MAIN - Earnings call transcript Q3 2018 | Main Street Capital Corporation

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Operator

Greetings and welcome to the Main Street Capital Corporation Third Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Roberson, Dennard Lascar Investor Relations. Thank you, you may begin.

Mark Roberson

Thank you, Operator, and good morning everyone. us conference Street call. joining quarter Corporation's for earnings XXXX you for Capital Main third Thank

yesterday Officer, a quarter Chief company's Joining the on will are document hour Chairman mainstcapital.com. David Managing an will the available Foster; questions. remain Operating to company's section operating Director is and for on call Magdol, room available financial CEO, XX. beginning and Hyzak; press me the and Street replay afternoon of Main the access at third and Vince and of after President call in until November results. Chief Investment the and that and available Nick on was A Smith. website Head Officer, details how in Brent Relations Financial today's today release included Officer are available Dwayne This replay issued completion Both of the and Meserve, Information yesterday's of Chief Investor be Market call the release. Middle the

also call identified or statements be Today's will, should, transcript this of XXXX, conference therefore, note being information the you on advised live may intends, contain no can These longer as similar be the with Main assumes forward-looking date through these accurate anticipates, expressions. are of words the the as these required any company's results Securities call other on projections set such of will assumptions found to reading. and forward-looking expects, a update company's statements information Many sec.gov. of and future homepage. results only speaks uncertainties at be which call guarantees to and listening result expressed but by XX, or may use time may replay can believes, the as based that of this from be of the obligation advise of the forth are statements. the can implied and the factors you broadcast of on Street or of by these limited materially in Actual Commission, Internet no Please factors unless performance. accessed time-sensitive law. that at estimates, reported is in not risks, there Exchange today, on differ We management's filings November as statements call the no statements that company's are any included or and website and this

of derived including has Certain And now, distributable information to third-party financial release over of discuss not investment discussed to During I'll on press today's including financial call and income. to the measures. Vince. measures this companies portfolio most been was comparable directly independently from related the call management for a call, these will verified. reconciliation net yesterday's non-GAAP measures information turn refer to Please GAAP sources

Vince Foster

and Thanks and Mark pipeline. portfolio, on will recent comment on other our today. developments performance few announcements and dividend a commenting investment you thank all our our I recent for discuss conclude investment us our of by joining

our CFO Smith, statistics, quarter comment pleased recent third developments other and will questions. take quarter current and results, originations operating we and Dwayne very Following financial were will your position recent Brent our portfolio results. my our with after key our our Hyzak, liquidity comments, certain on and which President third We exits,

net XX focus quarter with and the of Our lower basis on quarter of $XX.X during middle-market portfolio appreciated our a XX our the investments appreciating during by depreciated. million primary area

of per share quarter. other a appreciated with our loans, market $X.XX million sequential second $XX.XX, share net over middle a a basis. private collectively assets by and net increase on a $X.X quarter value We finished loans Our the asset the of

dividends declared in At a for cover RIC, Earlier have we're a on payout XX rules quarter of to and monthly respectively. most to middle and equity our special public Six adhere monthly dividend January, conservative debt collectively had Dwayne first primarily February as strict and ability for regular minimize of investments. companies our investment relative to XXXX lower each company XX for middle-market payout development exhibit a operating very lower March BDCs, company retain ratios will our to making January we fourth leverage taxes, or February Board Like this detail. market basis regulated greater we've rate. as years, quarter business are maintaining our first week declared time $X.XX continue supplemental years and Our share been tax and these in operated dividends ago earnings. diminishing XX, of December $X.XXX The our ex-dates BDC or earnings purposes we've share. thus a the a which five

comply projected gains, in as we dividends. mid-XXXX years, consistently an the from December. two During gains of payouts with supplemental payout either the One, presented RIC variable investments. realized years annual special such gains such forward by provide realized in exited to or dividend dividend distribute gains those substantial or as recurrence initial volatility June to of In but latter supplemental the supplemental paid fluctuations two, decided paying semi-annual, five to of the such to with and us amount several with Main Street make gains periodic dividends. supplemental the chose realized visibility to dividend generated requirements. of as obvious These We options the equity due

