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Investments (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Investments [Abstract]

Schedule of Investments

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		%

The industry composition of investments at fair value at December 31, 2022 and December 31, 2021, excluding short-term investments, was as follows:

($ 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		%

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		%

The industry composition of Jocassee’s investments at fair value at December 31, 2022 and December 31, 2021, excluding short-term investments, was as follows:

($ 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		%

Schedule of Investment Portfolio

The geographic composition of Jocassee’s investments at fair value at December 31, 2022 and December 31, 2021, excluding short-term investments, was as follows:

			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		%

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

As of December 31, 2022 and December 31, 2021, the Thompson Rivers investment portfolio consisted of the following investments:

($ 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		%

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						$	—					$	—

(1)Includes $4.4 million of dividend re-investments.

(2)Includes dividend re-investments of $32.1 million and $162.1 million of total contributed capital by related parties.

(3)Includes dividend re-investments of $32.1 million and $162.3 million of total contributed capital by related parties.

As of December 31, 2022 and December 31, 2021, Waccamaw River 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.						$	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)

(1)Includes $74.6 million of total contributed capital by related parties.

(2)Includes ($7.0) million of total return of capital (recallable) by related parties.

(3)Includes $7.4 million of unfunded commitments by related parties.

(4)Includes $48.2 million of total contributed capital by related parties.

(5)Includes $33.8 million of unfunded commitments by related parties.

As of December 31, 2022, the Sierra JV 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			$	125,220					100		%				$	110,047					100		%
			$	125,220					100		%				$	110,047					100		%

The industry composition of Sierra JV’s investments at fair value at December 31, 2022, excluding short-term

investments, was as follows:

($ 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		%

Schedule of Fair Value, Assets Measured on Recurring Basis

The following table presents the Company’s investment portfolio at fair value as of December 31, 2022 and 2021, categorized by the ASC Topic 820 valuation hierarchy, as previously described:

			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.

Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables reconcile the beginning and ending balances of the Company’s investment portfolio measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2022 and 2021:

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

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