SLRC - Earnings call transcript Q4 2024

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Operator

Good day, everyone, and welcome to the Q4 2024 SLR Investment Corp. Earnings Call. [Operator Instructions] Please note, this call may be recorded. I'll be standing by if you need any assistance. It is now my pleasure to turn the conference over to Michael Gross, Chairman and Co-CEO.

Michael Gross

Thank you very much, and good morning. Corp.'s for Investment December year SLR XXXX. XX, to earnings the call ended Welcome by partner, results, my Executive today and joined I'm long-term Relations Investor our Financial Shiraz team. quarter the Chief Solar Officer Bruce XXth of with SLRC along Officer, Kajee, for Co-Chief Spohler, the we begin, covering please statements? forward-looking start you before and Shiraz, by would webcast

Shiraz Kajee

please call made they call available like today this (XXX) of of described are in so Thank to from guarantees result and of our I'd future call earnings our the that not release. in Co-CEO, a to today's everyone number risks At our a February Investment update and you, to being of time are webcast Please visit or the the factors, disclosed on press statements, Michael Chairman that filings, and do statements. financial required future time later broadcast XX over like include performance at recorded. remind obtain forward-looking Gross. from unless results. regarding our statements those any SEC. in results Michael. to time, disclosures property turn filings being of indicative conference section to also with statements This press copies These your calendar replays attention website Good is any in law. uncertainties. would Past projections. release We undertake SEC differ may or involve morning, call are XXX-XXXX. and as by the note materially call and not our us Corp. be forward-looking of number any website webcast in forward-looking our that like to and is of is back customary Events a do our and not also at performance to Actual SLR strictly I'd Audio everyone. as Investors webcast will the our to www.slrinvestmentcorp.com. conference I this unauthorized including results latest the call To may of call prohibited. form Today's

Michael Gross

to much, this earnings our Shiraz, morning. and Thank joining thank you you everyone for very call

history I quarter and results, I'd and we on of alternative to trading operating the drivers IPO credit XXXX, This specialty Before the investment over of and a X and company's and acquisitions platform loss less of February $X.X the investments, XX Since its of rate as XX, discuss private basis XX-year average reflect XX a the points. fund fourth Capital month investment tuck-in than milestone SLR our earnings acquisitions our including years with on finance an adviser, our related manager. IPO, of have company like than briefly marks for X Partners. since more anniversary deployed billion

and experience diversification years XX to has approach ago, initiative underwriting combination effect finance we multi-strategy XXXX, our informed COVID-XX are financial Cumulative specialty team's disciplined and very complementary SLR team's current economic platform. oil dramatic price track with finance the creating rate and crisis, environment. private significant our We SLRC generate interest of the periods the drop our history Over in including to distress, of long-standing sponsor of a managing began investment credit successfully our achieved record and strategies. proud great through in the elevated of

executive actions combination multi-strategy very market rate global a is economic and investment recurring of as durable significant In economic extraction relevant pivoting yields was lending direct environment private tensions, U.S. more that and stable income history, sponsor-backed investment capture seeing finance is a the liquid We value secures we to strategies pipeline. achieve complexity conditions with a concurrent credit risk-reward to and risk protection higher tight see stream specialty across continue of often unfold. asset-based challenges. for increase for illiquidity uncertainties from of cash cyclical and longer. that it approach as commercial and we our best offering attractive of recent Consequently, premiums. company's we ABL loans our from now President particular, by that enterprise our within economic downside nature principal a from the as to Today, are the finance we investing conditions during flow to expectations collateral opportunities burgeoning can include strategies record of track think past believe in Our current long-standing rising while provide higher administration greater the underlying premiums for simultaneously geopolitical