practice through last we We December month. declared dividend this XXXX have continued the

envision our least conversion annualized payout next higher least to our We dividend regular that in transition are maturation the the $X.XX of size, transition monthly on rate rate begin dividends. business over the be a now monthly making current and end at to month model supplemental due We this such by an years the position period or five per at the than our basis. payout will $X.XX of dividends the of our and diversity,

of supplemental monthly year incrementally into dividends our currently reduced our $X.XX fully be dividends. will absorbed per While and

third-party gains the our equity. stock grow a dividends align enhance generating we our services annual the entities on various our of price of new into to correctly over more our to will dividend allow with at by reflected clearly completing reflect while the transition We understand and ability will transition to taxable our have our a dividends. absorption dividends and delivered indicate period level follow, goal monthly total our this to dividend returns goal continue be through our to the easier realized portion with in growing all also and best-in-class the our make our what our consistent supplemental This will that still yield, long-term of dividend past. yield believe dividends retain addition policy In dividends, regular monthly our to

our from XXXX. million the our in to in year, supplemental far rate per $XX increase including [$XX.XX] lower to loan asking rate dividend quarter and middle per June the this be of We've to we'll dividend process this share of launch XXXX originations lower roughly payout our $X.XX $X.XX per market share new month XXXX regular originated April $XXX to decreasing Board second quarter. December private beginning middle so So investments in market third million

above would characterize our investment average. I lower today as of pipeline market As middle

diluted investments. equity We as middle these continue XX% in our have equity on position quarter investments to currently market in end equity lower of of the and seek ownership And significant participation we percent which average own we in receive exposure. fully XX%

cover director over third performance officer $X.X our has in regular our to the group the without be to Our continued approximately of shares, With that, Dwayne, million purchasers call I'd to investing detail. during turn more quarter. to

Dwayne Hyzak

grew we over quarterly Thanks, basis, on a during increase Vince. Good and net or total last record morning investment net income in net pleased to We're everyone. assets which and net our both total another and and report GAAP income. investment year per share generated quarter a income

trailing debt lower on lower our and sponsor focus activities internal in and specifically unique and ROE operating asset We investment end effectively for a positioned lower ended middle a yield investment of strategy, oriented which investing lower primary partner investment underserved per lower are along strategy exceeded on in XX.X% other lower market middle structure budget middle as of with and equity driver success both the to XX exceed in our other a significant ability strategy market long the in middle significantly GAAP significantly middle strategy. market, our middle XX.X% XXXX, generate premium teams producing our asset market, we deliver management investment share, combined our our an has continues operating We benefits XX. and in the our allowed our acting or to annualized our of return-on-equity, total the to over quarter by additional have our the Since for management our success financing our organically increased Today, and activities and teens. strategy. return-on-equity be internal an future. market also marketing month lower for differentiates and middle from investment to has and generates investment pleased to quarter and and our ability I'm Main that realized different our portfolio focus and net going just the returns stated a our value in companies execute the market primary proposition believe the investment few believe Each we provides with represent ROE last We of options to try long-term has originations illustrate been Street the to the the to in complementary us the efficient unique executing us percentage to in investment professionals of that of aspects XXXX, that the resources superior this for source. years goal and of at shareholders. Results income the our not value term highlight market, our have net September consistently low-to-mid continues discuss grow we period, the expanding results increases both a efforts an a doubled

additional by with partnership lower our and our result coupled market resources has of large our BDC, permanent basis or market with unique portfolio investments. addressable a strategy, a As and our middle investment these facilitated debt that for companies long-term equity approach

