續從新的投資組合角度發現這些機會具有吸引力。

But I'll let Nick add any additional color he wants to add to that.

但是我會讓尼克添加他想要的任何顏色。

Yes, Robert, I mean, I think you are right, it is a muted M&A environment. But with that is also less repayments I think from the pipeline perspective, it is average. I think we're seeing both new deals and add-ons. The add-ons in the portfolio has increased over the last two to three years is the number in the portfolio has increased. But I think what's TBD still is going to be -- and some of the uncertainty is do some of these transactions close or not. I think we'll know more in the next three or six months of where is the tariff noise go? Do we actually close and finish those transactions? Or they get pushed out a little bit.

是的，羅伯特，我的意思是，我認為你是對的，這是一個低迷的併購環境。但從管道角度來看，我認為償還金額也較少，所以是平均值。我認為我們看到了新的交易和附加內容。過去兩到三年來，投資組合中的附加項目有所增加，投資組合中的數量也有所增加。但我認為仍有待解決的問題——其中的不確定性在於這些交易是否會結束。我認為在接下來的三到六個月內我們就會更清楚知道關稅噪音會傳到哪裡？我們真的結束並完成了這些交易嗎？或者他們被稍微推開了一點。

Thank you.

謝謝。

Excellent.

出色的。

Thank you Robert.

謝謝你，羅伯特。

Mark Hughes, Truist Securities.

馬克·休斯，Truist Securities。

Yeah, thank you. And thinking about your kind of nonrecurring income items, the dividend from investments, I think you've got some variability there. Is there any concern that those might slow down or the portfolio company is perhaps going to be a little more conservative with their balance sheet? Or is that not so much of an issue?

是的，謝謝。考慮到您的非經常性收入項目、投資股息，我認為這裡存在一些變化。是否有人擔心這些成長可能會放緩，或者投資組合公司可能會對其資產負債表更加保守？或者這不是什麼大問題？

Yes, Mark. Good morning and thanks for the question. I'd say that we do always have that concern. The dividend income component of our income stream is always going to be the most variable or most discretionary. But I'd say, as we sit here today, and as you've heard us say in the past, we have a number of our lower middle market companies that are not just doing well. They're doing really well, and they've been doing well for a long time.

是的，馬克。早安，感謝您的提問。我想說我們確實一直有這種擔憂。我們收入流中的股息收入部分始終是變動最大或最可自由支配的。但我想說，今天我們坐在這裡，正如你們過去聽到我們說的那樣，我們的一些中低端市場公司不僅僅是經營良好。他們做得很好，而且長期以來一直做得很好。

And as a result, their capital structure is such that it's very kind of very conservative limited amounts of leverage. So as they continue to produce significant cash flow, that cash flow has to go somewhere. And it's increasingly coming out of those companies to us and the other equity owners of those businesses through dividend income.

因此，他們的資本結構非常保守，槓桿率非常有限。因此，當他們繼續產生大量現金流時，這些現金流必須流向某個地方。這些公司透過股息收入向我們和這些企業的其他股權所有者支付的利潤越來越多。

So I think we -- it is something we watch. It is something that if the economy was to take a big step back, particularly if that step back was for an extended period of time. That dividend income would be at more risk. But as we look at the current portfolio, the current results we're seeing from the companies and more importantly, the dialogue we're hearing, while there clearly is a lot of uncertainty out there, the companies are still doing well and we expect, at least for the second quarter to continue to see good amounts of dividend income coming out of those companies.

所以我認為我們——這是我們所關注的事情。如果經濟大幅倒退，尤其是這種倒退持續較長時間，就會出現這種情況。股息收入面臨的風險更大。但是，當我們審視當前的投資組合、從公司看到的當前業績，更重要的是，從我們聽到的對話來看，雖然顯然存在許多不確定性，但這些公司仍然表現良好，我們預計，至少在第二季度，這些公司將繼續獲得大量股息收入。

Yeah. And then you obviously described a nice attractive what, $55 million gain here in the second quarter. And I think in earlier calls, you had alluded to the fact that there were some potential realizations in the pipeline. Is there more to come? Anything you've got visibility for? Or is it just kind of business per usual?