of were finish the conditions net our of credit currently income to approach asset classes, of which cash the the $X.XX. income spreads of in weighted Despite points, basis at believe passed our unitranche new in the specialty view our the our multi-strategy Net for heavily declines increase yields the has market, overall the yield response year of competitive operate quarter quality third refinancings solid the performance to income generated in Due portfolio portability in those that in the the of rate credit the elevated million The million some XX.X%, sponsor XX.X%. return with specialty portfolio specialty fixed slight in strategies, once the attractive specialty fourth investments of XXXX prolonged our to $X.XX SLRC of net from In in $XX.XX credit For and the the which were base some portfolio, The investments over finance. rates are second to consists such the shrink. to requirements. year-over-year the currently quarter, conservative finance are CapEx of portfolio dividend XX/XX portfolio of high the and originated more prior upper attractive cash ago, nonaccruals our to company's more income. our in of interest finance approach a investment offering in relative to of and to finance the private within as investments This to the more to net investment environment, finance investment across company's share of primarily portfolio seen The of sponsored loans a are conditions markets, year [Audio charge cover loans, flat again to have currently allocation the XXXX while middle structures a received to direct low $XXX have borrowers investing. of underwriting total stress market instances in our full our and we to share. but to a year-end in which from and we and industries originations susceptible are profile investment to favorable other was PIK XXX more more billion as strong fourth and investments. that provide testament flow representing $XX.XX portfolio down contributed sponsor resulting comprehensive repayments XX% Gap] year-end. per recession-resistant composition $XXX remainder a yield the signs at quarter in inflationary included finance increase portfolio a safeguarded result fourth conditions our XXXX, decline the finance increased X% a per allowing portfolios quarter half NII $X.XX, to comprehensive We QX flow of XX% year borrowers. SLRC our value continued several quarter. $X.X quarterly of our in at risk-adjusted was in meaningful asset increase coverage

and While and first our first even providing comprised secured portfolio strategies lien specialty lien long-standing believe portfolios quarter, of less fourth on higher broader resulted At a equipped increased portfolio SLR's in quarter end, more peers more than loans cyclical with flow pressures withstand performance and in was exposure persistent of exposure. loans portfolio. XX.X% than with senior composition conservatively our insulated and the has We and and we rates cash yields positioned interest yields which flow lien within with is remain to in the some comprehensive inflationary in our remain of returns cash declined portfolio pleased investment lien loans. high finance our our BDC instances, better first focus loans. quality second

in a credit economic one and the had As $XXX result on peer We back facility to a nonaccruals rate representing position multi-strategy low our finance a the well X.X% X.X% CFO, at including take portfolio only durable and or XX, SSLP the of you of softening companies, deploy. to the of million of value I'll available capital company fair call financial specialty the investment BDC is cost over we This December take our below our December and XX, available either to puts turn investment At to Shiraz, now is and economy. of highlights. through nonaccrual, average. respectively. a of just had the QX portfolio our SLRC on believe favorable of over conditions capacity basis, approach advantage investment

Shiraz Kajee

consistent million Thank XXXX, $X $XX.XX companies market share, investment across of you, end, value to of companies industries a value XXXX. billion on-balance at At was fair had with per XX market portfolio value the sheet At ended billion compared asset XX, debt-to-equity ratio X.XXx. September of XXX portfolio net XX, portfolio debt $XXX with of $X.X billion a December in across quarter quarter outstanding had Mike. SLR XX, or the XX SLRC's XXX $X approximately September at Investment December Corp.'s fair XX. net company in industries a approximately

net X.X target towards our our of to the debt-to-equity ratio expect of migrate X.XXx. We middle to range

a million and unsecured to the quarter, interest treasury note were points. to a of rate both issued on attractive at of We X-year believe company's efforts year-end, private million basis X.XX%, refinance the company rate a of unsecured fixed a offering spread representing the issuances the cost-effective fixed closed interest company of and notes. these the $XX note $XX at Subsequent to executed a address unsecured XXX maturing X.XX%. basis X-year X-year notes During

December XX, the unsecured had As funded XXXX, approximately of forma of SLRC XX% for representing issuances, debt. $XXX of debt, million pro

Moving to the P&L.

XX. loss for the compared For versus company quarter versus compares line, the for Accordingly, loss million the months for company's December unrealized per X XX. ended ended had of share the investment for months $XX.X This XX, period. million for fourth X $X.XX to a for XX, quarter the or totaled $XX.X quarter. Below December X the totaled million months $XX.X million gross ended net net $X.X distribution $XX.X income the the September prior per million covered million unrealized million expenses Net months share XXXX, our ended during average $X.X or quarter. prior with prior income totaled the average X and $XX.X December the the and realized $X.XX realized share for million $X.XX net $XX.X per and a totaling the investment

XX, to distribution XXXX, Bruce XX, the record over had a per for a of net On the XXXX Board March compared Spohler. March operations of of increase net $X.XX As quarterly February increase QX to share co-CEO, the December assets of XX. call declared million our I'll XXXX. turn result, in million months the as company SLRC ended X $XX holders ended a With months a $XX.X the resulting September that, of XX, payable of to XX net on from X for