and investments for we additional million have to portfolio XX, experiencing originations. originated a of our investments market are Through clear main middle several September fourth year lower in have visibility market quarter. record We street lower middle for the $XXX

capital to debt our middle relationships private We current with of expected origination the we market middle market, our allows market of marketing in efforts our growth also strengthen the our significant and expectations continued regarding that comfort confident belief for issuance in us our our This coupled our and interest lower providing the portfolio continued new have in strategies, are that XXXX. opportunities continued maintain a is our within favorable expand lower middle equity of shareholders. loan issuance to see modest combination growth through and us business best for

appreciation types our our of XX entities the Now be at with companies companies third are results. through of to quarter of of the quarter months. lower from are equity well our turning operating purposes to flow lower investment in contributions portfolio unrealized tax XX% that contributing market prior these with continued XX quarters, to with income end middle these our investments Consistent for XX with market diversified dividend middle total back last and XX our entities having in

market when equity that these corporations our middle provides visibility important nature We portfolio benefits believe the diversity middle strategy have contributed recurring diversity several the have also future. of We dividend income. our to we benefits C is from lower in market the very believe and the of our analyzing this that which in lower to investments

activity on and lower investments million, middle the investment end, $XX investment our resulted aggregate and in quarter equity a return market invested our in repayments in turning portfolio after Now middle completed our market of in to which approximately quarter increase of capital we our portfolio portfolio third net investments million. at specifically total lower $XX at debt

$XX.X flat million, million. private had was and net with of our portfolio portfolio decrease increase $X in of we loan middle a Our effectively net market

had result market, industries the different in investment than portfolio. companies more investments and of XX, September XX that are a XXX As we middle market, private portfolio lower of components loan across middle our

represents than of representing portfolio company than of investment total portfolio less our fair assets. our with the portfolio of largest Our X% majority X% investments less our value

on at end details in press we on portfolio I'll quarter our touch the yesterday, investment that highlights. are Additional release issued few included but a

debt-to-EBITDA the ratio companies Our lower portfolio portfolio XX% median which senior is market XX in to level middle above cost X. the lower middle was net billion over basis. $X.X representing fair included is portfolio our X.X of At investments a market value, conservative

value, in total structure, our call to $XXX market, and portfolio goals. liquidity that we our continues generated deliver to over portfolio, companies quarter, In we to portfolio net $XXX had a million investments over in will investments summary, compliment investment our our during results, had Brent, a of the XX at to approximately approximately and loan representing investment our high fair cover and at market X.X% market in as portfolio middle capital at total of million position. long a non-accrual of lower had term on to our a XX perform status, unrealized appreciation and continues to fair X.X% market, of level whole As lower perform we companies and million middle investments middle on which approximately fair our in and five level investment high representing private value. Street's the The $XX loan Main investments middle cost. at private comprised turn continues portfolio and valued, With I portfolio financial

Brent Smith

Thanks Dwayne.

are investment by in period million. same an income of million, XXXX, by increase of total to income to a recurring activity that in $X.X over $XX.X a an approximately for Partially increase total of primarily levels of decrease investment million partially income related to our the period income and investments, offset income quarter less We same million million income. in considered $X.X of million, third XX% in for $X.X compared is interest dividend the by an driven the and increased The accelerated of pleased a offset fee certain $X.X higher when by that total decrease $X prepayment, XXXX. re-pricing, in debt dividend includes other of in to increase report

