BBDC - Earnings call 1 2021 | Barings BDC, Inc.

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Operator

Greetings. At this time, I would like to welcome everyone to the Barings BDC, Inc. conference call for the quarter ended March 31, 2021. [Operator Instructions] Today's call is being recorded, and a replay will be available approximately 2 hours after the conclusion of the call on the company's website at www.baringsbdc.com, under the Investor Relations section.

Please note that this call may contain forward-looking statements that include statements regarding the company's goals, beliefs, strategies, future operating results and cash flows.

these those reasonable, projected believes differ results company from materially in the statements actual are could Although forward-looking statements. ended based for risks year XX, report those report on are subject ended forward-looking statements titled December statements on XX-K the company's assumptions in Form March underlying on These annual the and Risk to XX, Factors numerous quarterly under for and XXXX, disclosed including Form quarter and in uncertainties, XXXX. XX-Q the sections various are the fiscal is filed Securities the with and Each Exchange Commission. to Barings no or undertakes statement BDC forward-looking unless by obligation update revise law. any required

At Chief turn Executive will you, the Lloyd, Barings of to BDC. Thank Eric ahead. this time, Officer go sir. call I Please over

Eric Lloyd

joining you call. I Please today's safe open first presentation website. Thank that be you, Donna, section note is your and Relations and as XXXX to referring throughout earnings to good our well you for certainly on this And Investor us morning, and the hope up. are posted that appreciate everyone. doing families continues staying quarter we'll country today's of call, our We

Ian On of Bryan Chief the I'm Barings Finance, by President High, Barings Jonathan Bock. and Officer, call Financial Co-Head and Private Global Baring's joined and Head Co-Portfolio Situations U.S. of BDC's Special BDC's Manager; today, Fowler; the

some Before Ian with the quarter comments high-level and begin Jon review I'll about details of first our portfolio results, and quarter.

on we quarter. fourth March first we Given able and in deployments earnings of provide was XX, good saw that our preview a strong the quarter call XXXX to were pretty the

today. historically dividend portfolio that with been These given performance, active, across deployments, strong through drive has and along walk increases first the quarter the helped the As quarter quarter expected, will you the very first industry. particularly we remained least continued earnings active the

loan broadly the first we continued quarter with first backdrop months rising year. the last the begin prices equity The on X Let's and of outlined quarter generally BDC in prices Slide through shown trends the syndicated presentation. X on macro the our with fourth of call

to has right active back equity levels, lending not the the in prices for market direct direction. pre-COVID BDC While helped trend

trends saw magnified in performance value Net driven X.X% by summarized X were these on of Barings per across share we the presentation. the investment exceeding or income dividend. Slide believe highlights increase the share in part asset with I $XX.XX, positive per with $X.XX the quarter the increased our net in BDC's our to industry

Capital quarter's to new per Our the of net back MVC from $X.XX impact the on investment income acquisition. share a and $X.XX increased full of deployments

detail As stable have have our these we'll in exceeded now and fee increase quarter given drivers share. to allowed second our hurdle us $X.XX to outline more per incentive dividend later, for same created earnings rate more the our earnings a stream

the had we quarter. new investments, million $XXX new Regarding in first of originations

the we team down Clearly, vary the that $XXX our million While per this based quality million was market. always in deployments quarter. mind $XXX from conditions, to the saw fourth has of quarter, we the to and that market on level guidance will around current see this in in quarter, expect generally on capitalize can opportunities able keep been

cash well was asset restructured valued cost. interest. transaction Our returned Capital at -- X above remains first our cash MVC And and the portfolio the to in continued paying through nonaccrual investment was quarter perform original and acquired to that

the no first assets the nonaccrual quarter. at of had end we So

the Slide financial X quarter. for highlights outlines additional

X.XXx with continued secured on total at assets the capital our total and remained XX, of decreased both basis. increasing how of well growth target to Here, highlighting investment has $XXX Net our shown of absolute income, while this into the you structure leverage million investment And debt portfolio on slide, within can an March net share translated outstanding. as income XX.X% and see of percentage the not investment debt our range. a per of unsecured our evolution

mentioned the to it into I accomplishments, be forward of the easy stream unsecured portfolio And that while number I our integrating hurdle have While the had management could process. outlined end as of of MVC after portfolio the XXXX deployments XXXX, rate. including slow predictable it's X% recognize our been exceeded briefly, a above, new issuance down such significant active earnings going earnings important I February's think debt our first already and should it to quarter an more

insulating evolution nonaccruals in of is Recall, to earnings the a effects refinancing investors that loans stable result such a a in of decline lower first negative in would thereby at portfolio, out middle-market our This syndicated dividend. profile as turn with earnings started incentive or more rotation items result broadly from fee, lower a in a should of natural primarily predictable which mature, the yields.

