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FSK Q3 2026 earnings call transcript, November 5, 2026

FS KKR Capital Corp. Third Quarter 2026 Financial Results Conference Call

ReplayOfficial webcast
  • Management 32%
  • Stephen 16%
  • Dan Peterczak 12%
  • Michael Forman 8%
  • Analysts 16%

Management

  • Stephen

    Management

    6 min

  • Dan Peterczak

    Chief Investment Officer

    5 min

  • Michael Forman

    Chief Executive Officer

    3 min

Analysts · 5

Transcribed automatically by Lician from the company's public webcast; it can contain errors and speaker names are best effort.

  1. Prepared remarks9:27
  2. Operator

    Welcome to FSKKR Capital Corp's third quarter 2026 earnings conference call. Your lines will be in a listen-only mode during remarks by FSK's management. At the conclusion of the company's remarks, we will begin the question-and-answer

  3. Q&A9:43

  4. session, at which time I will give you a question-and-answer session. I will give you instructions on entering the queue. Please note that this conference call is being recorded. At this time, Anna Kleinen, Head of Investor Relations, will proceed with the introduction. Ms. Kleinen, you may begin.

  5. Thank you.

  6. Good morning and welcome to FSKKR Capital Corp's third quarter, 2026 earnings conference call. Please note that FSKKR Capital Corp may be referred to as FSKKR Capital Corp. the fund or the company throughout the call. Today's conference call is being recorded and an audio replay of the call will be available for 30 days. Replay information is included in a press release that FSK issued this morning. In addition, FSK has posted on its website a presentation containing supplemental financial information with respect to its portfolio and financial performance for the quarter ended September 30, 2026. A link to today's webcast and the presentation is available on the for investor section of the company's website under events and presentations. Please note that this call is the property of FSK. Any unauthorized rebroadcast of this call in any form is strictly prohibited. Today's conference call includes forward-looking statements that are not historical facts, including without limitation, statements with regard to future events or future performance. or financial conditions, statements regarding share repurchase activity, distribution levels and frequency, expectations for net investment income levels in future quarters, and the financial position, business strategies, and plans and objectives of management for FSK's future operations. Words such as anticipate, believe, expect, intend, project, and future for similar expressions indicate a forward-looking statement.

  7. Although, not all forward-looking statements include these words. These forward-looking statements are not guarantees of performance or events and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict, and could cause our actual results or future events to differ materially from those expressed or forecasted in these forward-looking statements for any reason. We ask that you refer to FSK's most recent filings with the SEC for important factors and risks that could cause actual results or future events to differ materially from these statements. The forward-looking statements included on this call are based on information available to FSK today and current expectations, forecasts, and assumptions, and involve a number of judgments, risks, and uncertainties. Except as required by the federal securities laws, FSK undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, this call will include certain non-GAAP financial measures that have not been prepared in accordance with U.S. Generally Accepted Accounting Principles. These non-GAAP financial measures are not in accordance with or in alternative to measures prepared in accordance with GAAP and may be different from non-GAAP financial measures used. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. These measures should only be used to evaluate FSK's results of operations in conjunction with their corresponding GAAP measures.

  8. For such non-GAAP measures, reconciliations to the most directly comparable GAAP measures can be found in FSK's third quarter earnings release that was furnished with the SEC on November 5th. and in the presentation posted on our website. To obtain copies of the company's latest SEC filings, please visit FSK's website. Speaking on today's call will be Michael Foreman, Chief Executive Officer and Chairman, Dan Peterczak, Chief Investment Officer and President, and Steven Lilly, Chief Financial Officer. Also joining us on the call today are Co-Chief Operating Officers Drew O'Toole and Ryan Wilson. I'll now turn the call over to Michael.

  9. Michael FormanChief Executive Officer

    Thank you, Anna, and good morning, everyone.

