Barings
Participation Investors
Report
for the
Three
Months Ended March 31, 2022
|
Adviser
Barings LLC
300 S Tryon St., Suite
2500
Charlotte, NC 28202
Independent
Registered Public Accounting Firm
KPMG LLP
Boston, Massachusetts
02110
Counsel
to the Trust
Ropes &
Gray LLP
Boston, Massachusetts
02111
Custodian
State Street Bank
and Trust Company
Boston, Massachusetts
02110
Transfer
Agent & Registrar
DST Systems, Inc.
P.O. Box 219086
Kansas City, Missouri
64121-9086
1-800-647-7374
Internet
Website
https://www.barings.com/en-us/guest/funds/closed-end-
funds/barings-participation-investors
|
Barings Participation Investors
c/o Barings LLC
300 S Tryon St.,
Suite 2500
Charlotte, NC 28202
1-866-399-1516
|
Investment
Objective and Policy
Barings Participation
Investors (the “Trust”) is a closed-end management investment company, first offered to the public in 1988, whose shares
are traded on the New York Stock Exchange under the trading symbol “MPV”. The Trust’s share price can be found in the
financial section of most newspapers under either the New York Stock Exchange listings or Closed-End Fund Listings.
The Trust’s
investment objective is to maintain a portfolio of securities providing a current yield and, when available, an opportunity for capital
gains. The Trust’s principal investments are privately placed, below investment grade, long-term debt obligations including bank
loans and mezzanine debt instruments. Such private placement securities may, in some cases, be accompanied by equity features such as
common stock, preferred stock, warrants, conversion rights, or other equity features. The Trust typically purchases these investments,
which are not publicly tradable, directly from their issuers in private placement transactions. These investments are typically made
to small or middle market companies. In addition, the Trust may invest, subject to certain limitations, in marketable debt securities
(including high yield and/or investment grade securities) and marketable common stock. Below investment grade or high yield securities
have predominantly speculative characteristics with respect to the capacity of the issuer to pay interest and repay capital.
The Trust distributes
substantially all of its net income to shareholders each year. Accordingly, the Trust pays dividends to shareholders four times per year.
All registered shareholders are automatically enrolled in the Dividend Reinvestment and Cash Purchase Plan unless cash distributions
are requested.
Form
N-PORT
The Trust files
its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (“SEC”) for the first and
third quarters of each fiscal year on part F of Form N-PORT. This information is available (i) on the SEC’s website at http://www.sec.gov;
and (ii) at the SEC’s Public Reference Room in Washington, DC (which information on their operation may be obtained by calling
1-800-SEC-0330). A complete schedule of portfolio holdings as of each quarter-end is available upon request by calling, toll-free, 866-399-1516.
Proxy
Voting Policies & Procedures; Proxy Voting Record
The Trustees of
the Trust have delegated proxy voting responsibilities relating to the voting of securities held by the Trust to Barings LLC (“Barings”).
A description of Barings’ proxy voting policies and procedures is available (1) without charge, upon request, by calling,
toll-free 866-399-1516; (2) on the Trust’s website at https://www.barings.com/en-us/guest/funds/closed-end-funds/barings-participation-investors;
and (3) on the SEC’s website at http://www.sec.gov. Information regarding how the Trust voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available (1) on the Trust’s website at https://www.barings.com/en-us/guest/funds/closed-end-funds/barings-participation-investors;
and (2) on the SEC’s website at http://www.sec.gov.
Legal
Matters
The Trust has entered
into contractual arrangements with an investment adviser, transfer agent and custodian (collectively “service providers”)
who each provide services to the Trust. Shareholders are not parties to, or intended beneficiaries of, these contractual arrangements,
and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or
to seek any remedy under them against the service providers, either directly or on behalf of the Trust.
Under the Trust’s
Bylaws, any claims asserted against or on behalf of the Trust, including claims against Trustees and officers must be brought in courts
located within the Commonwealth of Massachusetts.
The Trust’s
registration statement and this shareholder report are not contracts between the Trust and its shareholders and do not give rise to any
contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities
laws that may not be waived.
Barings Participation
Investors
TO OUR SHAREHOLDERS
April 30, 2022
We are pleased to present the March 31,
2022 Quarterly Report of Barings Participation Investors (the “Trust”).
PORTFOLIO PERFORMANCE
The Board of Trustees declared a quarterly dividend
of $0.20 per share, payable on June 10, 2022 to shareholders of record on May 31, 2022. The Trust paid a $0.20 per share dividend
for the preceding quarter. The Trust earned $0.20 per share of net investment income for the first quarter of 2022, compared to $0.28
per share in the previous quarter.
During the first quarter, the net assets of the
Trust increased to $162,516,736.44 or $15.33 per share compared to $161,080,475 or $15.19 per share on December 31, 2021. This translates
to a 0.92% total return for the quarter, based on the change in the Trust’s net assets assuming the reinvestment of all dividends.
Longer term, the Trust returned 14.1%, 11.0%, 9.9%, 10.6% and 11.5% for the 1, 3, 5, 10, and 25-year periods, respectively, based on the
change in the Trust’s net assets assuming the reinvestment of all dividends.
The Trust’s market price decreased 9.5%
during the quarter, from $14.80 per share as of December 31, 2021 to $13.39 per share as of March 31, 2022. The Trust’s
market price of $13.39 per share equates to a 12.7% discount to the March 31, 2022 net asset value per share of $15.33. The Trust’s
average quarter-end discount/premium for the 3, 5 and 10-year periods was -2.0%, 1.3% and 3.0%, respectively. U.S. fixed income markets,
as approximated by the Bloomberg Barclays U.S. Corporate High Yield Index and the Credit Suisse Leverage Loan Index, decreased 4.8% and
0.1% for the quarter, respectively.
PORTFOLIO ACTIVITY
The Trust closed eight new private placement
investments and ten add-on investments to existing portfolio companies during the first quarter. The total amount invested by the Trust
in these transactions was $7,539,084. Of note, the new platform investments included one fixed rate Sr. Subordinated Note and seven floating
rate term loans, five of which included equity co-investments, and the add-on investments included eight floating rate term loans and
one fixed rate Sr. Subordinated Note that included an equity co-investment.
The investment activity in the first quarter
of 2022 was lower than the first quarter of 2021, however, it was in line with historical first quarter investment activity. As the investment
landscape remains stable, some key trends have continued. First, investment activity is now back to (and even beyond) pre-pandemic levels.
Secondly, in the current market, financial sponsors and other ownership groups are motivated to divest portfolio companies due to the
high valuations for strong businesses. With the significant dry powder they have available, financial sponsors are also motivated to acquire
high-quality businesses which have outperformed through both good times and the more recent uncertainty. Lastly, private equity clients
continue to work with a smaller group of trusted lenders with whom they have long-standing relationships and who can offer certainty of
execution and creative solutions.
With demand for products and services continuing
to increase, one key question is whether supply chains can keep up with the renewed demand and whether we will see material increases
in prices as a result of supply-chain bottlenecks, rising raw material and energy costs and labor shortages. Across the world, and particularly
in regions with large manufacturing sectors which depend on international trade, these risks may be key. However, it is important to note
that such issues do not affect every geography and sector the same. When constructing portfolios, we focus on investing in high-quality
businesses which are leaders in their space and offer defensive characteristics which will allow them to perform through the cycle. Therefore,
while segments of the broader economy may be affected by potential supply chain issues, increasing raw material and energy costs and labor
shortages, we remain confident in the current diverse portfolio to perform through the potential cycle.
We continue to be selective in our
investment choices and maintain our underwriting discipline throughout multiple cycles. First, the Trust continues to invest in
first lien senior secured loans in high-quality companies in defensive sectors and remains well diversified by industry. This was a
strategy put in place more than five years ago and has provided strong risk adjusted returns for the Trust given their senior
position in the capital stack. As of March 31, 2022, 66.0% of the Trust’s investment portfolio is in first lien senior
secured loans compared to 2.7% as of December 31, 2017. These
(Continued)
investments have
proven resilient to date and their management teams now have the benefit of having a wealth of knowledge to draw upon from working in
such unique and challenging circumstances. Second, we hold meaningful investment liquidity based on the Trust’s combined available
cash balance and short-term investments of $5,182,564 or 2.8% of total assets, and low leverage profile at 0.14x as of March 31,
2022. We have strengthened our liquidity position with a $15.0 million committed revolving credit facility with MassMutual (See
Note 4). This facility coupled with the current cash balance provides ample liquidity to support our current portfolio as well as invest
in new portfolio companies. Third, we continue to be selective in pruning our equity investments and reinvesting the proceeds into first
lien senior secured investments further driving investment income. As always, the Trust continues to benefit from strong relationships
with our financial sponsor partners which provides clear benefits including potential access to additional capital if needed, strategic
thinking alongside their management teams and high-quality and timely information which is only available in a private market setting.
This allows us to work constructively together and maximize the portfolio companies’ long-term health and value.
In closing, we
believe it is always appropriate to provide views on the Trust’s long-term dividend policy which is to say, ‘we believe that
long-term dividends should be a reflection of long-term core earnings power, even when core earnings power is lower as a result of a
higher quality asset mix’. The Trust’s recently announced dividend of $0.20 per share is in line with our most recently reported
net investment income of $0.20 per share. That said, as we continue to both (1) deploy the Trust’s excess liquidity and (2) seek
opportunities to shift the Trust’s non-yielding equity investments to senior secured loans, we expect long-term earnings power
to meet the dividend distribution.
Thank you for
your continued interest in and support of Barings Participation Investors.
Sincerely,
Christina Emery
President
Portfolio Composition as of 03/31/22*
* Based on market value of total investments
(including cash)
Cautionary Notice: Certain statements contained in this
report may be “forward looking” statements. Investors are cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date on which they are made and which reflect management’s current estimates, projections, expectations
or beliefs, and which are subject to risks and uncertainties that may cause actual results to differ materially. These statements are
subject to change at any time based upon economic, market or other conditions and may not be relied upon as investment advice or an indication
of the Trust’s trading intent. References to specific securities are not recommendations of such securities, and may not be representative
of the Trust’s current or future investments. We undertake no obligation to publicly update forward looking statements, whether
as a result of new information, future events, or otherwise.
Barings
Participation Investors
|
|
|
|
Average Annual Returns March 31, 2022 |
1 Year |
5 Year |
10 Year |
|
|
|
|
Barings Participation Investors |
9.85% |
6.08% |
6.73% |
Bloomberg Barclays U.S. Corporate High Yield Index |
-0.66% |
4.69% |
5.75% |
Data for Barings Participation Investors (the
“Trust”) represents returns based on the change in the Trust’s market price assuming the reinvestment of all dividends
and distributions. Past performance is no guarantee of future results.
The graph and table do not reflect the deduction
of taxes that a shareholder would pay on distributions from the Trust or the sale of shares.
In July 2017, the head
of the U.K. Financial Conduct Authority (the “FCA”), announced that the FCA will no longer persuade or compel banks to submit
rates for the calculation of LIBOR after 2021. In March 2021, the FCA confirmed that all LIBOR settings will either cease to be provided
by any administrator or no longer be representative: (a) immediately after December 31, 2021, in the case of sterling, euro, Swiss franc,
and Japanese yen, and the one week and two month U.S. dollar settings; and (b) immediately after June 30, 2023, in the case of the remaining
U.S. dollar settings. In addition, as a result of supervisory guidance from U.S. regulators, some U.S. regulated entities will cease
to enter into new LIBOR contracts after January 1, 2022. At this time, no consensus exists as to what rate or rates will become accepted
alternatives to LIBOR, although the Alternative Reference Rates Committee, a steering committee convened by the Board of Governors of
the Federal Reserve System and the Federal Reserve Bank of New York and comprised of large U.S. financial institutions, has recommended
the use of the Secured Overnight Financing Rate, SOFR. There are many uncertainties regarding a transition from LIBOR to SOFR or any
other alternative benchmark rate that may be established, including, but not limited to, the timing of any such transition, the need
to amend all contracts with LIBOR as the referenced rate and, given the inherent differences between LIBOR and SOFR or any other alternative
benchmark rate, how any transition may impact the cost and performance of impacted securities, variable rate debt and derivative financial
instruments. In addition, SOFR or another alternative benchmark rate may fail to gain market acceptance, which could adversely affect
the return on, value of and market for securities, variable rate debt and derivative financial instruments linked to such rates. The
effects of a transition from LIBOR to SOFR or any other alternative benchmark rate on our cost of capital and net investment income cannot
yet be determined definitively. All of our loan agreements with our portfolio companies include fallback language in the event that LIBOR
becomes unavailable. This language generally either includes a clearly defined alternative reference rate after LIBOR’s discontinuation
or provides that the administrative agent may identify a replacement reference rate, typically with the consent of (or prior consultation
with) the borrower. In certain cases, the administrative agent will be required to obtain the consent of either a majority of the lenders
under the facility, or the consent of each lender, prior to identifying a replacement reference rate. In addition, any further changes