Third average and primarily The increase compensation of in million in interest quarter expense non-cash million. a quarter compared quarter operating our increase during share-based increase a annualized XXXX to as over third the in for is total $X.X $XX X.X% of increased $X third prior to compensation by expense expense. expense assets a year the to operating expenses, year. X.X% of related million the the same $X.X total was the excluding total The period our excluding of ratio million interest an prior expenses on basis percentage a

appreciation efficient approximately for recorded $X.X external of $XX.X third of in XX% our for of the million income Our per reduction its in paid operating on appreciation operating appreciation resulting of $X.X increased million investment for on resulted the middle investment during our appreciation and expenses net by $XX.X of other market through costs We and total on manager. market primarily in of other of offsetting third fund million investment to from million activity a during the total income investments The the gains distributable gain lower to structure portfolio, leverage the on net on investment and activities or with a $XX net appreciation continued middle $X.X the million of these the our to of a income and to our exceeded $X.X the share, Partially portfolio a million relationship manager increase net primarily $X.XX quarter related million a realized external third market quarter our recorded of from related three portfolio our XXXX benefited net portfolio. We of restructuring the loss quarter, our XX%. our of dividends $X.X the $X.X realized by investment third from investment. realized the a quarter, exit for which approximately investment net $X.X and market income recurring monthly gains net million allocated provided middle quarter manager, of to million it services lower our income relating dividend investment middle unrealized external HMS the million was portfolio. of

found be unrealized net in details the appreciation change release. earnings Additional our our for can in

of and operating share. resources remained strong. capitalization in had the third we overall million of credit our capital net of facility $XX resulted the $XX or our under we cash approximately increase approximately a credit On per results end net third million million Our million $XXX quarter, $XX.X liquidity capacity assets in of of a unused unused the total liquidity million. and front, liquidity At cash for have approximately $XXX $XXX and Currently, under $X.XX quarter of for our million. total $XXX capacity facility for of approximately of million

in $XX.XX of million raised under proceeds ATM average with the our price share. sale approximately equity also quarter $XX.X per We program net an during third

dividends we quarter investment $X.XX to XXXX, $X.XXX net forward look or previously questions. to above share This cash that expect for quarter. $X.XX $X.XXX generate back fourth I'll dividends. the share so per we per monthly per $X.XXX to the turn maintaining we to approach of of share, announced fourth the call we approximately XX% can during to estimate As the our quarter monthly distributable X% now conservative operator our any of will over income the take is With that to our

Operator

first [Operator from line comes Please Leslie question Instructions] the proceed question. Vandegrift Our your Raymond with of with James.

Leslie Vandegrift

end the it not all at missed how your the I prepared but First shares? heard remarks issuance many of quarter for through average just price the I ATM, the there the of

Vince Foster

average shares - Yes, it price number was approximately the the $XX.X was I $XX.XX. believe million and And of

Brent Smith

under X.X million. Just

Vince Foster

correct. Yes, I believe approximately that’s

Leslie Vandegrift

change the you same then And they ones five talking no last - from about there? quarter, mentioned the were you non-accruals, are

Brent Smith

change in that's correct. the There is Yes, non-accrual. no around investments

Leslie Vandegrift

the was mentioned which that quarter a remarks had there from the in loss investment that? investment, middle-market in the prepared on one a that And restructure, was you

Brent Smith

the in loss middle-market. realized the was [SBIA] - was It

Leslie Vandegrift

appreciate to over on And supplemental dividend regular to payments. then moving finally outlook - the the really

I is assume agree next everyone Because number now income obviously would you supplemental pay did – December? least the healthy do at spillover that before else that that. level you have think right that now you with I in

Brent Smith

third approximately the was $XX million. end the Yes, at spillover of quarter the

Leslie Vandegrift

on then And just market outlook.

You most lanes of guys other are definitely than BDCs. different at the

You have three your month. a portfolios niche niche –

markets general line any that? the BDCs middle that more this increased versus portfolios seeming have market the there? are private market maybe from from leveraging space competition in Given your have You middle any heat benefiting in the leverage the noticed doing and portfolios of more or other lower to up, seeing you

Brent Smith

an impact we because I see leverage. wouldn't really just portfolios Yes, say in our of that the

going I actually think any BDCs the have leverage, that haven't access received benefit yet. of to announced the most they're

that today is been anything. hasn't the So will on be we versus could what the longer-term impact have to would the say view really there it different an it impact have seen just of BDCs. other most the focus our side is if that we impact marginal be market think but our I on Remains given