  10. Thank you for joining FSK's third quarter 2026 earnings conference call. During the third quarter, FSK generated net investment income totaling 46 cents per share and adjusted net investment income totaling 46 cents per share. As of September 30th, our net asset value. share was $18.28. On October 8th, we announced that our board declared a fourth quarter 2026 distribution of 44 cents per share to common stockholders and a special distribution of 20 cents per share to common stockholders. Both distributions will be paid in December of this year. As we have indicated on prior earnings calls, we expect our quarterly distribution level will fluctuate as our net investment income. Barriers on a quarter-to-quarter basis. The special distribution amount represents a portion of FSK's estimated accumulated spillback income and is intended to distribute additional taxable income to shareholders in connection with the company's maintenance of its treatment as a regulated investment company under the Internal Revenue Code. Our third-quarter net investment income was positively impacted by a one-time portfolio... ...company dividend which Dan will discuss during his portion of the call. In terms of FSK strategic objectives, while we recognize there is more work to be done, we are pleased with the progress we are making. Since the stock buyback plan's inception on June 29th through October 30th, we have purchased $90 million worth of common stock, representing 30% of our $300 million program. The activity has resulted in the company's...

  11. ...purchasing approximately 8 million shares of common stock. We are continuing to achieve our goal of delivering a per share annualized dividend rate of 8% to 9% of net asset value per share to our common shareholders. We are continuing to work through certain non-income producing assets and investments facing challenges within our portfolio. And we are continuing our longer term focus of transitioning our investment portfolio to more firstly in senior secured positions. As we move into... to the fourth quarter of 2026 and begin contemplating the year ahead, we remain focused on achieving our strategic objectives. And with that, I'll turn the call over to Dan.

  12. Dan PeterczakChief Investment Officer

    Thanks, Michael.

  13. The market environment continues to be shaped by uncertainty surrounding geopolitical tensions, monetary policy, and the evolution and capital requirements of AI. Against this backdrop, we believe economic and corporate... ...fundamentals continue to demonstrate resilience. We believe private credit portfolios offer attractive characteristics in the current environment, including directly negotiated transactions, predominantly floating rate structures, and diversified exposure across issuers and industries. During the third quarter, we continued making progress on the strategic actions the FSK Care Advisor announced earlier this year to help enhance the financial... profile of FSK. During the third quarter, we repurchased 6.2 million shares of common stock, or approximately $69 million, at an average price of $11.24 per share. Our third quarter share repurchases were accretive to our net asset value per share by $0.16. Since the beginning of the fourth quarter through October 30th, we have repurchased 1.5 million shares, or approximately... ...$17 million, bringing the cumulative value of share repurchases to $90 million since the $300 million common stock repurchase program commenced on June 29th. And as a reminder, beginning in the second quarter of 2026, KKR agreed to waive its portion of the subordinated income incentive fee for four consecutive quarters. This waiver had a positive $12 million impact on our third quarter net investment income.

  14. As Michael mentioned, during the third quarter, FSK's net investment income was positively impacted by a $25 million non-recurring dividend from our portfolio company, Belk. This dividend increased our third quarter net investment income per share by $0.08. Turning to our investment activity, during the third quarter, we originated approximately $335 million of new investments. Our new investment is $335 million of new investments. Investments combined with $442 million of sales and repayments equates to a net portfolio decrease of $107 million during the third quarter. We continue to focus on upper middle market companies with EBITDA in the $50 to $150 million range across a diverse set of industries and sectors. As of September 30th, the weighted average EBITDA of our portfolio was $235 million. And the median EBITDA was $131 million. Our portfolio companies reported a weighted average year-over-year EBITDA growth rate of approximately 4% across companies in which we have invested in since April of 2018. Interest coverage levels remain healthy, with median third quarter coverage of two times. In August, Velocity Financial publicly announced its intention to acquire Torax. a business-purpose real estate lending platform. KKR originally invested in Torax in 2016, and since that time has worked closely with Torax management team to scale the platform considerably. As of September 30th, Romano, Torax holding company, was FSK's eighth largest investment.