Bruce Spohler

in billion portfolio exposure end the with our first portfolio the invested consisted million. fair loans secured value, consisted invested in on X.X% second our cash value flow Shiraz. remaining over comprehensive loans is X.X% only the senior the SSLP in in at to you, secured was $X.X asset-based borrowers. company. of XX.X% and lien loans The loans. investments distinct loans, comprehensive invested At lien Thank attributable $X.X average a quarter of lien to Measured of of senior with And including second approximately fair XXX XX.X% basis,

differentiated under year-end, defensive weighted finance yield our our earlier, X credit scale, history. year-end, risk average risk the secured our the to sponsor-owned representing our strongest compared finance-only At relative portfolio rating mentioned value remaining a X scale companies. to the Michael the XX.X% XX.X% profiles risk. portfolio a of construction the portfolio specialty on one was basis portfolio investment cost or portfolio, As Based at account At in performing assessment the least senior the investment for flow comprised on of with on Over has investments portfolio amount XX% was provides on this of nonaccrual. and of sponsor XX.X% rated loans risk XX.X% the in X currently portfolios. of risk X with positions weighted is believe quantitative our and total with rating on one based fair return prior well us We higher. X our of cash to the profile Moreover, portfolio over average only XX% to quarter. mid-market was

levies recent tariffs, tariffs of China, completed our our a the of countries wars, impact prospective such the looming to in that portfolio team entire others. assess as the tariffs investment thorough threat could With and India of review trade impact place and of current

pleased are believe We direct tariffs share is of to the impact that minimal. we potential

portfolio At to Now health portfolio flow secured lien the companies our XX% of me we across in impact SSLP. flow believe approximately loans, our originate $XXX to loans finance noncyclical any the pressures This factors. With Starting we to business care, secured face. year-end, flow first lending. portfolio from verticals. sponsor was invested such XX investment our that sponsor well borrowers, our borrowers on cash positioned cash cash withstand the loans touch including senior may let that business, our million financial and economic cyclical has X in our on In helped first mid-market senior loan we industries services. or mitigate as with in lien are

well approximately revenue weighted cost a digits weighted premiums. $XXX Our $XX growth to million for average X.Xx. loan-to-values and borrowers in as been the be low million have median Weighted XX%. continues capital and has managed our sponsor our of transition coverage higher interest Overall, with average of mid-single companies. on of average EBITDA inflationary stable successfully environment as and they carry EBITDA finance the Finance, loans of portfolio at have the approximately to Sponsor over EBITDA an

from Additionally, our result diversity cash free fourth strategies industries healthy the income of of sponsor credit flow. resulting only believe these PIK and credit amendments. focus portfolio our are flow in income of borrowers recurring recession-resilient capitalized finance on We gross form from private X.X% of quarter our high metrics is within across the with cash the

investments over made over we repayments million. just $XX quarter, of the of and During just experienced million $XXX

opportunities by say can with often don't sponsor no deal volume, criteria. letting Credit lower mentioned, selectively and to the meet ability go to focused returns and our if high Michael refinancings muted we continues finance flow do. on don't M&A profiles are our pass meet due be connection As new do investments not in risk on investors investment we our downside deals protection, hurdle to measured the that be

repayments invested For had from million loans was portfolio of highly down XX.X%, in the into year, $XXX XXXX, in million. we cash at flow significant quarter. remain tight in At over $XXX average this XX.X% of Thus a weighted year-end, on and and has prior levels structures, we been far, weaker spreads uptick not the in M&A protections creeping with selective. incremental there yield

activity conditions finance optimistic see year we increased we M&A. and in will this increases sponsor to improve confidence start that CEO as are However, throughout

Finance Now be with loans meaningful board, and values, the credit solid have let the these me loan support continues Across turn structures. base to which segments. to to quality of attractive borrowing our collateral Specialty

for year-end, companies strategies me market from XXX these portfolio. higher are regulations, SLR's positioned liquidity are market, often challenges. banks collaborate model an programs asset-based Let first reaction to tighter often loans shifting these SLR continued banks ineligible to to hold regional to Under our creating against retreating $X banks, their lending have loans. capital are banks billion attractive in these require the to team. and portfolio Fed credit who opportunity issuers. asset-based more with and ABL Regional across on noninvestment-grade for is a the touch domestic adjust totaled environment rate their in ABL business At ABL

portfolio loan Our recent Bank portfolio platform from The and of the the and is platform acquisition an of Webster with going in performing integration servicing is of this. line smoothly the is expectations. example and