market I'll our and to now portfolio. the Fowler turn call to update Ian investment the an provide on over

Ian Fowler

everyone. and good Eric, Thanks, morning,

fundings Slide the can X, $XXX additional turn investment details of partially to $XX gross investments If activity new on million, $XXX million, million. by you offset Net repayments mentioned. of and Eric with that you totaled see middle-market sales

New investments, new investments platform million XX follow-on totaling included and delayed term $XXX $XX draw investments loan and million of fundings.

of of saw and new MVC equity offset position basis X full investments and sales portfolio net of cost partially $X $XX has million the $X $XXX had now of originations, million. of redemption with by million a cross-platform new also million totaling The repayments. We $XX million,

in definitely come likelihood loan and market one prepayment we that expectation high quarter, our data of has to might XXXX quarter, With that to this in increased a trends think velocity Last point to the relative portfolio pass. sales cycles. outlined middle-market million past of repayments $XXX

of joint our us sizes. portions million to with and repayments of exposure portfolio This including to sales enabled of our approximately and quarter, selective were sales a manage to however, nonqualifying more that $XXX create smaller our assets investments, sales diverse venture gold

while quality allowed maintaining also a for conservative in sales participate the investments market These leverage current us profile. to active

need in that platform Barings as that the attractive market investment to We for and capital a in the escalates. repayments and frame position XXXX, to a redeploy strong wide create reference believe will continue Barings will of factor significant be transactions BDC competitive

portfolio the Slide accrual did we quarter tightening PIK extremely MVC in liquid of the continued you show across ability the single-B XX. an to fair remain for portfolio XX an saw middle-market appreciation for the middle-market increase capital risk spectrum on levels. competitive quarter the board this XX in December We and drove Both inside bridge structure. each our continues quality investments. be spreads across across unrealized from success tied March will of XX data first on to and to differentiate acquired investment and spreads is transactions to Pricing be in interest Slide shown A and market. realized the value as critical updates

the of breakdown investment March portfolio at of key A our Slide XX is components on XX.

in investments. remains of up commitments portfolio revenue X our of past, cross-platform which of details our we this and MVC middle-market our to our Capital on and the XX% our makes and portfolio core discussed goal portfolio portfolio, XX% the focus is As and have components are now portfolio our the of of slide The terms provide contribution. key total terms in of investments in middle-market portfolio, legacy

X.X%, of and This cross-platform Capital quarter portfolio investments the legacy feature respectively. terms included fair minority the had accounting to which end revenue is agreement to that portfolio and interest for the we've have amendment investments MVC at our modifications investments, nonaccrual complemented by We XX XX in portion loan investments. a XX.X% X value convert X.X% to a material total a payment quarter. cash yielded to no the the allow and no of Otherwise, of of PIK, for had debt

For weighted-average we first reported was lien our quarter. what middle-market leverage X.Xx, with portfolio, consistent last

first assets, at excluding up the fourth generally consistent of short-term now of quarter. XX% investment total end lien XX.X% with is Our portfolio, the made investments, the

portfolio debt continue brings lien lien Barings-originated investments, provides The Slide XX breakdown our comprised funded the lien. enhance primarily XX% of XX%. first seniority portfolio driven our in further a perspective. to which from portfolio to of the XX% which is the up of investments portfolio from portfolio investments first joint further of to over by This second down diversification. mezzanine ventures total is last quarter, and equity, MVC core component makes a down XX% The is

outlined, the initially serve the as believe to portfolio. while we can an Barings-originated attractive have complement MVC we portfolio As

increasing continue to will We earnings by assets. the noncore, and $X this I lower-yielding core towards redeploying This capital drive into higher-yielding investments million sale equity referenced the exemplified exit of by earlier. equity was strategy

