Annual report pursuant to Section 13 and 15(d)

INVESTMENTS (Tables)

v3.24.1.u1
INVESTMENTS (Tables)
 12 Months Ended
Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
As of March 31, 2024 and 2023, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:
Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of March 31, 2024:
Secured first lien debt
 $ 474,856  $ —  $ —  $ 474,856 
Secured second lien debt
 138,703  —  —  138,703 
Preferred equity
 213,480  —  — 

213,480 
Common equity/equivalents
 93,465  — 

18 
(A)

93,447 
Total Investments at March 31, 2024
 $ 920,504  $ —  $ 18  $ 920,486 
Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of March 31, 2023:
Secured first lien debt
 $ 437,517  $ —  $ —  $ 437,517 
Secured second lien debt
 75,734  —  —  75,734 
Preferred equity
 222,585  —  —  222,585 
Common equity/equivalents
 17,707  — 

27 
(A)
 17,680 
Total Investments at March 31, 2023
 $ 753,543  $ —  $ 27  $ 753,516 
(A)Fair value was determined based on the closing market price of shares of Funko, Inc. (our units in Funko can be converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability, as our investment was subject to certain restrictions.

The following table presents our investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy, and carried at fair value as of March 31, 2024 and 2023, by caption on our accompanying Consolidated Statements of Assets and Liabilities, and by security type:

Total Recurring Fair Value Measurements
Reported in Consolidated Statements
of Assets and Liabilities
Valued Using Level 3 Inputs

March 31,

2024 2023
Non-Control/Non-Affiliate Investments
Secured first lien debt
 $ 324,348  $ 279,748 
Secured second lien debt
 93,340  50,842 
Preferred equity
 162,522  164,534 
Common equity/equivalents(A)
42,005  1,724 
Total Non-Control/Non-Affiliate Investments
 622,215  496,848 

Affiliate Investments
Secured first lien debt
 147,603  157,769 
Secured second lien debt
 45,363  24,892 
Preferred equity
 50,958  58,051 
Common equity/equivalents
 51,442  15,243 
Total Affiliate Investments
 295,366  255,955 

Control Investments
Secured first lien debt
 2,905  — 
Secured second lien debt
 —  — 
Preferred equity
 —  — 
Common equity/equivalents
 —  713 
Total Control Investments
 2,905  713 

Total investments at fair value using Level 3 inputs
 $ 920,486  $ 753,516 
(A)Excludes our investment in Funko with a fair value of $18 thousand and $27 thousand as of March 31, 2024 and 2023, respectively, which was valued using Level 2 inputs.
Schedule of Fair Value Measurement Inputs and Valuation Techniques The weighted-average calculations in the table below are based on the principal balances for all debt-related calculations and on the cost basis for all equity-related calculations for the particular input.
Quantitative Information about Level 3 Fair Value Measurements
Fair Value as of
Valuation
Technique/
Methodology
 Unobservable
Input		 Range / Weighted-Average as of
March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023
Secured first lien debt $ 474,856  $ 432,126  TEV EBITDA multiple
4.2x – 8.8x /
6.4x
4.4x – 7.7x /
6.4x
EBITDA
$1,091 – $23,547 /
$10,509
$4,251 – $19,083 /
$10,764
Revenue multiple
0.3x – 0.6x /
0.4x
0.3x – 0.6x /
0.3x
Revenue
$31,586 – $93,916 /
$77,580
$15,483 – $109,615 / $94,957
—  5,391  Yield Analysis Discount Rate N/A
19.4% – 19.9% /
19.7%
Secured second lien debt 113,703  62,750  TEV EBITDA multiple
5.1x – 15.0x /
7.0x
5.4x – 6.6x /
6.2x
EBITDA
$5,648 – $23,003 /
$14,192
$4,112 – $6,379 /
$5,501
25,000  12,984  Yield Analysis Discount Rate
13.8% – 13.8% /
13.8%
14.0% – 14.0% /
 14.0%
Preferred equity 213,480  222,585  TEV EBITDA multiple
4.2x – 8.8x /
6.1x
4.4x – 7.7x /
5.9x
EBITDA
$1,091 – $23,547 /
$9,502
$4,251 – $19,083 /
$9,486
Revenue multiple
0.3x – 0.6x /
0.4x
0.3x – 0.6x /
0.4x
Revenue
$31,586 – $93,916 /
$75,099
$15,483 – $109,615 /
$69,247
Common equity/equivalents(A)
93,447  17,680  TEV EBITDA multiple
5.0x – 15.0x /
6.4x
4.7x – 7.2x /
6.4x