XX.X% level the compared quarter, average million yield $XXX asset in prior of was quarter. the For we new Weighted $XXX million. to XX.X% had

provide borrowers who cash experiencing Additionally, facilities coverage from to structured interest we tight seeing declining to traditional liquidity ABL opportunities flow ratios. are pressure are

the who liquidity. to base, liquidity our investments. attractive and sizes ABL for and supporting and a larger be working carve market the pipeline flow facility to to Access bigger speak and had to cash capital in ABL borrowing macroeconomic for borrowers provides to access headwinds. falling to relief hold lower liquidity The working business the now expanded seek order businesses capital platform BSL These new facilities pledged ABL environment of as in accordingly Some solutions additional allowed has a win and borrower. receptive credits out us with are in rate provide has more well-capitalized SLR incremental other assets the age into light us sponsor-backed

new so touch this quarter. let representing just me the profile teams XXXX Finally, At end, our in XX% quarter continues to do continue billion, ABL our totaled prior originators Equipment added Finance. unchanged total from Credit on XXXX.Now portfolio. in and $X portfolio of over

of During repayments $XXX coming compared borrowers. originated level leases Weighted asset X.X% yield the new assets the investment-grade with quarter. average business the to prior quarter, We was just from to we provides of million of fourth approximately this majority that $XXX over XX.X% had in our million.

Our by the conjunction bank failures. disruption has in the investment with pipeline regional caused expanded

million. have over Sciences. Life me runway. year-end, cash companies of touch Science portfolio approximately is At months portfolio let on Over invested Life XX in $XXX Finally, our XX% totaled that

expect our in life and XXXX. have the fourth continue during to science our investments the green investment of Recent at under pipeline, least stage. portfolio life quarter. product for companies of will of sciences significantly just all and commercialization activity gross This X% our the the income contributed we revenues and shoots investment. that science derisks represented portfolio improve seen in XX% one Additionally, in we have Life months,

year changes investing regulatory of some life team developments science sciences. life to industry these from keenly see focused and is we in from While the stem XX-plus environment, expect benefits on evolving their our history

over fees, have the yield fourth repayments. modest on the we just prior an but million science in signs With of investment quarter to and average $XX life pipeline. quarter, the a weighted end, of At excluding warrants, early in the including compared During funded existing XX% an quarter. over life market, of in had we science uptick just was improvement seen million over XX.X% the to borrower $X portfolio, the just

our Given the deployment highly of our our still risk-reward life originations we firm. opportunities investment luxury ability have being strategies, allocate in collectively across to the capital the positive across to selective yet best total sciences, in capital generating

Lastly, I want to touch on SSLP. the company's

with During consistent the fourth a earned representing quarter. $X.X million, annualized yield, the quarter, we prior XX.X%

quarter million. had of $XXX portfolio the fair end, of As value a over just

Now to back let the call turn me Michael.

Michael Gross

Thank you, Bruce.

investment close in portfolio. stability portfolio kind level This our the watch value asset very stability, in percentage broad and investments, net pleased diversification. XXXX, list we of small continued encouraged the results are a fourth of evidenced quarter another book nonaccruals, we by minimal of credit overall quarter on payment is the with evidenced income of and the quality by low As

quality in achieved consistency credit we BDC defaults view private crested and from a portfolios credit public approach about as narrative the of credit XXXX, our year average concerns the While multi-strategy results the testament creep and continue long-term to investing. private SLR's profile the to throughout in high above market into

capabilities, company our of across of emphasis a positioned businesses a years ago, portfolio specialty that preservation commercial XX.X% created finance the a that towards last have finance differentiates approach, our generated the and broad tilted with our platform the with XX on over we specialty in our XX IPO all capital opportunities. us is growth of company has the construction investment The diversified years of Since believe investment favorably multi-strategy As pipeline emphasis IRR reflect we our and peers. momentum we our for with shareholders. growing majority from finance

