Main Street Capital Corporation

This time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Zach Vaughn. Thank you. You may begin.

Thank you, operator, and good morning, everyone. Thank you for joining us for Main Street Capital Corporation's third quarter 2025 earnings conference call. Joining me today with prepared comments are Dwayne Hijak, Chief Executive Officer, David Magdahl, President and Chief Investment Officer, and Ryan Nelson, Chief Financial Officer. Also participating in the Q&A portion of the call is Nick Mazur, Managing Director and Head of MainStreet's Private Credit Investment Group. MainStreet issued a press release yesterday afternoon that details the company's third quarter financial and operating results. This document is available in the investor relations section of the company's website at mainstcapital.com. A replay of today's call will be available beginning an hour after the completion of the call and will remain available until November 14th. Information on how to access the replay was included in yesterday's release. We also advise you that this conference call is being broadcast live through the internet and can be accessed on the company's homepage. Please note that information reported on this call speaks only as of today, November 7, 2025, and therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading. Today's call will contain forward-looking statements. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may, or similar expressions. These statements are based on management's estimates, assumptions, and projections as of the date of this call, and there are no guarantees of future performance. Actual results may differ materially from the results expressed or implied in these statements as a result of risks, uncertainties, and other factors, including, but not limited to, the factors set forth in the company's filings with the Securities and Exchange Commission, which can be found on the company's website or at sec.gov. Main Street assumes no obligation to update any of these statements unless required by law. During today's call, management will discuss non-GAAP financial measures, including Distributable Net Investment Income, or DNII. DNII is Net Investment Income, or NII, as determined in accordance with U.S. generally accepted accounting principles, or GAAP, excluding the impact of non-cash compensation expenses. Management believes that presenting DNII and the related per share amount are useful and appropriate supplemental disclosures for analyzing Main Street's financial performance, since non-cash compensation expenses do not result in a net cash impact to Main Street upon settlement. Please refer to yesterday's press release for reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. Two additional key performance indicators that management will be discussing on this call are net asset value, or NAV, and return on equity, or ROE. NAV is defined as total assets minus total liabilities and is also reported on a per share basis. MainStreet defines ROE as the net increase in net assets resulting from operations divided by average quarterly NAV. Please note that certain information discussed on this call, including information related to portfolio companies, was derived from third-party sources and has not been independently verified. And now I'll turn the call over to MainStreet CEO, Dwayne Hijak. Thanks, Zach.