是的。然後你顯然描述了一個相當有吸引力的數字，第二季的收益為 5500 萬美元。我認為在之前的通話中您曾暗示過，有一些潛在的實現正在醞釀中。還有更多嗎？您能看到什麼嗎？或者這只是一種正常的業務？

Yes, Mark, I would say it's probably more in line with business as usual. There's always going to be some level of activity in the lower middle market portfolio, where you've got 80-plus companies. There's always going to be some level of activity ongoing, but after the very, very attractive realized gain that we had in late December with Promier and now the gain here in the second quarter, those were really the two large exit activities that we've been talking about.

是的，馬克，我想說這可能更符合正常的業務。中低階市場投資組合中總會有一定程度的活動，那裡有 80 多家公司。總是會有某種程度的活動在持續進行，但在去年 12 月底我們與 Promier 實現的非常有吸引力的收益以及現在第二季度的收益之後，這實際上是我們一直在談論的兩項大型退出活動。

Obviously, both of those are great companies. So we're a little torn on seeing them lead the portfolio, but at the same time, the realized gains and the returns from an equity investment standpoint, we consider them to be best-in-class.

顯然，這兩家都是很棒的公司。因此，看到他們領導投資組合，我們感到有些糾結，但同時，從股權投資的角度來看，實現的收益和回報，我們認為他們是同類中最好的。

So when you have that opportunity, it also makes sense if our partners in the businesses, the management teams of those companies want to pursue that transaction. We're going to help them pursue it to the best outcome possible. So we -- those are two of the primary transactions that we've been talking about for the last few quarters. So I would say that things are more back to kind of ordinary course from an exit activity expectation standpoint.

因此，當你有這樣的機會時，如果我們的業務夥伴、這些公司的管理團隊想要進行這項交易，這也是有意義的。我們將幫助他們追求最好的結果。所以——這是我們過去幾季一直在談論的兩項主要交易。因此，我想說，從退出活動預期的角度來看，事情已經恢復到正常水平了。

And then one other question. you've got a long holding period obviously with your equity investments. When you get to a period like this in the economy, does that create opportunity for you that you can look at something that perhaps is maybe a little more exposed or experiencing a little more volatility because you've got a longer horizon? Or alternatively, you tighten things up and certainly, you want to stay disciplined as you have been historically. But does this create opportunity where others don't step in, but you have the potential to do so?

還有一個問題。顯然，您的股權投資持有期很長。當經濟進入這樣的時期時，這是否會為您創造機會，讓您能夠以更長遠的眼光來看待一些可能更容易受到關注或經歷更大波動的事物？或者，你可以收緊政策，當然，你也要像過去一樣保持紀律。但這是否會創造機會，讓別人不介入，而你有潛力介入？

Yes, Mark, absolutely. I'd say that our view has always been, not just here recently, but for the last two decades that we want to make sure that we maintain a very conservative capital structure and, more importantly, a very significant amount of liquidity so that we can always be active in the marketplace. That includes time periods where the economy is humming and things are going really, really well.

是的，馬克，絕對是。我想說，我們的觀點一直是，不僅是最近，而且在過去的二十年裡，我們都希望確保我們維持非常保守的資本結構，更重要的是，保持大量的流動性，以便我們始終能夠在市場上活躍。其中包括經濟蓬勃發展、一切進展非常順利的時期。

But it also includes time periods where there's significant uncertainty. And just to give you a point of reference that you may recall, but just for your benefit, if you look at both Pearl Meyer and Heritage Vet or NVS vet partners or services.

但它也包括存在很大不確定性的時間段。只是為了給您一個您可能記得的參考點，但這只是為了您的利益，如果您同時查看 Pearl Meyer 和 Heritage Vet 或 NVS 獸醫合作夥伴或服務。

Both of those transactions were executed during COVID. Pearl Meyer was from memory, was May of 2020. Heritage Vet Partners was December of 2020. Most firms -- from our perspective, we're not active during those time periods. They weren't traveling.

這兩筆交易都是在 COVID 期間執行的。記憶中 Pearl Meyer 的生日是 2020 年 5 月。Heritage Vet Partners 成立於 2020 年 12 月。從我們的角度來看，大多數公司在那些時間段內並不活躍。他們沒有旅行。

They weren't going to see people in person. We work to the extent we could. And those activities led us to two transactions that were just fantastic opportunities. They fit us really, really well in terms of us being a partner with the individual owner operators, the management teams of those businesses.

