So, that was down from last quarter’s 12.6%, was basically flat to a year-ago quarter, which was just 11.9%. So, we continue to look at the — at the fee structure, and that’s something that we’ll keep thinking and watching what our peers do in the Street. But we’re comfortable with where we are right now.
Finian O’Shea: Great, thanks so much.
Operator: And our next question comes from Erik Zwick from the Hovde Group. Erik, please go ahead.
Erik Zwick: Good morning, everyone. And just looking at the investment activity in the quarter that the 370 million commitments was the highest volume in almost two years — a little over two years or so, so wondering if you could just frame what you’re seeing in the market? If it’s just an increased opportunity set that’s meeting your investment criteria, and how does the pipeline look today heading into the ’24 calendar year.
Armen Panossian: This is Armen. I think the year generally ebbed and flowed. And we were — there were some months in calendar 2023 that we thought it was little slow. It looked like private equity firms were less interested in doing deals given the high cost of funding with base rates so high. I just think, in the quarter, it was, frankly, just a little bit idiosyncratic. I think private equity firms sort of came back to the table, wanted to do some deals, they refinanced a couple of deals like for example, the PetVet deal, is a refinancing, with a skinny down first-lien loan. So, I wouldn’t say there’s thematically or directionally something that we could derive from the originations in this quarter. I would just say maybe there was some pent up deal flow that probably would have come in a smoother fashion in 2023, but just happened to kind of come in, in the quarter.
In terms of the pipeline, it’s pretty robust heading into the March quarter. We already have about $180 million in the funding pipeline for the quarter ended March. So, I think it’s looking pretty healthy so far year-to-date. And that’s pretty much it. I would say that there’s a little bit of pressure on spreads. Certainly, the spreads have come in, in the last three to six months versus early 2023.
Erik Zwick: Thanks, Armen. And maybe just a quick follow-up, a lot of the action was certainly in the private placement update of a $68 million in the secondary market. Just curious what you saw attractive, if there’s any kind of any commonalities or opportunities you saw in the fiscal Q1 purchases there?
Armen Panossian: I wouldn’t say that there’s any particular commonalities. We did buy some fixed rate bonds at dollar prices that were around 90. I think we saw in the quarter that there was pretty nice convexity in fixed rate bonds. So, I think if there’s any sort of theme on the secondary purchases that would be the theme. There’s just some high quality debt out there and that’s publicly traded. And when we do think it has an appropriate yield and an appropriate total return opportunity, we’re happy to flex that muscle, in terms of the public markets and deploy there.
Erik Zwick: That’s it for me today. Thanks for taking my questions.
Armen Panossian: Thank you.
Operator: Thank you. [Operator Instructions] And our next question comes from Paul Johnson from KBW. Paul, you may proceed.
Paul Johnson: Yes, good morning. Thanks for taking my questions. Most of mine have been asked at this point. But just kind of a few higher level ones. I mean, I guess just kind of looking at next quarter pairing the lighter interest income this quarter obviously kind of driven by the new non-accruals, but pairing that with the strong investment fundings you guys had, I mean should we be looking at a pretty nice rebound in interest income next quarter.
Matt Stewart: Hi, it’s Matt Stewart. I don’t want to give forward guidance, but what I will say is, if you look at the originations during the quarter ended December, they were heavily weighted towards the back end. Of the $300 million of privates we deployed, the majority of them were actually in the month of December, just as deals were looking to close before year-end. So, they were heavily weighted towards the back end of the quarter. As Chris noted earlier, when we were talking about non-accruals, our non-accruals affected our earnings just under $0.04 for the quarter. So, if you look at the bridge between the $0.62 from last quarter to $0.57, some of it was impacted by the timing of deployment versus the non-accruals. So, with that back weighted deployment, all being equal, that probably impacted earnings during the quarter of around $0.02.
Paul Johnson: Got it. Thanks. That’s very helpful. And then, I guess just, it sounds like you mentioned a little bit like terms have come in, spreads have been pressured a little bit. I mean, should we read that as a sign that it sounds like sponsors at least kind of come into the new year here capitulating a little bit on valuation multiples. Is that kind of what you’re observing in the market?
Armen Panossian: Yes, this is Armen. I don’t know capitulation is a strong word, but I think sponsors have some motivations to do deals this year and starting late last year, what are those motivations? It’s they have funds that they’ve raised and have periods or investment periods that are clicking away and there is as a result of motivation to deploy that capital. I think older vintage funds, the limited partners, the investors that are in those funds are pressuring sponsors to return capital. So, as a result, I would say sponsors are a little bit more willing to transact at prices that might not maximized IRRs or returns, but are a pretty good outcome for their fund and have the benefit of returning capital to their LPs. So, the combination of those two factors, new vintage funds having dry powder, older vintage funds, having LPs that want capital back, have resulted in sponsors considering transactions again rather than sitting on the sideline.
