The Company invests predominately in senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries, as well as syndicated senior secured loans, structured product investments, bonds and other fixed income securities. Structured product investments include collateralized loan obligations and asset-backed securities. The Adviser’s existing SEC co-investment exemptive relief under the 1940 Act permits the Company and the Adviser's affiliated private funds and SEC-registered funds to co-invest in loans originated by the Adviser, which allows the Adviser to efficiently implement its senior secured private debt investment strategy for the Company.

The cost basis of the Company’s debt investments includes any unamortized purchased premium or discount, unamortized loan origination fees and PIK interest, if any. Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments and net assets, are shown in the following tables:


($ in thousands)	Cost		Percent of Total Portfolio		Fair Value		Percent of Total Portfolio		Percent of Total Net Assets
December 31, 2022:
Senior debt and 1st lien notes	$	1,752,943	69	%	$	1,696,192	69	%	142	%
Subordinated debt and 2nd lien notes	326,639		13		263,139		11		22
Structured products	88,805		3		73,550		3		6
Equity shares	230,188		9		284,570		12		24
Equity warrants	178		—		1,057		—		—
Investments in joint ventures / PE fund	163,645		6		130,427		5		11

	$	2,562,398	100	%	$	2,448,935	100	%	205	%
December 31, 2021:
Senior debt and 1st lien notes	$	1,217,899	68	%	$	1,221,598	68	%	165	%
Subordinated debt and 2nd lien notes	253,551		14		240,037		13		32
Structured products	37,055		2		40,271		2		6
Equity shares	145,791		8		154,477		9		21
Equity warrants	1,111		—		1,107		—		—
Investments in joint ventures / PE fund	132,417		8		143,104		8		19

	$	1,787,824	100	%	$	1,800,594	100	%	243	%

During the year ended December 31, 2022, the Company made 95 new investments totaling $884.8 million, purchased $442.2 million of investments as part of the Sierra Merger, made investments in existing portfolio companies totaling $258.5 million and made additional investments in joint venture equity portfolio companies totaling $13.8 million.

During the year ended December 31, 2021,the Company made 112 new investments totaling $1,069.4 million, made investments in existing portfolio companies totaling $234.0 million, made a new joint venture equity investment totaling $13.7 million, made an additional investments existing joint venture equity portfolio companies totaling $79.4 million and made an $89.8 million equity co-investment alongside certain affiliates in a portfolio company focused on directly originated, senior-secured asset-based loans to middle-market companies.

During the year ended December 31, 2020, the Company made 76 new investments totaling $743.2 million, purchased $185.0 million of investments as part of the MVC Acquisition, made investments in existing portfolio companies totaling $114.6 million, made a new joint venture equity investment totaling $10.0 million and made an additional investment in one existing joint venture equity portfolio company totaling $10.0 million.


($ in thousands)	December 31, 2022		Percent of Portfolio		December 31, 2021		Percent of Portfolio
Aerospace and Defense	$	120,945	4.9	%	$	91,128	5.1	%
Automotive	76,934		3.2		55,875		3.1
Banking, Finance, Insurance and Real Estate	312,936		12.8		208,397		11.6
Beverage, Food and Tobacco	34,690		1.4		38,985		2.2
Capital Equipment	141,479		5.8		42,916		2.4
Chemicals, Plastics, and Rubber	47,076		1.9		32,234		1.8
Construction and Building	45,049		1.8		62,083		3.4
Consumer goods: Durable	43,932		1.8		47,316		2.6
Consumer goods: Non-durable	27,693		1.1		28,306		1.6
Containers, Packaging and Glass	37,877		1.5		10,218		0.6
Energy: Electricity	7,337		0.3		12,190		0.7
Energy: Oil and Gas	4,776		0.2		5,774		0.3
Environmental Industries	51,006		2.1		8,081		0.4
Healthcare and Pharmaceuticals	203,576		8.3		134,286		7.5
High Tech Industries	300,980		12.3		139,590		7.7
Hotel, Gaming and Leisure	54,023		2.2		27,553		1.5
Investment Funds and Vehicles	130,427		5.3		143,104		7.9
Media: Advertising, Printing and Publishing	55,477		2.3		46,414		2.6
Media: Broadcasting and Subscription	20,257		0.8		7,441		0.4
Media: Diversified and Production	60,561		2.5		52,887		2.9
Metals and Mining	33,125		1.4		10,684		0.6