  15. The acquisition is currently expected to close in the fourth quarter of 2026, subject to satisfactory three. Closing conditions. As of September 30th, non-accruals represented 6.4% of our portfolio on a cost basis and 3.4% of our portfolio on a fair value basis. As compared to 7.1% of our portfolio on a cost basis and 3.8% of our portfolio on a fair value basis as of June 30th. During the third quarter, two investments, three pillar global. A new era technology were added to non-accrual status. These new non-accruals total approximately $142 million of costs and $102 million of fair value across our investment portfolio. Medallia was restructured during the third quarter into a new $66 million first lien loan, a new $42 million preferred equity investment, and a new $14 million common equity investment. Following the restructuring, Medallia was removed from non-accrual status during the third quarter. We'd like to remind investors, as with any restructuring, risk and uncertainties remain with respect to future performance. And with that, I'll turn the call over to Stephen to go through our financial results.

  16. StephenManagement

    Thanks, Dan.

  17. As of September 30th, 2026, FSK's investment portfolio had a fair value of $11.3 million. Consisting of 234 portfolio companies. At the end of the third quarter, our 10 largest portfolio companies represented approximately 21% of the fair value of our portfolio, which is in line with prior quarters. We remain focused on senior secured investments, as our portfolio consisted of approximately 59% first lien loans and 63% senior secured debt as of September 30th. In addition, our joint venture represented approximately 14% of the fair value of our portfolio as of the end of the third quarter. As a result, when looking through to the investments in our joint venture, first lien loans total approximately 69% of our total portfolio, and senior secured investments total approximately 73% of our total portfolio as of September 30th. The weighted average yield on the... accruing debt investments was 10% as of September 30th, as compared to 9.8% during the second quarter. Turning to our quarterly operating results, our total investment income was $294 million for the third quarter, an increase of $4 million compared to the second quarter. The primary components of our total quarterly investment income were as follows. Total interest... Interest income was $206 million, representing a decrease of $11 million quarter over quarter. The decline in interest income primarily was due to a reduction in the size of our investment portfolio and assets placed on non-accrual during the second and third quarters. Dividend and fee income totaled $88 million, an increase of $15 million quarter over quarter. Our total dividend and fee income is...

  18. summarized as follows. $44 million of dividend income from our joint venture. Other dividends from various portfolio companies totaling approximately $40 million during the quarter, which includes the $25 million one-time dividend from Belk, and fee income totaling approximately $4 million during the quarter. Our net expenses were $167 million during the third quarter, which is a... a decrease of $1 million compared to the second quarter. The primary components of our net expenses were as follows. Our interest expense totaled $99 million, a decrease of $2 million quarter over quarter. Our weighted average stated interest rate on borrowings was 5.6% as of September 30th. Management fees totaled $42 million, a decrease of $2 million quarter over quarter. As Dan mentioned, for the second of four consecutive quarters, KKR waived 100% of its portion of the subordinated income incentive fee. This waiver applies to 50% of the subordinated income incentive fee that otherwise would be paid. Net of this waiver, income incentive fees totaled $11 million, a decrease of $1 million compared to the second quarter. Other expenses totaled $13 million, an increase of $2 million quarter of a quarter, primarily due to an increase in certain deal costs and professional expenses. Lastly, we incurred $2 million of excise tax during the third quarter in conjunction with the finalization of 2025 tax items related to certain international and ABF investments. The detailed bridge in our net asset value per share

  19. on a quarter-over-quarter basis is as follows. Our ending 2Q-2026 net asset value per share of $18.30 was increased by GAAP net investment income of $0.46 per share and was decreased by $0.19 per share due to a decrease in the overall value of our investment portfolio. Our net asset value per share was reduced by our $0.44 per share quarterly common stock distribution and our $0.01 per share quarterly preferred stock distribution on a common stock equivalent basis paid during the quarter. Our net asset value per share was increased by $0.16 per share due to share repurchases. The sum of these activities results in our September 30, 2026 net asset value per share of $18.28. From a forward-looking perspective. For the fourth quarter of 2026, we currently expect our GAAP net investment income per share to be in the range of 8% to 9% of net asset value per share on an annualized basis. We encourage investors to consider that the third quarter BELC dividend was non-recurring and that the fourth quarter is when FSK typically recognizes its annual excise tax provision. In addition, to these items, we expect the fourth quarter will be positively impacted by a dividend from a portfolio company, JW Aluminum, approximating $17 million. We remind investors that the portfolio activity Dan described, as well as market-based future risks and uncertainties, could cause their anticipated fourth quarter 2026 results to differ from this guidance.