Good morning, everyone, and thank you for joining us. We appreciate your participation on this morning's call, and we hope that everyone's doing well. On today's call, David, Ryan, and I will provide you with our key quarterly updates, after which we'll be happy to take your questions. We are pleased with our performance in the third quarter, which resulted in another quarter of strong operating results, highlighted by an annualized return on equity of 17%, favorable levels of DNII per share, a new record for NAV per share for the 13th consecutive quarter. We believe that these continued strong results demonstrate the sustained strength of our overall platform, the benefits of our differentiated and diversified investment strategies, the unique contributions of our asset management business, and the continued depth and quality of our portfolio companies, particularly our existing lower middle market portfolio companies. We are also pleased that we further strengthened our capital structure during the quarter, which Ryan will discuss in more detail. We continue to maintain a very strong liquidity position and conservative leverage profile, and we are well positioned for the continued growth of our investment portfolio. We remain confident that our unique investment income and value creation drivers, together with our cost-efficient operations and conservative capital structure, will allow us to continue to deliver superior results for our shareholders in the future. Our favorable results for the third quarter, combined with our positive outlook for the fourth quarter, resulted in our most recent dividend announcements, which I will discuss in more detail later. Our NAV per share increased in the quarter, primarily due to the impact of net fair value increases in both our lower middle market and private loan investment portfolios, which Ryan will discuss in more detail. The continued favorable performance of the majority of our lower middle market portfolio companies resulted in another quarter of strong dividend income contributions and significant net fair value appreciation in our lower middle market equity investments. Based upon our current views of these investments and feedback from our portfolio company management teams, we expect these contributions to continue to be strong for the next few quarters. We also continue to see significant interest from potential buyers in several of our lower middle market portfolio companies, which we expect will lead to favorable realizations over the next few quarters, and which we believe further highlights the strength and quality of our portfolio companies and their exceptional leadership teams. We're also excited about the new and following investments we made in our lower middle market portfolio companies during the quarter, which resulted in the addition of three new portfolio companies and a net increase in lower middle market investments of $61 million. Consistent with our guidance last quarter, our private loan investment activity in the quarter continued to be slower than our expected normal quarterly activity, resulting in a net decrease in private loan investments of $69 million. In addition to the potential for favorable investment realizations in our lower middle market portfolio, we also recently exited one of our private loan portfolio company equity investments and have a second exit in process, subject to customary closing conditions and regulatory approvals, with these activities representing total realized gains of at least $35 million, both at meaningful premiums to our quarter-end fair values. David will discuss our investment activity in more detail. Given our conservative capital structure and strong liquidity position, we remain very well positioned to continue the growth of our investment portfolio for the foreseeable future, and we are excited about the current opportunities we are seeing. We also continue to produce positive results in our asset management business. The funds we advise through our external investment manager continue to experience favorable performance in the third quarter, resulting in significant incentive fee income for our asset management business for the 12th consecutive quarter, and together with our recurring base management fees, a significant contribution to our net investment income. We remain excited about our plans for the external funds that we manage as we execute our investment strategies, and we are optimistic about the future performance of the funds and the attractive returns we are providing to the investors of each fund. We also remain excited about our strategy for growing our asset management business within our internally managed structure. As part of these efforts, we remain focused on growing the investment portfolio of MSC Income Fund, a publicly traded BDC advised by our external investment manager and our largest asset management business client, which maintains meaningful current liquidity and will benefit from a significant increase to its regulatory debt capacity at the end of January, 2026. In addition to deploying the fund's current liquidity into new private loan investments, we also continue to focus on maximizing the benefits of the fund's legacy lower middle market investment portfolio and are excited about the near-term expectations for additional realized value creation over the next few quarters. Based upon our results for the third quarter, combined with our favorable outlook in each of our primary investment strategies and for our asset management business, earlier this week our board declared a supplemental dividend of 30 cents per share payable in December, representing our 17th consecutive quarterly supplemental dividend, and it increased our regular monthly dividends for the first quarter of 2026 to 26 cents per share. These first quarter regular monthly dividends represent a 4% increase from the regular monthly dividends paid in the first quarter of 2025. The supplemental dividend for December is a result of our strong performance in the third quarter and our near-term expectations for additional net realized gains and will result in total supplemental dividends paid during the trailing 12-month period of $1.20 per share, representing an additional 40% paid to our shareholders in excess of our regular monthly dividends. We currently expect to recommend that our board continue to declare future supplemental dividends to the extent DNII before taxes significantly exceeds our regular monthly dividends paid or we generate net realized gains and we maintain a stable to positive NAV in future quarters. Based upon our expectations for continued favorable performance in the fourth quarter, we currently anticipate proposing an additional significant supplemental dividend payable in March 2026. Now turning to our current investment pipeline, As of today, I would characterize our lower middle market investment pipeline as above average. Consistent with our experience in prior periods of broad economic uncertainty, we believe that our ability to provide unique and flexible financing solutions to lower middle market companies and their owners and management teams in our differentiated long-term to permanent holding periods represent an even more attractive solution to the needs of many lower middle market companies given the current economic environment, and we are confident in our expectations for strong lower middle market investment activity in the fourth quarter. In addition, we continue to have an increased number of existing portfolio companies that are actively executing acquisition growth strategies that we anticipate will provide attractive follow-on investment opportunities for us in the near term and significant value creation opportunities for these portfolio companies in the longer term, consistent with the successes we demonstrated and experienced with other portfolio companies. We also continue to be pleased with the performance of our private credit team and the significant growth they have provided for our private loan portfolio and our asset management business over the last few years. Our investment pipeline has increased significantly since our last conference call, and as of today, I would characterize our private loan investment pipeline as above average. With that, I will turn the call over to David.

