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MidCap Financial Investment (MFIC) 7 Nov 24 2024 Q3 Earnings call transcript

AInvestFriday, Nov 8, 2024 9:53 am ET
1min read

MidCap Financial Investment Corporation recently held its earnings call for the period ending September 30, 2024. The call, led by Tanner Powell, CEO, provided insights into the company's performance and plans for the future following its mergers with Apollo Senior Floating Rate Fund and Apollo Tactical Income Fund. The call also included updates on the company's investment activity, portfolio, and market environment.

Mergers and Transformational Impact

The call began with an update on the successful completion of MidCap Financial Investment Corporation's mergers with AFT and AIF. The mergers are viewed as transformational, increasing the company's net assets by over 40% and generating significant investment capacity. The company is optimistic about the long-term benefits these mergers will bring, emphasizing the increased investment capacity and improved financial position.

Investment Activity and Portfolio

Ted McNulty, President, discussed the company's investment activity, highlighting the onboarding of approximately $600 million of investments from the closed-end funds, with a focus on directly originated loans. The company is actively rotating non-directly originated assets, prioritizing lower-yielding assets for sale. The sales are progressing well, and the company expects to complete these sales over the next few quarters.

Market Environment and Outlook

The call included a discussion on the current market environment, with a focus on the credit markets. MidCap Financial Investment Corporation has seen an increase in activity levels, particularly in opportunistic refinancings and repricing. The company is cautiously optimistic about increased activity levels in the back half of Q4 and into 2025, driven by rate cuts, financial sponsors seeking liquidity events, and significant dry powder.

Dividend and Future Plans

MidCap Financial Investment Corporation declared a quarterly dividend of $0.38 per share for shareholders of record as of December 10, 2024, payable on December 26, 2024. The company remains focused on investing in first lien loans to middle market companies, leveraging MidCap Financial's leading middle market lender status and significant origination track record.

Takeaways and Future Outlook

MidCap Financial Investment Corporation's earnings call highlighted the successful completion of its mergers, the company's strong investment activity, and its focus on the attractive opportunities in the middle market. The company's optimistic outlook, driven by increased investment capacity and a strong market environment, positions MidCap Financial Investment Corporation for continued growth and success in the coming quarters.

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