MSC Income Fund, Inc. ($MSIF)

Greetings, and welcome to the MSC Income Fund First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Zach Vaughan. Please go ahead.

Thank you, operator, and good morning, everyone. Thank you for joining us for MSC Income Fund's First Quarter 2026 Earnings Conference Call. Joining me today with prepared comments are Dwayne Hyzak, Chief Executive Officer; David Magdol, President and Chief Investment Officer; Nick Meserve, Managing Director and Head of Private Credit Investment Group; and Cory Gilbert, Chief Financial Officer. MSC Income Fund issued a press release yesterday afternoon that details the fund's first quarter financial and operating results. This document is available on the Investor Relations section of the fund's website at mscincomefund.com. A replay of today's call will be available beginning an hour after the completion of the call and will remain available until May 15. Information on how to access the replay was included in yesterday's earnings release. We also advise you that this conference call is being broadcast live through the Internet and can be accessed on the fund's homepage. Please note that information reported on this call speaks only as of today, May 8, 2026, and therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading. Today's call may contain forward-looking statements. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may or similar expressions. These statements are based on management's estimates, assumptions and projections as of the date of this call, and there are no guarantees of future performance. Actual results may differ materially from the results expressed or implied in these statements as a result of risks, uncertainties and other factors, including, but not limited to the factors set forth in the fund's filings with the Securities and Exchange Commission, which can be found on the fund's website or at sec.gov. MSC Income Fund assumes no obligation to update any of these statements unless required by law. During today's call, management will discuss non-GAAP financial measures, including adjusted net investment income, or ANII, and ANII before taxes. ANII is net investment income, or NII, as determined in accordance with U.S. generally accepted accounting principles or GAAP, excluding the impact of capital gains incentive fee. ANII before taxes is NII, as determined in accordance with GAAP, excluding the impact of any tax expenses included in NII and the capital gains incentive fee. MSC Income believes that presenting ANII and ANII before taxes and the related per share amounts is useful and appropriate supplemental disclosure for analyzing the fund's financial performance since the calculation of the capital gains incentive fee is based on the realized gains and losses and unrealized fair value appreciation and depreciation, none of which are included in the NII. And tax expenses included in NII may include excise tax expense, which is not solely attributable to NII and deferred taxes, which are not payable in the current period. Please refer to yesterday's press release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. An additional key financial metric that management will be discussing on this call is net asset value, or NAV. NAV is defined as total assets minus total liabilities and is also reported on a per share basis. Please note that certain information discussed on this call, including information related to portfolio companies, was derived from third-party sources and has not been independently verified. And now, I'll turn the call over to MSC Income Fund's CEO, Dwayne Hyzak.