Thanks, Duane, and good morning, everyone. As Duane highlighted in his remarks, we believe our strong third quarter financial results continue to demonstrate the strength of MainStreet's platform, our differentiated investment approach, and our unique operating model. We are very pleased to report that the overall operating performance for most of our portfolio companies continues to be positive, which contributed to our attractive third quarter financial results. Despite the continued heightened level of concern and uncertainty in the overall economy, we remain confident in the ability of our portfolio companies to continue to navigate the current climate. Each quarter, we try to highlight a key aspect of our investment strategy and differentiated approach. For today's call, we thought it would be useful to spend some time discussing the support we provide to our lower middle market portfolio companies. In addition to our ongoing investment management activities and the managerial assistance we offer our lower middle market portfolio companies, we are also happy to host an annual event for the leaders of our lower middle market portfolio companies called the Main Street Presidents Meeting, which we recently hosted for the ninth time. For those of you who are not familiar, our President's Meeting is an annual event that we host for our lower middle market portfolio company leaders to network, build relationships, share best practices, learn from each other and from third-party speakers, and benefit from being a part of MainStreet's family of portfolio companies. Based on post-event feedback from our lower middle market portfolio company executives, the event is highly valued by the participants, and the event improves each year as we refine our agenda based on the feedback we receive. Topics covered at our most recent event included artificial intelligence, use cases and best practices, disaster recovery planning and enterprise risk management, adding value through executing add-on acquisitions, linking incentive compensation to performance, and succession planning. As a result of this annual event, our portfolio companies have increasingly worked together, referred business to each other, utilize each other's operational resources, and form long-term relationships that we believe are invaluable. As an example, one valuable topic we covered this year was best practices for utilizing artificial intelligence in lower middle market businesses. Based on our surveying as part of the event, the vast majority of our portfolio companies are engaged in utilizing AI and are actively seeking additional ways to use AI tools in their businesses. This topic was enhanced by breakout sessions led by several of our portfolio company CEOs who shared specific examples of AI tools they use and the benefits they are achieving from utilizing AI in their businesses. Q&A from the audience was robust, and we are highly encouraged about the benefits that our lower middle market portfolio companies can achieve in the future from their continued adoption of AI. Another panel we received very positive feedback on this year was focused on executing proprietary strategic add-on acquisitions. The panel was comprised of another peer group of our portfolio company CEOs with extensive experience in this area who led a discussion on the benefits of pursuing add-on acquisitions, developing and executing a successful acquisition plan, strategies for creating shareholder value through these transactions, and lessons learned while sourcing and executing an acquisition growth strategy. We are highly confident that the lessons learned shared by the panelists will be very helpful for other portfolio company executives to consider as they execute their own acquisition strategies in the future. The engagement from the audience during both sessions was robust and led to several post-event discussions, including the sharing of key third-party resources and best practices that we believe will ultimately improve the future financial results and operating performance for our portfolio companies. Given our primary focus on our lower middle market investment strategy and the unique benefits it can provide both to us and our management team partners at our portfolio companies, we are excited to bring together the key leadership from our lower middle market portfolio companies at our annual President's Day. We always leave this event very excited about the quality of the individuals leading our lower middle market portfolio companies and the future value creation that we expect they and their teams can generate for our mutual benefit in the future. We left this year's event more excited than ever. Now, turning to the overall composition of results from our investment portfolio as of September 30th, we continue to maintain a highly diversified portfolio with investments in 185 companies spanning across numerous industries and end markets. Our largest portfolio companies, excluding the external investment manager, represented only 4.8% of our total investment income for the trailing 12-month period and 3.6% of our total investment portfolio fair value at quarter end. The majority of our portfolio investments represented less than 1% of our income and our assets. Our investment activity in the third quarter included total investments in our lower middle market portfolio of $106 million, including total investments of $69 million in three new lower middle market portfolio companies, which after aggregate repayments, return of invested equity capital, and a decrease in cost basis due to realized losses, resulted in net increase in our lower middle market portfolio of $61 million. Since quarter end, we have closed an additional lower middle market platform investment representing an additional $81 million of invested capital, and we have several other expected near-term investments. Driven by the capabilities and relationships of our private credit team, we also completed $113 million in total private loan investments during the third quarter, which after aggregate repayments and a decrease in cost basis due to realized losses, resulted in a net decrease in our private loan portfolio of $69 million. At the end of the third quarter, a lower middle market portfolio included investments in 88 companies representing $2.8 billion of fair value, which is over 28% above our cost basis. We had 86 companies in our private loan portfolio representing $1.9 billion of fair value. The total investment portfolio at fair value at quarter end was 18% above the related cost basis. In summary, Main Street's investment portfolio continues to perform at a high level and deliver on our long-term results and goals. Additional details on our investment portfolio quarter end are included in the press release that we issued yesterday. With that, I'll turn the call over to Ryan to cover our financial results, capital structure, and liquidity position.