Services: Business	338,417		13.8		342,758		19.0
Services: Consumer	67,070		2.7		65,801		3.7
Structured Products	86,703		3.5		24,662		1.4
Telecommunications	24,058		1.0		45,182		2.5
Transportation: Cargo	89,398		3.7		86,964		4.8
Transportation: Consumer	11,062		0.5		12,231		0.7
Utilities: Electric	17,374		0.7		12,857		0.7
Utilities: Oil and Gas	4,697		0.2		4,677		0.3

Total	$	2,448,935	100.0	%	$	1,800,594	100.0	%


	Fair Value at December 31, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total
Senior debt and 1st lien notes	$	—	$	104,836	$	1,591,356	$	1,696,192
Subordinated debt and 2nd lien notes	—		28,925		234,214		263,139
Structured products	—		55,723		17,827		73,550
Equity shares	164		1,339		283,067		284,570
Equity warrants	—		—		1,057		1,057

Investments subject to leveling	$	164	$	190,823	$	2,127,521	$	2,318,508
Investments in joint ventures / PE fund(1)							130,427
							$	2,448,935

	Fair Value at December 31, 2021
($ in thousands)	Level 1		Level 2		Level 3		Total
Senior debt and 1st lien notes	$	—	$	84,275	$	1,137,323	$	1,221,598
Subordinated debt and 2nd lien notes	—		9,468		230,569		240,037
Structured products	—		40,271		—		40,271
Equity shares	111		3,084		151,282		154,477
Equity warrants	—		243		864		1,107

Investments subject to leveling	$	111	$	137,341	$	1,520,038	$	1,657,490
Investments in joint ventures / PE fund(2)							143,104
							$	1,800,594

(1)The Company’s investments in Jocassee, Sierra JV, Thompson Rivers, Waccamaw River and the MVC Private Equity Fund LP are measured at fair value using NAV and have not been categorized in the fair value hierarchy. The fair value amount presented in this table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets.

(2)The Company’s investments in Jocassee, Thompson Rivers, Waccamaw River and the MVC Private Equity Fund LP are measured at fair value using net asset value and have not been categorized in the fair value hierarchy. The fair value amount presented in this table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets.


Year Ended December 31, 2022: ($ in thousands)	Senior Debt and 1st Lien Notes		Subordinated Debt and 2nd Lien Notes		Structured Products		Equity Shares		Equity Warrants		Total
Fair value, beginning of period	$	1,137,323	$	230,569	$	—	$	151,282	$	864	$	1,520,038
New investments	907,398		95,157		14,893		71,576		4		1,089,028
Investments acquired in Sierra merger	210,176		54,177		—		7,065		72		271,490
Transfers into (out of) Level 3, net	43		(11,848)		4,905		7,263		41		404
Proceeds from sales of investments	(323,831)		(21,555)		—		(7,304)		(250)		(352,940)
Loan origination fees received	(18,803)		(1,317)		—		—		—		(20,120)
Principal repayments received	(270,795)		(77,293)		(357)		—		—		(348,445)
Payment-in-kind interest/dividends	2,996		11,330		—		1,677		—		16,003
Accretion of loan premium/discount	790		89		—		—		—		879
Accretion of deferred loan origination revenue	8,338		2,734		—		—		—		11,072
Realized gain (loss)	(13,163)		(2,781)		—		1,096		(760)		(15,608)
Unrealized appreciation (depreciation)	(49,116)		(45,048)		(1,614)		50,412		1,086		(44,280)
Fair value, end of period	$	1,591,356	$	234,214	$	17,827	$	283,067	$	1,057	$	2,127,521