Thanks, Zach. Good morning, everyone, and thank you for joining us. We appreciate your participation on this morning's call. We hope that everyone is doing well. On today's call, we will provide you with the fund's key quarterly updates, after which we'll be happy to take your questions. We are pleased with the fund's performance in the first quarter given the backdrop of significant economic and geopolitical uncertainties. Despite these ongoing uncertainties, we're seeing an improved lending environment and increased opportunities in the fund's private loan investment strategy, and we believe the fund is well positioned to capitalize on and generate attractive returns on those opportunities. Based upon the quality of the fund's existing investment portfolio, together with a favorable liquidity position and expanded regulatory leverage capacity, which became effective at the end of January 2026 and the current investment pipeline, we remain excited about our future expectations for the fund. We are also confident of the fund's sole focus on its private loan strategy with respect to new portfolio company investments and the growth of recurring interest income from such debt investments, together with the fund's contractual future base management fee reductions as the fund's lower middle market investments decrease as a percentage of its total investment portfolio, which strengthen the fund's ability to deliver attractive recurring dividends and favorable total returns to the fund's shareholders in the future. The fund generated adjusted net investment income, or ANII, of $0.34 per share in the quarter or $0.36 per share on an ANII before taxes basis. These results, combined with our positive outlook for the future resulted in our most recent dividend announcements, which I will discuss in more detail later. The fund finished the quarter with an NAV per share of $15.87, a $0.02 increase from the prior quarter, and we continue to be pleased with the performance of the fund's investment portfolio. Cory will discuss our financial results in more detail. The fund's private loan investment activity in the first quarter was slower than our expected normal quarterly activity, primarily due to lower overall levels of private equity industry investment activity, and resulted in a net increase in private loan investments of $17 million. Despite this slower investment activity, the fund remains highly focused on executing new investment opportunities that are consistent with its historical private loan investments, as we work to grow the fund's investment portfolio. The fund is also focused on maximizing the benefits from its legacy lower middle market investment portfolio and eventually recycling this capital into private loan investments as investments are exited or repaid. As part of this focus, the fund continues to benefit from attractive follow-on investments in existing lower middle market portfolio companies, which we believe are beneficial to both current investment income and future value creation on those existing investments. We also continue to see significant interest from potential buyers in several of the fund's lower middle market portfolio companies, which we expect will lead to favorable realizations over the next few quarters. Nick and David will cover the fund's investment activity in more detail. Earlier this week, the fund announced a change to its regular dividend payment frequency from quarterly to monthly beginning in July 2026, which we believe is more shareholder friendly and is responsive to specific shareholder feedback. Based upon the fund's results for the first quarter, the fund's Board of Directors declared regular monthly dividends for the third quarter of $0.11 per share payable in each of July, August and September and a supplemental dividend of $0.03 per share payable in September, resulting in total dividends payable in the third quarter of $0.36 per share, consistent with the fund's total quarterly dividends for each quarter since the fund's listing in January 2025. Going forward, the fund expects to continue to maintain a dividend policy that provides for its total quarterly dividends, which are expected to include regular monthly dividends and a supplemental dividend to be set at a level generally consistent with the fund's ANII before taxes per share. Based upon the total dividends payable for the third quarter and the current stock price, the fund is currently providing its shareholders a dividend yield of 11%. As we look forward to the fund's near-term investment activities, as of today, I would characterize the private loan investment pipeline as average. We are excited about the current pipeline of new investment opportunities and follow-on investment opportunities in existing portfolio companies, and we remain confident in our ability to generate attractive new private loan investment opportunities and grow the fund's investment portfolio over the next several quarters. My last few comments are reminders of the continued support the fund has received from Main Street Capital Corporation. Since Main Street's wholly owned subsidiary was appointed the sole adviser to the fund in October 2020, Main Street has purchased over $30 million of the fund's common stock. In conjunction with the fund's equity offering in January 2025, Main Street entered into an open market share purchase plan to purchase fund shares at times when the fund shares were trading at predetermined levels below the fund's NAV per share with the terms of such plan being identical to the fund's open market share repurchase plan and with any share purchases being split by the fund and Main Street on a pro rata basis. Under these plans, each of which expired at the end of March, Main Street purchased over $8 million and the fund repurchased over $27 million of the fund stock. As an additional show of support for the fund, Main Street through its wholly owned investment adviser voluntarily agreed to permanently waive $1 million of the incentive fees earned for the first quarter to support the fund's resulting ANII before taxes per share. We believe these actions demonstrate the fund's commitment to the future success of the fund and reinforce Main Street's confidence in the strength and quality of the fund's investment portfolio and investment strategy. With that, I will turn the call over to Nick.

Thanks, Dwayne, and good morning, everyone. We are pleased with the performance of the fund's private loan investment portfolio in the first quarter, which represents the largest portion of the fund's investment portfolio and which, as a reminder, is now the fund's sole focus with respect to new portfolio company investments. The overall operating performance for most of the fund's private loan portfolio companies continued to be positive, which contributed to fund's first quarter financial results. The fund benefited from a realized gain of $3.1 million from the exit of one of its equity investments in a private loan portfolio company in the first quarter, which illustrates for the second quarter in a row the opportunity that can be available from these equity co-investments. Given the current economic uncertainty that exists across certain parts of the economy, we are diligently working to stay in front of the fund's portfolio companies to understand their exposures to changing environments. To date, based upon these ever-evolving discussions, we are comfortable with the future outlook for the portfolio. At quarter end, 93% of the private loan portfolio was comprised of secured debt investments, over 99% of which were first lien and 96% of which were floating rate loans. Portfolio had an attractive weighted average yield of 10.5%, which was down 20 basis points from the end of 2025, as a result of decreases in the SOFR rates for these floating rate debt investments and tighter spreads on new investments over the past year. During the first quarter, the fund invested $55 million in the private loan portfolio, which after aggregate investment activity resulted in a net increase of $17 million. Fund ended the first quarter investments in 80 private loan portfolio companies, totaling $823 million of fair value and representing 60% of the fund's total investment portfolio at fair value. As Dwayne mentioned, our private loan pipeline is average. While we began the year seeing increased private equity activity, the current backdrop of economic and geopolitical uncertainties has slowed the pace of new deal processes that were launched in the second half of the first quarter. While the volume of deal flow has softened, we do believe the overall spread environment has widened, and we expect overall terms to be more lender-friendly the rest of the year, and we continue to see what we believe are attractive opportunities. With that, I'll turn the call over to David.