他們不會親自去見人。我們盡我們所能地工作。這些活動為我們帶來了兩筆交易，這絕對是個絕佳的機會。就我們作為個體業主、企業管理團隊的合作夥伴而言，他們與我們非常契合。

They were also fantastic businesses. And our ability and desire to continue to be active in all time periods led us into two transactions that obviously were really, really good transactions for us and not just for us, but they are really good transactions for those management teams. So you should expect us, just like we have been in the past great recession, COVID-19 pandemic, et cetera, you should expect us to seek to be active.

他們也是出色的企業。我們的能力和在所有時期繼續活躍的願望使我們進行了兩筆交易，這顯然對我們來說是非常非常好的交易，不僅對我們而言，而且對那些管理團隊而言也是非常好的交易。因此，您應該期待我們，就像我們在過去的大衰退、新冠疫情等時期一樣，您應該期待我們尋求積極行動。

Obviously, the counterparty has to want to transact as well. But we feel good about our expectations to be active even if there continues to be significant uncertainty in the marketplace, the goal for us is to always first and foremost on the lower middle market strategy, just to find best-in-class individuals, management teams that have been in their business for a long time where we have opportunities to become their partner. So we've always found that super attractive, and we'll always find that super attractive in the future.

顯然，交易對手也必須願意進行交易。但我們對我們的積極預期感到滿意，即使市場仍然存在很大的不確定性，我們的目標始終是首先關注中低端市場策略，只是尋找一流的個人、長期從事其業務的管理團隊，我們有機會成為他們的合作夥伴。所以我們一直認為這非常有吸引力，而且我們將來也會一直認為這非常有吸引力。

And I'll let David add on if he has any additional color or commentary there.

如果大衛還有任何補充或評論，我會讓他補充。

I think Dwayne covered most, but the last thing I'd add is that with the seasoned nature of our portfolio, those companies are naturally have less leverage than the rest of the portfolio. And those managers are waiting for opportunities in times. They're tracking acquisition targets over extended periods of time, having been in the industry took their partners for a very long period of time. So we do see more activity in those portfolio companies on doing strategic acquisitions and, or putting growth capital into the companies when the opportunity is right.

我認為 Dwayne 已經涵蓋了大部分內容，但我最後要補充的是，由於我們投資組合的成熟度，這些公司的槓桿率自然會低於投資組合中的其他公司。而那些經理們正在等待時機。他們長期追蹤收購目標，並在業界與合作夥伴合作了很長一段時間。因此，我們確實看到這些投資組合公司在時機成熟時進行更多策略性收購或向公司注入成長資本。

Appreciate that. Thank you.

非常感謝。謝謝。

Thank you, Mark.

謝謝你，馬克。

Douglas Harter, UBS.

瑞銀的道格拉斯·哈特。

Hi, this is actually Cory Johnson on for Doug. So you mentioned wanting to bring leverage up, but perhaps not to your target range. Can you just talk maybe a little bit about the pace of how you expect it to maybe trend throughout this year? And like what might be around like the high market you're looking to get maybe towards about -- around the low end of your target range?

大家好，我是 Cory Johnson，代替 Doug 發言。所以您提到想要提高槓桿率，但可能沒有達到您的目標範圍。能否稍微談談您預計今年的趨勢速度？您希望進入的高端市場大概在什麼位置——或者在目標範圍的低端附近？

Sure, Cory. Thanks for joining us, and thanks for the question. I'd say that it's hard to really give a time period or even an amount of leverage we'll get to at the end of the year. It's obviously going to be highly dependent upon the investment activity, which as we just talked about, could be more uncertain or more muted, both on the lower middle market side and the private loan side just given what's going on in the economy.

當然，科里。感謝您加入我們，也感謝您的提問。我想說，很難真正給出一個時間段，甚至很難給出我們在年底能達到的槓桿金額。顯然，這將高度依賴投資活動，正如我們剛才所說，考慮到當前的經濟狀況，無論是中低端市場還是私人貸款方面的投資活動，都可能更加不確定或更低迷。

But I'd say the guidance we are giving is that as we execute growth of the portfolio, both lower middle market and private loan. Our plan is to utilize more of our debt capacity as opposed to additional equity issuances over time to increase that leverage ratio so that it moves more in line with our range and continue to be conservative, but moving in the direction of increasing leverage to be closer to the target range. But again, the timing and the ability to do that is primarily going to be dependent upon the pace of new investment activity.