Our top shown XX. on Slide are XX investments

XX across remains the portfolio investments transaction. MVC with place reducing of well portfolio. part total top total by Remember the the represent investments acquired And perspective, The with support industries. X Our thus the overall industry largest diverse risk. credit portfolio. in XX.X% Capital is the investments of potential are XX The as of from investments largest these were supported XXX that X.X% spread Barings as downside LLC, an investment agreement

summarize both is spread I'll staying and a that performance of by to remain strong, and environment. the Overall, portfolio vitally important saying now company portfolio not management market remained complacent. the in be ahead have Active while time issues compressing

deploy and strong the confident classes, ability Given of we breadth our attractive asset return to in depth and remain risk across capital platform of Barings many the at private rates profiles.

call provide our Jon turn on now to the results. financial I'll color additional over to

Jonathan Bock

And Slide Ian. jumping to Thanks, XX.

of increase to in Here's March as share of $X.XX a a full bridge NAV per XX. $XX.XX

per share. on per gains income share. of foreign Net investment an unrealized portfolio, net roughly Our $X.XX currency our $X.XX share on support credit investment an and unrealized and by drove currency our investment portfolio foreign of $X.XX increase net transactions per increase drove agreement and dividend outpaced our transactions depreciation

Additional net on unrealized Slide shown details depreciation XX. on this are

lower our equates $X portfolio? million net the to million current $XXX,XXX investment share net improved middle-market per of million roughly of this and the of spreads was impact $X.XX of broader appreciation, million on $X $X The of to which attributable is portfolio. debt approximately credit across market included depreciation was to $X middle-market And attributable depreciation, investments approximately in for unrealized the

the currencies. dollar the on of investments was depreciation offset roughly strong foreign $X held Depreciation our middle-market by impact of attributable to million in

prospects legacy total equity the for $X depreciation while been million, appreciation total roughly the that depreciation long-term of cross-platform positions Our MVC investments we about investments. legacy was for impacted feel both have million. entirely COVID, by saw saw to $X approximately net driven but net portfolio by X continue almost MVC good This portfolio of

XX, with Near the can unrealized support that agreement the million. Barings see you depreciation of had $X.X Slide of credit bottom

legacy be, offset logical potential the question outcomes would MVC credit why as the for did CSA to The of value the unrealized depreciation on CSA based losses on intended legacy have a the the So we in the portfolio. both legacy MVC the portfolio portfolio? determined is and view a agreement long-term support MVC

the positions, portfolio equity investments, end, -- And takes while only quarter the those account a outcome. circumstances including to -- equity impact valuation the repayments current into valuation portfolio investments. the investments depreciation the lead fluctuate, the depreciating but on and view different any of The quarter lower of of debt longer-term the at this the value downside also risk particularly of not CSA based certain valuations, of on on could

a So MVC for unrealized CSA the legacy on longer-term a of is portfolio improved outlook the reflection as depreciation an whole.

our sheet XX quarters. statement Now show last for X the Slide will and balance XX and income

for impact investment portfolio As net that investments the quarter, of increase. drove quarter in from share increased as $X.XX investment $XX.X total quarter investment income our new increase that in full fourth was we've million, the roughly net an a of driven discussed, of the growth by our per quarter, the in our the first MVC and and investment income, XXXX well that as income the to

fees, investment with which offset was a issuance. debt in unsecured partially borrowing and total and result higher increased rose income levels financing by costs higher associated increase the of The as interest our our interest

the fee The the X% pre-incentive first of investment our exceeded net to payment incentive quarter income first fee saw hurdle an rate. also as manager

and March of and a X.XXx balance total sheet XX, after equivalents roughly sales for transactions. from X.XXx artificially timing certain was cash high this cash was the Now on or Slide was although debt-to-equity unsettled XX, asset perspective given at adjusting level

unsecured for principal the consecutive total debt We outstanding to amount bringing million. also the issued quarter, third $XXX

and Slide senior balance has sheet asset funding our mix to diverse of you assets. as our we've match how our our the diversify And reliance Turning continued relates assets, of can both compared XXXX, to on XX, portfolio to to to in decreased of seniority debt see class. end our terms

on shown of Details the on that each profile and our of is borrowings shows debt our over Slide last the X XX, evolution quarters.