  20. As of September 30th, our debt-to-equity and net debt-to-equity levels were 127% and 125%, respectively, compared to 127% and 122% as of June 30th. At the end of the third quarter, our available liquidity was $3.4 billion and approximately 73% of our drawn balance sheet and 49% of our committed balance sheet.

  21. was comprised of unsecured debt. And with that, I'll turn the call back to Michael for a few closing remarks before we open the call for questions.

  22. Michael FormanChief Executive Officer

    Thanks, Stephen.

  23. We believe the third quarter represents another step forward in the goals we outlined earlier this year. We are encouraged by our progress, but we recognize there is still more work to do. Looking ahead, we remain focused on advancing our portfolio rotation efforts.

  24. Repurchasing shares and delivering long-term value for shareholders. As always, we appreciate your participation in the call today and for your interest in FSK. Operator, we'd now like to open the line for questions.

  25. Operator

    Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by. We'll compile the Q&A roster.

  26. Our first question comes from the line of John Hecht of Jefferies. Your line is now open.

  27. Question · Jefferies

    John HechtAnalyst · Jefferies

    Morning, guys, and thanks for taking my questions. And, Stephen, thanks for the detail about Q4. First question is, within your portfolio, what's the maturity cadence over the next two years? And is there any... industry-specific composition that you can call it? I guess software would be of interest predominantly, but, you know, anything else in terms of the industry composition during that period of time?

  28. Management

    Good morning, John.

  29. Question · Jefferies

    John HechtAnalyst · Jefferies

    Thanks for the question.

  30. You know, ballpark 25% of the portfolio would be sort of between now and kind of 28. You know, would you probably expect, considering when you kind of tied that back to origination? Yeah, I think from a conceptual perspective, you know, I'm probably a little bit less worried about, you know, the maturity wall concept in general, but I think we are focused on that on the software space. Obviously, there's been a seismic shift there in terms of, you know, valuations, where the debt market is going to take sort of new deals or refis of existing deals. So, you know, I think outside of software, probably not that worried. Inside of software, I think it's clearly on our mind. And I suspect it's on the mind of many others.

  31. Management

    Okay. And then, you know, I guess, thinking about your pipeline and outlook for deployment activity, anything moving with, you know, bid-ask spreads or terms, you know, I guess, particularly, right, of, you know, interest rate uncertainty and geopolitical uncertainty?

  32. Management

    Yeah, I'll take that in a couple different pieces, right? I think the market is definitely, I would say, wider than it was at the start of the year, right? And I would attribute that mainly to the activity or the redemption activity in the non-traded BDC space. You know, I think, at least in our opinion, I think spread's probably gone 100 basis points wider, including OIC. The sort of upfront fees. And it's, you know, since given sort of some of that back, but probably 50 basis points wider versus the start of the year. And I would say, you know, overall tone or, you know, a little bit more lender friendly than sort of borrower friendly. And obviously, you know, not just the redemptions, but the rest of the stuff gone on kind of macro geopolitical helps that. You know, I think in terms of FSK specifically, obviously, we're a little less focused on deployment, you know, more focused on the buyback plan done, more focused on getting leverage inside the target. So the number, you know, even our new deals or kind of new deployment this quarter was a little bit skewed by one transaction was committed to in 25 that actually funded this quarter. So, you know, I think Mark get a little bit back. I think where we're at now is we're focused on the things we sort of talked about. You know, at some point that dynamic will change. We'll get a little bit more kind of fresh new deal flow in here. Hopefully generate a little bit more on the upfront fee side as well. Great.

  33. Management

    Thanks very much.

  34. Operator

    Have a good day. Thank you.