or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which
could have an adverse impact on the market value for or value of any LIBOR-linked securities, loans, and other financial obligations
or extensions of credit held by or due to us and could have a material adverse effect on our business, financial condition and results
of operations.
Barings Participation
Investors
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
March 31, 2022
(Unaudited)
| |
| |
Assets: | |
| |
Investments (See Consolidated Schedule of Investments) | |
| | |
Corporate restricted securities - private placement investments at fair value (Cost - $160,751,267) | |
$ | 166,824,571 | |
Corporate restricted securities - rule 144A securities at fair value (Cost - $7,596,992) | |
| 8,006,113 | |
Corporate public securities at fair value (Cost - $4,571,044) | |
| 4,612,581 | |
| |
| | |
| |
| | |
Total investments (Cost - $172,919,303) | |
| 179,443,265 | |
| |
| | |
Cash | |
| 5,175,650 | |
Foreign currencies (Cost - $6,831) | |
| 6,914 | |
Dividend and interest receivable | |
| 1,896,405 | |
Receivable for investments sold | |
| 91,288 | |
Deferred financing fees | |
| 63,708 | |
Other assets | |
| 142,392 | |
| |
| | |
| |
| | |
Total assets | |
| 186,819,622 | |
| |
| | |
| |
| | |
Liabilities: | |
| | |
Note payable | |
| 15,000,000 | |
Credit facility | |
| 8,200,000 | |
Deferred tax liability | |
| 365,141 | |
Investment advisory fee payable | |
| 355,543 | |
Payable for investments purchased | |
| 290,250 | |
Interest payable | |
| 33,935 | |
Accrued expenses | |
| 58,017 | |
| |
| | |
| |
| | |
Total liabilities | |
| 24,302,886 | |
| |
| | |
| |
| | |
Commitments and Contingencies (See Note 7) | |
| | |
Total net assets | |
$ | 162,516,736 | |
| |
| | |
| |
| | |
Net Assets: | |
| | |
Common shares, par value $.01 per share | |
$ | 106,017 | |
Additional paid-in capital | |
| 145,010,902 | |
Total distributable earnings | |
| 17,399,817 | |
| |
| | |
| |
| | |
Total net assets | |
$ | 162,516,736 | |
| |
| | |
| |
| | |
Common shares issued and outstanding (14,787,750 authorized) | |
| 10,601,700 | |
| |
| | |
| |
| | |
Net asset value per share | |
$ | 15.33 | |
| |
| | |
See Notes to Consolidated Financial Statements
CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended March 31, 2022
(Unaudited)
| |
| |
Investment Income: | |
| | |
Interest | |
$ | 2,935,120 | |
Other | |
| 34,933 | |
| |
| | |
| |
| | |
Total investment income | |
| 2,970,053 | |
| |
| | |
| |
| | |
Expenses: | |
| | |
Investment advisory fees | |
| 355,543 | |
Interest | |
| 200,689 | |
Professional fees | |
| 73,565 | |
Trustees’ fees and expenses | |
| 69,000 | |
Reports to shareholders | |
| 22,500 | |
Custodian fees | |
| 6,000 | |
Other | |
| 28,342 | |
| |
| | |
| |
| | |
Total expenses | |
| 755,639 | |
| |
| | |
| |
| | |
Investment income - net | |
| 2,214,414 | |
| |
| | |
| |
| | |
Income tax, including excise tax expense | |
| 52,650 | |
| |
| | |
| |
| | |
Net investment income after taxes | |
| 2,161,764 | |
| |
| | |
| |
| | |
Net realized and unrealized loss on investments and foreign currency: | |
| | |
Net realized gain on investments before taxes | |
| 118,901 | |
Income tax expenses | |
| (21,004 | ) |
| |
| | |
| |
| | |
Net realized gain on investments after taxes | |
| 97,897 | |
| |
| | |
| |
| | |
Net increase in unrealized depreciation of investments before taxes | |
| (682,652 | ) |
Net increase in unrealized appreciation of foreign currency translation before taxes | |
| 77 | |
Net increase in deferred income tax expense | |
| (140,825 | ) |
| |
| | |
| |
| | |
Net increase in unrealized depreciation of investments and foreign currency transactions after taxes | |
| (823,400 | ) |
| |
| | |
| |
| | |
Net loss on investments and foreign currency | |
| (725,503 | ) |
| |
| | |
| |
| | |
Net increase in net assets resulting from operations | |
$ | 1,436,261 | |
| |
| | |
See Notes to Consolidated Financial Statements
Barings Participation
Investors
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended March 31, 2022
(Unaudited)
| |
| |
Net decrease in cash & foreign currencies: | |
| | |
Cash flows from operating activities: | |
| | |
Purchases of portfolio securities | |
$ | (9,467,410 | ) |
Proceeds from disposition of portfolio securities | |
| 2,579,827 | |
Interest, dividends and other income received | |
| 2,410,643 | |
Interest expense paid | |
| (198,536 | ) |
Operating expenses paid | |
| (589,937 | ) |
Income taxes paid | |
| (1,236,229 | ) |
| |
| | |
| |
| | |
Net cash used for operating activities | |
| (6,501,642 | ) |
| |
| | |
| |
| | |
Cash flows from financing activities: | |
| | |
Borrowings under credit facility | |
| 2,200,000 | |
Cash dividends paid from net investment income | |
| (2,120,340 | ) |
Financing fees paid | |
| (14,279 | ) |
| |
| | |
| |
| | |
Net cash provided by financing activities | |
| 65,381 | |
| |
| | |
| |
| | |
Net decrease in cash & foreign currencies | |
| (6,436,261 | ) |
Cash & foreign currencies - beginning of period | |
| 11,618,748 | |
Effects of foreign currency exchange rate changes on cash and cash equivalents | |
| 77 | |
| |
| | |
| |
| | |
Cash & foreign currencies - end of period | |
$ | 5,182,564 | |
| |
| | |
| |
| | |
| |
| | |
Reconciliation of net increase in net assets to net cash used for operating activities: | |
| | |
| |
| | |
| |
| | |
Net increase in net assets resulting from operations | |
$ | 1,436,261 | |
| |
| | |
| |
| | |
Increase in investments | |
| (6,344,157 | ) |
Increase in interest receivable | |
| (378,596 | ) |
Decrease in receivable for investments sold | |
| 349,380 | |
Decrease in other assets | |
| 108,330 | |
Increase in deferred tax liability | |
| 140,825 | |
Decrease in investment advisory fee payable | |
| (17,430 | ) |
Decrease in payable for investments purchased | |
| (618,199 | ) |
Decrease in accrued expenses | |
| (17,557 | ) |
Increase in interest payable | |
| 2,153 | |
Decrease in tax payable | |
| (1,162,575 | ) |
| |
| | |
| |
| | |
Total adjustments to net assets from operations | |
| (7,937,826 | ) |
| |
| | |
| |
| | |
Effects of foreign currency exchange rate changes on cash and cash equivalents | |
| (77 | ) |
| |
| | |
| |
| | |
Net cash used for operating activities | |
| (6,501,642 | ) |
| |
| | |
See Notes to Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the three months ended March 31, 2022
| |
For the three months ended 3/31/2021 (Unaudited)
| | |
For the year ended 12/31/2021
| |
Increase in net assets: | |
| | | |
| | |
| |
| | | |
| | |
Operations: | |
| | | |
| | |
Investment income - net | |
$ | 2,161,764 | | |
$ | 9,188,642 | |
Net realized gain on investments and foreign currency after taxes | |
| 97,897 | | |
| 4,867,781 | |
Net change in unrealized appreciation (depreciation) of investments and foreign currency after taxes | |
| (823,400 | ) | |
| 11,328,033 | |
| |
| | | |
| | |
| |
| | | |
| | |
Net increase in net assets resulting from operations | |
| 1,436,261 | | |
| 25,384,456 | |
| |
| | | |
| | |
| |
| | | |
| | |
Dividends to shareholders from: | |
| | | |
| | |
Distributable earnings to Common Stock Shareholders (2022 - $0.00 per share; 2021 - $0.80 per share) | |
| — | | |
| (8,481,360 | ) |
| |
| | | |
| | |
| |
| | | |
| | |
Total increase in net assets | |
| 1,436,261 | | |
| 16,903,096 | |
| |
| | | |
| | |
| |
| | | |
| | |
Net assets, beginning of period/year | |
| 161,080,475 | | |
| 144,177,379 | |
| |
| | | |
| | |
| |
| | | |
| | |
| |
| | | |
| | |
Net assets, end of period/year | |
$ | 162,516,736 | | |
$ | 161,080,475 | |
| |
| | | |
| | |
See Notes to Consolidated Financial Statements
Barings Participation
Investors
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest
outstanding:
| |
For
the three
months
ended
3/31/2022
| | |
For
the years ended December 31, | |
| |
(Unaudited) | | |
2021 | | |
2020 | | |
2019 | | |
2018 | | |
2017 | |
Net
asset value: | |
| | |
| | |
| | |
| | |
| | |
| |
Beginning
of period / year | |
$ | 15.19 | | |
$ | 13.60 | | |
$ | 13.80 | | |
$ | 13.18 | | |
$ | 13.91 | | |
$ | 13.15 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
investment income (a) | |
| 0.20 | | |
| 0.86 | | |
| 1.00 | | |
| 1.00 | | |
| 1.03 | | |
| 1.09 | |
Net
realized and unrealized gain (loss) on investments | |
| (0.06) | | |
| 1.53 | | |
| (0.40) | | |
| 0.69 | | |
| (0.68) | | |
| 0.75 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total
from investment operations | |
| 0.14 | | |
| 2.39 | | |
| 0.60 | | |
| 1.69 | | |
| 0.35 | | |
| 1.84 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Dividends
from net investment income to common shareholders | |
| — | | |
| (0.80) | | |
| (0.80) | | |
| (1.08) | | |
| (1.08) | | |
| (1.08) | |
Increase
/ (Decrease) from dividends reinvested | |
| — | | |
| 0.00 | | |
| 0.00
(b) | | |
| 0.01
(b) | | |
| (0.00)
(b) | | |
| (0.00)
(b) | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total
dividends | |
| — | | |
| (0.80) | | |
| (0.80) | | |
| (1.07) | | |
| (1.08) | | |
| (1.08) | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
asset value:
End of period / year | |
$ | 15.33 | | |
$ | 15.19 | | |
$ | 13.60 | | |
$ | 13.80 | | |
$ | 13.18 | | |
$ | 13.91 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Per share
market value: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
End
of period / year | |
$ | 13.39 | | |
$ | 14.80 | | |
$ | 11.88 | | |
$ | 16.13 | | |
$ | 15.05 | | |
$ | 14.10 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total
investment return | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
asset value (c) | |
| 0.92% | | |
| 17.84% | | |
| 4.66% | | |
| 13.21% | | |
| 2.53% | | |
| 14.29% | |
Market
value (c) | |
| (9.52%) | | |
| 32.09% | | |
| (21.11%) | | |
| 14.72% | | |
| 15.02% | | |
| 7.21% | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
assets (in millions): | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
End of
period / year | |
$ | 162.52 | | |
$ | 161.08 | | |
$ | 144.18 | | |
$ | 146.08 | | |
$ | 138.75 | | |
$ | 145.48 | |
Ratio
of total expenses to average net assets (d) | |
| 2.07%(e) | | |
| 2.66% | | |
| 1.47% | | |
| 2.26% | | |
| 2.76% | | |
| 3.23% | |
Ratio
of operating expenses to average net assets | |
| 1.39%(e) | | |
| 1.46% | | |
| 1.38% | | |
| 1.45% | | |
| 1.56% | | |
| 1.49% | |
Ratio
of interest expense to average net assets | |
| 0.50%(e) | | |
| 0.41% | | |
| 0.43% | | |
| 0.42% | | |
| 0.42% | | |
| 0.43% | |
Ratio
of income tax expense to average net assets | |
| 0.18%(e) | | |
| 0.79% | | |
| (0.34%) | | |
| 0.39% | | |
| 0.78% | | |
| 1.31% | |
Ratio
of net investment income to average net assets | |
| 5.40%(e) | | |
| 5.99% | | |
| 7.52% | | |
| 7.30% | | |
| 7.47% | | |
| 7.92% | |
Portfolio
turnover | |
| 1% | | |
| 43% | | |
| 34% | | |
| 22% | | |
| 48% | | |
| 24% | |
(a) | Calculated using average shares. |
(b) | Rounds to less than $0.01 per share. distributions which differs from the total investment return based
on the Trust’s market value due to the difference between the Trust’s net asset |
(c) | Net asset value return represents portfolio returns based on change in the Trust’s net asset value
assuming the reinvestment of all dividends and distributions which differs from the total investment return based on the Trust’s
market value due to the difference between the Trust’s net asset value and the market value of its shares outstanding; past performance
is no guarantee of future results. |
(d) | Total expenses include income tax expense. |
| |
| | |
| | |
| | |
| | |
| | |
| |
Senior borrowings: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total principal amount (in millions) | |
$ | 23.2 | | |
$ | 21 | | |
$ | 15 | | |
$ | 15 | | |
$ | 15 | | |
$ | 15 | |
Asset coverage per $1,000 of indebtedness | |
$ | 8,005 | | |
$ | 8,670 | | |
$ | 10,612 | | |
$ | 10,739 | | |
$ | 10,250 | | |
$ | 10,699 | |
See Notes to Consolidated Financial Statements
CONSOLIDATED SCHEDULE OF INVESTMENTS
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities - 107.58%: (A) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Private Placement Investments
- 102.65%: (C) | |
| | |
| |
| | |
| |
|
1WorldSync, Inc. |
A product information sharing platform that connects manufacturers/suppliers and key retailers via the Global Data Synchronization Network. |
6.75%
Term Loan due 06/24/2025 (LIBOR + 5.750%) | |
$ | 2,434,019 | | |
* | |
$ | 2,404,969 | | |
$ | 2,429,647 | |
* 07/01/19 and 12/09/20. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Accelerate
Learning | |
| | | |
| |
| | | |
| | |
A provider of standards-based, digital science education content of K-12 schools. |
6.01%
Term Loan due 12/31/2024 (LIBOR + 5.000%) | |
$ | 974,753 | | |
12/19/18 | |
| 965,913 | | |
| 958,507 | |
6.00%
Term Loan due 12/20/2024 (LIBOR + 5.000%) | |
$ | 746,495 | | |
09/30/21 | |
| 733,876 | | |
| 734,053 | |
| |
| | | |
| |
| 1,699,789 | | |
| 1,692,560 | |
Advanced
Manufacturing Enterprises LLC | |
| | | |
| |
| | | |
| | |
|
A designer and manufacturer of large, custom gearing products for a number of critical customer applications. |
Limited
Liability Company Unit (B) | |
| 1,945 uts. | | |
* | |
| 207,911 | | |
| — | |
* 12/07/12, 07/11/13 and 06/30/15. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Advantage
Software | |
| | | |
| |
| | | |
| | |
A provider of enterprise resource planning (ERP) software built for advertising and marketing agencies. |
Limited
Liability Company Unit Class A (F) | |
| 766 uts. | | |
10/01/21 | |
| 24,353 | | |
| 79,188 | |
Limited
Liability Company Unit Class A (F) | |
| 197 uts. | | |
10/01/21 | |
| 6,320 | | |
| 20,424 | |
Limited
Liability Company Unit Class B (F) | |
| 766 uts. | | |
10/01/21 | |
| 784 | | |
| 513 | |
Limited
Liability Company Unit Class B (F) | |
| 197 uts. | | |
10/01/21 | |
| 202 | | |
| 132 | |
| |
| | | |
| |
| 31,659 | | |
| 100,257 | |
Aftermath,
Inc. | |
| | | |
| |
| | | |
| | |
A provider of crime scene cleanup and biohazard remediation services. |
6.00%
Term Loan due 04/10/2025 (LIBOR + 5.000%) | |
$ | 963,473 | | |
04/09/19 | |
| 952,545 | | |
| 943,240 | |
6.00%
Term Loan due 04/10/2025 (LIBOR + 5.000%) | |
$ | 757,719 | | |
04/23/21 | |
| 747,239 | | |
| 741,807 | |
| |
| | | |
| |
| 1,699,784 | | |
| 1,685,047 | |
AIT
Worldwide Logistics, Inc. | |
| | | |
| |
| | | |
| | |
A provider of domestic and international third-party logistics services. |
8.75%
Second Lien Term Loan due 03/31/2029
(LIBOR + 7.750%) | |
$ | 1,669,355 | | |
04/06/21 | |
| 1,636,431 | | |
| 1,633,180 | |
Limited
Liability Company Unit (B) | |
| 56 uts. | | |
04/06/21 | |
| 55,645 | | |
| 109,548 | |
| |
| | | |
| |
| 1,692,076 | | |
| 1,742,728 | |
AMS
Holding LLC | |
| | | |
| |
| | | |
| | |
|
A leading multi-channel direct marketer of high-value collectible coins and proprietary-branded jewelry and watches. |
Limited
Liability Company Unit Class A Preferred (B)(F) | |
| 114 uts. | | |
10/04/12 | |
| 113,636 | | |
| 244,986 | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Amtech Software | |
| | |
| |
| | |
| |
A provider of enterprise resource planning software and technology solutions for packaging manufacturers. |
6.25%
First Lien Term Loan due 11/02/2027 (LIBOR + 5.500%) (G) | |
$ | 1,000,000 | | |
11/02/21 | |
$ | 526,824 | | |
$ | 528,214 | |
| |
| | | |
| |
| | | |
| | |
ASC
Holdings, Inc. | |
| | | |
| |
| | | |
| | |
|
A manufacturer of capital equipment used by corrugated box manufacturers. |
13%
Senior Subordinated Note due 12/31/2024 | |
$ | 805,872 | | |
11/19/15 | |
| 805,858 | | |
| 718,838 | |
Limited
Liability Company Unit (B) | |
| 111,100 uts. | | |
11/18/15 | |
| 111,100 | | |
| 18,576 | |
| |
| | | |
| |
| 916,958 | | |
| 737,414 | |
ASPEQ
Holdings | |
| | | |
| |
| | | |
| | |
|