Year Ended December 31, 2021: ($ in thousands)	Senior Debt and 1st Lien Notes		Subordinated Debt and 2nd Lien Notes		Equity Shares		Equity Warrants		Total
Fair value, beginning of period	$	1,055,717	$	130,820	$	44,227	$	1,134	$	1,231,898
New investments	1,096,053		151,301		103,526		163		1,351,043
Transfers into (out of) Level 3, net	(2,630)		2,234		3,224		—		2,828
Proceeds from sales of investments	(736,675)		(13,683)		(7,964)		(450)		(758,772)
Loan origination fees received	(26,844)		(3,660)		—		—		(30,504)
Principal repayments received	(255,215)		(32,131)		—		—		(287,346)
Payment-in-kind interest	865		8,504		—		—		9,369
Accretion of loan premium/discount	16		222		—		—		238
Accretion of deferred loan origination revenue	8,584		603		—		—		9,187
Realized gain (loss)	(575)		(37)		950		163		501
Unrealized appreciation (depreciation)	(1,973)		(13,604)		7,319		(146)		(8,404)
Fair value, end of period	$	1,137,323	$	230,569	$	151,282	$	864	$	1,520,038

All realized gains and losses and unrealized appreciation and depreciation are included in earnings (changes in net assets) and are reported on separate line items within the Company’s Consolidated Statements of Operations. Pre-tax net unrealized depreciation on Level 3 investments of $45.3 million during the year ended December 31, 2022 was related to portfolio company investments that were still held by the Company as of December 31, 2022. Pre-tax net unrealized depreciation on Level 3 investments of $3.8 million during the year ended December 31, 2021 was related to portfolio company investments that were still held by the Company as of December 31, 2021.

During the year ended December 31, 2022, the Company made investments of approximately $1,529.6 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the year ended December 31, 2022, the Company made investments of $83.6 million in companies to which it was previously committed to provide such financing.

During the year ended December 31, 2021, the Company made investments of approximately $1,410.5 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the year ended December 31, 2021, the Company made investments of $70.0 million in companies to which it was previously committed to provide such financing.

On May 8, 2019, the Company entered into an agreement with South Carolina Retirement Systems Group Trust (“SCRS”) to create and co-manage Jocassee Partners LLC (“Jocassee”), a joint venture, which invests in a highly diversified asset mix including senior secured, middle-market, private debt investments, syndicated senior secured loans and structured product investments. The Company and SCRS committed to initially provide $50.0 million and $500.0 million, respectively, of equity capital to Jocassee. On June 2, 2022, the Company committed an additional $50.0 million to Jocassee. Equity contributions will be called from each member on a pro-rata basis, based on their equity commitments.

The total value of Jocassee’s investment portfolio was $1,219.9 million as of December 31, 2022, as compared to $1,258.2 million as of December 31, 2021. As of December 31, 2022, Jocassee’s investments had an aggregate cost of $1,296.4 million, as compared to $1,242.2 million as of December 31, 2021. As of December 31, 2022 and December 31, 2021, the weighted average yield on the principal amount of Jocassee’s outstanding debt investments was approximately 8.6% and 5.3%, respectively. As of December 31, 2022 and December 31, 2021, the Jocassee investment portfolio consisted of the following investments:


($ in thousands)	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio
December 31, 2022:
Senior debt and 1st lien notes	$	1,177,895	91	%	$	1,123,760	92	%
Subordinated debt and 2nd lien notes	23,141		2	%	21,659		2	%