Thanks, Nick, and good morning, everyone. In addition to the private loan portfolio that Nick covered, the fund also maintains a portfolio of legacy lower middle market investments. As a reminder, these are combined debt and equity investments in smaller privately held companies, whereby the fund partnered directly with the company's existing business owners and management team through co-investments at Main Street Capital Corporation utilizing the customized one-stop debt and equity financing solutions provided in Main Street's lower middle market investment strategy. After the listing of the fund's shares on New York Stock Exchange in January 2025, the fund no longer makes investments in new lower middle market portfolio companies, but continues to participate in follow-on investments in its existing lower middle market portfolio companies. We are pleased to report that the overall operating performance for the fund's lower middle market portfolio companies continues to be positive, which contributed to the fund's first quarter results. Despite the continued heightened level of uncertainty in the overall economy, we remain confident in the ability of these lower middle market portfolio companies to continue to successfully navigate the current environment. During the first quarter, the fund completed $19 million in total lower middle market follow-on investments, which after aggregate investment activity resulted in a net increase in the lower middle market portfolio of $15 million. At quarter end, the lower middle market portfolio had investments in 55 portfolio companies totaling $508 million of fair value and representing 37% of the fund's total investment portfolio. The lower middle market portfolio at fair value is comprised of 54% debt investments and 46% equity investments, 99% of these debt investments were first lien loans, and they had an attractive weighted average yield of 12.6%. The fund had equity ownership positions in all of its lower middle market portfolio companies, representing an average 8% ownership position. We expect that these investments will continue to provide significant benefits in the future, including the opportunity for continued dividend income, fair value appreciation and eventually meaningful realized gains upon the future exit of these lower middle market investments. As Dwayne mentioned, we continue to see interest from potential buyers in some of the fund's lower middle market portfolio companies, which we expect will lead to favorable outcomes over the next few quarters. Turning to the fund's total investment portfolio as of March 31, the fund continued to maintain a highly diversified portfolio with investments in 143 portfolio companies spanning across numerous industries and end markets. Fund's largest portfolio companies represented less than 4% of the total investment portfolio at fair value at quarter end and less than 4% of the total investment income for the trailing 12-month period, with most portfolio investments representing less than 1% of the fund's income and assets. With that, I will turn the call over to Cory.