A manufacturer of highly-engineered electric heating parts and equipment for a range of industrial, commercial, transportation and marine applications. |
6.26%
Term Loan due 10/31/2025
(LIBOR + 5.250%) | |
$ | 1,131,056 | | |
11/08/19 | |
| 1,120,862 | | |
| 1,131,056 | |
| |
| | | |
| |
| | | |
| | |
Audio
Precision | |
| | | |
| |
| | | |
| | |
|
A provider of high-end audio test and measurement sensing instrumentation software and accessories. |
7.00%
Term Loan due 07/27/2024
(LIBOR + 6.000%) | |
$ | 1,746,000 | | |
10/30/18 | |
| 1,730,961 | | |
| 1,746,000 | |
| |
| | | |
| |
| | | |
| | |
Aurora
Parts & Accessories LLC | |
| | | |
| |
| | | |
| | |
A distributor of aftermarket over-the-road semi-trailer parts and accessories sold to customers across North America. |
Preferred
Stock (B) | |
| 210 shs. | | |
08/17/15 | |
| 209,390 | | |
| 209,390 | |
Common
Stock (B) | |
| 210 shs. | | |
08/17/15 | |
| 210 | | |
| 145,107 | |
| |
| | | |
| |
| 209,600 | | |
| 354,497 | |
BDP
International, Inc. | |
| | | |
| |
| | | |
| | |
A provider of transportation and related services to the chemical and life sciences industries. |
6.25%
Term Loan due 12/14/2024 (LIBOR + 5.250%) | |
$ | 2,384,888 | | |
12/18/18 | |
| 2,363,340 | | |
| 2,384,888 | |
6.25%
Incremental Term Loan due 12/19/2024
(LIBOR + 5.250%) | |
$ | 42,598 | | |
12/07/20 | |
| 42,024 | | |
| 42,598 | |
6.25%
Incremental Term Loan due 12/21/2024
(LIBOR + 5.250%) | |
$ | 40,854 | | |
03/30/21 | |
| 40,256 | | |
| 40,854 | |
| |
| | | |
| |
| 2,445,620 | | |
| 2,468,340 | |
Best
Lawyers (Azalea Investment Holdings, LLC) | |
| | | |
| |
| | | |
| | |
A global digital media company that provides ranking and marketing services to the legal community. |
12.00%
HoldCo PIK Note due 05/19/2028 | |
$ | 289,712 | | |
11/30/21 | |
| 284,217 | | |
| 284,561 | |
6.25%
First Lien Term Loan due 11/19/2027 (LIBOR + 5.250%) (G) | |
$ | 1,391,058 | | |
11/30/21 | |
| 1,033,063 | | |
| 1,034,597 | |
Limited
Liability Company Unit | |
| 44,231 uts. | | |
11/30/21 | |
| 44,231 | | |
| 44,231 | |
| |
| | | |
| |
| 1,361,511 | | |
| 1,363,389 | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
| Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost
| | |
Fair Value
| |
| |
| | | |
| |
| | | |
| | |
Blue
Wave Products, Inc. | |
| | | |
| |
| | | |
| | |
A distributor of pool supplies. | |
| | | |
| |
| | | |
| | |
Common
Stock (B) | |
| 51,064 shs. | | |
10/12/12 | |
$ | 51,064 | | |
$ | 138,521 | |
Warrant,
exercisable until 2022, to purchase common
stock at $.01 per share (B) | |
| 20,216 shs. | | |
10/12/12 | |
| 20,216 | | |
| 54,638 | |
| |
| | | |
| |
| 71,280 | | |
| 193,159 | |
BrightSign | |
| | | |
| |
| | | |
| | |
|
A provider of digital signage hardware and software solutions, serving a variety of end markets, including retail, restaurants, government, sports, and entertainment. |
6.75%
Term Loan due 10/14/2027 (LIBOR + 5.750%) (G) | |
$ | 1,424,643 | | |
10/14/21 | |
| 1,277,263 | | |
| 1,266,221 | |
Limited
Liability Company Unit (F) | |
| 111,835 uts. | | |
10/14/21 | |
| 111,835 | | |
| 111,835 | |
| |
| | | |
| |
| 1,389,098 | | |
| 1,378,056 | |
Brown
Machine LLC | |
| | | |
| |
| | | |
| | |
|
A designer and manufacturer of thermoforming equipment used in the production of plastic packaging containers within the food and beverage industry. |
6.25%
Term Loan due 10/04/2024
(LIBOR + 5.250%) | |
$ | 808,993 | | |
10/03/18 | |
| 804,158 | | |
| 808,993 | |
| |
| | | |
| |
| | | |
| | |
Cadence,
Inc. | |
| | | |
| |
| | | |
| | |
A full-service contract manufacturer (“CMO”) and supplier of advanced products, technologies, and services to medical device, life science, and industrial companies. |
6.00%
First Lien Term Loan due 04/30/2025 (LIBOR + 5.000%) | |
$ | 879,427 | | |
05/14/18 | |
| 871,513 | | |
| 844,250 | |
| |
| | | |
| |
| | | |
| | |
Cadent,
LLC | |
| | | |
| |
| | | |
| | |
A provider of advertising solutions driven by data and technology. |
6.00%
Term Loan due 09/07/2023
(LIBOR + 5.000%) | |
$ | 890,428 | | |
09/04/18 | |
| 887,844 | | |
| 890,428 | |
| |
| | | |
| |
| | | |
| | |
CAi
Software | |
| | | |
| |
| | | |
| | |
A vendor of mission-critical, production-oriented software to niche manufacturing and distribution sectors. |
7.25%
Term Loan due 12/10/2028 (LIBOR + 6.250%) (G) | |
$ | 2,500,000 | | |
12/13/21 | |
| 2,216,388 | | |
| 2,219,254 | |
| |
| | | |
| |
| | | |
| | |
Cash
Flow Management | |
| | | |
| |
| | | |
| | |
A software provider that integrates core banking systems with branch technology and creates modern retail banking experiences for financial institutions. |
6.25%
Term Loan due 12/27/2027 (LIBOR + 5.250%) (G) | |
$ | 986,967 | | |
12/28/21 | |
| 893,448 | | |
| 894,300 | |
| |
| | | |
| |
| | | |
| | |
Claritas
Holdings, Inc. | |
| | | |
| |
| | | |
| | |
|
A market research company that provides market segmentation insights to customers engaged in direct-to-consumer and business-to-business marketing activities. |
6.76%
Term Loan due 12/31/2023
(LIBOR + 5.750%) | |
$ | 1,533,322 | | |
12/20/18 | |
| 1,520,117 | | |
| 1,533,322 | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
CloudWave | |
| | |
| |
| | |
| |
A provider of managed cloud hosting and IT services for hospitals. |
7.00%
Term Loan due 01/04/2027
(LIBOR + 6.000%) | |
$ | 1,652,661 | | |
01/29/21 | |
$ | 1,622,807 | | |
$ | 1,563,418 | |
Limited
Liability Company Unit (B) (F) | |
| 55,645 uts. | | |
01/29/21 | |
| 55,645 | | |
| 34,305 | |
| |
| | | |
| |
| 1,678,452 | | |
| 1,597,723 | |
Cogency
Global | |
| | | |
| |
| | | |
| | |
A provider of statutory representation and compliance services for corporate and professional services clients. |
6.25%
Term Loan due 12/28/2027
(LIBOR + 5.500%) | |
$ | 972,449 | | |
02/14/22 | |
| 892,807 | | |
| 892,389 | |
Preferred
Stock | |
| 28 shs. | | |
02/14/22 | |
| 27,551 | | |
| 27,550 | |
| |
| | | |
| |
| 920,358 | | |
| 919,939 | |
Command
Alkon | |
| | | |
| |
| | | |
| | |
|
A vertical-market software and technology provider to the heavy building materials industry delivering purpose-built, mission critical products that serve as the core operating & production systems for ready-mix concrete producers, asphalt producers, and aggregate suppliers. |
8.00%
Term Loan due 04/17/2027 (LIBOR + 7.000%) (G) | |
$ | 2,489,559 | | |
* | |
| 2,000,152 | | |
| 2,045,868 | |
Limited
Liability Company Unit (B)(F) | |
| 18 uts. | | |
04/23/20 | |
| 18,006 | | |
| 20,113 | |
Limited
Liability Company Unit Class B | |
| 6,629 uts. | | |
04/23/20 | |
| — | | |
| 39,486 | |
*
04/23/20, 10/30/20 and 11/18/20. | |
| | | |
| |
| 2,018,158 | | |
| 2,105,467 | |
| |
| | | |
| |
| | | |
| | |
Concept
Machine Tool Sales, LLC | |
| | | |
| |
| | | |
| | |
|
A full-service distributor of high-end machine tools and metrology equipment, exclusively representing a variety of global manufacturers in the Upper Midwest. |
6.00%
Term Loan due 01/31/2025
(LIBOR + 5.000%) | |
$ | 584,016 | | |
01/30/20 | |
| 577,393 | | |
| 548,683 | |
Limited
Liability Company Unit (F) | |
| 1,237 shs. | | |
* | |
| 49,559 | | |
| 10,210 | |
*
01/30/20 and 03/05/21 | |
| | | |
| |
| 626,952 | | |
| 558,893 | |
| |
| | | |
| |
| | | |
| | |
CTS
Engines | |
| | | |
| |
| | | |
| | |
|
A provider of maintenance, repair and overhaul services within the aerospace & defense market. |
6.26%
Term Loan due 12/22/2026
(LIBOR + 5.250%) | |
$ | 1,388,868 | | |
12/22/20 | |
| 1,366,976 | | |
| 1,329,147 | |
| |
| | | |
| |
| | | |
| | |
Dart
Buyer, Inc. | |
| | | |
| |
| | | |
| | |
|
A manufacturer of helicopter aftermarket equipment and OEM Replacement parts for rotorcraft operators, providers and OEMs. |
6.25%
Term Loan due 04/01/2025
(LIBOR + 5.250%) (G) | |
$ | 1,689,077 | | |
04/01/19 | |
| 1,537,636 | | |
| 1,554,527 | |
| |
| | | |
| |
| | | |
| | |
Decks
Direct | |
| | | |
| |
| | | |
| | |
An eCommerce direct-to-consumer seller of specialty residential decking products in the United States. |
7.00%
Term Loan due 12/28/2026 (LIBOR + 6.000%) (G) | |
$ | 1,630,909 | | |
12/29/21 | |
| 1,499,589 | | |
| 1,500,736 | |
Limited
Liability Company Unit | |
| 2,209 uts. | | |
12/29/21 | |
| 94,091 | | |
| 94,097 | |
| |
| | | |
| |
| 1,593,680 | | |
| 1,594,833 | |
| |
| | | |
| |
| | | |
| | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Del Real LLC | |
| | |
| |
| | |
| |
A manufacturer and distributor of fully-prepared fresh refrigerated Hispanic entrees as well as side dishes that are typically sold on a heat-and-serve basis at retail grocers. |
11%
Senior Subordinated Note due 04/06/2023 (D) | |
$ | 1,420,588 | | |
10/07/16 | |
$ | 1,403,759 | | |
$ | 1,275,688 | |
Limited
Liability Company Unit (B)(F) | |
| 368,799 uts. | | |
* | |
| 368,928 | | |
| 29,467 | |
*
10/07/16, 07/25/18, 03/13/19 and 06/17/19. | |
| | | |
| |
| 1,772,687 | | |
| 1,305,155 | |
| |
| | | |
| |
| | | |
| | |
DistroKid
(IVP XII DK Co-Invest, LP) | |
| | | |
| |
| | | |
| | |
|
A subscription-based music distribution platform that allows artists to easily distribute, promote, and monetize their music across digital service providers, such as Spotify and Apple Music. |
6.75%
Term Loan due 09/30/2027
(LIBOR + 5.750%) | |
$ | 1,647,467 | | |
10/01/21 | |
| 1,617,256 | | |
| 1,620,008 | |
Limited
Liability Company Unit (F) | |
| 73,333 uts. | | |
10/01/21 | |
| 73,404 | | |
| 73,333 | |
| |
| | | |
| |
| 1,690,660 | | |
| 1,693,341 | |
Dunn
Paper | |
| | | |
| |
| | | |
| | |
|
A provider of specialty paper for niche product applications. |
10.26%
Second Lien Term Loan due 08/31/2023
(LIBOR + 9.250%) | |
$ | 1,725,000 | | |
09/28/16 | |
| 1,714,183 | | |
| 1,223,025 | |
| |
| | | |
| |
| | | |
| | |
Dwyer
Instruments, Inc. | |
| | | |
| |
| | | |
| | |
A designer and manufacturer of precision measurement and control products for use with solids, liquids and gases. |
6.51%
Term Loan due 07/01/2027
(LIBOR + 5.500%) | |
$ | 1,000,000 | | |
07/20/21 | |
| 850,739 | | |
| 853,051 | |
| |
| | | |
| |
| | | |
| | |
Echo
Logistics | |
| | | |
| |
| | | |
| | |
|
A provider of tech-enabled freight brokerage across various modes including Truckload, Less-than-Truckload, Parcel, and Intermodal, as well as managed (contracted) transportation services. |
7.75%
Second Lien Term Loan due 11/05/2029
(LIBOR + 7.250%) | |
$ | 1,679,204 | | |
11/22/21 | |
| 1,651,133 | | |
| 1,653,300 | |
Limited
Liability Company Unit | |
| 46 uts. | | |
11/22/21 | |
| 45,796 | | |
| 45,800 | |
| |
| | | |
| |
| 1,696,929 | | |
| 1,699,100 | |
EFI
Productivity Software | |
| | | |
| |
| | | |
| | |
A provider of ERP software solutions purpose-built for the print and packaging industry. | |
6.76%
Term Loan due 12/30/2027 (LIBOR + 5.75%) (G) | |
$ | 1,000,000 | | |
12/30/21 | |
| 907,828 | | |
| 908,655 | |
| |
| | | |
| |
| | | |
| | |
Electric
Power Systems International, Inc. | |
| | | |
| |
| | | |
| | |
|
A provider of electrical testing services for apparatus equipment and protection & controls infrastructure. |
6.75%
Term Loan due 04/19/2028 (LIBOR + 5.750%) (G) | |
$ | 1,247,434 | | |
04/19/21 | |
| 1,111,950 | | |
| 1,116,464 | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Elite Sportswear Holding, LLC | |
| | |
| |
| | |
| |
A designer and manufacturer of gymnastics, competitive cheerleading and swimwear apparel in the U.S. and internationally. |
Limited
Liability Company Unit (B)(F) | |
| 1,218,266 uts. | | |
10/14/16 | |
$ | 159,722 | | |
$ | — | |
| |
| | | |
| |
| | | |
| | |
Ellkay | |
| | | |
| |
| | | |
| | |
A provider of data interoperability solutions for labs, hospitals and healthcare providers. | |
6.85%
Term Loan due 09/14/2027
(LIBOR + 5.750%) | |
$ | 703,900 | | |
09/14/21 | |
| 691,048 | | |
| 692,389 | |
| |
| | | |
| |
| | | |
| | |
English
Color & Supply LLC | |
| | | |
| |
| | | |
| | |
A distributor of aftermarket automotive paint and related products to collision repair shops, auto dealerships and fleet customers through a network of stores in the Southern U.S. |
11.5%
(0.5% PIK) Senior Subordinated Note
due 12/31/2023 | |
$ | 1,359,186 | | |
06/30/17 | |
| 1,350,803 | | |
| 1,359,186 | |
Limited
Liability Company Unit (B)(F) | |
| 397,695 uts. | | |
06/30/17 | |
| 397,695 | | |
| 783,936 | |
| |
| | | |
| |
| 1,748,498 | | |
| 2,143,122 | |
ENTACT
Environmental Services, Inc. | |
| | | |
| |
| | | |
| | |
|
A provider of environmental remediation and geotechnical services for blue-chip companies with regulatory-driven liability enforcement needs. |
7.76%
Term Loan due 12/15/2025
(LIBOR + 6.750%) | |
$ | 1,012,672 | | |
02/09/21 | |
| 1,004,925 | | |
| 988,368 | |
| |
| | | |
| |
| | | |
| | |
eShipping | |
| | | |
| |
| | | |
| | |
|
An asset-life third party logistics Company that serves a broad variety of end markets and offers service across all major transportation modes. |
6.75%
Term Loan due 11/05/2027 (LIBOR + 5.750%) (G) | |
$ | 1,721,847 | | |
11/05/21 | |
| 1,301,938 | | |
| 1,304,283 | |
| |
| | | |
| |
| | | |
| | |
E.S.P.
Associates, P.A. | |
| | | |
| |
| | | |
| | |
A professional services firm providing engineering, surveying and planning services to infrastructure projects. |
Limited
Liability Company Unit (B) | |
| 273 uts. | | |
* | |
| 295,518 | | |
| 247,797 | |
*
06/29/18 and 12/29/20. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
F
G I Equity LLC | |
| | | |
| |
| | | |
| | |
|
A manufacturer of a broad range of filters and related products that are used in commercial, light industrial, healthcare, gas turbine, nuclear, laboratory, clean room, hotel, educational system, and food processing settings. |
Limited
Liability Company Unit Class B-1 (B) | |
| 49,342 uts. | | |
12/15/10 | |
| 42,343 | | |
| 736,278 | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate
Restricted Securities: (A) (Continued) | |
| Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost
| | |
Fair Value
| |
| |
| | | |
| |
| | | |
| | |
Follett
School Solutions | |
| | | |
| |
| | | |
| | |
A provider of software for K-12 school libraries. |
| | |
6.50%
First Lien Term Loan due 07/09/2028 (LIBOR + 5.750%) | |
$ | 1,705,621 | | |
08/31/21 | |
$ | 1,672,446 | | |
$ | 1,678,142 | |
LP
Units (B)(F) | |
| 881 uts. | | |
08/30/21 | |
| 8,805 | | |
| 8,805 | |
LP
Interest (B)(F) | |
| 200 shs. | | |
08/30/21 | |
| 2,003 | | |
| 2,003 | |
| |
| | | |
| |
| 1,683,254 | | |
| 1,688,950 | |
FragilePAK | |
| | | |
| |
| | | |
| | |
A provider of third-party logistics services focused on the full delivery life-cycle for big and bulky products. |
5.96%
Term Loan due 05/24/2027 (LIBOR + 5.750%) (G) | |
$ | 1,611,797 | | |
05/21/21 | |
| 1,034,652 | | |
| 984,085 | |
Limited
Liability Company Unit (B)(F) | |
| 108 shs. | | |
05/21/21 | |
| 107,813 | | |
| 92,948 | |
| |
| | | |
| |
| 1,142,465 | | |
| 1,077,033 | |
GD
Dental Services LLC | |
| | | |
| |
| | | |
| | |
|
A provider of convenient “onestop” general, specialty, and cosmetic dental services with 21 offices located throughout South and Central Florida. |
Limited
Liability Company Unit Preferred (B) | |
| 76 uts. | | |
10/05/12 | |
| 75,920 | | |
| 28,399 | |
Limited
Liability Company Unit Common (B) | |
| 767 uts. | | |
10/05/12 | |
| 767 | | |
| — | |
| |
| | | |
| |
| 76,687 | | |
| 28,399 | |
gloProfessional
Holdings, Inc. | |
| | | |
| |
| | | |
| | |
|
A marketer and distributor of premium mineral-based cosmetics, cosmeceuticals and professional hair care products to the professional spa and physician’s office channels. |
Preferred
Stock (B) | |
| 650 shs. | | |
03/29/19 | |
| 649,606 | | |
| 814,392 | |
Common
Stock (B) | |
| 1,181 shs. | | |
03/27/13 | |
| 118,110 | | |
| 22,023 | |
| |
| | | |
| |
| 767,716 | | |
| 836,415 | |
GraphPad
Software, Inc. | |
| | | |
| |
| | | |
| | |
|
A provider of data analysis, statistics and graphing software solution for scientific research applications, with a focus on the life sciences and academic end-markets. |