Vince Foster

And that Board step and/or the remember first approval. was shareholder getting

to The your bank you've second all additional once to your covenants that accommodate back and is, step you amended go can to try the group is if obtained to or get leverage. some

second So success. in the But process. through working with a BDCs still now it's work that's of the are phase kind some

Leslie Vandegrift

lower And market portfolio. finally on middle then just your

So pace? fourth and far looking in for quarter what like are originations repayments

Vince Foster

Yes, basis. middle so announced market $XX on then $XX million, for if effectively net over flat. market million middle lower the And but just the just net and yet is the it's activity the we all have it's a look originations at loan on not private the you over

Operator

of question. comes Please Hayes from line question Riley Tim your B. proceed next with with Our the FBR.

Tim Hayes

this, all the maintain dividend? of expect you I that if we dividends? jumped a always eventually in Or supplemental to form apologize do late. But a bit should monthly will I be missed just on I dividends And expect

Vince Foster

like if supplemental. completely the we'd No, we to I mean eliminate it help can

and to a have you last your dividend And regular be to subsequent the a way. out, be to of go tax you that return are credits, the limited policy monthly pass choices not you For where the tax we'd if big the there's think really if either is I back to distribute until holds, have theoretically But your you and huge out you file pay going the have resort. tax easier help lot just the gain it, and basically to retain can our tax can reasons real kind of it specials. if the that dividends would recognizing a have share gain gain or we to mechanism of yield like year understand

Tim Hayes

scenario seeing And in 'XX over starting where so I supplemental the more shift guess start the quarters, should it several to next that be the into kind we XQ gradually of of the monthlies?

Vince Foster

Yes.

Tim Hayes

a good companies? confidence your you it's of ability margin increase reflected the you will hopefully stock. marketing at in then, the And this portfolio and from the an tool have move say would But to devaluation that gains realized your obviously, help

Vince Foster

I so. Yes, think Dwayne?

Dwayne Hyzak

you and tracked monthly our more spread it's Vince his diversified years, - portfolio have you and but last couple between performance in think touched in And of comments, the a see it's grown our already the I dividend. would our more has growing DNII today. if

I consistent in dividend time middle maintain our into exit. rate with dividend a opposed lower the in monthly monthly the think have the we that's spread market, so the of our combined basis. the the through we leave and we through in the gave achieve supplemental years over that the year-to-date five as X/XX, we into but that feel portfolio we've really had the an it's that just to change a and factors keep this basis next on growth historical a can moving the with only the that make just our on them total confidence rather best maintain and total about same very growth the goal think choice, a at that investor over dividends transition long-term year-over-year where if we'd Those to comfortable being us had companies our very $X.XX, approach

Brent Smith

would I too. add And

otherwise or want might an implicitly remove inclined company you if this of big dividends having ago. And have the year, always given to you companies, exit to regard. think really help take company be that some our to XX a or you those we in I of case a will in really dividends appreciation a And and think special two back wasn't years you from that all that where when sell any I go semi-annual or want wouldn't eight nice to. or incentive

Tim Hayes

then question, and flow actually deals and sales past have of potential seeing of credit that is you believe us is on but over the I advisory opportunities? of you conference last standards an some return another how M&A been? asked portfolio opportunities And call, the may the I or And inflow are trading BDC multiples, hurdles? Are with kind depressed several weeks, the especially seeing at more

Vince Foster

Yes, so of questions you touched couple on a different here.

and try do we'll just and a don't you So it them, address each one as follow-up.