EBITDA
$1,154 – $63,269 /
$23,615
$1,105 – $30,833 /
$6,273
Total $ 920,486  $ 753,516 
(A)Fair value as of both March 31, 2024 and 2023 excludes our investment in Funko with a fair value of $18 thousand and $27 thousand, respectively, which was valued using Level 2 inputs.
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
The following tables provide our portfolio’s changes in fair value, broken out by security type, during the years ended March 31, 2024 and 2023 for all investments for which the Adviser determines fair value using unobservable (Level 3) inputs.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Year ended March 31, 2024:
Fair value as of March 31, 2023
 $ 437,517  $ 75,734  $ 222,585  $ 17,680  $ 753,516 
Total gain (loss):


Net realized gain (loss)(A)
(4,550) (3,200) 36,833  881  29,964 
Net unrealized appreciation (depreciation)(B)
(7,859) (1,031) 34,050  37,159  62,319 
Reversal of previously recorded (appreciation) depreciation upon realization(B)
3,212  3,200  (35,329) (92) (29,009)
New investments, repayments and settlements(C):


Issuances / originations
 74,536  64,000  14,688  30,700  183,924 
Settlements / repayments
 (28,000) —  —  —  (28,000)
Sales(D)
—  —  (50,726) (1,502) (52,228)
Transfers(E)
—  —  (8,621) 8,621  — 
Fair value as of March 31, 2024
 $ 474,856  $ 138,703  $ 213,480  $ 93,447  $ 920,486 

Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Year ended March 31, 2023:
Fair value as of March 31, 2022
 $ 425,087  $ 67,958  $ 217,599  $ 3,678  $ 714,322 
Total gain (loss):


Net realized gain (loss)(A)
—  (10,000) 20,778  —  10,778 
Net unrealized appreciation (depreciation)(B)
(29,552) (5,235) 11,216  13,622  (9,949)
Reversal of previously recorded (appreciation) depreciation upon realization(B)
—  10,001  (12,250) —  (2,249)
New investments, repayments and settlements(C):