X.XX% of February, the $XX or million X-year and notes X-year we coupon coupon $XX includes notes a quarter unsecured roughly first new of The a with private blended a million X.XX%. $XXX million debt with of of completed placement which included in X.XX% coupon of

$XX an capacity to We unsecured facility. senior million secured up raise commitment additional our continue to credit to borrowing of debt $XXX have available under and million

Jump to Slide XX.

potential to You impact can delayed of on shows well commitments cushion how Barings leverage, currently The limit. remaining while our BDC this of draw available entirety see leverage have unused $XXX if our impact our funding as loan companies these commitments using liquidity has $XX.X net our the table to upon, million here term we capacity including the venture commitments commitments. joint to available regulatory maintaining meet of the as of million of called capital portfolio against the our investments.

And Eric our quarter BDC. dividends took be quarter. share, of announced Slide adviser to last since XX over announced paid our the that yesterday as over X% $X.XX compared investment per the XXXX the we dividend will an mentioned, second Barings to updates as increase and

me graphical concept for across investors with BDC this asset and And shows evaluate of the relative different value that of risk, choice Slide classes. to opportunities to a relative provides to depiction of B benefit investors. and across BBB, how at value continue the meaningful Turn XX. BB now to study levels And this credit markets exist a we value

the XXX actual relative investments the an spread which to premium illiquidity point points, to on premium profile. we deployed XX, $XXX risk complexity indices outlines and first into sought as credit at a on attractive basis liquid benchmarks comparable translates new results our This represents at which in liquid market all-in premium Slide shown the quarter spread. XXX basis Barings same the of spread BDC spread million

we across XXX Europe Diving market segment basis deeper North averaged and indices. into America, our middle-market spread core points liquid relative roughly to

even complexity believe the For to return Barings illiquidity and to greater was XXX upcoming via the cross-platform spread across this our basis market to relative a is ability platforms for and we key differentiator and indices invest shareholder points, investments, at liquid excess continue generate in BDC premium cycle.

remarks are draw Slide our of these $X average this compared of ventures pace our secured The investments slightly senior $XXX of norms with summarizes XX. with the of which are I'll new so quarters, closed origination wrap prepared committed margin approximately $XXX XX% X of DM-X XXXX first activity in funded. new also loans. quarter in million remained to X.X%. joint during new and investment the And weighted investment was and or historical And million far strong and commitments, commitments, but slowed pipeline. Of second lien to delayed of compared loans, last million We've term the X% roughly approximately funded previously new

investments. lien investment Global on secured Barings billion basis $X.X a probability-weighted and senior Private current is Finance The is pipeline predominantly first and approximately

As for a reminder, this investment rates our based estimated in pipeline our pipeline. expected is on closing deals all

questions. to get let's Q&A. we the that, with Operator, line can open for And

Operator

Fargo Securities. O'Shea is [Operator Wells of Instructions] Finian coming question from first Our

Finian O'Shea

first profile. Eric, earnings wanted I your to ask about

you some out initially. Here, NOI do an X% which to making incentive return, set fee, you're

thinking the place of do lately? at that MVC Or hot you're today on upside a assets think pretty think to question destination -- we're congrats sure originations it it you're income. to in on especially all normal that earnings? you do just you this will to earnings. the earth forward arrived was this good been back off, eventually has want quarter. But comfortable if some know Just or going feel you is good perhaps, was and the is, So now with But about move to I'm that, that fee you will more do -- seem think to there in repay that. go? I as not there's high say terms come you've how Or

Eric Lloyd

Yes.

to trying that just You're the get think, I Fin, is right? to sustainability question,

Finian O'Shea

Yes. Yes.

Eric Lloyd

Yes.

is at if MVC listen, equity have you from largest a like Obviously, And assets, got So think those. Alloy, perspective. second a Custom the you which asset. look is higher the it, mix, right? of which the something I one earning So mean, think in highlighted a earning I there, income you it's current we asset that's I X

combination when a the at X.X%. we largest off a we basically across portfolio the asset got the the two, So example, marginal as those lot have one board, of I think, look the when an versus But single other, could the I of rotates is across mean diversification impact. board.

