Theodore Koenig: Yes, Christopher, this is — from my perspective, I think we’re going to see some — continue to see some slight increases here and overall Fed funds increases. Inflation is still not where they want it and they’ve signaled that we’re likely to see more upside in interest rates than downside right now in the near-term.
Christopher Nolan: And then I guess final question is strategy related. Monroe Capital announced recently acquiring the management of another BDC. What strategy overall there? And how will the BDC and MRCC work together, if at all together?
Theodore Koenig: Good question. We’ve gotten a fair amount of discussions with media on this. About two weeks ago, we announced that Monroe, the private asset management company will acquire the investment adviser of another BDC Horizon Technology Finance NASDAQ, HRZN, that’s a venture debt business. The management team there is comprised of about 38 people. They’ve been in business for about 20 years, best-in-class track record history. They manage about $1 billion today in a combination of their BDC and institutional capital. And I’ve been looking at the space for quite a while on behalf of Monroe. I think that the venture debt space in general is attractive in private credit, particularly in times when the IPO markets are closed, exits are difficult, fundraising is difficult for venture firms.
Instead of doing large down round equity financings, many of these high-growth companies will look to credit instead. Pricing is good. Leverage is good on enterprise value, low enterprise value risk. So, it’s a — it was an acquisition and opportunistic acquisition opportunity for us as a firm to continue to develop asset class categories that we can offer our institutional investors. I don’t think this will be an MRCC investment. I think it’s a different type of asset class. But for our other funds and our institutional investors at our adviser level at Monroe, this represents a very attractive opportunity for us to take advantage of a tactical place in the market where we can earn excess alpha.
Christopher Nolan: Great. Thanks Ted. That’s it from me.
Theodore Koenig: Thanks Chris.
Operator: We’ll hear now from Robert Dodd with Raymond James.
Robert Dodd: Hi guys. Question on the SLF, the earnings, obviously — I mean, its portfolio is very sensitive as well. So, the earnings within that SLF have increased about north of 20% from Q1 to Q4, but the dividend has improved. Obviously, there’s been markdowns within the SLF. But should we think of the dividend opportunity from the SLF to MRCC is kind of having a high watermark or something like that where as in book equity has to get back above $80 million before you get 50% of the earnings because obviously, in the fourth quarter, the payout ratio was the dividend to you is like 37% of the earnings that you own 50% of it. So, can you give us any color on how we should think about that given that the earnings at the SLF are quite rate sensitive as the MRCC?
Theodore Koenig: They are quite rate sensitive. You are right, I would guide you towards our kind of $900,000 per quarter level as a run rate for the SLF. That’s the guidance I would offer you on that front.
Robert Dodd: But could you give us any color about why — is it the markdowns and those need to be recovered? Or what’s the decision? I realize it’s not solely your decision or the MRCC decision. But there is — obviously, there has been an increasing mismatch between the earnings power within that and the dividend paid out? Is this a scenario where that changes?
