Fidus Investment Corporation (NASDAQ:FDUS) Q3 2023 Earnings Call Transcript

Paul Johnson : That’s very helpful. And then last one at this point. obviously, $0.68 was very strong results this quarter. I’m just curious, at this point, you kind of see this as sort of the full flow-through, if you will, of higher rates at this point, at least from an NII perspective in the portfolio? Or is there a possibility of [ continued ] higher OID amortization. I sort of think fees from the payments such to continue, I guess, generating results around these levels or possibly even higher kind of color there would be — would also be helpful. And that’s all for me.

Edward Ross : Sure. It’s a great question. One, that — it’s is not that easy to answer. But I think we are — obviously, we’re very pleased with the performance this quarter. This next quarter, I do want to highlight, we will have excise expense, so that will impact NII in Q4 which is relevant. I do think interest income, so on the revenue side, it’s at a pretty high level. At this point, I don’t see that rate going higher. Obviously, the Fed stay put. And I actually see a couple of higher-yielding investments in our portfolio that will probably repay. And so I see stability there from a yield perspective. But at the same time, and I do think there’ll be continued monetization of certain equity investments. It’s not going to be like 2021 where there was just a very robust amount of M&A activity.

But M&A is still transpiring, and we expect equity investments to still monetize, if you will. And so we think the outlook is very good as we move forward. The — exactly where we end up. Do we go above 68%. It’s clearly possible. It has to do with a lot of things, getting more invested our fee and fee income at a reasonable level that quarter or not. Are there any dividends all those things, you got to take into account a little bit. But obviously, $0.68 is a great quarter, and we would — we’re going to strive to do better. But at the same time, we’re focused on portfolio quality and consistency as opposed to just driving the highest earnings we can. So hopefully, that’s helpful. But Q4 will be impacted. I think that’s relevant. Shelby, do you have anything to add to that?

Shelby Sherard : No. You mentioned the excise tax. So that’s just kind of an annual accrual that we have, which we’ll continue to have this year.

Operator: This concludes our question-and-answer session. I’d like to turn the call back over to Mr. Edward for closing remarks.

Edward Ross : Thank you, Nick, and thank you, everyone, for joining us this morning. We look forward to speaking with you on our fourth quarter call in early March 2024. Have a great day and a great weekend.

Operator: Conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.