Thank you, David, and thank you to everyone who has joined us today. The fund's total investment income for the first quarter was $34.1 million, an increase of $0.9 million or 2.6% from the first quarter of 2025 and a decrease of $0.8 million or 2.4% from the fourth quarter. Interest income for the first quarter increased by $2 million from a year ago and by $0.5 million from the fourth quarter. The increase in interest income from the prior year and from the fourth quarter was principally attributable to higher average levels of income-producing investment portfolio debt investments, partially offset by a decrease in interest rates, primarily resulting from decreases in benchmark index rates on floating rate debt investments. Fee income for the first quarter increased by $0.5 million from a year ago and by $0.4 million from the fourth quarter. The increase in fee income from both the prior year and the fourth quarter was primarily due to an increase in fees related to increased investment activity. Dividend income for the first quarter decreased by $1.6 million from a year ago and by $1.8 million from the fourth quarter. The decrease in dividend income from both the prior year and the fourth quarter was primarily due to a decrease in dividends from the lower middle market equity investments and included decreases related to certain nonrecurring items of $0.2 million from a year ago and $1.2 million from the fourth quarter. As we previously discussed, dividend income will fluctuate quarter-to-quarter based on the underlying performance, cash flows and capital allocation activities of the fund's portfolio companies and certain nonrecurring items. The first quarter included income considered less consistent or nonrecurring in nature of $0.6 million. As we previously discussed, these nonrecurring items vary quarter-to-quarter and can include dividend income from equity investments and interest and fee incomes from accelerated prepayment, repricing and other activity related to debt investments. These items were $0.2 million lower than the first quarter of 2025 and $1.3 million lower than the fourth quarter and $0.6 million lower than the average of the prior 4 quarters. The fund's expenses net of waivers for the first quarter increased by $0.4 million from the first quarter of 2025 and decreased by $3.7 million from the fourth quarter. The increase from prior year was principally attributable to increases of $0.7 million in interest expense, $0.3 million in base management fee and $0.1 million in the incentive fee, net of waivers, partially offset by a decrease of $0.6 million in the capital gains incentive fee accrual. The increase in interest expense from a year ago was largely driven by an increase in average borrowings outstanding used to fund a portion of the growth of the fund's investment portfolio, partially offset by a decreased weighted average interest rate on the credit facilities due to decreases in benchmark index rates and decrease to the applicable spread resulting from the amendment on the SPV Facility in March of 2025. The decrease in base management fees from a year ago is primarily the result of increased average total assets, partially offset by the full quarter benefit of the lower base management fee percentage under the amended advisory agreement compared to a partial quarter benefit in the first quarter of 2025. $0.1 million increase in incentive fee on income net of waivers is a result of an increase in the gross calculated incentive fee on income of $1.1 million, partially offset by a $1 million voluntary waiver of incentive fee on income by the fund's investment adviser. The increase in the gross calculated incentive fee on income is the result of the amended advisory agreement. The capital gains incentive fee accrual was reduced by $0.6 million in the first quarter compared to no accrual a year ago due to the net fair value depreciation of the fund's investments in the first quarter of 2026. The $3.7 million decrease from the fourth quarter in the fund's expenses net of waivers was primarily driven by decreases of $3.4 million in the capital gains incentive fee and $1.3 million in the incentive fee on income, net of waivers, partially offset by a $0.8 million increase in interest expense and base management fees. $3.4 million decrease in the capital gains incentive fee accrual from the fourth quarter reflects a $0.6 million reduction to the accrual recorded in the first quarter of 2026, compared to the $2.8 million accrual in the fourth quarter. The accrual reduction was the result of the net fair value depreciation of the fund's investments in the first quarter. Increase in interest expense was primarily driven by an increase in average borrowings outstanding, partially offset by a decreased weighted average interest rate on the credit facilities due to decreases in benchmark index rates. The decrease in incentive fee on income was primarily due to the voluntary incentive fee waiver by the adviser. The fund's expense ratio calculated as the ratio of total noninterest operating expenses, excluding incentive fees, net of waivers, as a percentage of the fund's average total assets was 1.8% on an annualized basis for the first quarter, a decrease from 1.9% in the prior year and was consistent with the fourth quarter. The fund's adjusted NII before taxes in the first quarter was $16.6 million, or $0.36 per share, decreasing from $16.8 million, or $0.38 per share, from the prior year. During the quarter, the fund recorded a net decrease in the fair value of its investments of $2.9 million, representing the impact of $0.2 million of net realized losses and $2.6 million of net unrealized depreciation. The net fair value decrease was attributable to a decrease of $7.5 million in the private loan portfolio, $0.8 million in the residual middle market portfolio, partially offset by an increase of $5.1 million in the lower middle market portfolio. Overall, the fund's operating results from the first quarter resulted in a net increase in net assets of $13.2 million. After giving effect to the capital transactions, including dividends to shareholders and the repurchase of $16 million of the fund's common stock at prices below net asset value, the fund's NAV per share was $15.87, a $0.02 increase from the fourth quarter and $0.34 above the fund's public offering -- price per share in the public offering and listing on the New York Stock Exchange in January of 2025. Share repurchases were accretive to NAV per share, contributing approximately $0.08 per share to the fund's NAV per share during the quarter. As of quarter end, the fund had investments on nonaccrual status, comprising 1.1% of the total investment portfolio at fair value and 4.2% at cost. As of quarter end, the fund's regulatory asset coverage ratio was 2.11, and its net debt to NAV ratio was 0.88. During the first quarter, we strengthened our capital structure by issuing $150 million of privately placed unsecured notes in March at a 6.34% rate, maturing in May of 2029, as we continue to address near-term maturities and improve the fund's capital structure. With that, I will now turn the call back over to the operator so we can take any questions.