7.01%
Term Loan due 12/15/2023
(LIBOR + 6.000%) | |
$ | 2,390,711 | | |
* | |
| 2,376,990 | | |
| 2,402,665 | |
6.50%
Term Loan due 04/27/2027
(LIBOR + 5.500%) | |
$ | 84,102 | | |
04/27/21 | |
| 82,681 | | |
| 84,523 | |
Preferred
Stock (B)(F) | |
| 3,737 shs. | | |
04/27/21 | |
| 103,147 | | |
| 121,966 | |
*
12/19/17 and 04/16/19. | |
| | | |
| |
| 2,562,818 | | |
| 2,609,154 | |
| |
| | | |
| |
| | | |
| | |
Handi
Quilter Holding Company (Premier Needle Arts) | |
| | | |
| |
| | | |
| | |
|
A designer and manufacturer of long-arm quilting machines and related components for the consumer quilting market. |
Limited
Liability Company Unit Preferred (B) | |
| 372 uts. | | |
* | |
| 371,644 | | |
| 530,231 | |
Limited
Liability Company Unit Common Class A (B) | |
| 3,594 uts. | | |
12/19/14 | |
| — | | |
| — | |
*12/19/14
and 04/29/16. | |
| | | |
| |
| 371,644 | | |
| 530,231 | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Heartland Veterinary Partners | |
| | |
| |
| | |
| |
A veterinary support organization that provides a comprehensive set of general veterinary services as well as ancillary services such as boarding and grooming. |
11.00%
Opco PIK Note due 11/09/2028 (G) | |
$ | 1,725,000 | | |
11/17/21 | |
$ | 1,570,925 | | |
$ | 1,573,869 | |
| |
| | | |
| |
| | | |
| | |
HHI
Group, LLC | |
| | | |
| |
| | | |
| | |
|
A developer, marketer, and distributor of hobby-grade radio control products. |
Limited
Liability Company Unit (B)(F) | |
| 102 uts. | | |
01/17/14 | |
| 101,563 | | |
| 553,889 | |
| |
| | | |
| |
| | | |
| | |
Home
Care Assistance, LLC | |
| | | |
| |
| | | |
| | |
A provider of private pay non-medical home care assistance services. |
5.75%
Term Loan due 03/30/2027 (LIBOR + 4.750%) | |
$ | 850,872 | | |
03/26/21 | |
| 836,705 | | |
| 836,518 | |
| |
| | | |
| |
| | | |
| | |
HOP
Entertainment LLC | |
| | | |
| |
| | | |
| | |
|
A provider of post production equipment and services to producers of television shows and motion pictures. |
Limited
Liability Company Unit Class F (B)(F) | |
| 47 uts. | | |
10/14/11 | |
| — | | |
| — | |
Limited
Liability Company Unit Class G (B)(F) | |
| 114 uts. | | |
10/14/11 | |
| — | | |
| — | |
Limited
Liability Company Unit Class H (B)(F) | |
| 47 uts. | | |
10/14/11 | |
| — | | |
| — | |
Limited
Liability Company Unit Class I (B)(F) | |
| 47 uts. | | |
10/14/11 | |
| — | | |
| — | |
| |
| | | |
| |
| — | | |
| — | |
IGL
Holdings III Corp. | |
| | | |
| |
| | | |
| | |
A specialty label and flexible packaging converter. | |
6.75%
Term Loan due 10/23/2026 (LIBOR + 5.750%) (G) | |
$ | 1,708,189 | | |
11/02/20 | |
| 1,499,333 | | |
| 1,498,852 | |
| |
| | | |
| |
| | | |
| | |
IM
Analytics Holdings, LLC | |
| | | |
| |
| | | |
| | |
|
A provider of test and measurement equipment used for vibration, noise, and shock testing. |
8.01%
Term Loan due 11/22/2023 (LIBOR + 7.000%) | |
$ | 1,044,550 | | |
11/21/19 | |
| 1,040,238 | | |
| 826,761 | |
Warrant,
exercisable until 2026, to purchase common
stock at $.01 per share (B) | |
| 8,885 shs. | | |
11/25/19 | |
| — | | |
| — | |
| |
| | | |
| |
| 1,040,238 | | |
| 826,761 | |
Industrial
Service Solutions | |
| | | |
| |
| | | |
| | |
|
A provider of maintenance, repair and overhaul services for process equipment within the industrial, energy and power end-markets. |
6.51%
Term Loan due 01/31/2026
(LIBOR + 5.500%) | |
$ | 885,785 | | |
02/05/20 | |
| 874,422 | | |
| 847,697 | |
| |
| | | |
| |
| | | |
| | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
JF Petroleum Group | |
| | |
| |
| | |
| |
A provider of repair, maintenance, instalation and projection management servicese to the US fueling infrastructure industry. |
6.50%
Term Loan due 04/20/2026
(LIBOR + 5.500%) | |
$ | 681,428 | | |
05/04/21 | |
$ | 664,702 | | |
$ | 651,445 | |
| |
| | | |
| |
| | | |
| | |
Jones
Fish | |
| | | |
| |
| | | |
| | |
A provider of lake management services, fish stocking and pond aeration sales and services. |
6.50%
First Lien Term Loan due 12/20/2027 (LIBOR + 5.500%) (G) | |
$ | 1,261,603 | | |
02/28/22 | |
| 1,072,196 | | |
| 1,071,814 | |
Common
Stock (F) | |
| 384 shs. | | |
02/28/22 | |
| 38,397 | | |
| 38,397 | |
| |
| | | |
| |
| 1,110,593 | | |
| 1,110,211 | |
Kano
Laboratories LLC | |
| | | |
| |
| | | |
| | |
|
A producer of industrial strength penetrating oils and lubricants. |
6.00%
Term Loan due 09/30/2026 (LIBOR + 5.000%) (G) | |
$ | 1,245,108 | | |
11/18/20 | |
| 830,858 | | |
| 828,365 | |
6.00%
Term Loan due 10/31/2027 (LIBOR + 5.000%) (G) | |
$ | 452,766 | | |
11/08/21 | |
| 269,845 | | |
| 270,446 | |
Limited
Liability Company Unit | |
| 20 uts. | | |
11/19/20 | |
| 19,757 | | |
| 19,760 | |
| |
| | | |
| |
| 1,120,460 | | |
| 1,118,571 | |
LeadsOnline | |
| | | |
| |
| | | |
| | |
|
A nationwide provider of data, technology and intelligence tools used by law enforcement agencies, investigators, and businesses. |
6.00%
Term Loan due 12/23/2027 (LIBOR + 5.000%) (G) | |
$ | 1,721,258 | | |
02/07/22 | |
| 1,467,368 | | |
| 1,466,624 | |
Limited
Liability Company Unit (F) | |
| 4,528 uts. | | |
02/07/22 | |
| 4,528 | | |
| 4,528 | |
| |
| | | |
| |
| 1,471,896 | | |
| 1,471,152 | |
LYNX
Franchising | |
| | | |
| |
| | | |
| | |
|
A global franchisor of B2B services including commercial janitorial services, shared office space solutions, and textile and electronics restoration services. |
7.25%
Term Loan due 12/18/2026
(LIBOR + 6.250%) | |
$ | 2,483,144 | | |
* | |
| 2,442,360 | | |
| 2,438,356 | |
* 12/22/20 and 09/09/21 | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Manhattan
Beachwear Holding Company | |
| | | |
| |
| | | |
| | |
A designer and distributor of women’s swimwear. | | |
12.5%
Senior Subordinated Note due 05/30/2022 (D) | |
$ | 419,971 | | |
01/15/10 | |
| 404,121 | | |
| — | |
15%
(2.5% PIK) Senior Subordinated Note
due 05/30/2022 (D) | |
$ | 115,253 | | |
10/05/10 | |
| 114,604 | | |
| — | |
Common
Stock (B) | |
| 35 shs. | | |
10/05/10 | |
| 35,400 | | |
| — | |
Common
Stock Class B (B) | |
| 118 shs. | | |
01/15/10 | |
| 117,647 | | |
| — | |
Warrant,
exercisable until 2023, to purchase common
stock at $.01 per share (B) | |
| 104 shs. | | |
10/05/10 | |
| 94,579 | | |
| — | |
| |
| | | |
| |
| 766,351 | | |
| — | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Marshall Excelsior Co. | |
| | |
| |
| | |
| |
A designer, manufacturer and supplier of mission critical, highly engineered flow control products used in the transportation, storage and consumption of liquified petroleum gas, liquified anhydrous ammonia, refined industrial and cryogenic gasses. |
6.50%
Term Loan due 02/18/2028
(SOFR + 5.500%) (G) | |
$ | 580,882 | | |
02/24/22 | |
$ | 520,718 | | |
$ | 520,550 | |
| |
| | | |
| |
| 520,718 | | |
| 520,550 | |
Master
Cutlery LLC | |
| | | |
| |
| | | |
| | |
A designer and marketer of a wide assortment of knives and swords. |
13.00%
Senior Subordinated Note due 07/20/2022 (D) | |
$ | 868,102 | | |
04/17/15 | |
| 867,529 | | |
| 58,163 | |
Limited
Liability Company Unit | |
| 5 uts. | | |
04/17/15 | |
| 678,329 | | |
| — | |
| |
| | | |
| |
| 1,545,858 | | |
| 58,163 | |
Media
Recovery, Inc. | |
| | | |
| |
| | | |
| | |
|
A global manufacturer and developer of shock, temperature, vibration and other condition indicators and monitors for in-transit and storage applications. |
7.00%
First Out Term Loan due 11/22/2025 (SOFR + 6.000%) | |
$ | 488,583 | | |
11/25/19 | |
| 482,536 | | |
| 488,583 | |
| |
| | | |
| |
| | | |
| | |
MES
Partners, Inc. | |
| | | |
| |
| | | |
| | |
|
An industrial service business offering an array of cleaning and environmental services to the Gulf Coast region of the U.S. |
Preferred
Stock Series A (B) | |
| 30,926 shs. | | |
07/25/19 | |
| 12,412 | | |
| — | |
Preferred
Stock Series C (B) | |
| 1,275 shs. | | |
09/22/20 | |
| 457,365 | | |
| — | |
Common
Stock Class B (B) | |
| 259,252 shs. | | |
* | |
| 244,163 | | |
| — | |
Warrant,
exercisable until 2030, to purchase common
stock at $.01 per share (B) | |
| 351,890 shs. | | |
09/22/20 | |
| — | | |
| — | |
*
09/30/14 and 02/28/18. | |
| | | |
| |
| 713,940 | | |
| — | |
| |
| | | |
| |
| | | |
| | |
MeTEOR
Education LLC | |
| | | |
| |
| | | |
| | |
|
A leading provider of classroom and common area design services, furnishings, equipment and instructional support to K-12 schools. |
12.00%
Senior Subordinated Note due 03/20/2024 | |
$ | 915,819 | | |
03/09/18 | |
| 911,064 | | |
| 897,503 | |
12.00%
Senior Subordinated Debt due 03/31/2025 | |
$ | 351,088 | | |
03/31/22 | |
| 344,066 | | |
| 344,066 | |
Limited
Liability Company Unit (B)(F) | |
| 190 uts. | | |
03/09/18 | |
| 200,718 | | |
| 412,709 | |
| |
| | | |
| |
| 1,455,848 | | |
| 1,654,278 | |
MNS
Engineers, Inc. | |
| | | |
| |
| | | |
| | |
|
A consulting firm that provides civil engineering, construction management and land surveying services. |
5.96%
Term Loan due 07/30/2027 (LIBOR + 5.500%) | |
$ | 1,197,000 | | |
08/09/21 | |
| 1,175,600 | | |
| 1,177,848 | |
Limited
Liability Company Unit (B) | |
| 100,000 uts. | | |
08/09/21 | |
| 100,000 | | |
| 100,000 | |
| |
| | | |
| |
| 1,275,600 | | |
| 1,277,848 | |
| |
| | | |
| |
| | | |
| | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Music Reports, Inc. | |
| | |
| |
| | |
| |
An administrator of comprehensive offering of rights and royalties solutions for music and cue sheet copyrights to music and entertainment customers. |
7.00%
Incremental Term Loan due 08/21/2026
(LIBOR + 6.000%) | |
$ | 820,507 | | |
11/05/21 | |
$ | 805,475 | | |
$ | 802,767 | |
7.00%
Term Loan due 08/21/2026
(LIBOR + 6.000%) | |
$ | 597,605 | | |
08/25/20 | |
| 586,642 | | |
| 584,685 | |
| |
| | | |
| |
| 1,392,117 | | |
| 1,387,452 | |
Narda-MITEQ
(JFL-Narda Partners, LLC) | |
| | | |
| |
| | | |
| | |
|
A manufacturer of radio frequency and microwave components and assemblies. |
6.25%
First Lien Term Loan due 11/30/2027 (LIBOR + 5.250%) (G) | |
$ | 763,436 | | |
12/06/21 | |
| 543,090 | | |
| 543,545 | |
6.25%
Incremental Term Loan due 12/06/2027
(LIBOR + 5.250%) | |
$ | 873,738 | | |
12/28/21 | |
| 859,110 | | |
| 859,764 | |
Limited
Liability Company Unit Class A Preferred | |
| 790 uts. | | |
12/06/21 | |
| 79,043 | | |
| 80,608 | |
Limited
Liability Company Unit Class B Common | |
| 88 uts. | | |
12/06/21 | |
| 8,783 | | |
| 8,783 | |
| |
| | | |
| |
| 1,490,026 | | |
| 1,492,700 | |
National
Auto Care | |
| | | |
| |
| | | |
| | |
|
A provider of professional finance and insurance products and consulting services to auto, RV, and powersports dealerships. |
6.26%
First Lien Term Loan due 09/28/2024 (LIBOR + 5.250%) (G) | |
$ | 998,707 | | |
12/20/21 | |
| 533,232 | | |
| 533,143 | |
| |
| | | |
| |
| | | |
| | |
Navia
Benefit Solutions, Inc. | |
| | | |
| |
| | | |
| | |
A third-party administrator of employee-directed healthcare benefits. |
6.25%
Term Loan due 02/01/2026 (LIBOR + 5.250%) (G) | |
$ | 1,717,238 | | |
02/10/21 | |
| 1,149,145 | | |
| 1,154,875 | |
| |
| | | |
| |
| | | |
| | |
Northstar
Recycling | |
| | | |
| |
| | | |
| | |
|
A managed service provider for waste and recycling services, primarily targeting food and beverage end markets. |
5.75%
Term Loan due 09/30/2027
(LIBOR + 4.750%) | |
$ | 749,313 | | |
10/01/21 | |
| 735,571 | | |
| 736,822 | |
| |
| | | |
| |
| | | |
| | |
Office
Ally (OA TOPCO, LP) | |
| | | |
| |
| | | |
| | |
A provider of medical claims clearinghouse software to office-based physician providers and healthcare insurance payers. |
7.00%
Term Loan due 12/10/2028
(LIBOR + 6.000%) (G) | |
$ | 983,176 | | |
12/20/21 | |
| 830,494 | | |
| 832,226 | |
Limited
Liability Company Unit | |
| 21,092 uts. | | |
09/29/17 | |
| 21,092 | | |
| 21,092 | |
| |
| | | |
| |
| 851,586 | | |
| 853,318 | |
Omega
Holdings | |
| | | |
| |
| | | |
| | |
|
A distributor of aftermarket automotive air conditioning products. |
6.00%
Term Loan due 03/31/2029 (SOFR + 5.000%) | |
$ | 645,704 | | |
03/31/22 | |
| 544,324 | | |
| 544,324 | |
| |
| | | |
| |
| 544,324 | | |
| 544,324 | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Omni Logistics, LLC | |
| | |
| |
| | |
| |
A specialty freight forwarding business specifically targeting the semiconductor, media, technology and healthcare end markets. |
6.00%
Term Loan due 12/30/2026
(LIBOR + 5.000%) | |
$ | 1,736,897 | | |
12/30/20 | |
$ | 1,695,658 | | |
$ | 1,705,989 | |
| |
| | | |
| |
| | | |
| | |
Options
Technology Ltd | |
| | | |
| |
| | | |
| | |
A provider of vertically focused financial technology managed services and IT infrastructure products for the financial services industry. |
5.76%
Term Loan due 12/18/2025 (LIBOR + 4.750%) | |
$ | 1,582,958 | | |
12/23/19 | |
| 1,563,235 | | |
| 1,555,756 | |
| |
| | | |
| |
| | | |
| | |
PANOS
Brands LLC | |
| | | |
| |
| | | |
| | |
A marketer and distributor of branded consumer foods in the specialty, natural, better-for-you,“free from” healthy and gluten-free categories. |
12%
(1% PIK) Senior Subordinated Note due 08/17/2022 | |
$ | 1,775,705 | | |
02/17/17 | |
| 1,772,646 | | |
| 1,775,705 | |
Common
Stock Class A (B) | |
| 380,545 shs. | | |
* | |
| 380,545 | | |
| 336,135 | |
*
01/29/16 and 02/17/17. | |
| | | |
| |
| 2,153,191 | | |
| 2,111,840 | |
| |
| | | |
| |
| | | |
| | |
PB
Holdings LLC | |
| | | |
| |
| | | |
| | |
A designer, manufacturer and installer of maintenance and repair parts and equipment for industrial customers. |
6.26%
Term Loan due 02/28/2024 (LIBOR + 5.250%) | |
$ | 783,253 | | |
03/06/19 | |
| 775,607 | | |
| 751,923 | |
| |
| | | |
| |
| | | |
| | |
Pearl
Holding Group | |
| | | |
| |
| | | |
| | |
|
A managing general agent that originates, underwrites, and administers non-standard auto insurance policies for carries in Florida. |
7.00%
First Lien Term Loan due 12/16/2026 (LIBOR + 6.000%) (G) | |
$ | 1,739,980 | | |
12/20/21 | |
| 1,554,971 | | |
| 1,551,596 | |
Warrant
- Class A, to purchase common stock at
$.01 per share | |
| 924 uts. | | |
12/22/21 | |
| — | | |
| — | |
Warrant
- Class B, to purchase common stock at
$.01 per share | |
| 312 uts. | | |
12/22/21 | |
| — | | |
| — | |
Warrant
- Class CC, to purchase common stock at
$.01 per share | |
| 32 uts. | | |
12/22/21 | |
| — | | |
| — | |
Warrant
- Class D, to purchase common stock at
$.01 per share | |
| 82 uts. | | |
12/22/21 | |
| — | | |
| — | |
| |
| | | |
| |
| 1,554,971 | | |
| 1,551,596 | |
| |
| | | |
| |
| | | |
| | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Pegasus Transtech Corporation | |
| | |
| |
| | |
| |
A provider of end-to-end document, driver and logistics management solutions, which enable its customers (carriers, brokers, and drivers) to operate more efficiently, reduce manual overhead, enhance compliance, and shorten cash conversion cycles. |
6.96%
Term Loan due 08/31/2026
(LIBOR + 6.500%) | |
$ | 382,796 | | |
09/29/20 | |
$ | 372,791 | | |
$ | 373,227 | |
6.96%
Term Loan due 11/17/2024
(LIBOR + 6.500%) | |
$ | 1,894,364 | | |
11/14/17 | |
| 1,876,553 | | |
| 1,847,005 | |
| |
| | | |
| |
| 2,249,344 | | |
| 2,220,232 | |
Petroplex
Inv Holdings LLC | |
| | | |
| |
| | | |
| | |
|
A leading provider of acidizing services to E&P customers in the Permian Basin. |
Limited
Liability Company Unit | |
| 0.40% int. | | |
* | |
| 174,669 | | |
| 13,647 | |
* 11/29/12 and 12/20/16. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Polara
(VSC Polara LLC) | |
| | | |
| |
| | | |
| | |
A manufacturer of pedestrian traffic management and safety systems, including accessible pedestrian signals, “push to walk” buttons, and related “traffic” control units. |
5.75%
First Lien Term Loan due 12/03/2027 (LIBOR + 4.750%) (G) | |
$ | 950,713 | | |
12/03/21 | |
| 824,466 | | |
| 808,221 | |
Limited
Liability Company Unit (F) | |
| 759 uts. | | |
12/03/21 | |
| 75,861 | | |
| 75,861 | |
| |
| | | |
| |
| 900,327 | | |
| 884,082 | |
Polytex
Holdings LLC | |
| | | |