XXX private support the Thank you including to platform portfolio which We lenders, contributed at and milestone. investors, investment both who valued portfolio of trades of cash X.X% affiliates by for SLRC's yield you across closing, SLRC employees, have who are grateful this currently investors rating performance. benefits as SLR and the we strategies. to attractive believe more market dividend contributed to to and to an close, humbled flow-on a presents companies of shareholders compared credit and income-seeking than offer all our have In agencies, yesterday's diversification

company's continues annual stock the Our The SLRC team with principles. to alignment significant includes one compensation Thank company's year year. a a outlook. Operator, their in demonstrates wealth hallmark X% as stable incentive in your investment our the the of fellow we closely. funding questions? today for all the open team's adviser investors up The invested BDC and institutional of portfolio, marketplace of of and those alongside interest owns investment be would percentage you it's time that the private significant know confidence shareholders again our over busy for SLR every having you stock earnings please time line the and of follow listed for

Operator

[Operator Zwick first question take our from Instructions] Capital we'll Erik of And Lucid Markets.

Erik Zwick

you specialty a there spent with for opportunities part your verticals with? choose I'm acquiring how last or portfolios the And reasons to to curious if that looked last strong the at about mentioned finance didn't and you of go might is there pipeline the pipeline Were those what potentially any teams, time amount fair And like? others forward of today. talking whole and be? so, respect year You that the that year. Webster looks what opportunity

Bruce Spohler

transacted opportunities question. on Yes, to and last with see starting Great we did have we some pass. that year, could decided we

that of the where have banking think specialty But a own a we organically seen teams. see terms can the activity may create generally if buying recall, on bringing feel sourcing regional and in market. disruption, better across portfolios and post something what basis we how and be portfolios. that looks there the some because team to the we dedicated, we level that we would and we generally, relative as is finance I that to we of than have to passed underwriting teams in that portfolio elevated credit we it's get and And on in pass, you the portfolios begin processes do have,

it kiss contributor a to be lot frogs. expect a but we do have you So, to this of year,

Erik Zwick

Sure. work you're Makes there. capital and of risk-adjusted that was last finance the side better majority I returns maybe towards know year sponsor seeing that sense. put you on I specialty And moving like analogy. finance, the to the

noted the tight spreads are that what You starting any could finance. curious that perspective remain risk-adjusted keeps a just as there seeing Are I'm out very sponsor the address seeing well? it you're that maybe just opportunity primarily pressure in as you the actors structure from you if to bend not attractive? there spread

Bruce Spohler

I the finance both that specialty terms in level So, at not at of stability loosening strategies. the to does influx But we're unattractive bit comparison equilibrium. feels stabilized, sponsor relative to kind the compression if spread that moment, would But the say finance returns relatively a the found I sponsor business. our we albeit of little its have to just deal and to don't and a there in there. of has flow be the ABL market find seem liking afforded know of the capital the new absolute in

can platforms are X.X% X% all find New in if you in. them, to the

going moved returns to of our say what would sponsor. the in kind the sponsor yield XX% moment. invest But down from is we're if XX.X% targeting And XX.X%. in XX.X% things to I have stabilized heard, you book that's As for to we're

Operator

Compass of Alexander Casey from question next our Point. take We'll

Casey Alexander

that segment finance an sort the the the to rate acceptable last level. largest do Is what doesn't question structure of, if feel the know, quarters, over is of think returned to back has kind at volatility? equipment and it's portfolio. of look change there's reduce is acceptable really liability the loans, fixed just X a structure, the BDC that I'm the you're lock of curious yield if comprehensive to first you portfolio, can that in assets, you sector. it rate improved its sort XXX yield. mean it's though. do the or about unique And I I side I points the something matching yield basis you up of liabilities now It of don't like liabilities, to floating My anything there can more because

Bruce Spohler

well is matched. this things. in of benefits question. good couple a from the It reasonably environment Look, So finance equipment sector

part rate. the On That as is floating rate in parent investment the floating million the equity. liability well of debt, about actually debt as came our side, as is $XXX company's

just another to way our it's pull out. income So,

benefits real say could driver. it debt just up, and a look are but when at across income not equity rates us You investment. that's We total our the

the equity little little obviously, So a own debt we bit, is a be both since bit up XXX%. the will down

an big environment, here this the is think outperform. this driver I in in inflationary environment, does business

because We have fixed that your on did business helping investments in years back. is putting we a to rate that the higher put last the we've a X been environment, liabilities point, in years rate few

that's our the every the we inflationary cheaper extend this And We that to we're equipment. keep where elevated mind, asset and seeing where profitability. make their lease, want that writing is such and such is month the the that the lease will environment check environment decision existing is longer in buy that keep You in also that borrowers find versus profit. they're