We have cushion of over XXX points that basis to X%.

points if X%. look we XXX higher over return than basis you was it So at the the gross had,

cushion about good that feel we there. So

more there's think actually we so upside. And

what the You done at look we've cross-platform on investments.

we I other And we High shareholders an do have the think the Barings. can phone Bryan that's we as XX to example. was it the on those don't know, like at probably, as ago, months things I why introduced

but I that there's think So we shareholders very the feel more also X% upside return confident is sustainable. there, for

Finian O'Shea

then helpful. both And could just the as of But demand give is a a of but pipeline there's That's on that perhaps at the competition with missed number Great. follow-up, the Ian pipeline, Jon, from Okay. sponsors I you also end that quality back, for fiercely the M&A hearing lot well, for we're plans. us their that. also if

So me. sounds things the where some high are better there, how that -- pre-pandemic? be how than evolved all today? like Or just there's for we are in they level to totally high -- on are some terms And level of back has do quantity will things that quality, it but

Ian Fowler

economy. at can balance managers pipeline kicking I've fueling were it's Fin, I quarter definitely back, with has economy And step economy the of Jon my their unlike in And maybe terms the the high-quality the support the portfolio with allowed market been taking deal start fourth in raised. career the looking and anything ever of maybe you. to lot seen volume some the a capital of on just for think, I then those and and that cover the fiscal And sheets. A I'll can up of growth just that, incredible, and the think today, potentially the really stabilized was issues in monetary has shore some assets.

things in would start statements, than So yes, given of you when extremely here. years. prepared much just there's our to sort a or first X said But quarters -- It comparative other our the business. first quarter, we seasonality one like basis busier think was at of on of relative I looking expect, active

at new started see think looking in to lower Usually, some of going things you come I start assets think coming quality and after assets. see of market. deterioration to you're quality when first I we've platforms, followed -- to through by quality a cycle probably the some better the

starting see I you're that. to So think

You're structure and from become that just to the portfolio money been definitely pricing and have there out the seeing rebound their more terms all able issues. competitive, the and much given managers

which And It find so And expect doesn't good for are we we that to you mean in have finding. opportunities market, a pretty young can't fortunately, the us, portfolio. we continue.

don't so ramp we're Jon? to sort And we going market. expect normal just recycling, to into expect have significantly that we competitive more a of other going than don't

Jonathan Bock

And investment Fin, a that was portfolio basis. the number of just Thanks. Yes. $X.X probability-weighted billion on

So Fin. thanks that, for

Operator

Our next from Jefferies. of Joseph question Kyle is coming

Kyle Joseph

companies Obviously, are really comps? to a nonaccruals. perspective? easier the strong we get for of your the for sense here I strong, in expectations things I question from here no in growth through really of get your into kind is, EBITDA want of performance a And 'XX from bit. it to credit on thick and and terms dig year. it's the guess a and Congratulations wanted credit as just big do revenue trends portfolio underlying I But your start been to

Ian Fowler

Yes.

So this is Ian.

better. a risk certainly discretionary and we obviously, derail into by consumer-facing there fortunate fiscal that But our saying No, right Is in So the doing again, start the possible. the and/or I we recovered? direction. because deemphasize generally fully were headed that's could we businesses. COVID within that portfolio. we somewhat? Yes, I with It's we're again avoid would is just we And support, going Have economy, haven't. monetary guess

travel avoid. of impaired industries leisure, COVID, that were all restaurants, that and retail, were areas gyms, So we generally a lot the by significantly

from us, portfolio the a of again, was and most portfolio For essential businesses. perspective, deemed

the So shutdowns quickly. they with place, even rebounded in very

portfolio, we've going have so direction. right in And would seen within input to, seeing I say, those you forward, all I the the it certainly and we're costs rising. think numbers are headed

see definitely we so out And inflation there.

does fight have the COVID there's And So some some into we really start there, point, out rates and bloated impacted rise? that pumping at liquidity there's balance the rates to reeling Fed the see from being And question the long is lot how market? companies do some still a are sheet. question, companies by of keep no

think So end I markets those issues. have will some

Kyle Joseph

just high and And the to the assets that. on want MVC there long a equity, portfolio. the one thinking Appreciate high-yield is Or -- make Is equity the fixed sure income content holding about monetizing an I possible? and as I to understand there. onto as follow-up component there. then just then equity Obviously, the income just you're strategy fixed but really obviously, it? assets how that

Eric Lloyd

-- definitely go ahead, Bock. mean, I

Jonathan Bock

that the of kind of well as say as spread over is mentioned and to maximizing earnings that appreciation can on find Thanks. the make investments that that be and you'd side. can stability breadth -- profitability the the repaid the the of that even side both profile. come platform. sure we're profile earnings as given income things I would can the of higher come stability depth Eric the are of And the goal just

don't rush. to So on I'd ensuring say focus strategy you that the going is

do out level I'd sure it value see a for make of you that, probably always You right your and say cycling net And at time, investors over as to what's asset bit relates and profile sure income income. a maximize liquidity asset strong. the the It's we it, just environment deliberate making proper given remains now price buoying the current very because market with prices. is being you'll