Equity shares	8,521		—	%	2,458		—	%
Equity warrants	31		—	%	158		—	%
Investment in joint ventures	75,941		6	%	61,028		5	%
Short-term investments	10,826		1	%	10,826		1	%
	$	1,296,355	100	%	$	1,219,889	100	%
December 31, 2021:
Senior debt and 1st lien notes	$	1,084,502	87	%	$	1,085,172	86	%
Subordinated debt and 2nd lien notes	23,607		2		24,011		2
Structured products	4,569		—		5,410		1
Equity shares	5,448		1		3,887		—
Equity warrants	31		—		75		—
Investment in joint ventures	111,490		9		127,092		10
Short-term investments	12,572		1		12,572		1
	$	1,242,219	100	%	$	1,258,219	100	%


($ in thousands)	December 31, 2022				December 31, 2021
Aerospace and Defense	$	69,133	5.7	%	$	71,857	5.8	%
Automotive	20,625		1.7		18,626		1.5
Banking, Finance, Insurance and Real Estate	105,047		8.7		109,961		8.8
Beverage, Food and Tobacco	25,885		2.1		30,352		2.4
Capital Equipment	25,014		2.1		17,006		1.4
Chemicals, Plastics, and Rubber	33,111		2.7		24,665		2.0
Construction and Building	17,616		1.5		14,506		1.2
Consumer goods: Durable	18,751		1.7		10,294		0.8
Consumer goods: Non-durable	22,861		1.9		23,886		1.9
Containers, Packaging and Glass	24,445		2.0		25,277		2.0

Energy: Electricity	15,375		1.3		10,571		0.9
Energy: Oil and Gas	5,726		0.5		5,091		0.4
Environmental Industries	7,314		0.6		7,563		0.6
Forest Products & Paper	2,269		0.2		475		—
Healthcare and Pharmaceuticals	128,983		10.7		128,495		10.3
High Tech Industries	141,906		11.7		171,960		13.8
Hotel, Gaming and Leisure	23,587		2.0		35,383		2.8
Investment Funds and Vehicles	61,028		5.0		127,092		10.2
Media: Advertising, Printing and Publishing	5,969		0.5		18,423		1.5
Media: Broadcasting and Subscription	34,676		2.9		37,840		3.0
Media: Diversified and Production	28,897		2.4		21,059		1.7
Metals and Mining	5,069		0.4		5,792		0.5
Retail	15,720		1.3		14,420		1.2
Services: Business	199,805		16.5		151,723		12.2
Services: Consumer	52,543		4.3		55,156		4.4
Structured Product	—		—		5,409		0.4
Telecommunications	38,034		3.1		36,036		2.9
Transportation: Cargo	56,018		4.6		49,103		3.9
Transportation: Consumer	12,562		1.0		6,546		0.5
Utilities: Electric	4,194		0.3		3,265		0.3
Utilities: Oil and Gas	6,900		0.6		6,870		0.6
Wholesale	—		—		945		0.1
Total	$	1,209,063	100.0	%	$	1,245,647	100.0	%


	December 31, 2022				December 31, 2021
Australia	$	26,111	2.1	%	$	16,509	1.3	%
Austria	6,697		0.5	%	1,115		0.1
Belgium	16,385		1.4		14,814		1.2
Canada	7,280		0.6		8,507		0.7
Denmark	953		0.1		6,960		0.6
Finland	1,967		0.2		47,992		3.8
France	133,682		11.1		3,391		0.3
Germany	38,068		3.1		6,357		0.5
Hong Kong	16,593		1.4		2,272		0.2
Ireland	4,334		0.4		123,816		9.9
Italy	—		—		113,896		9.1
Luxembourg	1,759		0.1		4,766		0.4
Netherlands	35,194		2.9		3,744		0.3
Panama	945		0.1		—		—
Singapore	4,955		0.4		—		—
Spain	4,189		0.3		1,225		0.1
Sweden	4,371		0.4		32,150		2.6
Switzerland	5,558		0.5		965		0.1
United Kingdom	126,305		10.4		5,305		0.4
USA	773,717		64.0		851,863		68.4
Total	$	1,209,063	100.0	%	$	1,245,647	100.0	%

Jocassee’s subscription facility with Bank of America N.A., which is non-recourse to the Company, had approximately $174.3 million and $176.3 million outstanding as of December 31, 2022 and December 31, 2021, respectively. Jocassee’s credit facility with Citibank, N.A., which is non-recourse to the Company, had approximately $357.9 million and $342.8 million outstanding as of December 31, 2022 and December 31, 2021, respectively. Jocassee’s term debt securitization, which is non-recourse to the Company, had approximately $323.3 million and $323.1 million outstanding as of December 31, 2022 and December 31, 2021, respectively.

