Daniel Pietrzak: Yes. I think it will enhance the M&A environment. I mean, I think the M&A sort of environment probably needs that catalyst first. My gut is that catalyst is some view from the broader investor community that the world is at equilibrium or at a minimum, we’ve stopped the big inflation move sort of upward. I think that just gets into the simple idea of finding that willing seller and finding that willing buyer. We are still seeing some M&A activity out there I think, honestly, it’s probably skewed more towards the best-in-class businesses because people want those businesses, people are willing to still pay multiples for them that are strong or grow sort of high and relate to maybe the multiples that would have existed for that business a year plus ago.
In terms of the management team, I mean, 1 thing we have seen focused on this larger borrower, the upper end of the middle market, we’ve probably got a better CEO, better CFO, better governance. So the better controls, more support from their Board. I think that’s a positive. But what have we seen? We’ve seen a fair amount of pricing increases go through? We’ve seen one company do it times 9 times, I think we are a little bit mindful or may be concerned that pricing increases are sort of at their last legs, but we’ve seen companies being able to do that. I think you look — people have looked for where they can take costs out. something, I think, pretty normal in a time like this. I think those companies that have had some supply chain issues are looking to diversify their supplier base I think that’s a broader theme in the overall market.
So I think we’ve seen management teams do a very good job trying to be very forward-leaning. I think just the reality is maybe 2 things. One, the moves have been fast and meaningful right, as it relates to rates. Obviously, the wage pressure has been building up for some time, but the wage pressure, we think, is very real across the market. And like I said, I think they’ve been doing kind of a good job, and we expect that to continue and hopefully enhance value for these companies going forward.
Casey Alexander: I didn’t make a chuckle, but when you said the world at equilibrium all that could occur to me was after 40 years in this business, I’m not sure what the world of equilibrium means. I think it’s always in sort of a state of change flux. We’re always stressing this.
Daniel Pietrzak: That’s the word that popped in my mind at the time.
Casey Alexander: Thanks for taking my questions. I appreciate.
Operator: I see no further questions at this time. I will now turn the call back over to Mr. Daniel Pietrzak for any closing remarks. Sorry, 1 just queued up, would you like me to take that question? One moment please. And our next question coming from the line of Robert Dodd with Raymond James.
Robert Dodd: So following up actually to Ryan question, in terms of the amendment activity, you talked about slight uptick. Any more color you can give on that, on kind of thematically is it primarily on second liens if we look at where it’s in the capital structure? Or is it any industry group that there’s a little bit more exposure to maybe capital goods or something like that? Or is it just totally idiosyncratic across the portfolio depending on individual business?
Daniel Pietrzak: Probably a little bit, and thanks for the question, probably a little bit more idiosyncratic. That said, obviously, a lot of the amendment conversations that you would come back to the table on would relate to financial covenant, i.e., a leverage covenant, that is something that generally exists in a first lien or so the unitranche deal, we wouldn’t be doing a second lien deal if there was a covenant in front of us. So I think it would be skewed to that part of the capital structure. But that’s because where I think that test does sort of come into play. Yes, I think you could argue it could be impacting folks across sort of all industries, just depending on a certain challenge that they may have been sort of having. But again, I think it’s been a slight uptick, but I’m not surprised by it. I think that will sort of continue, but it’s nothing like the amendment activity that we would have seen in 2020, just to be clear.