但我想說，我們給出的指導是，隨著我們執行投資組合的成長，包括中低端市場和私人貸款。我們的計劃是利用更多的債務能力，而不是隨著時間的推移發行額外的股票來提高槓桿率，以便它更符合我們的範圍並繼續保持保守，但朝著增加槓桿率的方向發展，以更接近目標範圍。但同樣，實現這一目標的時機和能力主要取決於新投資活動的步伐。

All right, thank you. And then additionally, so you had, you've had your operational expense ratio come down this quarter. Do you see like any -- is there any additional capacity that you think to be able to bring down your ratio as you continue to scale up?

好的，謝謝。此外，本季您的營運費用率已經下降。您是否看到了什麼—隨著您繼續擴大規模，您認為是否有任何額外的容量能夠降低您的比率？

Sure, I think we always view there being an opportunity to continue to become more efficient. It's one of the biggest benefits of our structure as an internally managed BDC. But I would say that when you look at where we are today, realistically, there's not a ton of room there.

當然，我認為我們始終認為有機會繼續提高效率。這是我們作為內部管理的 BDC 結構的最大優勢之一。但我想說，當你看看我們今天所處的位置時，現實情況是，那裡並沒有太多的空間。

The variability quarter-to-quarter, year-to-year as we sit here today is going to be more focused on the incentive portion of our compensation and how are we performing from an operating performance standpoint, both the income statement, ROE performance as well as new investment activity. Those are going to be the biggest drivers just like they have been in the past that drive our incentive comp.

我們今天在這裡討論的季度與季度之間、年度與年度之間的變化將更多地集中在我們薪酬的激勵部分，以及從經營業績的角度來看我們的表現如何，包括損益表、ROE 表現以及新的投資活動。正如過去一樣，這些將成為推動我們激勵薪酬的最大驅動力。

And if we're doing really, really well, there will be more incentive comp. If we're not doing as well there will be less and the variability in our incentive comp will be the biggest factor that drives that expense ratio. Again, we think that's one of the biggest strengths. If we outperform our team is going to have some additional comp.

如果我們做得非常非常好，就會有更多的激勵補償。如果我們做得不好，我們的激勵薪酬就會減少，而我們的激勵薪酬的變化將是影響費用率的最大因素。再次，我們認為這是最大的優勢之一。如果我們表現出色，我們的團隊將會獲得一些額外的補償。

If we head into a tough environment, there will be less incentive comp that again, directly aligns with the performance and the benefits we're providing to our shareholders. Again, one of the -- we think it's one of the biggest benefits of our structure. And one of the things that has served us so well for 20 years.

如果我們陷入艱難的環境，激勵補償就會減少，這與我們為股東提供的績效和利益直接相關。再說一遍，我們認為這是我們結構的最大優勢之一。這也是 20 年來對我們幫助最大的一件事。

Great, thank you.

太好了，謝謝。

Thank you.

謝謝。

Sean Paul Adams, B Riley Securities.

肖恩·保羅·亞當斯 (Sean Paul Adams)，B Riley Securities。

Hey guys, good morning. I dialed a little bit in late, so apologies if this already got answered. But can you talk about your current expectations for the scale growth and run rate for earnings from the MSC adviser going forward?

大家好，早安。我打電話有點晚了，如果這個問題已經得到答复，請原諒。但是，您能否談談您目前對 MSC 顧問未來規模成長和獲利運行率的預期？

Sure. Thanks for joining, and thanks for the question. On our contribution from MSA, I would say, as we sit here today, the biggest catalyst or biggest event was the transaction that happened in January of this year, where we were successful in completing a listing and an equity offering for MSC Income Fund.

當然。感謝您的加入，也感謝您的提問。關於 MSA 的貢獻，我想說，今天我們坐在這裡，最大的催化劑或最大的事件是今年 1 月發生的交易，我們成功完成了 MSC Income Fund 的上市和股票發行。

Now that, that activity is behind us and we look forward, the future growth on the base side is really going to be focused on deployment of capital at MSC Income Fund. So as you see us have more activity, you'll see the base management fee come up. But that number will be directly correlated with the investment activity.