[Operator Instructions] Our first question is from Robert Dodd with Raymond James.

Just -- I sort of asked this on the other call earlier, but just looking at the forward outlook, I mean, over the -- this was obviously on the private loan side, a slower quarter, but there's been several of those in and above when we talked about it before. Actually, there's a sort of pricing activity levels. I mean, what's the confidence, especially now that you have the higher leverage limit? What's the confidence you can actually really increase the size of the private loan book to kind of optimize ROE of this? I mean, obviously, more short, medium term rather than -- obviously, you can get there long term, but what's the confidence that, that can meaningfully grow this year?

Sure, Robert. I think it's going to be somewhat dictated by the market opportunity. The fund, as you know, is solely focused on private loan for new investments. So the pace in the amount of growth that the fund has is going to be subject to what we see in the broader market. So I think we have confidence. We do think that the overall environment has improved. But a lot of the pace is going to be dictated by how active private equity sponsors are in this environment. I think right now, we think there will be activity, but that will play out over the next couple of quarters. So I think there is some you kind of uncertain nature of that activity because it is going to be dictated by the sponsors. Nick, I don't know if you want to add anything to that?

No, I think that pretty much covers it. Like we said earlier, I think it's going to be a -- the pricing has come towards us. And so I think there were some pricing in the last 6, 12 months that just didn't fit us, and we thought it was too low for the risk, and we pass on those deals of lowering our pricing. I think that's come in to us now. And now, we seem to have the deal volume pick up to match the overall origination.

Our next question is from Brian McKenna with Citizens.

So somewhat related, but just trying to think through the trajectory of ROEs over the next year or so. So I think you're in a great position to deploy capital, I think it'll be pretty prudent, but that's been running the ROE on a net NII basis. It's been running about 8.5% the last couple of quarters. I mean, should we start -- should we expect that will start to expand here back to 9% plus just as leverage is optimized? Like, I'm just trying to think through the trajectory from here for that.

Sure, Brian. You mentioned kind of the concept of NII ROE. I think that's going to be dictated by 2 things: one, you and Robert hit on is that the pace of growth and deployments and how much new activity we have there that could drive some incremental net investment income ROE. The other piece will be any movement in nonaccruals, whether it's an existing nonaccrual going back on accrual or something that's on accrual today going the other direction. Those would be the big drivers. I don't think that's a surprise when you look at the drivers there, but those are the 2 big catalysts. I think on the net income ROE, which is the number we typically spend more time on, that will be dictated also by the performance of the private loans, but we still have about 1/3 of the portfolio invested in lower middle market assets. And to the extent we have good outcomes on any of those equity investments, that will be -- continue to be a catalyst or a positive driver on net income ROE. I think that's the way we would look at it, Brian.

Got it. All right. That's helpful. And then just in terms of the lower middle market equity portfolio, David, I think you mentioned there's still a pipeline there for some additional realization markup events. Is there any way just to kind of quantify that? And then, just thinking through the overall mix of the book, private loans versus the lower middle market, like when does that ultimately kind of hit that next threshold that will start to lower the fee to the adviser? I'm just trying to think through the mix here over the next couple of years for the portfolio.

Yes, Brian. I would say when you look at the catalyst to get it -- get the portfolio to where the lower middle market is less than 20%, there has to be a lot of turnover. The good news for the portfolio is that it's very diversified. The bad news is that it's very diversified. So even if you have 2, 3 or 4 lower middle market investments exit in the near term, while they will move that 33% plus or minus number down, it's going to take a while before it moves down below 20%. So the real catalyst will be more the growth of the portfolio, deployment of private loans and continued access to capital. We have to continue to raise additional capital to make sure we can have access to the full leverage capacity. You have to have each of those things get addressed, but it's really going to be a driver -- it's going to be driven more by the deployment of new private loans and less at least near term by the turnover of the lower middle market portfolio.

Our next question is from Arren Cyganovich with Truist Securities.

Just following up on the last question about the lower middle market potential sales of those loans. What type of buyers are these? Are these institutional buyers that you're looking to potentially sell these investments to?

Yes. So just to kind of clarify that, Arren, we -- if we have exits there, it's not us selling our investment, selling the loan to a third party, this would be a result of the portfolio company going through a change of control transaction. And as a result of that change of control, our debt is repaid and then our equity is also sold. So that would be the driver of the activity. And those buyers would typically be 1 of 2 sets of buyers, either a traditional private equity firm that is the buyer or it's a strategic that may or may not be backed by a private equity firm, but it would be more of a traditional private company buyer. But David, feel free to add on.