Operator

Robert of from is Raymond question next Dodd James. Our coming

Robert Dodd

that good into another on quarter and catch-up. getting Congratulations incentive

improved first the for that little expectations and be long-term equity just there? debt? a down Jon, part question, the Or is neutral outlook. long the CSA, us it. term Is preempted and across your it higher bit. color for Can CSA give you may board But has actually First that that improved drove outlook of comments any on you the a

Jonathan Bock

argue a on you Good series is of across-the-board to because valued equity outcomes, on there that that number of and the improvement. volatility term the right? of longer nature improvement as going have look based higher options of equity it's think about profile, right, find impact if if just just CSA CSA near-term the you until realized question, I'd You'd of or at how And in debt given a the lower, Robert. less liquidity the general you valuation run it's a the simulation. has going if you're model values,

of So really of point? the vantage terms CSA today's general from it debt focus is that a in calculation

Robert Dodd

think, Perfect. like On, every quarter. I XX, this I Page

transfers the leverage versus flat quarter. flat the repayments on turn. interest interest segment, going Is slightly of than mean, Was coverage quarter, interest a interest see Or of coverage and lower coverage dynamic there spreads but last with what's down last to about or anything coverage middle-market I there is debt? I there the leverage half obviously, there a spreads the same that generally higher Is JVs? higher. worse the Average On loans speaking, consequence there? anything, the

Ian Fowler

and Robert. kick and I'll to it Eric start, Well, over then I'll Jon,

spreads quarter, LTV. and fourth doing to at a look quarter perspective, the in not deals first market Just you from we're really comparing leverage when any and change of the that key metrics there's of terms

has know materially changed. that You'll

leverage we up and deals we've seeing compress a I going spreads we expect are tighten and going said like think bit. forward, what

back there. But XXXX. And I'll So better the great and I quarter-over-quarter. see much say, like, at significantly talk think the Jon been you about crisis, Eric And was just coverage deterioration compared when than we there will to, hasn't look let perspective, some from financial XXXX interest historical or much a change it in today JVs.

Jonathan Bock

that the to of is the the at come of you'll one a it can to one trend and quarterly be find that at operate in bit noise there see we're of is the end little those speaks general day, times, numbers. Ian to some I'd that the what continuing we under. Robert, But

Robert Dodd

not But correct total anything? new Page or XX if the me is right, I'm wrong, portfolio, originations

Jonathan Bock

Correct.

Eric Lloyd

good it's And correct, we market, X.Xx. interest that coverage, At That's Robert. about the feel number. X.Xx middle really on

Robert Dodd

a a point, it's not At all. number bad at

Let's take from the was it quarter? last just down

Eric Lloyd

Yes.

it. You got

Operator

Alexander Our is of coming Casey Point. next question from Compass

Casey Alexander

of I'll can at give to. both you my you you questions them address same and the however want time,

at are both the Slide the X positions portfolio largest from XX. Looking MVC. Obviously, in

if How So they're companies, structurally think between you definition helpful give How you there as if Custom us us And be are two? Holdings. And X some strategically differentiation give color it those be JVs? and the also. would would I the could some helpful Alloy very could secondly, different? think X on they're to why Security then different? I that

Jonathan Bock

is this Bock. Casey,

So -- go ahead.

Eric Lloyd

Go ahead. Maybe Ian can...

Casey Alexander

to one ask X you trying when get See, you people X time, questions answer. at

Jonathan Bock

exactly It's Casey. right,

terms So what we'll start with of the trends. high-level

general a we in marks. finding the sense end the at context are to is stay of the make we both lines loans give in we performance of you don't but Casey, try things in along day, it we So and performance. aggregate, sure try comment at on effectively look those individual to We'll the of that portfolio the reflected company to that

while relates our the at companies group, in we so as it stick the end across of to seen about is joint ventures And and difference. can kind go one, and the very strong number question of structural not the commenting to of the on answer peers sure it that others the specific. But portfolio a as try we say make we've a portfolio process day, trends we that we a to

investment Partners. familiar very across venture Jocassee that's called wide that you're start relates mandate the You'll to has the very and ability as credit -- and joint see it to a with South investment spectrum, an Carolina that

specific In be would standpoint, the return or type another addition, case, a BDCs very allow referred asset to a that joint there of asset in from which, that attractive Thompson that are be to other here industry JVs risk-adjusted class with venture own a can as specific focus Rivers.