Tim Hayes

that. Yes, apologize for I

Vince Foster

I exit management have where the do given would do, surprised say team or want you general for wouldn't think activity exit some as amount on we good the in other be pretty holders companies to that valuations front, probably certain it's if take the a time. look, we that always that equity I are of a

to process and of do a exit transactions in teams those in position the would we a will it's Main with with we business. the somewhere something owners But very collectively exit that we're pushing. It company-by-company an several more again basis and the of the that other that think going for at on exit be be I looking good companies So not Street the are if a us. have be would happen, think be management where

we side some lower as that, give our I'll us, asked on the him commentary so Officer with on also Looking market. you middle things of Chief think And a mentioned about David let Magdol, I earlier, market. overall the is just ok Investment new at question origination the

David Magdol

result book We're overtime lower seeing side. that year-to-date basis we market So is market the and improved a obviously the more seeing flows on on efforts as just marketing lot on are a deal a also volume seeing result. a middle as middle our increased activity lower of

just if XX the conferences, go-to meeting volume XX% attended in. we're we intermediaries We've And transactions. look with actual meetings number volume the the you to on through deal what's expect of that's referral the with of deal XX attend individual now meetings, transactions of more year-over-year, up increased through at is coming seeing that XX% about important than our incoming and markets, to quality sources. and really So by

we translate to So continue expect new that to over time. originations to

Vince Foster

would management looking some your I with of at quarters, the between and some and third-parties being last say Tim, new But new of finish color opportunities. level today remain dialogue for commentary terms in opportunities of last material the around us very think I always come opportunities. sit And not asset something our the us look terms new something very having we a a us there's line of business. we here time-to-time. it's to continue as they we're closer and think was on to at we interested opportunity. asset and There's to update from question consistent in n as about I interested couple management

Operator

comes National proceed your from question. with of Christopher Securities Corporation. the question Please [Operator Our Testa with next line Instructions]

Christopher Testa

just philosophy BDCs deserve a is policy dividends that. if get as much might on for it Just dividend just I credit as wanted change regular. see even of that they the what don't supplemental touch mean has been the to the regarding of they're just and sort lot

So wondering it'll just just evaluation. was think what a thing better you maybe guys I'm get that the shares that? that underlying drove

Vince Foster

we Chris, really never it. liked doing

on earning with potentially was if operating criticized were income, earnings was not we dividend you your newer newer I monthly regular The that and operating would right. and both were we out, be fear comprised the you smaller. think paid gains for your and early participant, a when industry dividends

we You We kind to was don't to explaining past so history into brain our of to do our and earn gains alternative to through our never well said dates, and And that ability to the put think of yourself liked return. retain it's situation. damage through done two dividends we impossible highlight kind in worst the dividend have operating an to X really up how do in painted be earnings don't like wanted to December didn't want so we we I want and we and It's really confusing, name, by other in largely shareholder - to we it, a out reminders, there's specials, semiannual wanted the another we BDCs, as been tax out retain therefore retail to two don't base coming of want that passing them it in them, is gets least claim credits of we the to to confusing. send the go we corner well. kind the

we are the when we think really of now asset really middle private that generate management market The business doesn't right. middle to gains, material generate have years So, doesn't ago, where about you business, gains. market compared The didn't is business stream six the business. income or loan five

we so have I we of now think our criticized demonstrated a our dividends some earnings of for our consist be base And we're not gain amount track that understands going if forward shareholder we a and in in position a record won't small earning of and dividends. operating think

we with a time So do then those we care it away to for right multi-year we'll think period. is the away do over all reasons

Christopher Testa

market. team the as good you guys remarks That's investment color in expansion on prepared to pertains had the lower great middle it detail, thank your you. of And your given some

have do So lower you'd bigger you or of book any high level more my senior kind before is to the at think much could market question get middle how make there? that would be material

Vince Foster

huge. think opportunity market on touched We middle lower the I think before. we've is

that market. look materials the published very us a wouldn't will they're we to at. because touched XXX,XXX fit that very, size at it's before there's large not do and we we a think we we upwards Not something all their those you about robust of or of some the fit market. companies attractive companies be the XXX,XXX on there's If think operations look in But that for be

So us as continue we to continue grow - of the for key on think ability look that at there, we add number years. we kind last to long-term visibility that's just been to is our The resources growth. to of we've focused why that the have for

at time is look it in years. time We something market. we've procedures, resources, opportunities resources over a the think I a them continue think very that not very have to add we with make middle we done but to structure of as look to we amount approach more five look at productive we have extremely we focused we to be growth got over defined process, going senior significant as And members on next two think the very lower of add our will reasonable it in and we is forward. as the market, in We opportunity and the them we it well place opportunity can date onboard the to do that an team.