  35. Our next question comes from the line of Rick Shane of JP Morgan. Your line is now open.

  36. Question · J.P. Morgan

    Rick ShaneAnalyst · J.P. Morgan

    Hey, guys.

  37. Thanks for taking my questions.

  38. John really stuck the landing in terms of what I wanted to ask. But the comment about focusing on continuing to delever and at the same time buy back stock through paydowns makes sense. I am curious now that we're starting to see. Value stabilized. You realized a lot of losses in the third quarter, but did not hit book. So suggesting your reserve levels or your reserve levels, your marks are appropriate. That's good execution. What do you think the timeframe realistically to starting to deploy capital again on a sort of a net basis looks like? Is that a 28? timeframe?

  39. Management

    Yeah, it's a fair question.

  40. Management

    I appreciate the question. You know, I think we've been pretty consistent in, you know, in either conversations or, you know, talking about it on the last couple of calls. You know, it's important for us to get the buyback done. I think we want to manage that buyback with also kind of being in the right leverage. I think we've talked about our leverage target, you know, it's kind of one-to-one in a quarter. We've gotten it down at least versus, say, two quarters ago. You know, so that's probably playing out, you know, John, over the course of 27 is my guess, right? You think about both getting the repurchase program done as well as getting within that leverage number. Now, there are things that I think are, you know, good results like we had a very good investment or experience with the TORAC investment. You know, we started that in 2016. You know, the company grew meaningfully, you know, well beyond anybody's expectations in terms of value, but it felt like a good time for that company to take its next step and sort of monetize. So I probably think about it over the course of, you know, the next buy course. Got it. And Dan, I do realize the... irony of me asking questions about growth and sort of glossing over the commitment on the buyback. So I do appreciate, you know, where you guys are sort of...what you're moving through. No, I appreciate that, Connor. Thank you.

  41. Management

    Thanks, guys.

  42. Operator

    Our next question comes from the line of Finian O'Shea of Wells Fargo Securities. Your line is now open.

  43. Question · Wells Fargo

    Finian O'SheaAnalyst · Wells Fargo

    Hi, everyone.

  44. Good morning.

  45. Management

    Stephen, I think you mentioned you had a more complete picture of spillover from the EBF vehicles. Any color you could give on that as to where you are if we might expect future specials or this is it? And if you will, maybe arrange on the fourth quarter tax item.

  46. Management

    Yeah, Finn, good morning. You know, I think when you consider in our last 10K, I think we said spillover was $464 million. You know, we paid $2 million of XIs in this quarter. So that would imply that, you know, that balance is a little bit higher when you do that math. And then we also paid the, uh, announced the special distribution. of 20 cents a share. So, you know, you're sort of settling still in the top end of the range. Um, you know, and we will publish the, uh, spillover for the end of 2026, you know, when we file our 10K, you know, in February. So that number will come out then, but still would say from a guidance standpoint, you're more of the top end of the range. Um, you know, so I'd probably just leave it, leave it there for now. Okay. That's helpful. Thanks. And, um, then just to follow up on, on sort of the overall progress, um, the, the, that continues, you guys talked a bit about, should we think about the, the fee waivers as, you know, more straightforwardly this, this one time, uh, one year event or as they lapse? Um, do you, do you all contemplate a more, a permanent change after that? Yeah, good morning, Ben. I take that one. Um, yeah, obviously we're, we're in the second quarter of that, the second quarter of the announced sort of four quarters. Um, you know, I, I think we're, you know, happy we sort of did that. I think we're happy with the overall package of, of, um, you know, items we did, you know, come back now sort of two quarters.

  47. Management

    I think we'll obviously, um, you know, have that conversation, you know, with the board kind of as a, as, as appropriate, as kind of required on that annual basis. But, you know, right now, I think we're only two quarters in and I think we're happy with some of the progress that we've been able to make, uh, across the portfolio. But I think we acknowledge that there is some more work to do and that's what we're focused on. So it ties to the portfolio progress as to whether it's sort of. of just this one time. You know, obviously, you know, I think it ties to, you know, in some ways, um, you know, the entirety of the situation, right? I wouldn't say it ties directly to the portfolio process. My point being, you know, more that, you know, we're two quarters into the four quarters being announced. You know, we obviously discuss fees with the board on an annual basis. But I think we singularly on our side of it. The team are focused on, you know, the portfolio and the work we have to do. Very good. I appreciate that. Thank you. Thanks. Have a good day.