One thing I'd add is that we have companies that get tracked for a long time by various buyers. The management teams take incoming calls, and it's a really powerful position for us to be in, where we're not necessarily actively managing or the company is not actively marketing the company. But as buyers come in both financial and strategic, we're monitoring them and developing relationships at the portfolio company level over a number of years. And when you hear us giving guidance, it's when the portfolio company execs have come to the conclusion that they can maximize their value, either through a process or through an incoming phone call. So it's very much dictated by them and their sense of how the windshield looks versus the rearview mirror when they can maximize value. But it is not -- it's different than institutional investors looking at private loan portfolios like Dwayne said for the majority of the industry.

Okay. Sorry, I just misheard whenever you were discussing it. So that makes much more sense to me. That's all I have.

[Operator Instructions] Our next question is from Cory Johnson with UBS.

Yes. So I just want to talk a little bit about like, I guess, the competition in the lower middle market. I have been hearing that there is sort of an increased competition there, but your yield sort of held up, and it seems like your term you're saying are, if anything, strengthening. So I guess, are you seeing any increased competition? And then also, is there -- given your platform and low leverage that you currently have and maybe a little bit of hampered competition from some of the other players, are you seeing any opportunity to possibly move upmarket and do deals? And is that something you would actually look to do?

Yes, Cory, maybe I'll -- thanks for the question, maybe I'll address that a couple of ways, and I'll let Nick or David add on here. So I think when we look at Main Street's description of our strategies, lower middle market is very different than what you would hear from other BDCs. Other BDCs use the term lower middle market. And I think they're referring purely to size. In the case of the Main Street platform, we're referencing more of a strategy where we are partnering just like we have for the last 20-plus years with the existing owner-operator and their management team to provide a structured transaction, where the Main Street platform is an investor in both the debt and the equity. So again, something that's very different than what you would see at other BDCs execute from an investment strategy standpoint. If you look at the lower middle market strategy, again, which is not private -- it's not the MSC Income Fund's strategy going forward, they do have an existing portfolio. About 1/3 of the portfolio is in lower middle market, and we do see follow-on opportunities in those companies. And when we see those, the fund will continue to participate in that, and we think those are great opportunities to create value, both from an interest income standpoint and a long-term equity value creation standpoint. But the sole strategy from a new portfolio company standpoint is in private loan, which is also lower middle market from a size standpoint. The size of those companies at initial investment are broadly between kind of 7.5% and [ 50% ] is where most of them fit. Most of it would be on the bottom 1/3 of that range. I'd say that's where we do compete with other BDCs or other private credit firms. And I think we've long been in that space, just like we have in our lower middle market strategy, and we haven't seen a lot of changes, kind of new entrants into that space. And I'd say we haven't seen a lot in the current environment. It is a market or a part of the segment that does have competition. So it's not something that Main Street is the only party that's providing debt financing or debt capital to those private equity sponsors. So it is -- it does have competition. But I'd say we continue to view it as a market that's attractive, both from a spread standpoint and a structure standpoint relative to the upper -- kind of upper middle market. And as a result, we do not have plans today across the Main Street platform, MSC Income Fund, Main Street or private loan kind of private funds that are focused on the private loan strategy. We don't have an expectation to move upmarket across any of those different entities. But Nick, on the new private loan side, if you want to give some additional color on the competitive landscape or the marketplace?

I'd say over the last, call it, 12 to 24 months, we really haven't seen any new entrants in the market, I think, from a combination there of a fundraising difficulty for smaller or new entrants. We just haven't seen that happen. I think a lot of the fundraising has really drifted towards the upper middle market, and the larger side is competing in the broad syndicated side. And so we're seeing the same handful of players. One interesting one on the lower middle market and the private credit side is we don't see the same 6 or 7 or 8 firms in every single transaction. There will be 5 or 6 people bidding for each transaction, but it's a very different group on any individual deal.

Cory, did we answer your question or address the topics you're trying to hit on?

Yes, you did.

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

I just want to thank everybody for joining us this morning, and we look forward to talking to you again in early August after our second quarter earnings release. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you.