Dwayne Hyzak

one of cetera think workout person now, as in cetera. to team a terms own et you middle run you your if it So, lower you are your valuations administrative support way about market are person, your own et

active pro that take And companies, their help really out have - to originating cetera specialized and to that we senior market being resources might out we so wanted adding specialized lower some work administrative skills the dealing we members administratively trying away. with think administrative lower to burdens skills board or et people can so middle

But that practice. we line, and generate or help able business middle in hires have some private a Meserve if off we you'll our had people resources Nick to low coming brought new and our resource senior market see train and campus the them jump loan So senior start really in in way was we context we've to campus a take double-digits good and fundamentally want new retention. to we're off in

and larger double somewhat So you digit have do without to are doing trying comment? we deals larger growth that implies David, deals. even

David Magdol

had just I thing. one

in only four approximately years people translation as in doubled. to things got we do get Street at the way, the versus sometimes skill The to people gets Main we're ago, to unique headcount If only middle you that set. it's thing market we today train equity, our lower look train not not a lost total debt, we're

That we the a Very we to isn't equity execute, have set of look someone that can with we're portfolio. if resource, are hiring identify, that most resources or set. and skill valuable seasoning skill So both. we the of and our translate find outside some debt today outside they either because stack manage understand rarely that how could

internally. got of we've So we think lots expansion

Christopher Testa

volume the become in the the X/XX is guess And that larger of more seen market's that's the recap in market as we've also the favorable more quarter been something towards trend years. accustomed especially has to a M&A past there dividend and versus I over several gone LBOs

in use capital wondering if well? just trends I'm So kind favorable of market you've demand in of the seen the loan terms of lower as middle

Vince Foster

lower with the we're the on executing consistent past. types the largely what in in done we've of say I'd transactions middle are market

is add change middle-market? the commentary significant seen you'd Nick, We haven't there any on there.

Nick Meserve

less new lot a we've models. market dividend and Yes, seen that of we've the obviously than middle it. seen of of the LBO repricings recapped, less out of The lot acquisition

Christopher Testa

AFFE, have filed deserve And of then know last comments management division you a they get Apollo the made this to to definitely Vince BDCs as obviously quarter petition exempt be. that investment Ares on formal kind with and had SEC I since from and

the thing. really have with additional any this terms move Just wondering timing. onto of if speed insight doesn’t of just SEC in Obviously many you lightning the the at

anything add that that just wondering was if you there So could filing? since

Vince Foster

expect to Sure. the that with that legislative group on respond is of that last issue. and Apollo I calls And to consensus I - the period cetera had made and triggers and news is of with - communicating and can to the during we request out think part detail. more pressure regular try that which was industry pressure bear review and to SEC you is to the bring pressure can questions SBIA. are have this XXX-day that activities I joint coordinating The and and that informal divide kind the from likely similar we of filing believe et call efforts most we Ares conquer filing an what the by regulatory figure its try highlight And good to

kind event. we're so And for of preparing that

is your SEC be drawn process to long here out a relative idea, to saying; this going order. class think is the good I

try of primarily and a SEC the that there staff what disposed looking favorably quarters others kind giving educate to my convinced. of that to several staff are That's solution probably probably the members of of understanding at work to be is towards probably we're So us and remain course is. there clearly is

a providing cetera. et data building, communicating, its And educating, it's consensus so

hopefully So we think by my I something do, there is have this of pretty done. kind next might that personal but year That's lot a time to opinion of work we're optimistic and hope.