The Company may sell portions of its investments via assignment to Jocassee. Since inception, as of December 31, 2022, and December 31, 2021, the Company had sold $875.9 million and $698.5 million, respectively, of its investments to Jocassee. For the years ended December 31, 2022 and December 31, 2021, the Company realized a loss on the sales of its investments to Jocassee of $5.6 million and $1.4 million, respectively. As of December 31, 2022 and December 31, 2021, the Company had $18.2 million and $216.9 million, respectively, in unsettled receivables due from Jocassee that were included in "Receivable from unsettled transactions" in the accompanying Consolidated Balance Sheets. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale and satisfies the following conditions:

The Company has determined that Jocassee is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Jocassee as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Jocassee due to the allocation of voting rights among Jocassee members.

As of December 31, 2022 and December 31, 2021, Jocassee had the following contributed capital and unfunded commitments from its members:



($ in thousands)	As of December 31, 2022		As of December 31, 2021
Total contributed capital by Barings BDC, Inc.	$	35,000	$	30,000
Total contributed capital by all members	$	385,000	$	330,000

Total unfunded commitments by Barings BDC, Inc.	$	65,000	$	20,000
Total unfunded commitments by all members	$	215,000	$	220,000

On April 28, 2020, Thompson Rivers LLC (“Thompson Rivers”) was formed as a Delaware limited liability company. On May 13, 2020, the Company entered into a limited liability company agreement governing Thompson Rivers. Under Thompson Rivers’ current operating agreement, as amended to date, the Company has a capital commitment of $75.0 million of equity capital to Thompson Rivers, all of which has been funded as of December 31, 2022. As of December 31, 2022, aggregate commitments to Thompson Rivers by the Company and the other members under the current operating agreement total $450.0 million, all of which has been funded.

For the years ended December 31, 2022 and 2021, Thompson Rivers declared $261.9 million and $37.5 million in dividends, respectively, of which $9.1 million and $4.8 million, respectively, was recognized as dividend income in the Company’s Consolidated Statement of Operations. In addition, for the year ended December 31, 2022, the Company recognized $32.8 million of the dividends as a return of capital.

As of December 31, 2022, Thompson Rivers had $890.9 million in Ginnie Mae early buyout loans and $65.1 million in cash. As of December 31, 2021, Thompson Rivers had $3.1 billion in Ginnie Mae early buyout loans and $220.6 million in cash. As of December 31, 2022, Thompson Rivers had 5,414 outstanding loans with an average unpaid balance of $0.2 million and weighted average coupon of 4.0%. As of December 31, 2021, Thompson Rivers had 15,617 outstanding loans with an average unpaid balance of $0.2 million and weighted average coupon of 4.0%.


($ in thousands)	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio
December 31, 2022:
Federal Housing Administration (“FHA”) loans	$	864,625	91	%	$	811,358	91	%
Veterans Affairs (“VA”) loans	84,654		9	%	79,553		9	%

	$	949,279	100	%	$	890,911	100	%
December 31, 2021:
Federal Housing Administration (“FHA”) loans	$	2,799,869	93	%	$	2,839,495	93	%
Veterans Affairs (“VA”) loans	224,660		7	%	223,540		7	%

	$	3,024,529	100	%	$	3,063,035	100	%

Thompson Rivers’ repurchase agreement with JPMorgan Chase Bank, which is non-recourse to the Company, had approximately $224.2 million and $694.8 million outstanding as of December 31, 2022 and December 31, 2021, respectively. Thompson Rivers’ repurchase agreement with Bank of America N.A., which is non-recourse to the Company, had approximately $428.0 million and $1,245.2 million outstanding as of December 31, 2022 and December 31, 2021, respectively. Thompson Rivers’ repurchase agreement with Barclays Bank, which is non-recourse to the Company, had approximately $184.2 million and $933.1 million outstanding as of December 31, 2022 and December 31, 2021, respectively.