  48. Operator

    Our next question comes from the line of Aaron Seganovich of Trues Securities.

  49. Your line is now open.

  50. Question · Trues Securities

    T
    Aaron SeganovichAnalyst · Trues Securities

    Yes. Thank you. Apologies. I want to touch on the portfolio management and have already come through. You had a couple new ones this quarter. What's in the watch list? I know it's hard to say when things go bad or not, but do you feel like you're... You've gotten a good handle in terms of maybe limiting some of these new non-accruals as you're kind of working through the portfolio and going forward. Yeah, I'll have to take that. I think you are correct, right? A credit book does move and does sort of change quarter on quarter. So with that said, I think you can look at kind of our... you know, risk rating threes and fours as probably a fair description of watchlist names. You know, I think if you think about some of the specific events of the quarter, you know, I think, you know, speaking for ourselves, but I suspect the other lenders as well, we were happy to get the medallion restructuring done to try to get to the next, you know, phase for that company. You know... Three Pillar is one of the names that would be kind of in that software space with some AI risk around it. The team is very active in trying to work on to the next steps there. You know, New Year is more of an IT integration kind of managed services business. You know, I think there's really operational points there more than, you know, anything else, but again, kind of team and other lenders in that kind of position focused on that.

  51. Management

    So, um... You know, I think, you know, active across the board, um, feel like we've had, you know, some good progress on some of the other names that we may have talked about in the past, but I think we are mindful that, you know, things can change or, you know, the world is a pretty volatile place right now. Um, and, you know, we've got to get some of these positions to the other side. And maybe just to talk about it from the standpoint of your platform, um, beyond, uh, this... You see, uh, you know, what, what are you seeing? You know, I imagine that you're still originating and you're, you know, still, you're doing all of the more, uh, forward looking and forward actions, uh, in, in other vehicles. Um, you know, what are you, what are you seeing from the market from, from that standpoint? And, um, you know, maybe just some, some thoughts on, uh, on some of the trends you're, you're seeing, uh, currently. Yeah, maybe a couple points. I mean, you are correct, right? I mean, um, you know, we are, uh, quite active in the market, um, uh, you know, to, you know, other pools of capital, you know, FSK's historically invested alongside of, or still does, you know, maybe just in, in much, much smaller size. Um, you know, I, I do go back to the, what I, you know, said on, on, I think it was John's question, you know, the overall tone of the market. Um, definitely a little bit more lender friendly than it was sort of prior. I think that's good to see. Um, you know, I think the team, you know, for, for most of this year probably felt pretty light in terms of new deal flow. Um, you know, kind of broad stroke across the board. I'm not sure that's entirely surprising considering, you know, Iran and, and still this lingering inflation. You know, I think we're getting up.

  52. Management

    A bit, you know, busier or there's a, you know, a bit more kind of activity. Um, you know, more kind of inbound on books being prepared, companies trying to be sold. Um, but, you know, I think the market is still missing, um, you know, uh, uh, what I, what I think we've all been expecting, you know, a healthy amount of deal flow of sponsors selling businesses. Um, and I think that's just going to take some time or it's going to, the, the kind of bid ask of price is going to sort of narrow or need to narrow. You know, so I think, I think we're out of the business of forecasting, um, you know, when M&A is going to come back in a normal sort of sense. But, you know, at some point, I think some of these things will have to come to market. You'll have to see some of the activity and stuff. And maybe the only other comment, just for your benefit, you know, we have seen, um, you know, even, you know, we'll call it the opposite side of maybe the redemptions in the, in the retail space. We have seen a strong, uh, either continued interest or maybe even a little bit greater interest from the institutional side on investing in the space on the investor side. Uh, on that last comment, is the institutional interest, you know, remaining kind of at that level? I know kind of, you know, picked up in the summer and, uh, early fall, uh, whenever spreads were. Yeah, I think it's remaining. Great. Thank you.