Thank you, David. To echo Duane's and David's comments, we are pleased with our operating results for the third quarter, which included favorable levels of NII per share and DNII per share and another increase in NAV per share. Our total investment income for the third quarter was $139.8 million, increasing by $3 million, or 2.2%, over the third quarter of 2024, and decreasing by $4.1 million, or 2.9%, from the second quarter of 2025. Interest income decreased by $7.3 million from a year ago and increased by $2.4 million from the second quarter of 2025. The decrease from prior year was principally attributable to a decrease in interest rates, primarily resulting from decreases in benchmark index rates on our floating rate debt investments and decreases in interest rate spreads on existing debt investments and an increase in investments on non-accrual status, partially offset by the impact of increased net investment activity. The increase from prior quarter was driven primarily by the impact of increased net investment activity and a decrease in investments on non-accrual status. Dividend income increased by $8 million when compared to a year ago, including a $600,000 increase in unusual or non-recurring dividends and decreased by $6.6 million from the second quarter, including a $4.2 million decrease in unusual or non-recurring dividends. The increase in dividend income from prior year is primarily a result of the continued underlying positive performance of our lower middle market portfolio companies. The decrease in dividend income from the second quarter is primarily due to non-recurring dividends received from one of our lower middle market portfolio companies in the second quarter. Fee income increased by $2.2 million from a year ago and was consistent with fee income from the second quarter. The increase from prior year was primarily due to higher closing fees on new and follow-on investments and an increase in exit and prepayment fees from investment activity. B income considered non-recurring increased by $900,000 from a year ago and by $500,000 from the second quarter of 2025. The third quarter included higher levels of income considered less consistent or non-recurring in nature in comparison to the prior year, including interest income from accelerated prepayment, repricing and other activity, accelerated fee income, and dividends from our equity investments. In the aggregate, these items totaled $4.3 million and were $2.1 million, or two cents per share, higher than the third quarter of 2024. Income considered less consistent or non-recurring in nature decreased from the second quarter by $3.8 million, or four cents per share, primarily due to a decrease in dividends from one of our lower middle market portfolio companies. The current quarter's less consistent or non-recurring income was in line with the prior four-year average. Our operating expenses increased by $1.1 million over the third quarter of 2024 and decreased by $300,000 from the second quarter. The increase in operating expenses from the prior year was largely driven by increases in cash compensation-related expenses and share-based compensation expense partially offset by a decrease in interest expense. The decrease in interest expense from a year ago was primarily driven by a decrease in the weighted average interest rate on our credit facilities resulting from decreases in the benchmark index interest rates and a decrease in the applicable margin rates resulting from the amendments of our credit facilities in April 2025, partially offset by an increase in average borrowings to fund the growth of our investment portfolio. The ratio of our total operating expenses, excluding interest expense as a percentage of our average total assets, was 1.4% for the quarter on an annualized basis and 1.3% for the trailing 12-month period and continues to be among the lowest in our industry. Our external investment manager contributed $8.8 million to our net investment income during the third quarter, representing an increase of $900,000 from the same quarter a year ago, and was consistent with the contribution to our net investment income in the second quarter. Our investment manager ended the quarter with total assets under management of $1.6 billion. During the quarter, we recorded net fair value appreciation, including net realized losses and net unrealized depreciation, on the investment portfolio of $43.9 million. This increase was primarily driven by net fair value appreciation in our lower middle market and private loan investment portfolios, partially offset by net fair value depreciation in our external investment manager. The net fair value appreciation in our lower middle market portfolio was largely driven by the continued positive performance of certain of our portfolio companies. The net fair value appreciation in our private loan portfolio was primarily driven by several specific portfolio companies and decreases in market spreads. The net fair value depreciation of our external investment manager was primarily driven by decreases in the valuation multiples of publicly traded peers, which we use as one of the benchmarks for valuation purposes, partially offset by increased incentive fee income. We recognize net losses of $19.1 million in the quarter. The realized losses recognized were primarily the results of the restructures of two private loan investments and the full exits of two lower middle market investments, which were partially offset by a realized gain on the full exit of a lower middle market investment and the partial exit of another portfolio investment. We ended the third quarter with investments on non-accrual status comprising approximately 1.2% of the total investment portfolio at fair value and approximately 3.6% at cost. Net asset value, or NAV, increased by 48 cents per share over the second quarter and by $2.21 per share, or 7.2% when compared to a year ago, to a record NAV per share of $32.78 at quarter end. Our regulatory debt-to-equity leverage, calculated as total debt excluding SBIC debentures divided by NAV, was 0.62 times, and our regulatory asset coverage ratio was 2.61 times, and these ratios continue to be more conservative than our long-term target ranges of 0.8 to 0.9 times and 2.25 to 2.1 times, respectively. We continue to be active this quarter on capital activities, aided by our strong relationships as we continue to manage our near-term maturities and overall capital structure, diversity, and efficiency. In August 2025, we issued $350 million of unsecured investment-grade notes maturing in August 2028 with an interest rate of 5.4%. In September 2025, we repaid the $150 million due on our December 2025 notes prior to their maturity and without any fees or penalties. Given our current liquidity position and recent investment activity, we continue to be less active during the third quarter in our ATM program, raising net proceeds of $6.7 million from equity issuances. After giving effect to the capital activities in the third quarter of 2025, we entered the fourth quarter of 2025 with strong liquidity, including cash and unused capacity under our credit facilities, totaling over $1.5 billion, with a near-term debt maturity of $500 million in July 2026. We continue to believe that our conservative leverage, strong liquidity, and continued access to capital are significant strengths that have proven to benefit us historically and have us well positioned for the future, allowing us to continue to execute our attractive investment strategies despite the current market uncertainty. Because of the market uncertainty, we expect to continue to operate over the next few quarters at leverage levels more conservative than our long-term targets. Coming back to our operating results, DNII before taxes per share for the quarter of $1.07 was one cent higher than DNII before taxes per share for the third quarter of last year, and four cents lower than DNII before taxes per share for the second quarter. Looking forward, we expect fourth quarter of 2025 DNII before taxes of at least $1.05 per share with the potential for upside driven by portfolio investment activities during the quarter. With that, I will now turn the call over to the operator so we can take any questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. One moment, please, while we poll for questions. Our first question comes from Aaron Saganovich with Truist Securities. Please proceed with your questions.