| |
| | | |
| | |
A manufacturer of water based inks and related products serving primarily the wall covering market. |
13.9%
(7.9% PIK) Senior Subordinated Note
due 12/31/2024 (D) | |
$ | 1,069,985 | | |
07/31/14 | |
| 1,064,183 | | |
| 967,801 | |
Limited
Liability Company Unit | |
| 148,096 uts. | | |
07/31/14 | |
| 148,096 | | |
| — | |
Limited
Liability Company Unit Class F | |
| 36,976 uts. | | |
* | |
| 24,802 | | |
| — | |
*
09/28/17 and 02/15/18. | |
| | | |
| |
| 1,237,081 | | |
| 967,801 | |
| |
| | | |
| |
| | | |
| | |
Portfolio
Group | |
| | | |
| |
| | | |
| | |
|
A provider of professional finance and insurance products to automobile dealerships, delivering a suite of offerings that supplement earnings derived from vehicle transactions. |
7.00%
First Lien Term Loan due 12/02/2025 (LIBOR + 6.000%) (G) | |
$ | 1,205,775 | | |
11/15/21 | |
| 943,413 | | |
| 938,435 | |
| |
| | | |
| |
| 943,413 | | |
| 938,435 | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
| Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost
| | |
Fair Value
| |
| |
| | | |
| |
| | | |
| | |
PPC
Event Services | |
| | | |
| |
| | | |
| | |
A special event equipment rental business. | | |
16.00%
Term Loan due 05/28/2023 (D) | |
$ | 791,691 | | |
07/21/20 | |
$ | 616,461 | | |
$ | 687,980 | |
8.00%
Term Loan due 05/28/2023 (D) | |
$ | 781,249 | | |
07/21/20 | |
| 616,911 | | |
| 651,562 | |
Preferred
Stock Series P-1 (B) | |
| 71 shs. | | |
07/21/20 | |
| 71,018 | | |
| 211,129 | |
Common
Stock (B) | |
| 170,927 shs. | | |
07/21/20 | |
| — | | |
| 10,962 | |
Limited
Liability Company Unit (B) | |
| 3,450 uts. | | |
11/20/14 | |
| 172,500 | | |
| — | |
Limited
Liability Company Unit Series A-1 (B) | |
| 339 uts. | | |
03/16/16 | |
| 42,419 | | |
| — | |
| |
| | | |
| |
| 1,519,309 | | |
| 1,561,633 | |
ProfitOptics | |
| | | |
| |
| | | |
| | |
|
A software development and consulting company that delivers solutions via its proprietary software development platform, Catalyst. |
6.50%
Term Loan due 02/15/2028
(LIBOR + 5.750%) (G) | |
$ | 901,452 | | |
03/15/22 | |
| 690,015 | | |
| 689,874 | |
8%
Senior Subordinated Note due 02/15/2029 | |
$ | 32,258 | | |
03/15/22 | |
| 32,258 | | |
| 32,258 | |
Limited
Liability Company Unit | |
| 96,774 uts. | | |
03/15/22 | |
| 64,516 | | |
| 64,548 | |
| |
| | | |
| |
| 786,789 | | |
| 786,680 | |
Recovery
Point Systems, Inc. | |
| | | |
| |
| | | |
| | |
|
A provider of IT infrastructure, colocation and cloud based resiliency services. |
7.50%
Term Loan due 07/31/2026
(LIBOR + 6.500%) | |
$ | 1,336,166 | | |
08/12/20 | |
| 1,316,724 | | |
| 1,325,477 | |
Limited
Liability Company Unit (F) | |
| 21,532 uts. | | |
03/05/21 | |
| 21,532 | | |
| 14,450 | |
| |
| | | |
| |
| 1,338,256 | | |
| 1,339,927 | |
RedSail
Technologies | |
| | | |
| |
| | | |
| | |
|
A provider of pharmacy management software solutions for independent pharmacies and long-term care facilities. |
5.50%
Term Loan due 10/27/2026
(LIBOR + 4.750%) | |
$ | 1,639,207 | | |
12/09/20 | |
| 1,607,316 | | |
| 1,622,815 | |
| |
| | | |
| |
| | | |
| | |
ReelCraft
Industries, Inc. | |
| | | |
| |
| | | |
| | |
A designer and manufacturer of heavy-duty reels for diversified industrial, mobile equipment OEM, auto aftermarket, government/military and other end markets. |
Limited
Liability Company Unit Class B | |
| 293,617 uts. | | |
11/13/17 | |
| 184,689 | | |
| 747,696 | |
| |
| | | |
| |
| | | |
| | |
Renovation
Brands (Renovation Parent Holdings, LLC) | |
| | | |
| |
| | | |
| | |
A portfolio of seven proprietary brands that sell various home improvement products primarily through the e-Commerce channel. |
6.50%
Term Loan due 08/16/2027
(LIBOR + 5.500%) | |
$ | 970,874 | | |
11/15/21 | |
| 948,185 | | |
| 949,658 | |
Limited
Liability Company Unit | |
| 39,474 uts. | | |
09/29/17 | |
| 39,474 | | |
| 39,474 | |
| |
| | | |
| |
| 987,659 | | |
| 989,132 | |
| |
| | | |
| |
| | | |
| | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Resonetics, LLC | |
| | |
| |
| | |
| |
A provider of laser micro-machining manufacturing services for medical device and diagnostic companies. |
7.75%
Second Lien Term Loan due 04/28/2029
(LIBOR + 7.000%) | |
$ | 1,725,000 | | |
04/28/21 | |
$ | 1,694,491 | | |
$ | 1,694,845 | |
7.75%
Secomd Lien Term Loan due 04/28/2029
(LIBOR + 7.000%) | |
$ | 552,000 | | |
11/15/21 | |
| 541,516 | | |
| 542,350 | |
| |
| | | |
| |
| 2,236,007 | | |
| 2,237,195 | |
REVSpring,
Inc. | |
| | | |
| |
| | | |
| | |
|
A provider of accounts receivable management and revenue cycle management services to customers in the healthcare, financial and utility industries. |
9.26%
Second Lien Term Loan due 10/11/2026
(LIBOR + 8.250%) | |
$ | 1,725,000 | | |
10/11/18 | |
| 1,695,707 | | |
| 1,725,000 | |
| |
| | | |
| |
| | | |
| | |
Rock-it
Cargo | |
| | | |
| |
| | | |
| | |
A provider of specialized international logistics solutions to the music touring, performing arts, live events, fine art and specialty industries. |
6.00%
Term Loan due 06/22/2024 (LIBOR + 5.000% Cash) | |
$ | 2,448,431 | | |
* | |
| 2,425,131 | | |
| 2,071,373 | |
* 07/30/18 and 09/30/20. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
ROI
Solutions | |
| | | |
| |
| | | |
| | |
|
Call center outsourcing and end user engagement services provider. |
6.00%
Term Loan due 07/31/2024
(LIBOR + 5.000%) (G) | |
$ | 1,592,918 | | |
07/31/18 | |
| 1,045,893 | | |
| 1,058,290 | |
| |
| | | |
| |
| | | |
| | |
RPX
Corp | |
| | | |
| |
| | | |
| | |
A provider of subscription services that help member companies mitigate the risk of patent disputes and reduce the cost of patent litigation. |
7.00%
Term Loan due 10/23/2025
(LIBOR + 6.000%) | |
$ | 2,477,283 | | |
* | |
| 2,434,320 | | |
| 2,430,983 | |
* 10/22/20 and 09/28/21. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Ruffalo
Noel Levitz | |
| | | |
| |
| | | |
| | |
|
A provider of enrollment management, student retention and career services, and fundraising management for colleges and universities. |
7.00%
Term Loan due 05/29/2022
(LIBOR + 6.000%) | |
$ | 1,226,029 | | |
01/08/19 | |
| 1,225,166 | | |
| 1,226,029 | |
| |
| | | |
| |
| | | |
| | |
Safety
Products Holdings, Inc. | |
| | | |
| |
| | | |
| | |
A manufacturer of highly engineered safety cutting tools. |
7.00%
Term Loan due 12/15/2026 (LIBOR + 6.000%) | |
$ | 1,672,310 | | |
12/15/20 | |
| 1,642,775 | | |
| 1,668,965 | |
Common
Stock | |
| 29 shs. | | |
12/16/20 | |
| 29,262 | | |
| 40,236 | |
| |
| | | |
| |
| 1,672,037 | | |
| 1,709,201 | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Sandvine Corporation | |
| | |
| |
| | |
| |
A provider of active network intelligence solutions. |
8.46%
Second Lien Term Loan due 11/02/2026 (LIBOR + 8.000%) | |
$ | 1,725,000 | | |
11/01/18 | |
$ | 1,700,264 | | |
$ | 1,725,000 | |
| |
| | | |
| |
| | | |
| | |
Sara
Lee Frozen Foods | |
| | | |
| |
| | | |
| | |
|
A provider of frozen bakery products, desserts and sweet baked goods. |
5.50%
Lien Term Loan due 07/30/2025 (LIBOR + 4.500%) | |
$ | 1,483,456 | | |
07/27/18 | |
| 1,467,583 | | |
| 1,364,780 | |
| |
| | | |
| |
| | | |
| | |
Scaled
Agile, Inc. | |
| | | |
| |
| | | |
| | |
A provider of training and certifications for IT professionals focused on software development. |
6.50%
Term Loan due 12/15/2027 (LIBOR + 5.500%) (G) | |
$ | 1,725,000 | | |
12/16/21 | |
| 1,173,077 | | |
| 1,190,537 | |
| |
| | | |
| |
| | | |
| | |
SEKO
Worldwide, LLC | |
| | | |
| |
| | | |
| | |
A third-party logistics provider of ground, ocean, air and home delivery forwarding services. |
6.00%
Term Loan due 12/30/2026 (LIBOR + 5.000%) (G) | |
$ | 1,710,259 | | |
12/30/20 | |
| 1,450,597 | | |
| 1,463,760 | |
| |
| | | |
| |
| | | |
| | |
Smart
Bear | |
| | | |
| |
| | | |
| | |
|
A provider of web-based tools for software development, testing and monitoring. |
8.51%
Second Lien Term Loan due 11/10/2028
(LIBOR + 7.500%) | |
$ | 1,725,000 | | |
03/02/21 | |
| 1,683,547 | | |
| 1,694,533 | |
| |
| | | |
| |
| | | |
| | |
Smartling,
Inc. | |
| | | |
| |
| | | |
| | |
A provider in SaaS-based translation management systems and related translation services. |
6.75%
Term Loan due 10/26/2027
(LIBOR + 5.750%) (G) | |
$ | 1,725,000 | | |
11/03/21 | |
| 1,388,369 | | |
| 1,390,816 | |
| |
| | | |
| |
| | | |
| | |
Specified Air Solutions (dba Madison Indoor Air Solutions) | | |
|
A manufacturer and distributor of heating, dehumidification and other air quality solutions. |
Limited
Liability Company Unit (B) | |
| 726,845 uts. | | |
02/20/19 | |
| 2,298,574 | | |
| 11,039,545 | |
| |
| | | |
| |
| | | |
| | |
Springbrook
Software | |
| | | |
| |
| | | |
| | |
A provider of vertical-market enterprise resource planning software and payments platforms focused on the local government end-market. |
6.76%
Term Loan due 12/20/2026 (LIBOR + 5.750%) (G) | |
$ | 1,633,473 | | |
12/23/19 | |
| 1,309,447 | | |
| 1,300,168 | |
| |
| | | |
| |
| | | |
| | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Stackline | |
| | |
| |
| | |
| |
An e-commerce data company that tracks products sold through online retailers. |
8.75%
Term Loan due 07/30/2028
(LIBOR + 7.750%) | |
$ | 1,758,600 | | |
07/29/21 | |
$ | 1,728,166 | | |
$ | 1,731,236 | |
Common
Stock (B) | |
| 1,340 shs. | | |
07/30/21 | |
| 42,078 | | |
| 63,588 | |
| |
| | | |
| |
| 1,770,244 | | |
| 1,794,824 | |
Standard
Elevator Systems | |
| | | |
| |
| | | |
| | |
A scaled manufacturer of elevator components combining four elevator companies, Standard Elevator Systems, EMI Porta, Texacone, and ZZIPCO. |
6.50%
First Lien Term Loan due 12/02/2027 (LIBOR + 5.750%) (G) | |
$ | 1,725,000 | | |
12/02/21 | |
| 1,023,440 | | |
| 1,025,353 | |
| |
| | | |
| |
| | | |
| | |
Strahman
Holdings Inc. | |
| | | |
| |
| | | |
| | |
|
A manufacturer of industrial valves and wash down equipment for a variety of industries, including chemical, petrochemical, polymer, pharmaceutical, food processing, beverage and mining. |
Preferred
Stock Series A (B) | |
| 158,967 shs. | | |
12/13/13 | |
| 158,967 | | |
| 179,633 | |
Preferred
Stock Series A-2 (B) | |
| 26,543 shs. | | |
09/10/15 | |
| 29,994 | | |
| 29,994 | |
| |
| | | |
| |
| 188,961 | | |
| 209,627 | |
Stratus
Unlimited | |
| | | |
| |
| | | |
| | |
|
A nationwide provide of brand implementation services, including exterior and interior signage, refresh and remodel, and facility maintenance and repair. |
6.51%
Term Loan due 06/08/2027 (LIBOR + 5.500%) (G) | |
$ | 946,707 | | |
07/02/21 | |
| 756,975 | | |
| 759,549 | |
Limited
Liability Company Unit (B) | |
| 75 uts. | | |
06/30/21 | |
| 74,666 | | |
| 73,394 | |
| |
| | | |
| |
| 831,641 | | |
| 832,943 | |
Sunvair
Aerospace Group Inc. | |
| | | |
| |
| | | |
| | |
|
An aerospace maintenance, repair, and overhaul provider servicing landing gears on narrow body aircraft. |
12%
(1% PIK) Senior Subordinated Note
due 08/01/2024 | |
$ | 2,012,135 | | |
* | |
| 1,993,015 | | |
| 1,980,878 | |
Preferred
Stock Series A | |
| 28 shs. | | |
12/21/20 | |
| 71,176 | | |
| 78,309 | |
Common
Stock (B) | |
| 68 shs. | | |
** | |
| 104,986 | | |
| 231,297 | |
*
07/31/15 and 12/21/20. | |
| | | |
| |
| 2,169,177 | | |
| 2,290,484 | |
** 07/31/15 and 11/08/17. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Syntax
Systems Ltd | |
| | | |
| |
| | | |
| | |
A cloud management service provider. | | |
6.25%
Term Loan due 10/14/2028
(LIBOR + 5.500%) (G) | |
$ | 998,236 | | |
10/28/21 | |
| 750,813 | | |
| 750,184 | |
| |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Tank Holding | |
| | |
| |
| | |
| |
A manufacturer of proprietary rotational molded polyethylene and steel storage tanks and containers. |
6.75%
Term Loan due 03/31/2028
(SOFR + 6.000%) (G) | |
$ | 500,000 | | |
03/31/22 | |
$ | 466,937 | | |
$ | 466,932 | |
| |
| | | |
| |
| 466,937 | | |
| 466,932 | |
Tencarva
Machinery Company | |
| | | |
| |
| | | |
| | |
A distributor of mission critical, engineered equipment, replacement parts and services in the industrial and municipal end-markets. |
6.51%
Term Loan due 12/20/2027 (LIBOR + 5.500%) (G) | |
$ | 1,977,260 | | |
12/20/21 | |
| 1,413,180 | | |
| 1,414,806 | |
| |
| | | |
| |
| | | |
| | |
The Caprock Group (aka TA/TCG Holdings, LLC) | | | |
| | |
|
A wealth manager focused on ultra-high-net-worth individuals, who have $25-30 million of investable assets on average. |
8.05%
HoldCo PIK Note due 10/21/2028 | |
$ | 1,150,000 | | |
10/28/21 | |
| 1,128,390 | | |
| 1,130,258 | |
5.26%
Term Loan due 12/15/2027
(LIBOR + 4.250%) (G) | |
$ | 575,000 | | |
12/21/21 | |
| 98,134 | | |
| 100,761 | |
| |
| | | |
| |
| 1,226,524 | | |
| 1,231,019 | |
The
Hilb Group, LLC | |
| | | |
| |
| | | |
| | |
|
An insurance brokerage platform that offers insurance and benefits programs to middle-market companies throughout the Eastern seaboard. |
6.76%
Term Loan due 09/30/2026 (LIBOR + 5.750%) | |
$ | 1,705,581 | | |
* | |
| 1,676,529 | | |
| 1,667,324 | |
* 12/02/19 and 12/15/20. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Therma-Stor
Holdings LLC | |
| | | |
| |
| | | |
| | |
A designer and manufacturer of dehumidifiers and water damage restoration equipment for residential and commercial applications. |
Limited
Liability Company Unit (B) | |
| 19,696 uts. | | |
11/30/17 | |
| — | | |
| 10,698 | |
| |
| | | |
| |
| | | |
| | |
Transit
Technologies LLC | |
| | | |
| |
| | | |
| | |
|
A software platform for the transportation market that offers end-to-end software solutions focused on operations, fleet management and telematics services. |
5.75%
Term Loan due 02/10/2025
(LIBOR + 4.750%) | |
$ | 780,310 | | |
02/13/20 | |
| 772,479 | | |
| 752,219 | |
| |
| | | |
| |
| | | |
| | |
Trident
Maritime Systems | |
| | | |
| |
| | | |
| | |
A leading provider of turnkey marine vessel systems and solutions for government and commercial new ship construction as well as repair, refurbishment, and retrofit markets worldwide. |
6.51%
Term Loan due 02/19/2026
(LIBOR + 5.500%) | |
$ | 1,712,063 | | |
02/25/21 | |
| 1,688,673 | | |
| 1,712,063 | |
| |
| | | |
| |
| | | |
| | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
Tristar Global Energy Solutions, Inc. |
| | |
| |
A hydrocarbon and decontamination services provider serving refineries worldwide. |
12.5%
(1.5% PIK) Senior Subordinated Note due 06/30/2024 (D) | |
$ | 1,204,904 | | |
01/23/15 | |
$ | 1,203,934 | | |
$ | 1,085,618 | |
| |
| | | |
| |
| | | |
| | |
Truck-Lite | |
| | | |
| |
| | | |
| | |
A leading provider of harsh environment LED safety lighting, electronics, filtration systems, and telematics for a wide range of commercial vehicles, specialty vehicles, final mile delivery vehicles, off-road/off-highway, marine, and other adjacent harsh environment markets. |
7.26% Term Loan due 12/02/2026
(LIBOR + 6.250%) | |
$ | 1,692,159 | | |
12/13/19 | |
| 1,669,429 | | |
| 1,665,083 | |
7.26%
First Lien Term Loan due 04/28/2029 (LIBOR + 6.250%) (G) | |
$ | 802,272 | | |
11/15/21 | |
| 486,431 | | |
| 488,649 | |
| |
| | | |
| |
| 2,155,860 | | |
| 2,153,732 | |
Trystar,
Inc. | |
| | | |
| |
| | | |
| | |
|
A niche manufacturer of temporary power distribution products for the power rental, industrial, commercial utility and back-up emergency markets. |
6.25% Term Loan due 10/01/2023
(LIBOR + 5.250%) | |
$ | 2,271,264 | | |
09/28/18 | |
| 2,257,770 | | |
| 2,234,923 | |
6.25%
Third Amendment Term Loan due 09/28/2023
(LIBOR + 5.250%) | |
$ | 215,038 | | |
10/27/21 | |
| 212,044 | | |
| 211,598 | |
Limited
Liability Company Unit (B)(F) | |
| 56 uts. | | |
09/28/18 | |
| 60,413 | | |
| 50,794 | |
| |
| | | |
| |
| 2,530,227 | | |
| 2,497,315 | |
Turnberry
Solutions, Inc. | |
| | | |
| |
| | | |
| | |
A provider of technology consulting services. | |
| | |
7.00%
Term Loan due 07/30/2026
(SOFR + 6.000%) | |
$ | 1,624,908 | | |
07/29/21 | |
| 1,596,770 | | |
| 1,592,410 | |
| |
| | | |
| |
| | | |
| | |
U.S.