The Company has determined that Thompson Rivers is an investment company under ASC Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Thompson Rivers as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Thompson Rivers due to the allocation of voting rights among Thompson Rivers members.

As of December 31, 2022 and December 31, 2021, Thompson Rivers had the following contributed capital and unfunded commitments from its members:



($ in thousands)	As of December 31, 2022			As of December 31, 2021
Total contributed capital by Barings BDC, Inc. (1)	$	79,411		$	79,414
Total contributed capital by all members	$	482,083	(2)	$	482,120	(3)

Total unfunded commitments by Barings BDC, Inc.	$	—		$	—
Total unfunded commitments by all members	$	—		$	—

On January 4, 2021, Waccamaw River LLC (“Waccamaw River”) was formed as a Delaware limited liability company. On February 8, 2021, the Company entered into a limited liability company agreement governing Waccamaw River. Under Waccamaw River’s current operating agreement, as amended to date, the Company has a capital commitment of $25.0 million of equity capital to Waccamaw River, of which approximately $22.5 million (including approximately $5.3 million of recallable return of capital) has been funded as of December 31, 2022. As of December 31, 2022, aggregate commitments to Waccamaw River by the Company and the other members under the current operating agreement total $125.0 million, of which $112.6 million (including $14.0 million of recallable return of capital) has been funded.

As of December 31, 2022, Waccamaw River had $200.5 million in unsecured consumer loans and $8.0 million in cash. As of December 31, 2021, Waccamaw River had $60.8 million in unsecured consumer loans and $4.9 million in cash. As of December 31, 2022, Waccamaw River had 18,335 outstanding loans with an average loan size of $11,542, remaining average life to maturity of 44.0 months and weighted average interest rate of 12.0%. As of December 31, 2021, Waccamaw River had 5,500 outstanding loans with an average loan size of $11,280, remaining average life to maturity of 46.5 months and weighted average interest rate of 10.9%.

Waccamaw River’s secured loan borrowing with JPMorgan Chase Bank, N.A., which is non-recourse to the Company, had approximately $72.3 million outstanding as of December 31, 2022. Waccamaw River’s secured loan borrowing with Barclays Bank PLC, which is non-recourse to the Company, had approximately $44.8 million outstanding as of December 31, 2022.

The Company has determined that Waccamaw River is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Waccamaw River as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Waccamaw River due to the allocation of voting rights among Waccamaw River members.



($ in thousands)	As of December 31, 2022			As of December 31, 2021
Total contributed capital by Barings BDC, Inc.	$	27,800		$	19,000
Total contributed capital by all members	$	126,620	(1)	$	82,620	(4)

Total return of capital (recallable) by Barings BDC, Inc.	$	(5,280)		$	(5,280)
Total return of capital (recallable) by all members (2)	$	(14,020)		$	(14,020)

Total unfunded commitments by Barings BDC, Inc.	$	2,480		$	11,280
Total unfunded commitments by all members	$	12,400	(3)	$	56,400	(5)

On February 25, 2022, as part of the Sierra Merger, the Company purchased its interest in Sierra Senior Loan Strategy JV I LLC (“Sierra JV”). The Company and MassMutual Ascend Life Insurance Company (“MMALIC”), a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company, are the members of Sierra JV, a joint venture formed as a Delaware limited liability company and commenced operations on July 15, 2015. Sierra JV’s investment objective is to generate current income and capital appreciation by investing primarily in the debt of privately-held middle market companies with a focus on senior secured first lien term loans. The members of Sierra JV make capital contributions as investments by Sierra JV are completed, and all portfolio and other material decisions regarding Sierra JV must be submitted to Sierra JV’s board of managers, which is comprised of four members, two of whom are selected by the Company and the other two are selected by MMALIC. Approval of Sierra JV’s board of managers requires the unanimous approval of a quorum of the board of managers, with a quorum consisting of equal representation of members appointed by each of the Company and MMALIC.