  53. Operator

    Yeah, I think it's remaining. Obviously, there's a little bit of a tailwind to, um, uh, thanks for your questions. Have a good day. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone.

  54. Our next question comes from the line of Robert Dodd of Raymond James.

  55. Question · Raymond James

    Robert DoddAnalyst · Raymond James

    Your line is now open. Hi, guys, and congratulations on the stable quarter. I've got a question on the asset-backed finance side of the book, right? I mean, if I look at it in the, just do the math, right, you had 11.6% of the portfolio at the end of Q3, but with TORAC, Romano, or whatever I'm supposed to currently call it, getting acquired in Q4, I mean, you could end the year potentially. in the single digits on that side of the business, let's call it, you know, 10%-ish. Is that, like, is that the new plan, right? I mean, you've talked about going to more firstly, I mean, is the plan to shrink the ABS component in the book, which may not be as well understood by investors, because it is different from a lot of other BDCs do, is it the plan to shrink that? Or is this just a temporary low in terms of mass allocation to the ABF strategy? Yeah, good morning. I wouldn't classify it as an active, you know, focus on shrinking it. I think we've historically talked about it in the range of 10 to 15%. I think you should expect that range to sort of continue. Obviously, we're, you know, constantly managing the, like any other BDC, the So, thank you very much. 30% bucket as well. And as we are kind of shrinking, you know, certain assets are taking repayments to buyback shares and sort of delever. So I think it's part of the whole calculus. But I wouldn't think about it as an active sort of piece. I think we've seen good performance in that part of our portfolio. We think that marketplace itself remains quite interesting from a risk-adjusted return perspective. You know, so it's, but I just constantly have that 10 to 15% range.

  56. Management

    Got it. Got it. Thank you. I mean, on that, just on webinar, I mean, obviously there's about a $40 million gap between your fair value and your cost basis this quarter. I mean, on the acquisition price, is that basically that's baked into the fair value or is the acquisition price potentially higher than you had it marked at Q3?

  57. Management

    $14 or $15 billion by this point. You know, they've done a good job. I think it was just a, you know, we've owned it for 10 years, I think both for the company's benefit. I think from time to time, it's good to rotate out of these things. It was sort of proper to sell. But I'll come back on that sort of specific point, yeah. Got it. Thank you. One more, if I can, real quick, flipping the other end on what's normally non-income producing equity, JW Aluminum, but it's going to pay a... dividend in the fourth quarter. I mean, that business continues to do very well. I know I've asked you about this before, but like, you know, yes, the M&A market's slow, but that's a good business. It's not AI exposed. Maybe it's going to, you're going to use aluminum to build the skeletons for a robot overlords. But, you know, that seems like exactly the kind of business that would be attractive to a buyer right now. Is there any... Have there been any inquiries or any interest more recently in you monetizing that business? Yeah, it's... Your point's not unfair. I think we've been very happy with performance there. I think the team has done a good job over a long period of time. You know, and the management team today is doing a good job. There is kind of tailwind there, to your point. You know, probably difficult. To comment on if there's any, you know, inbound interest, but I don't think you're incorrect in the sense that, you know, with those tailwinds, with it not being AI, it's probably not a bad fact.

  58. Operator

    You know, I would note, you know, this is the fourth or fifth, you know, dividend the business has paid in the last handful of years. It's not necessarily every quarter, but considering performance, it is becoming a little bit more of a consistent fact. and sort of a one-off fact. Good enough. Thank you. Okay. Have a good day.

  59. I am showing no further questions at this time. I would now like to turn it back to Dan Peterczyk for closing remarks.

  60. Operator

    Thank you. And thank you, everyone, for your time today. If there are any follow-up points, please do not hesitate to reach out to the team. We look forward to speaking with you on our next quarterly call. Have a good day.

  61. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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