Ted Goldthorpe: I mean, my opinion, not particularly. Again, it’s kind of $8 million. It doesn’t have kind of a meaningful impact on the asset side. We generally feel like we want to be in the 1.25 times to 1.4 times net leverage. So I wouldn’t say that that necessarily has a meaningful impact on how we think about leverage for the portfolio as a whole and how we think about either taking up or down that leverage a little bit. I’d say we probably would be more focused on sort of the macro in terms of where we think sort of the economy is broadly, as well as how attractive we think the investing environment is. That’d probably be more so driving our leverage decisions as opposed to the CLO portfolio itself.
David Miyazaki: Okay. Great. Thanks. And then if I can just kind of step back and widen the lens a little bit. I mean, Ted, you and the team have had a lot of experience in the middle market. One of the things that managers in the industry tend to do is talk about the ideal kind of borrower profile to go after and it’s almost always whatever they happen to be working on. And since you’ve worked in the upper middle market and you’ve worked with some of these acquisitions that have been from the lower middle market, at $100 million it looks like in EBITDA, it’s been kind of your home kind of neighborhood as far as what your weighted average EBITDA is. Is that pretty close to what your, say, the median would be and how do you feel about where you are? Do you like that neighborhood or do you think that you should be going up bigger is one of the trends to hear about or do you like sticking in the middle or lower side where you have more bargaining power?
Ted Goldthorpe: Yeah. I think the latter. I mean, our franchise is really what I would call big enough. So we don’t want to lend to companies below $15 million of EBITDA. Our weighted average EBITDA in our portfolio I think is a little misleading. It skews high versus where I think our real franchise is. I mean, the reality is some of our peers are competing head to head with the syndicated markets and the banks, which we are not. And just given our size as a platform, we just think, like, you can see our average spread to LIBOR is L750 versus a market at the large cap end of like L525. So, our credit quality is very stable. Non-accrual is really low. So we think as long as the company is big enough, we think we get paid extra return and we don’t see a discernible difference in credit quality. So I would say that weighted average EBITDA always looks high if you really think about our core franchise and it’s driven by a couple outliers.
David Miyazaki: Okay. Yeah. That oftentimes tend to be one of the limitations of looking at weighted averages.
Patrick Schafer: Yeah. I mean, also it’s against it to that point. Like there’s a lot of instances where if we get involved in a roll-up acquisition strategy at 40 of EBITDA, that might be 180 of EBITDA now, but obviously our original investment was 40 and that’s kind of how we look at it. And so too, we tend to be a little bit more active in sort of, I would say, the quote-unquote syndicated market, but more so like in periods of stress where we’re looking at acquiring assets off of bank balance sheets and things like that and those would tend to skew higher EBITDA, but that is more of an opportunistic purchasing as opposed to, as Ted said, kind of the core of our franchise.
David Miyazaki: Right. Okay. Last topic, I like slide 14, it’s always, I mean, it’s just good to kind of see the history of how you march through acquiring assets and the industry kind of has a mixed bag of outcomes with regard to acquiring portfolios of loans from other managers. And I mean, what can you kind of say about how your realizations or even what it used to kind of ongoing wind downs have been relative to your expectations? And when we look at the larger amounts that are still held, are you getting to a point where the proportion of difficult loans and conditions is higher now because the end of the portfolio is harder to wind down or do you think that the progress is going to be relatively linear?
Ted Goldthorpe: I think the latter. It’s a great question, actually. I mean, the reality is if you look at slide 14, I mean, the Oak Hill portfolio, we’re basically out of Harvest for less than $10 million of exposure and we don’t — it’s not on here because that’s like the original platform was KCAP and we’re down to a very small number in KCAP too. So really the legacy loans relate to Garrison. A number of those loans, some are more challenged than not, but most of them are lower yielding. And so Garrison had an on balance sheet CLO structure. So those are the types of loans, those lower spreading loans tend to be the ones that get refinanced later. That being said, we closed the Garrison transaction end of 2020.
So we’re three and a half years into that portfolio. So a lot of those legacy loans are coming up on maturities and other things. One suggestion that, very smart shareholders said to us yesterday is, we may want to break out of that $69 million, how much we’ve extended. Because again, we tend to be — in the Garrison portfolio specifically, we tend to be a small player. So we usually take the realization. There has been some instances of us extending because we like the credit and we could get more spread and so we should break that out for people around proactive extensions versus what else is in the portfolio. And then we should also break out for you guys what’s like low yielding as a percentage of the remaining $69 million. But to answer your last…
