Release Date: March 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How do you see middle-market loan spreads evolving this year, and is there potential for them to widen as perceived risks increase? A: Edward Ross, CEO, expects yields to remain stable, as they have been over the past few months. He notes that while there may be opportunities to invest at higher rates where risks are perceived, the overall expectation is for yields to stay consistent due to the available capital and interest in maintaining or growing portfolios.
Q: Regarding Quantum IR Technologies, is there a possibility to take control of the situation to recoup some value? A: Edward Ross, CEO, acknowledges the negative events impacting Quantum IR Technologies and confirms that Fidus is actively involved in efforts to improve the investment's outlook. He indicates that the current risk profile is reflected in the valuation of their investments.
Q: How will the distributions from Health Use and Medsurant be recorded, and have they been accrued into the value of those investments? A: Shelby Sherard, CFO, explains that these will be booked as return of capital and realized gains. The Q4 value anticipated these repayments, and they are reflected in the fair value. The distributions are due to the sale of underlying operations, not the equity itself.
Q: What is Fidus's target balance sheet leverage in the current market environment? A: Edward Ross, CEO, states that the target leverage is around 1:1. While comfortable with current levels, Fidus plans to use debt as a majority of growth capital, supplemented by an ATM program when necessary.
Q: What are your thoughts on potential impacts from tariffs and import goods on your portfolio? A: Edward Ross, CEO, acknowledges some exposure to potential cost increases but does not foresee significant impacts. He believes most portfolio companies have pricing power to manage cost changes, maintaining overall portfolio performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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