So, in we that this question, long-winded we we to environment, but to well feel answer a your do returns. matched. see think will And nice continue stable

Casey Alexander

want That's Okay. been you're the more would is opportunities to into understand that buy. what flow sure transitioning might My what talking second in I about the question pipeline I is, cash to just traditional make ABL, building is in stand-alone you new specialty pipeline coming that as stack from. want companies to where of a having increase the finance ABL opportunities up opposed have

Bruce Spohler

'XX of down saw our XX% that loans. have was cash correct. flow down we've And I XX%. the guess taken peak a that mean of about risk from Yes, book like you just we individual when is to It's my ABL portfolio lower. what will in

And last was we few we has you instead, down apart But XX%. are year is at potential loans. up That to that. have doing like we to in the the been a taken question I would X.XX, see, accelerate years from think purchased trough from our Webster portfolios our as and ago. ABL individual your about that closer any separate one X.XX leverage to

have pipeline ample ABL and individual up we do portfolios our making of loans So, that pursue are assets. capacity both just buy to the

Casey Alexander

JV? Right. Great. ship at X.XX going it there I appreciate is, take from do lower-yielding if I Senior. loans functional if Solar and up right The the at a the mean, there spreads accept good, that, credit your in And kind loans those point return or is this seeing now, was to you're stands wherever. stance a follow-on that are of is of on them to to as those down not time? the to place piece is from lower its that set place of a SSLP is spread for a capacity JV to not enough

Bruce Spohler

So merger XXX%, migrating type that were put And SSLP. X.XX% loans the 'XX, yes, we the was SUNS acquired loans priced into with of then at are into cash with question. level. flow continuing loans had to we the Remember, great back in which the it connection in originally, many back

run optimization. which that, think doing we why close to can is that that portfolio at we are we So, continue full to

Operator

Melissa move We'll Instructions] JPMorgan. to Wedel next of [Operator

Melissa Wedel

on already, asked been touch could have the I thought Some opportunity. of back maybe them we but actually ABL

was as funders some the the I volume described you've there, during just surprised bit see a and the quarter. the we leaving exits opportunity space little what Given of by

in if there yields to correct, be seem And quarter-over-quarter a pretty even was I'm yields. So, resilient. increase

dynamic in also the the some you saw changes XQ. what's that of driving and in want to the both but repayments that space, understand Just yield

Bruce Spohler

Sure.

average repayments, had cycles. as But got ABL. we the of So, is to get should repaid your you loans interest it like about trend repayments systemic return rate million that's we takeaway of the really quarter-over-quarter it the stable point and about celebrate, indicative a that average quarter. yield the is repaid; you duration basis a a $XXX sometimes lender, in a that at fourth years. whether think ABL ticks couple there we in SLR. is is up stability, about was across be asset as ABL What of the points The not duration The know, -- X I of more that something

longer that's see typically it, about loans, life sponsor you think you science than loans. in if So,

that they be we love move kept it had financing But loans companies the is nature that Would ABL. them on SLR's number but kept due years. when balance close X can. were they to lower again, to and just have for of So, coming will to that on. of a moving we cost them, were to These sheet happened idiosyncratic

in So, quarter regard. that it was an just odd

a cash for at point revolving you ABL other we worth you you as have term in The loan ABL a unlike flow maybe structured end think about, facility of structure where quarter, that often as portfolio purchased credit and Webster third often in noting revolver. the example, small loan a lending, The is the the entire your is facility.

so, have fees economically minimal utilization see up what through facility, you we is go outstandings that and while will happens of mandate the And of usage and facility will down. you

They temporary of borrowing were context, repayments you So repayments as put fourth we a of loss se a repayment. about relationship in not quarter. in facility. were $XXX a saw it $XX million to think just typical per the of million that in

across facilities. ABL outstandings credit and So will those ebb the flow

Operator

of next to move KBW. Paul Johnson We'll

Paul Johnson

of to involved Are for vertical. business you still some can in a platform, of terms in case in that how and and your SLR back the tell sponsor-backed the much like with give that broader or maintain for in those? us terms is years, windows relevance parts the take, opportunity investing that's still, just where and going just other time share guess, sponsors the lending can there are platform off, cash But flow business manage I you quite portfolio loans? several In been of few growth allowing been of you've and that run that