Christopher Testa

mentioned why just exempt were never devil's seeking some And opposition is actual the mean I there you mean I to understood that I so Playing SEC I'm I probably this to do are know understood amenable was actual not from really never just I've curious, would staff had this. there's what what the like, advocate curious. think BDCs and be? this, at maybe to gain. members this what not this just you opposition

Vince Foster

you We do an we only – assume externally asset managed. for effect do Street counting So tell reasonable we kind right. is if but this Street, to comp with ability of the a Street. go owning our or to could well, to let's and of your there that fee yourself, assume form be for XX us Its can't would that Main internally to in BDC. X were fund-to-funds relative shareholders Main have managed is new I Main out you charged to a which It really

communicate there's you the fund-to-funds. a right. fees vehicles that's private a Fund-to-fund when second to commonly goal So equity, like at is fundamental see round of

BDC. have And of of benchmark you mean has So fund, XXXX difficult a a part happened advertise really my make any Street. salary Main internally think through the If that's I managed cost we're it's prime have actively to examples communicate. or and it overriding it's pass doesn't it their sense. of to managed mutual Russell They and what I take gross fund fund. concern and on the up

the managed to stop the that cause figure of the is type the Maybe really filing where – right the to where or BDCs of funds do. and is BDCs filings and did along to the lot There another mutual there it's... is continuum place line out a body trying our work barely hold within of disclosure So the internally disclosure? of so

just get us of it's think that when that such I have because investors and us curtails doesn't So think of absence appears lack - it's of it businesses to in a And to to say of education appear we rule. bad be AFFE capital the - not it kicked fundamentally unreasonable industry. or more out to It's to prove flow small we relative institutional the more unequivocally apply being AFFE we the – it's I that.

up can back like have to guys that We and you help.

Christopher Testa

great Got it. detail. That's

Vince Foster

say them right. and say Just okay, expect can't to

that's do. have we So the work to

Christopher Testa

and appreciate to a detail to Yes, change, you. questions the okay I not would my you expect just Thank but them say taking policy morning. guys all this

Operator

line of question. Our RBC. with the Jason your next from question Please comes with proceed Arnold

Jason Arnold

industries feel any I could be? kind bigger was like just great? you your comment you or curious be a like on or Any if you of opportunities it would pending industries if be color like than to industry-wise where there's lighter feel there you picture little might bit specific in would real any exposure

Vince Foster

industry try intentionally new specific and any we think I and where out we don't think find go have we we're would light or opportunities.

the saying trying more team, owners focused equity transaction, accomplish is what more on to is what need we and We're target the to existing go management and as to out model opposed opportunistic. they industry. Our specific are what this are

look there flipside right we one say more that you find So looking that position paperwork is we there's I the diversity at for it wouldn't to unattractive portfolio. of if we're specifically. our kind on of exposure at and overweight we look in do at had, that when the We industry

you're side. have may origination of the not new You but on asking the inverse what

Jason Arnold

than hey need on there note kind we or conversely to just bet that that more of industries we there? comments down maybe we any now just whittle need I to here guess say, that And right you your is maybe

Vince Foster

industries have lot robust earnings along that we've got while progression in last say had eyes over of both expansion. as multiple in get in economy a and further a we to expansion a just I’ll open our the

types of just I'd in that on flows at not something very earnings being for looking So sure multiple we're a we're we cautious overpaying can make robust year market.

Operator

closing floor at would like the over for questions further this time. comments. back to Management, I to no have turn now We

Vince Foster

you speaking us late joining we February. for look thanks and forward always as Again, in again Great. to to

Operator

Ladies and conclude gentlemen, this today's does teleconference.

your and disconnect this time. for your have participation a Thank day. wonderful lines may You at you

Main Street Capital (MAIN) 2 Nov 182018 Q3 Earnings call transcript