Legal Support, Inc. | |
| | | |
| |
| | | |
| | |
A provider of court reporting, record retrieval and other legal supplemental services. |
6.26%
Term Loan due 11/12/2024
(LIBOR + 5.250%) | |
$ | 2,083,995 | | |
* | |
| 2,065,454 | | |
| 2,042,316 | |
* 11/29/18 and 03/25/19. | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
UroGPO,
LLC | |
| | | |
| |
| | | |
| | |
|
A group purchasing organization that connects pharmaceutical companies with urology practices to facilitate the purchase of pharmaceutical drugs for discounted prices. |
6.75%
Term Loan due 12/15/2026
(LIBOR + 5.750%) | |
$ | 2,316,667 | | |
12/14/20 | |
| 2,280,315 | | |
| 2,316,667 | |
| |
| | | |
| |
| | | |
| | |
VitalSource | |
| | | |
| |
| | | |
| | |
A provider of digital fulfillment software for the higher education sector. |
6.25%
Term Loan due 06/01/2028
(LIBOR + 5.500%) | |
$ | 1,694,196 | | |
06/01/21 | |
| 1,664,341 | | |
| 1,694,195 | |
Limited
Liability Company Unit (B)(F) | |
| 1,891 uts. | | |
06/01/21 | |
| 18,909 | | |
| 32,570 | |
| |
| | | |
| |
| 1,683,250 | | |
| 1,726,765 | |
| |
| | | |
| |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
| |
| | |
| |
| | |
| |
Corporate
Restricted Securities: (A) (Continued) | |
Principal Amount, Shares, Units or Ownership Percentage | | |
Acquisition Date | |
Cost | | |
Fair Value | |
| |
| | |
| |
| | |
| |
VP Holding Company | |
| | |
| |
| | |
| |
A provider of school transportation services for special-needs and homeless children in Massachusetts and Connecticut. |
5.96%
Term Loan due 05/22/2024
(LIBOR + 5.500%) | |
$ | 2,396,318 | | |
05/17/18 | |
$ | 2,379,226 | | |
$ | 2,348,392 | |
| |
| | | |
| |
| | | |
| | |
Westminster
Acquisition LLC | |
| | | |
| |
| | | |
| | |
A manufacturer of premium, all-natural oyster cracker products sold under the Westminster and Olde Cape Cod brands. |
Limited
Liability Company Unit (B)(F) | |
| 370,241 uts. | | |
08/03/15 | |
| 370,241 | | |
| 74,381 | |
| |
| | | |
| |
| | | |
| | |
Wolf-Gordon,
Inc. | |
| | | |
| |
| | | |
| | |
A designer and specialty distributor of wallcoverings and related building products, including textiles, paint, and writeable surfaces. |
Common
Stock (B) | |
| 157 shs. | | |
01/22/16 | |
| 62,177 | | |
| 262,270 | |
| |
| | | |
| |
| | | |
| | |
Woodland
Foods, Inc. | |
| | | |
| |
| | | |
| | |
|
A provider of specialty dry ingredients such as herbs & spices, rice & grains, mushrooms & truffles, chilies, and other ingredients to customers within the industrial, foodservice, and retail end-markets. |
6.50%
Term Loan due 11/30/2027 (LIBOR + 5.500%) (G) | |
$ | 1,205,684 | | |
12/01/21 | |
| 1,030,941 | | |
| 1,032,287 | |
Limited
Liability Company Unit (F) | |
| 146 uts. | | |
09/29/17 | |
| 145,803 | | |
| 145,803 | |
| |
| | | |
| |
| 1,176,744 | | |
| 1,178,090 | |
World
50, Inc. | |
| | | |
| |
| | | |
| | |
|
A provider of exclusive peer-to-peer networks for C-suite executives at leading corporations. |
6.25%
Term Loan due 01/10/2026
(LIBOR + 5.250%) | |
$ | 303,267 | | |
09/21/20 | |
| 296,782 | | |
| 302,661 | |
5.50%
Term Loan due 12/31/2025
(LIBOR + 4.500%) | |
$ | 1,206,358 | | |
01/09/20 | |
| 1,187,361 | | |
| 1,187,257 | |
| |
| | | |
| |
| 1,484,143 | | |
| 1,489,918 | |
Ziyad | |
| | | |
| |
| | | |
| | |
|
An end-to-end importer, brand manager, value-added processor, and distributor of Middle Eastern and Mediterranean foods. |
6.00%
First Lien Term Loan due 02/09/2028 (LIBOR + 5.000%) (G) | |
$ | 1,003,440 | | |
02/09/22 | |
| 534,020 | | |
| 533,554 | |
Limited
Liability Company Unit (F) | |
| 31 uts. | | |
02/09/22 | |
| 31,256 | | |
| 31,260 | |
| |
| | | |
| |
| 565,276 | | |
| 564,814 | |
| |
| | | |
| |
| | | |
| | |
Total
Private Placement Investments (E) | |
| | | |
| |
$ | 160,751,267 | | |
$ | 166,824,571 | |
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate
Restricted Securities: (A) (Continued) | |
Interest Rate
| | |
|
Maturity
Date |
| |
Principal Amount
| | |
Cost
| | |
Market
Value
| |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
Rule
144A Securities - 4.93%: (H) | |
| | | |
|
|
| |
| | | |
| | | |
| | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
Bonds
- 4.93% | |
| | | |
|
|
| |
| | | |
| | | |
| | |
American
Airlines Inc. | |
| 11.750 | | |
|
07/15/25 |
| |
$ | 500,000 | | |
$ | 496,452 | | |
$ | 583,745 | |
Cleveland-Cliffs
Inc. | |
| 9.875 | | |
|
10/17/25 |
| |
| 331,000 | | |
| 353,867 | | |
| 369,065 | |
Coronado
Finance Pty Ltd. | |
| 10.750 | | |
|
05/15/26 |
| |
| 247,000 | | |
| 243,012 | | |
| 264,599 | |
CVR
Energy Inc. | |
| 5.750 | | |
|
02/15/28 |
| |
| 500,000 | | |
| 461,128 | | |
| 474,205 | |
First
Quantum Minerals Ltd. | |
| 7.500 | | |
|
04/01/25 |
| |
| 500,000 | | |
| 476,300 | | |
| 507,500 | |
First
Quantum Minerals Ltd. | |
| 7.250 | | |
|
04/01/23 |
| |
| 238,000 | | |
| 237,290 | | |
| 237,586 | |
Houghton
Mifflin Harcourt | |
| 9.000 | | |
|
02/15/25 |
| |
| 500,000 | | |
| 493,991 | | |
| 522,500 | |
Neptune
Energy Bondco PLC | |
| 6.625 | | |
|
05/15/25 |
| |
| 500,000 | | |
| 495,259 | | |
| 502,745 | |
Panther
BF Aggregator 2 LP | |
| 8.500 | | |
|
05/15/27 |
| |
| 100,000 | | |
| 94,037 | | |
| 103,750 | |
Picou
Holdings LLC | |
| 10.000 | | |
|
12/31/25 |
| |
| 500,000 | | |
| 457,704 | | |
| 513,125 | |
Prime
Security Services, LLC | |
| 6.250 | | |
|
01/15/28 |
| |
| 885,000 | | |
| 791,678 | | |
| 866,056 | |
Terrier
Media Buyer, Inc. | |
| 8.875 | | |
|
12/15/27 |
| |
| 530,000 | | |
| 511,319 | | |
| 539,275 | |
The
Manitowoc Company, Inc. | |
| 9.000 | | |
|
04/01/26 |
| |
| 500,000 | | |
| 490,463 | | |
| 521,345 | |
Trident
TPI Holdings Inc. | |
| 9.250 | | |
|
08/01/24 |
| |
| 500,000 | | |
| 491,687 | | |
| 502,500 | |
Verscend
Holding Corp | |
| 9.750 | | |
|
08/15/26 |
| |
| 482,000 | | |
| 504,941 | | |
| 501,280 | |
CSC
Holdings LLC | |
| 5.000 | | |
|
11/15/31 |
| |
| 625,000 | | |
| 517,864 | | |
| 523,663 | |
Scientific
Games Holdings LP | |
| 6.625 | | |
|
03/01/30 |
| |
| 480,000 | | |
| 480,000 | | |
| 473,174 | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
Total
Bonds | |
| | | |
|
|
| |
| | | |
| 7,596,992 | | |
| 8,006,113 | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
Common
Stock - 0.00% | |
| | | |
|
|
| |
| | | |
| | | |
| | |
TherOX,
Inc. (B) | |
| | | |
|
|
| |
| 2 | | |
| — | | |
| — | |
Touchstone
Health Partnership (B) | |
| | | |
|
|
| |
| 292 | | |
| — | | |
| — | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
Total
Common Stock | |
| | | |
|
|
| |
| | | |
| — | | |
| — | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
Total
Rule 144A Securities | |
| | | |
|
|
| |
| | | |
$ | 7,596,992 | | |
$ | 8,006,113 | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
Total
Corporate Restricted Securities | |
| | | |
|
|
| |
| | | |
$ | 168,348,259 | | |
$ | 174,830,684 | |
| |
| | | |
|
|
| |
| | | |
| | | |
| | |
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Corporate Public Securities - 2.85%:
(A) | |
LIBOR Spread
| | |
Interest Rate
| | |
Maturity
Date | |
Principal Amount
| | |
Cost
| | |
Market Value
| |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Bank
Loans - 1.99% | |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Almonde,
Inc. | |
| 7.250 | | |
| 8.250 | | |
06/13/25 | |
$ | 500,000 | | |
$ | 505,000 | | |
$ | 491,015 | |
Alpine
US Bidco LLC | |
| 9.000 | | |
| 9.750 | | |
04/28/29 | |
| 628,215 | | |
| 611,440 | | |
| 609,369 | |
Edelman
Financial Services | |
| 6.750 | | |
| 7.199 | | |
06/08/26 | |
| 128,178 | | |
| 127,832 | | |
| 126,127 | |
Kenan
Advantage Group Inc. | |
| 7.250 | | |
| 8.250 | | |
08/17/27 | |
| 564,317 | | |
| 549,773 | | |
| 544,566 | |
Magenta
Buyer LLC | |
| 8.250 | | |
| 9.000 | | |
05/03/29 | |
| 503,333 | | |
| 498,347 | | |
| 497,671 | |
STS
Operating, Inc. | |
| 8.000 | | |
| 9.000 | | |
04/25/26 | |
| 500,000 | | |
| 505,000 | | |
| 483,750 | |
Front
Line Power Construction LLC | |
| 12.500 | | |
| 13.500 | | |
11/01/28 | |
| 250,000 | | |
| 241,864 | | |
| 242,500 | |
Syncsort
Incorporated | |
| 7.250 | | |
| 8.000 | | |
04/23/29 | |
| 222,222 | | |
| 220,698 | | |
| 217,889 | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Total
Bank Loans | |
| | | |
| | | |
| |
| | | |
| 3,259,954 | | |
| 3,212,887 | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Bonds
- 0.84% | |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Genesis
Energy LP | |
| | | |
| 6.500 | | |
10/01/25 | |
| 337,000 | | |
| 324,538 | | |
| 332,383 | |
Hecla
Mining Company | |
| | | |
| 7.250 | | |
02/15/28 | |
| 500,000 | | |
| 476,092 | | |
| 523,830 | |
Triumph
Group, Inc. | |
| | | |
| 7.750 | | |
08/15/25 | |
| 500,000 | | |
| 502,324 | | |
| 503,690 | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Total
Bonds | |
| | | |
| | | |
| |
| | | |
| 1,302,954 | | |
| 1,359,903 | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Common
Stock - 0.02% | |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Tourmaline
Oil Corp | |
| | | |
| | | |
| |
| 42,397 | | |
| — | | |
| 33,943 | |
Front
Line Power Construction LLC | |
| | | |
| | | |
| |
| 3,178 | | |
| 8,136 | | |
| 5,848 | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Total
Common Stock | |
| | | |
| | | |
| |
| | | |
| 8,136 | | |
| 39,791 | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Preferred
Stock - 0.00% | |
| | | |
| | | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Total
Corporate Public Securities | |
| | | |
| | | |
| |
| | | |
$ | 4,571,044 | | |
$ | 4,612,581 | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Total
Investments | |
| | | |
| 110.41 | % | |
| |
| | | |
$ | 172,919,303 | | |
$ | 179,443,265 | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Other
Assets | |
| | | |
| 4.54 | | |
| |
| | | |
| | | |
$ | 7,376,357 | |
Liabilities | |
| | | |
| (14.95 | ) | |
| |
| | | |
| | | |
$ | (24,302,886 | ) |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| |
| | | |
| | | |
| | |
Total
Net Assets | |
| | | |
| 100.00 | % | |
| |
| | | |
| | | |
$ | 162,516,736 | |
(A) | In each of the convertible note, warrant, and common stock investments, the issuer has agreed to provide
certain registration rights. |
(B) | Non-income producing security. |
(C) | Security valued at fair value using methods determined in good faith by or under the direction of the
Board of Trustees. |
(D) | Defaulted security; interest not accrued. |
(E) | Illiquid security. As of March 31, 2022 the values of these securities amounted to $166,824,571 or
102.65% of net assets. |
(F) | Held in PI Subsidiary Trust |
(G) | A portion of these securities contain unfunded commitments. As of March 31, 2022, total unfunded
commitments amounted to $11,370,297 and had unrealized appreciation of $8,212 or 0.01% of net assets. See Note 7. |
(H) | Security exempt from registration under Rule 144a of the Securities Act of 1933. These securities may
only be resold in transactions exempt from registration, normally to qualified institutional buyers. |
PIK - Payment-in-kind
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Industry
Classification: | |
Fair Value/ Market Value
| |
| |
| | |
AEROSPACE &
DEFENSE - 5.77% | |
| | |
CTS
Engines | |
$ | 1,329,147 | |
Dart
Buyer, Inc. | |
| 1,554,527 | |
Narda-MITEQ
(JFL-Narda Partners, LLC) | |
| 1,492,700 | |
Sunvair
Aerospace Group Inc. | |
| 2,290,484 | |
Trident
Maritime Systems | |
| 1,712,063 | |
Trident
TPI Holdings Inc. | |
| 502,500 | |
Triumph
Group, Inc. | |
| 503,690 | |
| |
| 9,385,111 | |
| |
| | |
AIRLINES
- 1.40% | |
| | |
American
Airlines Inc. | |
| 583,745 | |
Echo
Logistics | |
| 1,699,100 | |
| |
| 2,282,845 | |
| |
| | |
AUTOMOTIVE
- 3.66% | |
| | |
Aurora
Parts & Accessories LLC | |
| 354,497 | |
English
Color & Supply LLC | |
| 2,143,122 | |
JF
Petroleum Group | |
| 651,445 | |
Omega
Holdings | |
| 544,324 | |
Panther
BF Aggregator 2 LP | |
| 103,750 | |
Truck-Lite | |
| 2,153,732 | |
| |
| 5,950,870 | |
| |
| | |
BROKERAGE,
ASSET MANAGERS & EXCHANGES - 1.78% |
The
Caprock Group (aka TA/TCG Holdings, LLC) | |
| 1,231,019 | |
The
Hilb Group, LLC | |
| 1,667,324 | |
| |
| 2,898,343 | |
| |
| | |
BUILDING
MATERIALS - 1.14% | |
| | |
Decks
Direct | |
| 1,594,833 | |
Wolf-Gordon,
Inc. | |
| 262,270 | |
| |
| 1,857,103 | |
| |
| | |
Cable &
Statellite - 0.32% | |
| | |
CSC
Holdings LLC | |
| 523,663 | |
| |
| | |
| |
| | |
CHEMICALS
- 1.28% | |
| | |
Kano
Laboratories LLC | |
| 1,118,571 | |
Polytex
Holdings LLC | |
| 967,801 | |
| |
| 2,086,372 | |
| |
| | |
| |
Fair
Value/ Market Value | |
| |
| | |
CONSUMER
CYCLICAL SERVICES - 6.68% | |
| | |
Accelerate
Learning | |
$ | 1,692,560 | |
LYNX
Franchising | |
| 2,438,356 | |
MeTEOR
Education LLC | |
| 1,654,278 | |
PPC
Event Services | |
| 1,561,633 | |
Prime
Security Services, LLC | |
| 866,056 | |
ROI
Solutions | |
| 1,058,290 | |
Turnberry
Solutions, Inc. | |
| 1,592,410 | |
| |
| 10,863,583 | |
| |
| | |
CONSUMER
PRODUCTS - 2.78% | |
| | |
AMS
Holding LLC | |
| 244,986 | |
Blue
Wave Products, Inc. | |
| 193,159 | |
Elite
Sportswear Holding, LLC | |
| — | |
gloProfessional
Holdings, Inc. | |
| 836,415 | |
Handi
Quilter Holding Company | |
| 530,231 | |
HHI
Group, LLC | |
| 553,889 | |
Jones
Fish | |
| 1,110,211 | |
Manhattan
Beachwear Holding Company | |
| — | |
Master
Cutlery LLC | |
| 58,163 | |
Renovation
Brands (Renovation Parent Holdings, LLC) | |
| 989,132 | |
| |
| 4,516,186 | |
| |
| | |
DIVERSIFIED
MANUFACTURING - 7.04% | |
| | |
Advanced
Manufacturing Enterprises LLC | |
| — | |
F
G I Equity LLC | |
| 736,278 | |
MNS
Engineers, Inc. | |
| 1,277,848 | |
Reelcraft
Industries, Inc. | |
| 747,696 | |
Resonetics,
LLC | |
| 2,237,195 | |
Safety
Products Holdings, Inc. | |
| 1,709,201 | |
Standard
Elevator Systems | |
| 1,025,353 | |
Strahman
Holdings Inc. | |
| 209,627 | |
Tank
Holding | |
| 466,932 | |
The
Manitowoc Company, Inc. | |
| 521,345 | |
Therma-Stor
Holdings LLC | |
| 10,698 | |
Trystar,
Inc. | |
| 2,497,315 | |
| |
| 11,439,488 | |
| |
| | |
ELECTRIC
- 1.21% | |
| | |
Dwyer
Instruments, Inc. | |
| 853,051 | |
Electric
Power Systems International, Inc. | |
| 1,116,464 | |
| |
| 1,969,515 | |
See Notes to Consolidated Financial Statements
Barings Participation
Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Industry Classification:
(Continued) | |
Fair Value/ Market Value
| |
| |
| | |
ENVIRONMENTAL
- 1.38% | |
| | |
ENTACT
Environmental Services, Inc. | |
$ | 988,368 | |
Marshall
Excelsior Co. | |
| 520,550 | |
Northstar
Recycling | |
| 736,822 | |
| |
| 2,245,740 | |
| |
| | |
FINANCE
COMPANIES - 0.58% | |
| | |
Portfolio
Group | |
| 938,435 | |
| |
| | |
| |
| | |
FINANCIAL
OTHER - 0.97% | |
| | |
Cogency
Global | |
| 919,939 | |
Edelman
Financial Services | |
| 126,127 | |
National
Auto Care | |
| 533,143 | |
| |
| 1,579,209 | |
| |
| | |
FOOD &
BEVERAGE - 4.44% | |
| | |
Alpine
US Bidco LLC | |
| 609,369 | |
Del
Real LLC | |
| 1,305,155 | |
PANOS
Brands LLC | |
| 2,111,840 | |
Sara
Lee Frozen Foods | |
| 1,364,780 | |
Westminster
Acquisition LLC | |
| 74,381 | |
Woodland
Foods, Inc. | |
| 1,178,090 | |
Ziyad | |
| 564,814 | |
| |
| 7,208,429 | |
| |
| | |
GAMING
- 0.29% | |
| | |
Scientific
Games Holdings LP | |
| 473,174 | |
| |
| | |
| |
| | |
HEALTHCARE
- 6.42% | |
| | |
Cadence,
Inc. | |
| 844,250 | |
Ellkay | |
| 692,389 | |
GD
Dental Services LLC | |
| 28,399 | |
Heartland
Veterinary Partners | |
| 1,573,869 | |
Home
Care Assistance, LLC | |
| 836,518 | |
Navia
Benefit Solutions, Inc. | |
| 1,154,875 | |
Office
Ally (OA TOPCO, LP) | |
| 853,318 | |
RedSail
Technologies | |
| 1,622,815 | |
TherOX,
Inc. | |
| — | |
Touchstone
Health Partnership | |
| — | |
UroGPO,
LLC | |
| 2,316,667 | |
Verscend
Holding Corp | |
| 501,280 | |
| |
| 10,424,380 | |
| |
| | |
| |
Fair
Value/ Market Value | |
| |
| | |
INDUSTRIAL
OTHER - 15.03% | |
| | |
Aftermath,
Inc. | |
$ | 1,685,047 | |
ASPEQ
Holdings | |
| 1,131,056 | |
Concept
Machine Tool Sales, LLC | |
| 558,893 | |
E.S.P.
Associates, P.A. | |
| 247,797 | |
Front
Line Power Construction LLC | |
| 248,348 | |
IGL
Holdings III Corp. | |
| 1,498,852 | |
IM
Analytics Holdings, LLC | |
| 826,761 | |
Industrial
Service Solutions | |
| 847,697 | |
Media
Recovery, Inc. | |
| 488,583 | |
PB
Holdings LLC | |
| 751,923 | |
Polara
(VSC Polara LLC) | |
| 884,082 | |
Specified
Air Solutions (dba Madison Indoor Air Solutions) | |
| 11,039,545 | |
Stratus
Unlimited | |
| 832,943 | |
STS
Operating, Inc. | |
| 483,750 | |
Tencarva
Machinery Company | |
| 1,414,806 | |
World
50, Inc. | |
| 1,489,918 | |
| |
| 24,430,001 | |
| |
| | |
Local
Authority - 0.91% | |
| | |
LeadsOnline | |
| 1,471,152 | |
| |
| | |
| |
| | |
MEDIA &
ENTERTAINMENT - 4.01% | |
| | |
Advantage
Software | |
| 100,257 | |
BrightSign | |
| 1,378,056 | |
Cadent,
LLC | |
| 890,428 | |
DistroKid
(IVP XII DK Co-Invest, LP) | |
| 1,693,341 | |
HOP
Entertainment LLC | |
| — | |
Houghton
Mifflin Harcourt | |
| 522,500 | |
Music
Reports, Inc. | |
| 1,387,452 | |
Terrier
Media Buyer, Inc. | |
| 539,275 | |
| |
| 6,511,309 | |
| |
| | |
METALS &
MINING - 1.49% | |
| | |
Cleveland-Cliffs
Inc. | |
| 369,065 | |
Coronado
Finance Pty Ltd. | |
| 264,599 | |
First
Quantum Minerals Ltd. | |
| 745,086 | |
Hecla
Mining Company | |
| 523,830 | |
Picou
Holdings LLC | |
| 513,125 | |
| |
| 2,415,705 | |
| |
| | |
MIDSTREAM
- 0.20% | |
| | |
Genesis
Energy LP | |
| 332,383 | |
See Notes to Consolidated Financial Statements
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2022
(Unaudited)
Industry Classification:
(Continued) | |
Fair Value/ Market Value
| |
| |
| | |
OIL
FIELD SERVICES - 0.34% | |
| | |
Neptune
Energy Bondco PLC | |
$ | 502,745 | |
Petroplex
Inv Holdings LLC | |
| 13,647 | |
Tourmaline
Oil Corp | |
| 33,943 | |
| |
| 550,335 | |
| |
| | |
PACKAGING
- 0.95% | |
| | |
ASC
Holdings, Inc. | |
| 737,414 | |
Brown
Machine LLC | |
| 808,993 | |
| |
| 1,546,407 | |
| |
| | |
PAPER
- 0.75% | |
| | |
Dunn
Paper | |
| 1,223,025 | |
| |
| | |
| |
| | |
PROPERTY &
CASUALTY - 0.95% | |
| | |
Pearl
Holding Group | |
| 1,551,596 | |
| |
| | |
| |
| | |
REFINING
- 0.96% | |
| | |
CVR
Energy Inc. | |
| 474,205 | |
MES
Partners, Inc. | |
| — | |
Tristar
Global Energy Solutions, Inc. | |
| 1,085,618 | |
| |
| 1,559,823 | |
| |
| | |
TECHNOLOGY
- 27.25% | |
| | |
1WorldSync,
Inc. | |
| 2,429,647 | |
Almonde,
Inc. | |
| 491,015 | |
Amtech
Software | |
| 528,214 | |
Audio
Precision | |
| 1,746,000 | |
Best
Lawyers (Azalea Investment Holdings, LLC) | |
| 1,363,389 | |
CAi
Software | |
| 2,219,254 | |
Cash
Flow Management | |
| 894,300 | |
Claritas
Holdings, Inc. | |
| 1,533,322 | |
CloudWave | |
| 1,597,723 | |
Command
Alkon | |
| 2,105,467 | |
EFI
Productivity Software | |
| 908,655 | |
Follett
School Solutions | |
| 1,688,950 | |
GraphPad
Software, Inc. | |
| 2,609,154 | |
Magenta
Buyer LLC | |
| 497,671 | |
Options
Technology Ltd | |
| 1,555,756 | |
ProfitOptics | |
| 786,680 | |
Recovery
Point Systems, Inc. | |
| 1,339,927 | |
REVSpring,
Inc. | |
| 1,725,000 | |
RPX
Corp | |
| 2,430,983 | |
Ruffalo
Noel Levitz | |
| 1,226,029 | |
| |
Fair
Value/ Market Value | |
| |
| | |
Sandvine
Corporation | |
$ | 1,725,000 | |
Scaled
Agile, Inc. | |
| 1,190,537 | |
Smart
Bear | |
| 1,694,533 | |
Smartling,
Inc. | |
| 1,390,816 | |
Springbrook
Software | |
| 1,300,168 | |
Stackline | |
| 1,794,824 | |
Syncsort
Incorporated | |
| 217,889 | |
Syntax
Systems Ltd | |
| 750,184 | |
Transit
Technologies LLC | |
| 752,219 | |
U.S.