reference a sure So a to we a attractive the that's And is built the number large find frame is that a so to classes. of of also to over our sure do very using venture attractive and time, but make those is there of make what over you'll number poured goal way BDC have those many broad goal we and strategies asset to of classes asset can the a joint structure. private that is by franchise discuss investment asset

So with Rivers X South with if state it's both ones, and at of Carolina one of venture a to global joint additional Waccamaw. question, you smaller as a very and one good Thompson you large then worked in referred the also South partners think that's see close state our of but can the Carolina,

Operator

next Our from of coming Paul KBW. question Johnson is

Paul Johnson

I'll My Fin. actually X% over is generate was that I a earnings of Or do your different the increase just hurdle a sort it is first sort I'm to curious, goal consider it to, -- goal guess similar the you just X% way. of ask earnings and stable very fashion? above or question hurdle? to time, around

Eric Lloyd

there Is a...

Jonathan Bock

term... long a from see I

Eric Lloyd

one. first generate strategy there gotten to both all That's -- way, of making along a the highly away. and, the is we go, we've I'd and said bought X-plus it's it portfolio. but this There I diversified, that kind you that last hate predictable, percent. quarter, consistently Row we've And sure this we from Think our after Bock. say. say of boring,

the said, being in the saw two. just we That lift right, or you got quarter last

earnings deploy risk on But to is makes the while compromising we sense well side. do it opportunities where see that increase when so the to the absolutely, to above capital, going risk-adjusted we're that that And goal not return number.

we deploy in XX X-plus So And would we'll an I to aggressively that makes the earnings goal us just there, I'm risk or returns opportunities the to then add will shareholders. in help there. sorry, sure is the those cut going goal isn't it to you percent are like generate make a step adjusted we I and you and capital sense. Jon, the chase the What we're continue step consistently to fourth XX. off. quarter, did for when there? where of to chase The And in believe get increases kind

Jonathan Bock

you while expect maximize want risk always the exact but the do Paul. so way that's you and compromising return, don't profile, No, to

additional context. provides that Hopefully, question. good a it's So

Paul Johnson

good follow-up. Got a it. That's then Yes. Yes. answer. And lastly, very my

But -- of if Partners, believe, JV for BDC? have I the to the and and me me eventually earnings kind the And retained. I been you down don't the advantage earnings the is that's can distribute it's that any to intend earned if the so last On you you I'm doing Jocassee quarter. think the what correct that? for there wrong, as to retain same been from correct you plans income are wrong. Again, few. believe do I'm this been maybe Or JV I of

Jonathan Bock

improper We'll the question. just concept with start joint good point credit reliant effectively dog. to BDC an that you're to there is a ventures return that payout tail on of just maybe that not a maintain a at over-leveraging in and higher strategy to if where us. times the overly higher-level when And is space spread one a asset kind a generate makes that the It's wags became sense

or and whether and the we quarter, very every is at set work closely look we partner what opportunity retained, that. can our not be and investment determining with so And

we that task portfolio, can't you no NAV That has the can You're our to right, venture? if have and reinvest here asset opportunity value those it continue it's time, And is circumstances. prudent. do view that it net a thankful possible mean it value seems whenever you difficult as But of our to we're been when so there's very profile proceeds doesn't pretty simple properly, change. and over in the be rest of off earnings grow asset net cash given very to partners building grow BDCs and in the retain certain And dividend and been that, for the that.

Operator

turn time, floor over closing to for back to Lloyd this the Mr. comments. like I'd At

Eric Lloyd

friends. know Well, quarter. to for where to so can time hopefully, your everybody everybody, I and for little together it's a and busy people say us just look open ones start up remain to support out loved and grateful a hope want the hear times during healthy forward -- listen about more taking We there. a time for the summer stays time and I actually invest to these bit and to our with thanks positive

let out know. there. healthy Thanks stay do so can positive And we stay So much. us and if anything,

Operator

for and in gentlemen, interest thank and participation you BDC. Ladies Barings your

the log off and a webcast, You may day. time disconnect or this lines wonderful at your have

Barings BDC (BBDC) 7 May 212021 Q1 Earnings call transcript