And even before we owned it, it went through the 2008, 2009 crisis. And then we’ve been through all kinds of liquidity, different things, COVID, et cetera. But over the long run, our CLO reduced high-teens returns based on our investments. And so we’ve, kind of, weathered a lot of ups and downs, a lot of different types of markets. And this one, I’m not going to say this is the same as we’ve seen before. And I’m not going to say the whole marketplace has the exact same dynamics, but the structure has been a very successful long-term investment structure for us, and we don’t think any differently. There are some adverse events and some are idiosyncratic. We’ve avoided a lot of traditionally cyclical elements in our CLO, like we don’t have energy investments, for example, which have gone down a lot, gone up and then go down.
I mean, there’s a lot going on there. But then as a general sort of overview of that, we feel that this is a good investment in the long run, although there are periods of time where you have some adverse developments, but the power and the earnings of it has produced fairly consistently high-teens returns for us over the long run.
Casey Alexander: All right. Thank you. That’s all my questions. I appreciate it.
Michael Grisius: Thanks, Casey.
Christian Oberbeck: Well, Casey, I hope you appreciate our presentation was shorter this time.
Operator: Thank you. [Operator Instructions] Our next question will come from the line of Erik Zwick from Hovde Group. Your line is open.
Erik Zwick: Thank you. Good morning, everyone. I wanted to start with the pipeline for my first question. I think last quarter, you mentioned, you kind of described it as robust with many actionable opportunities. And this morning, you mentioned that it continues to grow. So I’m wondering if you could just provide a little color, first in terms of any particular industries where you’re seeing stronger demand or stronger activity? And then second, just if you could categorize how it shapes up in terms of new investment opportunities versus follow-ons?
Michael Grisius: Yes, I’ll try to address that. You’re right, the pipeline that we have remains very robust, and that’s mostly reflective of the business development efforts that we’ve taken on over the last several years. Certainly, deal flow in the market is down relative to historical levels. It continues to be down, although we’re seeing some pickup in that respect. So our actionable pipeline has more to do with, kind of, what we’re doing in the marketplace and our reputation growing and our relationship is growing. But that’s definitely yielding really good opportunities for us. We think it’s a great time to be investing capital. There’s a lot of caution in the marketplace. We think we’ve got certainly among the best teams in the BDC marketplace.
We like being in the lower end of the middle market for sure. We think we get an opportunity to underwrite our deals in a way that the larger market can’t. We get better legal protections as well. We like the verticals that we’re in. And I think as a result of that robust pipeline, we have an opportunity to be highly, highly selective. Now as it relates to sort of the industries that we’re in, we’re generalists. So we’re really just looking for businesses that have really strong characteristics that get us comfortable that they’re going to hold up under most reasonable circumstances that we can think of as we analyze the businesses, but we also have a few verticals that we tend to focus on. And that’s by design, because those verticals are ones where we think that businesses that differentiate themselves and really create a business model where they have an enduring value proposition that they offer for their customers, they can hold up really well and thrive.