Issuances / originations
 107,200  5,188  21,000  380  133,768 
Settlements / repayments
 (50,800) (6,596) —  —  (57,396)
Sales(D)
—  —  (35,758) —  (35,758)
Transfers(E)
(14,418) 14,418  —  —  — 
Fair value as of March 31, 2023
 $ 437,517  $ 75,734  $ 222,585  $ 17,680  $ 753,516 
(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the respective years ended March 31, 2024 and 2023.
(B)Included in net unrealized appreciation (depreciation) of investments on our accompanying Consolidated Statements of Operations for the respective years ended March 31, 2024 and 2023.
(C)Includes increases in the cost basis of investments resulting from new portfolio investments, the amortization of discounts, and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs, and other cost-basis adjustments.
(D)2024: Includes $0.3 million of proceeds from the recapitalization of Old World Christmas, Inc. ("Old World")
2023: Includes $13.4 million of proceeds from the recapitalization of Old World and $12.3 million of proceeds from the recapitalization of Horizon Facilities Services, Inc ("Horizon").
(E)2024: Transfers represent preferred equity of SFEG Holdings, Inc. ("SFEG") with a total cost basis and fair value of $4.8 million and $8.6 million, respectively, which was converted to common equity in October 2023.
2023: Transfers include (1) secured second lien debt of Ginsey with a total cost basis and fair value of $12.2 million, which was converted into secured first lien debt in August 2022 and (2) secured first lien debt of PSI Molded Plastics, Inc. with a total cost basis and fair value of $26.6 million, which was converted into secured second lien debt in September 2022.
Schedule of Investment Holdings
The following table summarizes our investments by security type as of March 31, 2024 and 2023:
March 31, 2024 March 31, 2023
Cost Fair Value Cost Fair Value
Secured first lien debt $ 513,425  60.1  % $ 474,856  51.6  % $ 471,439  65.4  % $ 437,517  58.1  %
Secured second lien debt 144,958  16.9  % 138,703  15.0  % 84,158  11.7  % 75,734  10.1  %
Total debt 658,383  77.0  % 613,559  66.6  % 555,597  77.1  % 513,251  68.2  %
Preferred equity 145,070  17.0  % 213,480  23.2  % 149,099  20.7  % 222,585  29.5  %
Common equity/equivalents 50,837  6.0  % 93,465  10.2  % 15,934  2.2  % 17,707  2.3  %
Total equity/equivalents 195,907  23.0  % 306,945  33.4  % 165,033  22.9  % 240,292  31.8  %
Total investments
 $ 854,290  100.0  % $ 920,504  100.0  % $ 720,630  100.0  % $ 753,543  100.0  %
Investments at fair value consisted of the following industry classifications as of March 31, 2024 and 2023:
March 31, 2024 March 31, 2023
Fair Value
Percentage of
Total Investments
 Fair Value Percentage of
Total Investments
Diversified/Conglomerate Services $ 264,535  28.7  % $ 268,954  35.7  %
Home and Office Furnishings, Housewares, and Durable Consumer Products 160,038  17.3  % 143,685  19.1  %
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 92,781  10.1  % 20,088  2.7  %
Hotels, Motels, Inns, and Gaming 77,366  8.4  % 58,713  7.8  %
Buildings and Real Estate 60,431  6.6  % 60,571  8.0  %
Oil and Gas 51,171  5.6  % —  —  %
Healthcare, Education, and Childcare 49,638  5.4  % 37,445  5.0  %
Leisure, Amusement, Motion Pictures, and Entertainment 39,350  4.3  % 47,616  6.3  %
Mining, Steel, Iron and Non-Precious Metals 30,537  3.3  % 25,998  3.5  %
Aerospace and Defense 29,064  3.2  % 22,215  2.8  %
Chemicals, Plastics, and Rubber 20,363  2.2  % 24,891  3.3  %
Printing and Publishing 14,238  1.5  % —  —  %
Cargo Transport 13,500  1.5  % 14,707  2.0  %
Telecommunications 9,002  1.0  % 18,987  2.5  %
Other < 2.0% 8,490  0.9  % 9,673  1.3  %
Total investments
 $ 920,504  100.0  % $ 753,543  100.0  %
Investments at fair value were included in the following geographic regions of the U.S. as of March 31, 2024 and 2023:

 March 31, 2024 March 31, 2023
Location
 Fair Value
Percentage of
Total Investments
 Fair Value
Percentage of
Total Investments
South $ 346,838  37.7  % $ 171,056  22.7  %
West 223,871  24.3  % 197,989  26.3  %
Northeast 207,870  22.6  % 266,612  35.4  %
Midwest 141,925  15.4  % 117,886  15.6  %
Total investments
 $ 920,504  100.0  % $ 753,543  100  %
The geographic region indicates the location of the headquarters for our portfolio companies. A portfolio company may have additional business locations in other geographic regions.
Schedule of Investments Classified by Contractual Maturity Date
The following table summarizes the contractual principal repayment and maturity of our investment portfolio for the next five fiscal years and thereafter, assuming no voluntary prepayments, as of March 31, 2024:

 Amount
For the fiscal years ending March 31:
 2025 $ 72,770 
2026 236,193 
2027 185,776 
2028 38,250 
2029 100,394 
Thereafter 25,000 
Total contractual repayments $ 658,383 
Investments in equity securities 195,907 
Total cost basis of investments held as of March 31, 2024:
 $ 854,290