Legal Support, Inc. | |
| 2,042,316 | |
VitalSource | |
| 1,726,765 | |
| |
| 44,262,387 | |
| |
| | |
TRANSPORTATION
SERVICES - 10.44% | |
| | |
AIT
Worldwide Logistics, Inc. | |
| 1,742,728 | |
BDP
International, Inc. | |
| 2,468,340 | |
eShipping | |
| 1,304,283 | |
FragilePAK | |
| 1,077,033 | |
Omni
Logistics, LLC | |
| 1,705,989 | |
Pegasus
Transtech Corporation | |
| 2,220,232 | |
Rock-it
Cargo | |
| 2,071,373 | |
SEKO
Worldwide, LLC | |
| 1,463,760 | |
VP
Holding Company | |
| 2,348,392 | |
Kenan
Advantage Group Inc. | |
| 544,566 | |
| |
| 16,946,696 | |
Total
Investments - 110.42% (Cost - $172,919,303) | |
$ | 179,443,265 | |
See Notes to Consolidated Financial Statements
Barings Participation
Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Barings Participation
Investors (the “Trust”) was organized as a Massachusetts business trust under the laws of the Commonwealth of Massachusetts
pursuant to a Declaration of Trust dated April 7, 1988.
The Trust
is a diversified closed-end management investment company. Barings LLC (“Barings”), a wholly-owned indirect subsidiary of
Massachusetts Mutual Life Insurance Company (“MassMutual”), acts as its investment adviser. The Trust’s investment
objective is to maintain a portfolio of securities providing a current yield and, when available, an opportunity for capital gains. The
Trust’s principal investments are privately placed, below investment grade, long-term debt obligations including bank loans and
mezzanine debt instruments. Such direct placement securities may, in some cases, be accompanied by equity features such as common stock,
preferred stock, warrants, conversion rights, or other equity features. The Trust typically purchases these investments, which are not
publicly tradable, directly from their issuers in private placement transactions. These investments are typically made to small or middle
market companies. In addition, the Trust may invest, subject to certain limitations, in marketable debt securities (including high yield
and/or investment grade securities) and marketable common stock. Below investment grade or high yield securities have predominantly speculative
characteristics with respect to the capacity of the issuer to pay interest and repay capital.
On January 27,
1998, the Board of Trustees authorized the formation of a wholly-owned subsidiary of the Trust (“PI Subsidiary Trust”) for
the purpose of holding certain investments. The results of the PI Subsidiary Trust are consolidated in the accompanying financial statements.
Footnote 2.D below discusses the Federal tax consequences of the PI Subsidiary Trust.
| 2. | Significant
Accounting Policies |
The following
is a summary of significant accounting policies followed consistently by the Trust in the preparation of its consolidated financial statements
in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Trustees
have determined that the Trust is an investment company in accordance with Accounting Standards Codification (“ASC”) 946,
Financial Services – Investment Companies, for the purpose of financial reporting.
A.
Fair Value Measurements:
Under U.S.
GAAP, fair value represents the price that should be received to sell an asset (exit price) in an orderly transaction between willing
market participants at the measurement date.
Determination
of Fair Value
The determination
of the fair value of the Trust’s investments is the responsibility of the Trust’s Board of Trustees (the
“Trustees”).
The Trustees have adopted procedures for the valuation of the Trust’s securities and have delegated responsibility for applying
those procedures to Barings. Barings has established a Pricing Committee which is responsible for setting the guidelines used in following
the procedures adopted by the Trustees ensuring that those guidelines are being followed. Barings considers all relevant factors that
are reasonably available, through either public information or information available to Barings, when determining the fair value of a
security. The Trustees meet at least once each quarter to approve the value of the Trust’s portfolio securities as of the close
of business on the last business day of the preceding quarter. This valuation requires the approval of a majority of the Trustees of
the Trust, including a majority of the Trustees who are not interested persons of the Trust or of Barings. In approving valuations, the
Trustees will consider reports by Barings analyzing each portfolio security in accordance with the procedures and guidelines referred
to above, which include the relevant factors referred to below. Barings has agreed to provide such reports to the Trust at least quarterly.
The consolidated financial statements include private placement restricted securities valued at $166,824,571 (102.65% of net assets)
as of March 31, 2022, the values of which have been estimated by the Trustees based on the process described above in the absence
of readily ascertainable market values. Due to the inherent uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the securities existed, and the differences could be material.
Independent
Valuation Process
The fair
value of bank loans and equity investments that are unsyndicated or for which market quotations are not readily available, including
middle-market bank loans, will be submitted to an independent provider to perform an independent valuation on those bank loans and equity
investments as of the end of each quarter. Such bank loans and equity investments will be held at cost until such time as they are sent
to the valuation provider for an initial valuation subject to override by the Adviser should it determine that there have been material
changes in interest rates and/or the credit quality of the issuer. The independent valuation provider applies various methods (synthetic
rating analysis, discounting cash flows, and re-underwriting analysis) to establish the rate of return a market participant would require
(the “discount rate”) as of the valuation date, given market conditions, prevailing lending standards and the perceived credit
quality of the issuer. Future expected cash flows for each investment are discounted back to present value using these discount rates
in the discounted cash flow analysis. A range of value will be provided by the valuation provider and the Adviser will determine the
point within that range that it will use in making valuation recommendations to the Trustees, and will report to the Trustees on its
rationale for each such determination. The Adviser will continue to use its internal valuation model as a comparison point to validate
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
the
price range provided by the valuation provider and, where applicable, in determining the point within
that range that it will use in making valuation recommendations to the Trustees. If the Advisers’
Pricing Committee disagrees with the price range provided, it may make a fair value recommendation
to the Trustees that is outside of the range provided by the independent valuation provider, and
will notify the Trustees of any such override and the reasons therefore. In certain instances, the
Trust may determine that it is not cost-effective, and as a result is not in the shareholders’
best interests, to request the independent valuation firm to perform the Procedures on certain investments.
Such instances include, but are not limited to, situations where the fair value of the investment
in the portfolio company is determined to be insignificant relative to the total investment portfolio.
Finally, the Trustees determined in good faith that the Trust’s investments were valued at
fair value in accordance with the Trust’s valuation policies and procedures and the 1940 Act
based on, among other things, the input of Barings, the Trust’s Audit Committee and the independent
valuation firm.
Following
is a description of valuation methodologies used for assets recorded at fair value.
Corporate
Public Securities at Fair Value – Bank Loans, Corporate Bonds, Preferred Stocks and Common Stocks
The Trust
uses external independent third-party pricing services to determine the fair values of its Corporate Public Securities. At March 31,
2022, 100% of the carrying value of these investments was from external pricing services. In the event that the primary pricing service
does not provide a price, the Trust utilizes the pricing provided by a secondary pricing service.
Public
debt securities generally trade in the over-the-counter market rather than on a securities exchange. The Trust’s pricing services
use multiple valuation techniques to determine fair value. In instances where significant market activity exists, the pricing services
may utilize a market based approach through which quotes from market makers are used to determine fair value. In instances where significant
market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market
characteristics such as benchmark yield curves, option adjusted spreads, credit spreads, estimated default rates, coupon rates, anticipated
timing of principal underlying prepayments, collateral, and other unique security features in order to estimate the relevant cash flows,
which are then discounted to calculate the fair value.
The Trust’s
investments in bank loans are normally valued at the bid quotation obtained from dealers in loans by an independent pricing service in
accordance with the Trust’s valuation policies and procedures approved by the Trustees.
Public
equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sales price of that day.
At
least annually, Barings conducts reviews of the primary pricing vendors to validate that the inputs
used in that vendors’ pricing process are deemed to be market observable as defined in the
standard. While Barings is not provided access to proprietary models of the vendors, the reviews
have included on-site walk-throughs of the pricing process, methodologies and control procedures
for each asset class and level for which prices are provided. The reviews also include an examination
of the underlying inputs and assumptions for a sample of individual securities across asset classes,
credit rating levels and various durations. In addition, the pricing vendors have an established
challenge process in place for all security valuations, which facilitates identification and resolution
of prices that fall outside expected ranges. Barings believes that the prices received from the
pricing vendors are representative of prices that would be received to sell the assets at the measurement
date (exit prices) and are classified appropriately in the hierarchy.
Corporate
Restricted Securities at Fair Value – Bank Loans, Corporate Bonds
The fair
value of certain notes is determined using an internal model that discounts the anticipated cash flows of those notes using a specific
discount rate. Changes to that discount rate are driven by changes in general interest rates, probabilities of default and credit adjustments.
The discount rate used within the models to discount the future anticipated cash flows is considered a significant unobservable input.
Increases/(decreases) in the discount rate would result in a (decrease)/increase to the notes’ fair value.
The fair
value of certain distressed notes is based on an enterprise waterfall methodology which is discussed in the equity security valuation
section below.
Corporate
Restricted Securities at Fair Value – Common Stock, Preferred Stock and Partnerships & LLC’s
The fair
value of equity securities is determined using an enterprise waterfall methodology. Under this methodology, the enterprise value of the
company is first estimated and that value is then allocated to the company’s outstanding debt and equity securities based on the
documented priority of each class of securities in the capital structure. Generally, the waterfall proceeds from senior debt, to senior
and junior subordinated debt, to preferred stock, then finally common stock.
To estimate
a company’s enterprise value, the company’s trailing twelve months earnings before interest, taxes, depreciation and amortization
(“EBITDA”) is multiplied by a valuation multiple.
Both the
company’s EBITDA and valuation multiple are considered significant unobservable inputs. Increases/(decreases) to the company’s
EBITDA and/or valuation multiple would result in increases/(decreases) to the equity value.
Barings
Participation Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
Short-Term
Securities
Short-term
securities with more than sixty days to maturity are valued at fair value, using external independent third-party services. Short-term
securities, of sufficient credit quality, having a maturity of sixty days or less are valued at amortized cost, which approximates fair
value.
New
Accounting Pronouncement
In March
2020, the Financial Accounting Standards Board issued Accounting Standards Update 2020-04 (“ASU 2020-04”) “Reference
Rate Reform (Topic 848): Facilitation of the
Effects
of Reference Rate Reform on Financial Reporting.” This guidance provides optional expedients
and exceptions for applying generally accepted accounting principles to contract modifications
and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another
reference rate expected to be discontinued. ASU 2020-04 is effective for all entities as of March
12, 2020 through December 31, 2022. The Trust expects that the adoption of this guidance will not
have a material impact on the Trust’s financial position, result of operations or cash flows.
Fair Value Hierarchy
The Trust categorizes
its investments measured at fair value in three levels, based on the inputs and assumptions used to determine fair value. These levels
are as follows:
Level 1 –
quoted prices in active markets for identical securities
Level 2 –
other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk,
etc.)
Level 3 –
significant unobservable inputs (including the Trust’s own assumptions in determining the fair value of investments)
The following table
summarizes the levels in the fair value hierarchy into which the Trust’s financial instruments are categorized as of March 31,
2022.
The fair values
of the Trust’s investments disaggregated into the three levels of the fair value hierarchy based upon the lowest level of significant
input used in the valuation as of March 31, 2022 are as follows:
Assets: | |
Total | | |
Level
1 | | |
Level
2 | | |
Level
3 | |
Restricted
Securities | |
| | | |
| | | |
| | | |
| | |
Corporate
Bonds | |
$ | 18,125,493 | | |
$ | — | | |
$ | 8,006,113 | | |
$ | 10,119,380 | |
Bank
Loans | |
| 136,667,522 | | |
| — | | |
| — | | |
| 136,667,522 | |
Common
Stock - U.S. | |
| 1,343,175 | | |
| — | | |
| — | | |
| 1,343,175 | |
Preferred
Stock | |
| 1,550,396 | | |
| — | | |
| — | | |
| 1,550,396 | |
Partnerships
and LLCs | |
| 17,144,098 | | |
| — | | |
| — | | |
| 17,144,098 | |
Public
Securities | |
| | | |
| | | |
| | | |
| | |
Bank
Loans | |
| 3,212,887 | | |
| — | | |
| 1,816,452 | | |
| 1,396,435 | |
Corporate
Bonds | |
| 1,359,903 | | |
| — | | |
| 1,359,903 | | |
| — | |
Common
Stock - U.S. | |
| 39,791 | | |
| 5,848 | | |
| — | | |
| 33,943 | |
Preferred
Stock | |
| — | | |
| — | | |
| — | | |
| — | |
Short-term
Securities | |
| — | | |
| — | | |
| — | | |
| — | |
Total | |
$ | 179,443,265 | | |
$ | 5,848 | | |
$ | 11,182,468 | | |
$ | 168,254,949 | |
See information disaggregated
by security type and industry classification in the Consolidated Schedule of Investments.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
Quantitative Information
about Level 3 Fair Value Measurements
The following table
represents quantitative information about Level 3 fair value measurements as of March 31, 2022.
|
Fair
Value |
Valuation
Technique |
Unobservable
Inputs |
Range |
Weighted* |
|
|
|
|
|
|
Bank Loans |
$ 116,741,698 |
Income Approach |
Implied Spread |
8.8% - 9.7% |
9.3% |
|
|
|
|
|
|
Corporate Bonds |
$ 8,503,040 |
Income Approach |
Implied Spread |
16.0% - 17.2% |
16.6% |
|
|
|
|
|
|
Equity Securities** |
$ 20,443,776 |
Enterprise Value Waterfall
Approach |
Valuation Multiple |
5.5x to 55.0x |
13.5x |
Certain of the Trust’s
Level 3 equity securities investments may be valued using unadjusted inputs that have not been internally developed by the Trust, including
recently purchased securities held at cost. As a result, fair value of assets of $22,5566,435 have been excluded from the preceding table.
| * | The weighted
averages disclosed in the table above were weighted by relative fair value |
| ** | Including
partnerships and LLC’s |
Following is a
reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Assets: | |
Beginning
balance at 12/31/2021 | | |
Included in
earnings | | |
Purchases | | |
Sales | | |
Prepayments | | |
Transfers
into Level 3 | | |
Transfers
out of Level 3 | | |
Ending
balance at 03/31/2022 | |
Restricted
Securities | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Corporate
Bonds | |
$ | 9,549,244 | | |
$ | 510,991 | | |
$ | 59,145 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 10,119,380 | |
Bank
Loans | |
| 130,187,625 | | |
| (425,650 | ) | |
| 7,468,625 | | |
| — | | |
| (563,078 | ) | |
| — | | |
| — | | |
| 136,667,522 | |
Common
Stock - U.S. | |
| 1,257,986 | | |
| 119,019 | | |
| 38,397 | | |
| (72,227 | ) | |
| — | | |
| — | | |
| — | | |
| 1,343,175 | |
Preferred
Stock | |
| 1,608,973 | | |
| (86,128 | ) | |
| 27,551 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,550,396 | |
Partnerships
and LLCs | |
| 17,285,572 | | |
| (248,965 | ) | |
| 117,854 | | |
| (10,363 | ) | |
| — | | |
| — | | |
| — | | |
| 17,144,098 | |
Public
Securities | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Bank
Loans | |
| 1,127,428 | | |
| (21,244 | ) | |
| 290,251 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,396,435 | |
Common
Stock - U.S. | |
| 33,565 | | |
| 378 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 33,943 | |
Corporate
Bonds | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
$ | 161,050,393 | | |
$ | (151,599 | ) | |
$ | 8,001,823 | | |
$ | (82,590 | ) | |
$ | (563,078 | ) | |
$ | — | | |
$ | — | | |
$ | 168,254,949 | |
| * | For the
three months ended March 31, 2022, transfers into and out of Level 3 were the result of changes
in the observability of significant inputs for certain portfolio companies. |
Barings Participation
Investors
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
Income,
Gains and Losses on Level 3 assets included in Net Increase in Net Assets resulting from Operations
for the year are presented in the following accounts on the Statement of Operations:
| |
Net Increase
(Decrease)
in Net
Assets
Resulting from Operations | | |
Change
in Unrealized (Depreciation) in Net Assets from assets still held | |
| |
| | |
| |
Interest Income
(OID Amortization) | |
$ | 128,666 | | |
$ | — | |
| |
| | | |
| | |
Net realized gain on investments
before taxes | |
| 91,615 | | |
| — | |
| |
| | | |
| | |
Net change in unrealized (depreciation) of investments
before taxes | |
| (371,880 | ) | |
| (1,259,155 | ) |
B.
Accounting for Investments:
Investment
Income
Investment
transactions are accounted for on the trade date. Interest income, including the amortization of premiums and accretion of discounts
on bonds held using the yield-to-maturity method, is recorded on the accrual basis to the extent that such amounts are expected to be
collected. Generally, when interest and/or principal payments on a loan become past due, or if the Trust otherwise does not expect the
borrower to be able to service its debt and other obligations, the Trust will place the investment on non-accrual status and will cease
recognizing interest income on that investment for financial reporting purposes until all principal and interest have been brought current
through payment or due to a restructuring such that the interest income is deemed to be collectible. The Trust writes off any previously
accrued and uncollected interest when it is determined that interest is no longer considered collectible. As of March 31, 2022, the fair
value of the Trust’s non-accrual assets was $4,726,812, or 2.6% of the total fair value of the Trust’s portfolio, and the
cost of the Trust’s non-accrual assets was $6,291,502, or 3.6% of the total cost of the Trust’s portfolio.