現在，這些活動已經結束，我們展望未來，基礎方面的未來成長將真正集中在 MSC 收入基金的資本部署上。因此，當您看到我們有更多的活動時，您會看到基本管理費上升。但這個數字將與投資活動直接相關。

The incentive fee is by far the biggest variable, which again varies with our performance, not just at MSC Income Fund, but also at the private loan funds we have. But I think we feel pretty good about where we are with the performance of those vehicles and would expect to continue to see incentive fee income going forward.

激勵費是迄今為止最大的變量，它也隨著我們的業績而變化，不僅是 MSC 收入基金，還有我們擁有的私人貸款基金。但我認為，我們對這些車輛的表現感到非常滿意，並預計未來將繼續看到激勵費收入。

But as you look out maybe one quarter forward, I think something in line with where we were in the first quarter would be a good number to expect for the second quarter. As you look out further than that, it's all going to be dependent upon our pace of investment activity and then just the overall economic performance and what that means for the performance of our portfolio of companies and our net investment income at those asset management business clients.

但當你展望未來一個季度時，我認為與第一季的情況持平將是第二季的一個好數字。如果你進一步看，你會發現這一切都取決於我們的投資活動速度，然後是整體經濟表現，以及這對我們公司投資組合的表現和我們在資產管理業務客戶的淨投資收入意味著什麼。

Thank you. And just a quick follow-up, if I can. Could you just walk us through some of the implied exit multiples embedded in the LMM equity portfolio versus where you see the market transacting today.

謝謝。如果可以的話，我只想快速跟進。您能否向我們介紹 LMM 股票投資組合中隱含的一些退出倍數，以及您今天看到的市場交易情況？

Yes. If I understand your question, I -- one is there's details in our 10-Q that I'll give you those numbers. I'd say that there's not a lot of variability or movement quarter-to-quarter. So our goal with our kind of quarterly valuation process is that you're getting to a valuation multiple for each of the companies that is what that transaction, you should close that in a marketed process.

是的。如果我理解你的問題，我——首先是我們的 10-Q 中有詳細信息，我會給你這些數字。我想說的是，季度與季度之間的變化或變動並不大。因此，我們採用季度估值流程的目標是獲得每家公司的估值倍數，也就是交易本身，您應該在市場化流程中完成該交易。

Obviously, you have transactions like Heritage Vet Partners and Promier, where as you enter and create a process, if that process goes well, you'll see significant value expansion, primarily not on EBITDA, but primarily on the multiple.

顯然，您有像 Heritage Vet Partners 和 Promier 這樣的交易，當您進入並創建流程時，如果該流程進展順利，您將看到顯著的價值擴張，主要不是在 EBITDA 上，而主要在倍數上。

And if you look back at the history on both Promier and Heritage Vet Partners, you'll see there was significant fair value appreciation as we went to market kind of went through an auction or a sale process and got to a good outcome. But in general, the fair value process we have is the goal of that is to provide a valuation that you think it would transact at in the open marketplace.

如果你回顧 Promier 和 Heritage Vet Partners 的歷史，你會發現，當我們進入市場，經歷了拍賣或銷售過程並獲得了良好的結果時，公允價值就有了顯著的升值。但一般來說，我們採用的公允價值流程的目標是提供您認為可以在公開市場上交易的估值。

Got it. Thank you for the color. I appreciate it.

知道了。謝謝你的顏色。我很感激。

Thank you.

謝謝。

(Operator instructions) With no further questions, I would like to turn the conference back over to management for closing remarks.

（操作員指示）如果沒有其他問題，我想將會議交還給管理階層進行結束語。

I just want to say thank you again, everyone, for joining us this morning. We appreciate the continued support of our shareholders. and we look forward to having everyone join us again for our next call in August after the release of our results for the second quarter.

我只想再次感謝大家今天早上加入我們。我們感謝股東們的持續支持。我們期待大家在八月發布第二季業績後再次參加我們的下一次電話會議。

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.

謝謝。今天的會議到此結束。現在您可以斷開您的線路了，感謝您的參與。