For the year ended December 31, 2022, Sierra JV declared $45.2 million in dividends, of which $4.5 million was recognized as dividend income in the Company’s Consolidated Statements of Operations. In addition, for the year ended December 31, 2022, the Company recognized $35.7 million of the dividends as a return of capital.

The Company has determined that Sierra JV is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Sierra JV as it is not a substantially wholly owned investment company subsidiary. In addition, Sierra JV is not an operating company and the Company does not control Sierra JV due to the allocation of voting rights among Sierra JV members.

As of December 31, 2022, the total cost and value of Sierra JV’s investment portfolio was $125.2 million and $110.0 million, respectively. As of December 31, 2022, the weighted average yield on the principal amount of Sierra JV’s outstanding debt investments was approximately 9.2%. As of December 31, 2022, the Sierra JV investment portfolio consisted of the following investments:


($ in thousands)	December 31, 2022

Automotive	$	2,283	2.1	%
Banking, Finance, Insurance and Real Estate	1,414		1.3
Beverage, Food and Tobacco	3,181		2.9
Capital Equipment	9,208		8.4
Chemicals, Plastics, and Rubber	2,772		2.5
Construction and Building	1,887		1.7
Consumer goods: Durable	1,272		1.1

Containers, Packaging and Glass	1,812		1.6



Environmental Industries	7,797		7.1

Healthcare and Pharmaceuticals	13,614		12.4
High Tech Industries	13,713		12.5


Media: Advertising, Printing and Publishing	10,032		9.1

Media: Diversified and Production	5,498		5.0

Retail	5,489		5.0
Services: Business	10,876		9.9
Services: Consumer	8,265		7.5


Transportation: Cargo	6,221		5.6
Transportation: Consumer	4,713		4.3



Total	$	110,047	100.0	%

On July 8, 2021, the Company made an equity investment in Eclipse Business Capital Holdings LLC (“Eclipse”) of $89.8 million, a second lien senior secured loan of $4.5 million and unfunded revolver of $13.6 million, alongside other related party affiliates. On August 12, 2022, the Company increased the unfunded revolver to $22.7 million. As of December 31, 2022 and December 31, 2021, $5.3 million and $1.8 million, respectively, of the revolver was funded. Eclipse conducts its business through Eclipse Business Capital LLC. Eclipse is one of the country’s leading independent asset-based lending (“ABL”) platforms that provides financing to middle-market borrowers in the U.S. and Canada. Eclipse provides revolving lines of credit and term loans ranging in size from $10 – $125 million that are secured by collateral such as accounts receivable, inventory, equipment, or real estate. Eclipse lends to both privately-owned and publicly-traded companies across a range of industries, including manufacturing, retail, automotive, oil & gas, services, distribution, and consumer products. The addition of Eclipse to the portfolio allows the Company to participate in an asset class and commercial finance operations that offer differentiated income returns as compared to directly originated loans. Eclipse is led by a seasoned team of ABL experts.

The Company has determined that Eclipse is not an investment company under ASC Topic 946, Financial Services - Investment Companies. Under ASC 810-10-15-12(d), an investment company generally does not consolidate an investee that is not an investment company other than a controlled operating company whose business consists of providing services to the company. Thus, the Company is not required to consolidate Eclipse because it does not provide services to the Company. Instead the Company accounts for its equity investment in Eclipse in accordance with ASC 946-320, presented as a single investment measured at fair value.