Payment-in-Kind
Interest
The Trust
currently holds, and expects to hold in the future, some investments in its portfolio that contain Payment-in-Kind (“PIK”)
interest provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance
of the investment, rather than being paid to the Trust in cash, and is recorded as interest income. Thus, the actual collection of PIK
interest may be deferred until the time of debt principal repayment. PIK interest, which is a non-cash source of income at the time of
recognition, is included in the Trust’s taxable income and therefore affects the amount the Trust is required to distribute
to
its stockholders to maintain its qualification as a “regulated investment company”
for federal income tax purposes, even though the Trust has not yet collected the cash.
Generally,
when current cash interest and/or principal payments on an investment become past due, or if the Trust otherwise does not expect the
borrower to be able to service its debt and other obligations, the Trust will place the investment on PIK non-accrual status and will
cease recognizing PIK interest income on that investment for financial reporting purposes until all principal and interest have been
brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Trust writes
off any accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible. As of March 31, 2022,
the Trust held no PIK non-accrual assets.
Realized
Gain or Loss and Unrealized Appreciation or Depreciation of Portfolio Investments
Realized
gains and losses on investment transactions and unrealized appreciation and depreciation of investments are reported for financial statement
and Federal income tax purposes on the identified cost method.
C.
Use of Estimates:
The preparation
of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates and the differences could be material.
D.
Federal Income Taxes:
The Trust
has elected to be taxed as a “regulated investment company” under the Internal Revenue Code, and intends to maintain this
qualification and to distribute substantially all of its net taxable income to its shareholders. In any year when net long-term capital
gains are realized by the Trust, management, after evaluating the prevailing economic conditions, will recommend that Trustees either
designate the net realized long-term gains as undistributed and pay the federal capital gains taxes thereon, or distribute all or a portion
of such net gains.
The Trust
is taxed as a regulated investment company and is therefore limited as to the amount of non-qualified income that it may receive as the
result of operating a trade or business, e.g. the Trust’s pro rata share of income allocable to the Trust by a partnership operating
company. The Trust’s violation of this limitation could result in the loss of its status as a regulated investment company, thereby
subjecting all of its net income and capital gains to corporate taxes prior to distribution to its shareholders. The Trust, from time-to-time,
identifies investment opportunities in the securities of entities that could cause such trade or business income to be allocable to the
Trust. The PI Subsidiary Trust (described in
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
Footnote
1, above) was formed in order to allow investment in such securities without adversely affecting the Trust’s status as a regulated
investment company.
The PI
Subsidiary Trust is not taxed as a regulated investment company. Accordingly, prior to the Trust receiving any distributions from the
PI Subsidiary Trust, all of the PI Subsidiary Trust’s taxable income and realized gains, including non-qualified income and realized
gains, is subject to taxation at prevailing corporate tax rates. As of March 31, 2022, the PI Subsidiary Trust has incurred income
tax expense of $21.004.
Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of the existing assets and liabilities and their respective tax basis. As of March 31, 2022, the PI Subsidiary
Trust has a deferred tax liability of $365,141.
E.
Distributions to Shareholders:
The Trust
records distributions to shareholders from distributable earnings and net realized gains, if any, on the ex-dividend date. The Trust’s
dividend is declared four times per year. The Trust’s net realized capital gain distribution, if any, is declared in December.
| 3. | Investment
Advisory and Administrative Services Contract |
A. Services:
Under an
Investment Advisory and Administrative Services Contract (the “Contract”) with the Trust, Barings has agreed to use its best
efforts to present to the Trust a continuing and suitable investment program consistent with the investment objectives and policies of
the Trust. Barings represents the Trust in any negotiations with issuers, investment banking firms, securities brokers or dealers and
other institutions or investors relating to the Trust’s investments. Under the Contract, Barings also provides administration of
the day-to-day operations of the Trust and provides the Trust with office space and office equipment, accounting and bookkeeping services,
and necessary executive, clerical and secretarial personnel for the performance of the foregoing services.
B.
Fee:
For its
services under the Contract, Barings is paid a quarterly investment advisory fee equal to 0.225% of the value of the Trust’s net
assets as of the last business day of each fiscal quarter, an amount approximately equivalent to 0.90% on an annual basis. A majority
of the Trustees, including a majority of the Trustees who are not interested persons of the Trust or of Barings, approve the valuation
of the Trust’s net assets as of such day.
Senior
Secured Indebtedness
MassMutual
holds the Trust’s $15,000,000 Senior Fixed Rate Convertible Note (the “Note”) issued by the Trust on December 13,
2011. The Note is due December 13, 2023 and accrues interest at 4.09% per annum. MassMutual, at its option, can convert the principal
amount of the Note into common shares. The dollar amount of principal would be converted into an equivalent dollar amount of common shares
based upon the average price of the common shares for ten business days prior to the notice of conversion. For the three months ended
March 31, 2022, the Trust incurred total interest expense on the Note of $153,375.
The Trust
may redeem the Note, in whole or in part, at the principal amount proposed to be redeemed together with the accrued and unpaid interest
thereon through the redemption date plus the Make Whole Premium. The Make Whole Premium equals the excess of (i) the present value
of the scheduled payments of principal and interest which the Trust would have paid but for the proposed redemption, discounted at the
rate of interest of U.S. Treasury obligations whose maturity approximates that of the Note plus 0.50% over (ii) the principal of
the Note proposed to be redeemed.
Credit
Facility
On July
22, 2021 (the “Effective Date”), MassMutual provided to the Trust, a five-year $15,000,000 committed revolving credit facility.
Interest charged is at the rate of LIBOR (London Interbank Offered Rate) plus 2.25% on the outstanding borrowings. The Trust will also
be responsible for paying a commitment fee of 0.50% on the unused amount. For purposes of calculating the commitment fee for the period
from the Effective Date to the earlier to occur of (x) the date that is 270 days after the Effective Date and (y) the first date on which
the aggregate outstanding borrowings is greater than $7,500,000, the unused amount shall be deemed to be in an amount equal to $7,500,000.
As of March 31, 2022, the Trust had $8,200,000 of outstanding borrowings on the revolving credit facility.
| 5. | Purchases and Sales of Investments
|
| |
For
the three months ended 03/31/2022 | |
| |
Cost
of Investments Acquired | | |
Proceeds
from Sales or Maturities | |
| |
| | | |
| | |
Corporate
restricted securities | |
$ | 8,362,274 | | |
$ | 2,230,447 | |
Corporate
public securities | |
| 486,937 | | |
| — | |
In the normal
course of its business, the Trust trades various financial instruments and enters into certain investment activities with investment
risks. These risks include: (i) market risk, (ii) volatility risk and (iii) credit, counterparty and liquidity
Barings
Participation Investors
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
risk.
It is the Trust’s policy to identify, measure and monitor risk through various mechanisms
including risk management strategies and credit policies. These include monitoring risk guidelines
and diversifying exposures across a variety of instruments, markets and counterparties. There can
be no assurance that the Trust will be able to implement its credit guidelines or that its risk
monitoring strategies will be successful.
Impacts
of COVID-19
The pandemic
related to the global spread of novel coronavirus disease (COVID-19), which was first detected in December 2019, has resulted in significant
disruptions to global business activity and the global economy, as well as the economies of individual countries, the financial performance
of individual companies and sectors, and the securities and commodities markets in general. This pandemic, the full effects of which
are still unknown, has resulted in substantial market volatility and may continue to adversely impact the prices and liquidity of the
Trust’s investments and the Trust’s performance.
LIBOR
The United
Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced a desire to phase out the use of LIBOR
by the end of 2021. LIBOR has historically been a common benchmark interest rate index used to make adjustments to variable-rate loans.
It is used throughout global banking and financial industries to determine interest rates for a variety of financial instruments and
borrowing arrangements. The transition process might lead to increased volatility and illiquidity in markets that currently rely on LIBOR
to determine interest rates. It could also lead to a reduction in the value of some LIBOR-based investments held by a fund and reduce
the effectiveness of new hedges placed against existing LIBOR-based investments. While some LIBOR-based instruments contemplate a scenario
where LIBOR is no longer available by providing for an alternative rate-setting methodology, not all have such provisions and there may
be significant uncertainty regarding the effectiveness of any such alternative methodologies.
| 7. | Commitments
and Contingencies |
During the
normal course of business, the Trust may enter into contracts and agreements that contain a variety of representations and warranties.
The exposure, if any, to the Trust under these arrangements is unknown as this would involve future claims that may or may not be made
against the Trust and which have not yet occurred. The Trust has no history of prior claims related to such contracts and agreements.
At March 31, 2022
the Trust had the following unfunded commitments:
Delayed
Draw Term Loans:
Investment | |
Unfunded Amount | | |
Unfunded Value | |
Amtech Software | |
$ | 363,636 | | |
$ | 364,142 | |
Best Lawyers | |
| 221,154 | | |
| 221,398 | |
Command Alkon | |
| 436,013 | | |
| 436,490 | |
Dart Buyer, Inc. | |
| 134,550 | | |
| 140,487 | |
Dwyer Instruments, Inc. | |
| 131,579 | | |
| 131,883 | |
Electric Power Systems International Inc. | |
| 113,921 | | |
| 114,333 | |
eShipping | |
| 293,035 | | |
| 293,434 | |
FragilePAK | |
| 539,063 | | |
| 522,151 | |
Heartland Veterinary Partners | |
| 113,357 | | |
| 113,672 | |
IGL Holdings III Corp. | |
| 182,733 | | |
| 182,582 | |
Kano Laboratories LLC | |
| 569,601 | | |
| 569,042 | |
National Auto Care | |
| 356,209 | | |
| 356,174 | |
Navia Benefit Solutions Inc. | |
| 543,720 | | |
| 546,023 | |
Pearl Holding Group | |
| 136,184 | | |
| 135,287 | |
Portfolio Group | |
| 496,800 | | |
| 493,097 | |
ROI Solutions, LLC | |
| 534,628 | | |
| 542,112 | |
Scaled Agile, Inc. | |
| 287,170 | | |
| 289,516 | |
SEKO Worldwide, LLC | |
| 225,121 | | |
| 229,310 | |
Smartling, Inc. | |
| 202,941 | | |
| 203,229 | |
Standard Elevator Systems | |
| 552,585 | | |
| 553,389 | |
Stratus Unlimited | |
| 172,106 | | |
| 173,099 | |
Syntax Systems Ltd | |
| 193,308 | | |
| 193,191 | |
Tencarva Machinery Company | |
| 233,555 | | |
| 233,747 | |
The Caprock Group | |
| 360,424 | | |
| 362,391 | |
Truck-Lite Co., LLC | |
| 300,786 | | |
| 301,618 | |
Ziyad | |
| 276,811 | | |
| 276,682 | |
| |
$ | 7,970,990 | | |
$ | 7,978,477 | |
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
Revolvers:
Investment | |
Unfunded Amount | | |
Unfunded Value | |
Amtech
Software | |
$ | 90,909 | | |
$ | 91,035 | |
Best Lawyers | |
| 110,577 | | |
| 110,699 | |
BrightSign | |
| 134,202 | | |
| 133,162 | |
CAi Software | |
| 235,746 | | |
| 236,017 | |
Cash Flow
Management | |
| 74,627 | | |
| 74,691 | |
Cogency
Global | |
| 60,611 | | |
| 60,576 | |
Decks Direct | |
| 100,364 | | |
| 100,628 | |
EFI Productivity
Software | |
| 73,012 | | |
| 73,072 | |
eShipping | |
| 94,748 | | |
| 94,981 | |
Jones Fish | |
| 164,557 | | |
| 164,507 | |
LeadsOnline | |
| 224,512 | | |
| 224,415 | |
Marshall
Excelsior Co. | |
| 50,167 | | |
| 50,144 | |
Narda-MITEQ | |
| 207,682 | | |
| 207,815 | |
National
Auto Care | |
| 98,039 | | |
| 98,030 | |
Office
Ally | |
| 133,124 | | |
| 133,267 | |
Polara | |
| 108,266 | | |
| 106,416 | |
ProfitOptics | |
| 193,548 | | |
| 193,518 | |
Scaled
Agile, Inc. | |
| 231,716 | | |
| 233,230 | |
Smartling,
Inc. | |
| 101,471 | | |
| 101,615 | |
Standard
Elevator Systems | |
| 116,364 | | |
| 116,526 | |
Syntax
Systems Ltd | |
| 44,762 | | |
| 44,676 | |
Tank Holding | |
| 21,818 | | |
| 21,818 | |
Tencarva
Machinery Company | |
| 297,534 | | |
| 297,779 | |
The Caprock
Group | |
| 105,981 | | |
| 106,307 | |
Woodland
Foods, Inc. | |
| 151,961 | | |
| 152,181 | |
Ziyad | |
| 173,007 | | |
| 172,926 | |
| |
| 3,399,307 | | |
| 3,400,033 | |
Total
Unfunded
Commitments | |
$ | 11,370,297 | | |
$ | 11,378,510 | |
As of March
31, 2022, unfunded commitments had unrealized appreciation of $8,212 or 0.01% of net assets.
| 8. | Quarterly
Results of Investment Operations (unaudited) |
| |
March
31, 2022 | |
| |
Amount
| | |
Per Share
| |
Investment
income | |
$ | 2,970,053 | | |
| | |
Net investment
income (net of taxes) | |
| 2,161,764 | | |
$ | 0.20 | |
Net realized
and unrealized loss on investments (net of taxes) | |
| (725,503 | ) | |
| (0.06 | ) |
Barings Participation
Investors
This
privacy notice is being provided on behalf of Barings LLC and its affiliates: Barings Securities LLC; Barings Australia Pty Ltd; Barings
Japan Limited; Barings Investment Advisers (Hong Kong) Limited; Barings Funds Trust; Barings Global Short Duration High Yield Fund; Barings
BDC, Inc.; Barings Corporate Investors and Barings Participation Investors (together, for purposes of this privacy notice, “Barings”).
When you use
Barings you entrust us not only with your hard-earned assets but also with your personal and financial data. We consider your data to
be private and confidential, and protecting its confidentiality is important to us. Our policies and procedures regarding your personal
information are summarized below.
We may collect
non-public personal information about you from:
| • | Applications
or other forms, interviews, or by other means; |
| • | Consumer
or other reporting agencies, government agencies, employers or others; |
| • | Your
transactions with us, our affiliates, or others; and |
We may share
the financial information we collect with our financial service affiliates, such as insurance companies, investment companies and securities
broker-dealers. Additionally, so that we may continue to offer you products and services that best meet your investment needs and to
effect transactions that you request or authorize, we may disclose the information we collect, as described above, to companies that
perform administrative or marketing services on our behalf, such as transfer agents, custodian banks, service providers or printers and
mailers that assist us in the distribution of investor materials or that provide operational support to Barings. These companies are
required to protect this information and will use this information only for the services for which we hire them, and are not permitted
to use or share this information for any other purpose. Some of these companies may perform such services in jurisdictions other than
the United States. We may share some or all of the information we collect with other financial institutions with whom we jointly market
products. This may be done only if it is permitted by the state in which you live. Some disclosures may be limited to your name, contact
and transaction information with us or our affiliates.
Any disclosures
will be only to the extent permitted by federal and state law. Certain disclosures may require us to get an “opt-in” or “opt-out”
from you. If this is required, we will do so before information is shared. Otherwise, we do not share any personal information about
our customers or former customers unless authorized by the customer or as permitted by law.
We restrict access
to personal information about you to those employees who need to know that information to provide products and services to you. We maintain
physical, electronic and procedural safeguards that comply with legal standards to guard your personal information. As an added measure,
we do not include personal or account information in non-secure e-mails that we send you via the Internet without your prior consent.
We advise you not to send such information to us in non-secure e-mails.
This joint notice
describes the privacy policies of Barings, the Funds and Barings Securities LLC. It applies to all Barings and the Funds accounts you
presently have, or may open in the future, using your social security number or federal taxpayer identification number - whether or not
you remain a shareholder of our Funds or as an advisory client of Barings. As mandated by rules issued by the Securities and Exchange
Commission, we will be sending you this notice annually, as long as you own shares in the Funds or have an account with Barings.
Barings Securities
LLC is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). Investors
may obtain information about SIPC including the SIPC brochure by contacting SIPC online at www.sipc.org or calling (202)-371-8300. Investors
may obtain information about FINRA including the FINRA Investor Brochure by contacting FINRA online at www.finra.org or by calling (800)
289-9999.
April 2019
This page left
intentionally blank.
Members
of the Board of
Trustees
Clifford M.
Noreen
Chairman
Michael H.
Brown*
Barbara M.
Ginader*
Edward P. Grace
III*
Eric J. Lloyd
Susan B. Sweeney*
Maleyne M.
Syracuse*
*Member
of the Audit Committee
Officers
Christina Emery
President
Jonathan Bock
Chief Financial Officer
Jill Dinerman
Chief Legal Officer
Michael Cowart
Chief Compliance
Officer
Elizabeth Murray
Principal Accounting
Officer
Christopher
D. Hanscom
Treasurer
Ashlee Steinnerd
Secretary
Alexandra Pacini
Assistant Secretary
Sean Feeley
Vice President
Jonathan Landsberg
Vice President
|
DIVIDEND
REINVESTMENT AND CASH PURCHASE PLAN
Barings
Participation Investors (the “Trust”) offers a Dividend Reinvestment and Cash Purchase Plan (the “Plan”).
The Plan provides a simple and automatic way for shareholders to add to their holdings in the Trust through the receipt of dividend
shares issued by the Trust or through the reinvestment of cash dividends in Trust shares purchased in the open market. The dividends
of each shareholder will be automatically reinvested in the Trust by DST Systems, Inc., the Transfer Agent, in accordance with the
Plan, unless such shareholder elects not to participate by providing written notice to the Transfer Agent. A shareholder may terminate
his or her participation by notifying the Transfer Agent in writing.
Participating
shareholders may also make additional contributions to the Plan from their own funds. Such contributions may be made by personal
check or other means in an amount not less than $100 nor more than $5,000 per quarter. Cash contributions must be received by the
Transfer Agent at least five days (but no more then 30 days) before the payment date of a dividend or distribution.
Whenever
the Trust declares a dividend payable in cash or shares, the Transfer Agent, acting on behalf of each participating shareholder,
will take the dividend in shares only if the net asset value is lower than the market price plus an estimated brokerage commission
as of the close of business on the valuation day. The valuation day is the last day preceding the day of dividend payment.
When
the dividend is to be taken in shares, the number of shares to be received is determined by dividing the cash dividend by the net
asset value as of the close of business on the valuation date or, if greater than net asset value, 95% of the closing share price.
If the net asset value of the shares is higher than the market value plus an estimated commission, the Transfer Agent, consistent
with obtaining the best price and execution, will buy shares on the open market at current prices promptly after the dividend payment
date.
The reinvestment
of dividends does not, in any way, relieve participating shareholders of any federal, state or local tax. For federal income tax
purposes, the amount reportable in respect of a dividend received in newly-issued shares of the Trust will be the fair market value
of the shares received, which will be reportable as ordinary income and/or capital gains.
As compensation
for its services, the Transfer Agent receives a fee of 5% of any dividend and cash contribution (in no event in excess of $2.50 per
distribution per shareholder.)
Any questions
regarding the Plan should be addressed to DST Systems, Inc., Transfer Agent for Barings Participation Investors’ Dividend Reinvestment
and Cash Purchase Plan, P.O. Box 219086, Kansas City, MO 64121-9086.
|
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