Thank you. In your prepared remarks, you indicated that the pipeline for investment activity is actually above average for both. And that's a notable change for the private loan portfolio pipeline from last quarter. Maybe you just talk a little bit about the sustainability of that and what necessarily kind of changed in

Sure, Aaron. I'll give a few comments. I'll let Nick add on if he has anything he wants to add. But I'd say this quarter, we've just seen the pipeline grow significantly. I think overall, from a market standpoint, from our perspective, you've seen an increase in overall activity, and we've seen that come in both at the front end of the funnel and in transactions that we're working on that we expect to close either in the fourth quarter or the first quarter. So overall, I think it's been driven by more market activity. I think the quality of the transactions, consistency of the transactions with what we've done historically continues to be the same. So I think it's really driven more by market activity. But I'll let Nick add on any additional color.

I think what I would add there is it probably started the week after the last earnings call. So it's been picked up for a decent amount of time now. And I think we expect it to continue to 26. And I think it's both in volume, the number of deals and the overall deal sizes. And each transaction, it just overall, the pipeline feels like it's more live and actually going to close and get to a finish line versus I'd say, you know, over the last year, a lot of deals felt like they just weren't going to get anywhere. And we were kind of just performing back and forth on LOIs. But you don't really feel like you're going to get to a closed transaction.

Got it. And you had an improvement in credit quality in the quarter, at least from a statistical standpoint. You know, maybe you could talk about it, give us a little bit more color about what was driving that.

Yeah, Aaron, I wouldn't say there's anything specific. I think overall, in both the lower middle market and private loan portfolios, the companies are doing well. There's always some, you know, outliers. both in terms of companies doing exceptionally well and some underperforming when you've got a large, diversified portfolio like we have. But I wouldn't say there's anything specific quarter-over-quarter that changed. It's just overall the portfolio continues to perform at a high level.

Thank you. Thank you.

Our next question comes from Healy Shess with Raymond James. Please proceed with your questions.

Good morning. Thanks for the question. Going back to the private loan portfolio, can you talk a little bit more about what was driving the 69 million net decrease? Was it primarily driven by elevated repayments, the slowing deal flow, or just less attractive opportunities in the current market environment? Any additional color you can provide there?

