Art Penn: Sure. So, when you’re dealing with more liquid investments, like those, if they were to kind of trade from 90 to par, we could say, okay, we could sell this loan at par. We have a new primary middle market loan. We can do and question what’s the best risk-adjusted return? In most cases, if these loans get pulled to par, which we hope they do, we would trade out of them and reallocate the money into core middle market originations.
Paul Johnson: Got it. Thanks. That makes sense. And then last question, just on your equity co-investment strategy. I’m just curious, I mean, that’s obviously been a big part of your strategy since you guys have been in business taking equity co-investments. I’m just curious, when you go into a deal, are you essentially given the option of equity co-investment where you can get it and — versus like fees or OID? Essentially, do you have the option of one or the other perhaps exit fees or OID? And if there is an option, I guess between the two, when you’re evaluating it, you have really a preference for either one. I’m just kind of thinking of a time like now, where you’re actually actively looking to reduce your equity exposure in the portfolio. I mean, is that something you’ve pulled away from, or is it still a pretty normal part of the investment process?
Art Penn: Yes, in general, since many of our deals are kind of buy and build and our debt capital is strategic capital to make that buy and build happen. We feel as though in general, if we believe in the growth of the company, having some form of equity participation makes sense for the debt, because after all, we’re helping to drive that value. We should or why wouldn’t we have some participation in that upside. So by and large, it is something we do and may be a differentiator versus some of our peers. I think, it’s particularly important in the buy-and-build growth here types of deals, which is primarily what we’re doing these days, right? So, it is important. Rarely, is it a trade-off, hey you can get the co-invest if you take less yield or you take less OID, usually it’s just kind of baked in and part of the understanding that we have with the private equity sponsor, that this is how we do business and it’s not a trade-off situation.
In certain cases, they want to limit us or not let us have it in which case we sometimes were like okay, the debt is so good. We don’t need the equity. In some cases, we’re kind of like, okay, the equity is not that attractive. That’s fine. In other cases, it may be a situation, where we walk from the deal, because we think the equity is a really important part of our package. So we try to look at each deal in each part of the capital structure on their own two feet, such that in some cases the debt is really good. We may not be so excited about the equity and that’s fine. In other cases, we may be really excited about the equity and try to get more. So, case by case, each piece of the capital structure needs to stand on its own two feet, but rarely is it kind of a trade-off scenario.
Paul Johnson: Got it. Appreciate it. Very interesting and that’s all from me.
Operator: Ladies and gentlemen, this concludes today’s question-and-answer session. At this time, I’d like to turn the conference back to Mr. Art Penn for closing remarks.
Art Penn: Thank you everybody. Wishing everybody a terrific Thanksgiving full gratitude. Terrific holiday season and we’ll be talking to you next in early February for December 31 earnings. Thank you very much.
Operator: Ladies and gentlemen, this concludes today’s conference. We appreciate your participation. You may now disconnect.