Michael Gross

question. Great

manage funds funds. for part, All the most we our multi-strategy are of

exposure all the So, they the flow. and ABL have strategies cash to

loan So, with all And that $XXX and very and flow to few of that diversification across exceptions, to commingled high-net-worth funds, invested being from also down keep any funds into cash million of SLRC putting behalf allows we're million on the of a anywhere take $XX us platform. funds. the is

So, we you borrowing than But our to a seems funds. relevance wonder loans is it are to are our SRC I institutional we think our we're than services, treating health portfolio. XX% in sponsor with ebbs flow comprises lending targeted not and community That that across flow services. flow if corollary cash what different may in regards the is flows cash financial the is our we sponsor industries: asset commitment very are business to cycles. care, And the cash of class probably XX%, X towards answer our business

so, more a tend for cost And on as cheapest less the drive they active. be to to in value borrowing sponsors, of relationships those creating on sectors, industries, the focused time, the covenants. have those a lender those over equity we focused deep and are will much the It's much sponsors of we trying But active partnership. be in amount least with more when

our those sponsor flow in relevance So, sure across cycle. the industries borrowers cash we we to that community make the these maintain to

So, terms how just do. as they our investment follows closely theirs see of activity opportunity in the we

Paul Johnson

what looking drove appreciate just the if quarter. question this Or helpful. call, there the income performing of you run anything on kind the $XX dividend been last me. that. And That's I'm apologize in year? But good it. like in going said for finance know or this we that? And on about higher Got then obviously million there at I equipment that rate is for fourth Is quarter. the of nonrecurring beginning but earlier dividend forward? thinking about I I should investment basically in so looked well. income has next be a of what

Michael Gross

Sure.

but what to was constant. you So run got as like of conditions economic no, hopefully, to that rate, we think would hold

that to day part, closed the from the actually in majority large of was point, portfolio. the the your lease definitely ABL it, the Webster it Some the of increased businesses, last But QX. in was of portfolio, acquisition coming of we income from

full very return. for So, mid-teens you returning had the Those assets, impact attractive QX. are quarter

should that us. early So be with continuing. Those have relationships stuck days

and run to flows seeking year your addition lending adding very is been cash we'd both as I cash continuing So, emphasize originators repayment. in commitment underwriting We've as mentioned, enough primary you're last The difference And is collateral the that's of of only into QX. can't active, in and collateral collateral ABL in It source needed I ABL, like if our asset rate. just like just flow. think direct to to class. a

QX. see what of in of a the a do elevated growth area, lot as terms we and is dividend that in income So, you're that seeing

our it capital for mostly Just more but may to ABL that expand extends you in focus one industry working also types and of into expertise. receivables second, know goes collateral, beyond just inventory,

have ABL expertise a life and health pay. that as is we cash Just care lending, have health care underwriting receivables, dedicated in health team care pay care flow health commercial sciences we government and both

industries digital also Webster We have businesses to acquisition. as some old apparel. the industry school media to dedicated with such We pivoted

a there expertise is ABL, space be So, in lot of out white very regional industry often there. can And and a differentiator.

Paul Johnson

you more? appreciate to Got hire new mean, ABL. it. headcount the those kind on the mean, there. hires of place is in is businesses? expect kind would additional requirement what need companies? mentioned human mean, those more one capital the I that. I I to mean of I I most for some Or you in for of basically existing

Michael Gross

all our good growth. companies SLRC, news look you of The all for is they're built portfolio if at out

is the there. So, infrastructure all

highly prior service to the since the Credit, we owner place. are into exclusively their are took As business, XX it infrastructure able Where looking people servicing business. that ABL already We had evidenced Business in from commercial on portfolio the and grow Webster way to personal and really fact people bought the adding different we're the a we're origination X it. side is have a talented recruit to different people experience experienced for about that in people to by Bruce, we banks. committed the to we

Paul Johnson

Finco those headcount level? level? that that at hires, the is when headcount, And Or it. that is like at Got added adviser the specialty

Michael Gross

Finco. specialty That's

Operator

time. that have questions And further this no appears we it at Instructions] [Operator

Michael Gross

We all We recognize busy your thank year. today. time attendance for the a it's of you

So, up it of just follow have. to or you missed those to the for listen may feel questions recording, you any free please who for

Operator

This does conclude today's conference.

You your lines, disconnect and a may everyone, great have day. now

SLR Investment (SLRC) 26 Feb 252024 Q4 Earnings call transcript