I'd say it was a combination probably of all three. I think in general, as we had communicated on the last call, for the third quarter, our investment activity was a little bit below our expectations. We also had more than expected or more than normal repayment or prepayment activity. So I'd say it was a combination of those two factors that drove the decrease. I think, as Nick said, we feel good about the pipeline today. In addition to the new origination activity, you know, being higher from an expectation standpoint. I think some of the prepayment activity is a little bit lighter. So I think it's just kind of a point in time in the third quarter. You had both, you know, both the lower originations and higher repayments that both occurred in the same quarter.

I think the only thing I'd add there is there's probably a handful of deals that we expected to close late in the quarter that really got pushed in the fourth quarter. And they're still going to close. It just got pushed in this quarter versus the third quarter. Overall, it was a lighter origination, but some of it was just timing.

Okay. And do you see any of these, like, trends shifting going into 4Q, or is it more of the same?

I think overall, you know, as Nick said, I think we feel good about the new investment expectations for Q4. I think we also feel pretty good about um expectations for q1 just given you know the strength of the pipeline both in the early stages and the more developed stages you know looking out longer than that it really is going to come down to how active the private equity industry as a whole is but i think for the for the near term i think we feel pretty good about it got it thank you appreciate it thank you as a reminder if you would like to ask a question please press star 1 on your telephone keypad

Our next question comes from Doug Harder with UBS. Please proceed with your question.

Hi, this is Corey Johnson on for Doug. The compensation expense was a little bit higher this quarter and in the press release, part of what you attributed to that was an increase in headcount to support the portfolio and asset management activities. Can you talk a little bit about what type of roles those are? And I guess, you know, what... should we expect the headcount to continue to grow into this year, the end of this year, and also into next?

Sure, Corey. Thanks for the question. Thanks for joining us this morning. I'd say that across the platform on the investment side, both lower middle market and private loan, we have been and continue to look for ways to grow our teams and our investment professionals. I think we view both market opportunities to be very attractive. The lower middle market is very people heavy or people intensive, just the nature of the activities, more of a private equity type investment strategy. So we are always looking to add resources there and we continue to be in that position today. So some of that headcount and comp increase would be concentrated there, but we've also grown our private loan team significantly, not just for Main Street's portfolio and balance sheet, but as you know, we've got an asset management business that we have been and we expect to continue to grow going forward. That growth is going to be almost exclusively focused on the private loan, private credit side. So we've also been working, you know, Nick and his team have been working to grow our team there. So I'd say it's on both sides.

All right. And then I guess, do you happen to have any targets for your RIA in terms of like AUM for 2026 that you could possibly share? Is there a range or anything at all that you're looking to hit?

Yeah, we haven't shared any specific guidance, Corey. I think our goal and our expectation is that we will grow AUM. We'll grow it two ways. Right now, as you likely recall, we have our largest asset management business client, MSC Income Fund, which is a publicly traded BDC. It has the opportunity at the end of January of 2026 to have a significant increase in its regulatory leverage capacity. We would expect to expand the leverage capacity there. Those that capital or those proceeds would be invested in the private loan, private credit space. We think that'll be the biggest catalyst going forward into 2026. We also have our second private fund, MS Private Loan Fund 2, that's still kind of in the earlier stages of its investment deployment activities. That should ramp up significantly in 2026 as well. But outside of giving guidance that those are the two catalysts, we have not given specific guidance for how much we expect the AUM to grow in 2026.

Thanks. And if I could just ask one more, you know, you spoke about how your LMM companies are sort of talking about AI and, you know, sort of how to integrate that. Have you seen, you know, I guess in those conversations that have companies been mentioning that AI is making, you know, significant efficiency gains? And are they showing up at all in like the valuations that, you know, that perhaps that, you might be able to realize either now or do you expect that to possibly make a difference in an upcoming course, something soon?

For Corey, I'd say it's more forward-looking. I don't think we've seen significant benefit from AI from a historical standpoint or any of the valuations that we have today. I do think we're excited, as our portfolio companies and their management teams are, that there's a lot of opportunities through the implementation of AI. So I think we're excited about that, but it would be more forward-looking as opposed to historical.

Got it. Thank you. Thank you.

This now concludes our question and answer session, and I would now like to turn the floor back over to management for closing comments.

We just want to say thank you again to everyone for joining us this morning. I think it will be a few months before we talk to you again, so hopefully everyone has a happy holidays, and we look forward to talking to you again with our next update call in February after the results for the fourth quarter and the year end for Main Street. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.