MPV Barings Participation Investors

 

Barings

Participation Investors

Report for the    Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

Barings Participation Investors

 

TO OUR SHAREHOLDERS

October 31, 2021

 

We are pleased to present the September 30, 2021 Quarterly Report of Barings Participation Investors (the “Trust”).

PORTFOLIO PERFORMANCE

The Board of Trustees declared a quarterly dividend of $0.20 per share, payable on November 19, 2021 to shareholders of record on November 8, 2021. The Trust paid a $0.20 per share dividend for the preceding quarter. The Trust earned $0.20 per share of net investment income for the third quarter of 2021, compared to $0.20 per share in the previous quarter.

During the third quarter, the net assets of the Trust increased to $162,398,423 or $15.32 per share compared to $154,442,288 or $14.57 per share on June 30, 2021. This translates to a 6.6% total return for the quarter, based on the change in the Trust’s net assets assuming the reinvestment of all dividends. Longer term, the Trust returned 21.5%, 10.7%, 10.0%, 10.6% and 12.0% for the 1, 3, 5, 10, and 25-year periods, respectively, based on the change in the Trust’s net assets assuming the reinvestment of all dividends.

The Trust’s market price increased 0.6% during the quarter, from $13.72 per share as of June 30, 2021 to $13.80 per share as of September 30, 2021. The Trust’s market price of $13.80 per share equates to a 9.9% discount to the September 30, 2021 net asset value per share of $15.32. The Trust’s average quarter-end premium for the 3, 5 and 10-year periods was 1.5%, 2.7% and 4.8%, respectively. U.S. fixed income markets, as approximated by the Bloomberg Barclays U.S. Corporate High Yield Index and the Credit Suisse Leverage Loan Index, increased 0.9% and 1.1% for the quarter, respectively.

PORTFOLIO ACTIVITY

The Trust closed seven new private placement investments and nine add-on investments to existing portfolio companies during the second quarter. The total amount invested by the Trust in these transactions was $11,621,834. Of note, the new platform investments were floating rate term loans, three of which included equity co-investments, and the add-on investments included eight floating rate term loans and one equity co-investment.

The robust growth in investment activity over the last 12 months continued in the third quarter of 2021 with the Trust enjoying a strong quarter in terms of deployment. As the investment landscape has improved, some key trends have continued. First, investment activity is now back to (and even beyond) pre-pandemic levels. Secondly, in the current market, financial sponsors and other ownership groups are motivated to divest portfolio companies due to the high valuations for strong businesses. With the significant dry powder they have available, financial sponsors are also motivated to acquire high-quality businesses which have outperformed through both good times and the more recent uncertainty. Lastly, private equity clients continue to work with a smaller group of trusted lenders with whom they have long-standing relationships and who can offer certainty of execution and creative solutions.

With demand for products and services continuing to increase, one key question is whether supply chains can keep up with the renewed demand and whether we will see material increases in prices as a result of supply-chain bottlenecks, rising raw material and energy costs and labor shortages. Across the world, and particularly in regions with large manufacturing sectors which depend on international trade, these risks may be key. However, it is important to note that such issues do not affect every geography and sector the same. When constructing portfolios, we focus on investing in high-quality businesses which are leaders in their space and offer defensive characteristics which will allow them to perform through the cycle. Therefore, while segments of the broader economy may be affected by potential supply chain issues, increasing raw material and energy costs and labor shortages, we remain confident in the current diverse portfolio to perform through the potential cycle.

We continue to be selective in our investment choices and maintain our underwriting discipline throughout multiple cycles. First, the Trust continues to invest in first lien senior secured loans in high-quality companies in defensive sectors and remains well diversified by industry. This was a strategy put in place more than four years ago and has provided strong risk adjusted returns for the Trust given their senior position in the capital stack. As of September 30, 2021, 59.0% of the Trust’s investment portfolio is in first lien senior secured loans compared to 2.7% as of December 31, 2017. These investments have proven resilient to date and their management teams now have the benefit of having a wealth of knowledge to draw upon from working in such unique and challenging circumstances. Second, we hold meaningful

 

(Continued) 

 

 

investment liquidity based on the Trust’s combined available cash balance and short-term investments of $17,594,742 or 9.8% of total assets, and low leverage profile at 0.09x as of September 30, 2021. We have strengthened our liquidity position by entering into a $15.0 million committed revolving credit facility with MassMutual (See Note 4). This facility coupled with the current cash balance provides ample liquidity to support our current portfolio companies to the extent the duration of COVID-19 related stress extends as well as invest in new portfolio companies. Third, we continue to be selective in pruning our equity investments and reinvesting the proceeds into first lien senior secured investments further driving investment income. As always, the Trust continues to benefit from strong relationships with our financial sponsor partners which provides clear benefits including potential access to additional capital if needed, strategic thinking alongside their management teams and high-quality and timely information which is only available in a private market setting. This allows us to work constructively together and maximize the portfolio companies’ long-term health and value.

In closing, we believe it is always appropriate to provide views on the Trust’s long-term dividend policy which is to say, ‘we believe that long-term dividends should be a reflection of long-term core earnings power, even when core earnings power is lower as a result of a higher quality asset mix’. The Trust’s recently announced dividend of $0.20 per share is in line with our most recently reported net investment income of $0.20 per share. That said, as we continue to both (1) deploy the Trust’s excess liquidity and (2) seek opportunities to shift the Trust’s non-yielding equity investments to senior secured loans, we expect long-term earnings power to meet the dividend distribution.

Thank you for your continued interest in and support of Barings Participation Investors.

Sincerely,

 

Christina Emery

President

Portfolio Composition as of 09/30/21*

 

* Based on market value of total investments (including cash)

Cautionary Notice: Certain statements contained in this report may be “forward looking” statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management’s current estimates, projections, expectations or beliefs, and which are subject to risks and uncertainties that may cause actual results to differ materially. These statements are subject to change at any time based upon economic, market or other conditions and may not be relied upon as investment advice or an indication of the Trust’s trading intent. References to specific securities are not recommendations of such securities, and may not be representative of the Trust’s current or future investments. We undertake no obligation to publicly update forward looking statements, whether as a result of new information, future events, or otherwise.

 

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

September 30, 2021

(Unaudited)

 

 

Assets:
Investments (See Consolidated Schedule of Investments)
Corporate restricted securities - private placement investments at fair value (Cost - $139,783,087)		$	144,146,843
Corporate restricted securities - rule 144A securities at fair value (Cost - $8,986,848)			9,724,248
Corporate public securities at fair value (Cost - $5,066,828)			5,384,108
Short-term securities at fair value (Cost - $5,999,789)			5,999,789
Total investments (Cost - $159,836,552)			165,254,988
Cash			11,592,784
Foreign currencies (Cost - $2,165)			2,169
Dividend and interest receivable			1,119,492
Receivable for investments sold			85,641
Deferred financing fees			52,162
Other assets			752,878
Total assets			178,860,114
Liabilities:
Note payable			15,000,000
Payable for investments purchased			904,817
Investment advisory fee payable			365,396
Interest payable			27,267
Accrued expenses			164,211
Total liabilities			16,461,691
Commitments and Contingencies (See Note 7)
Total net assets		$	162,398,423
Net Assets:
Common shares, par value $.01 per share		$	106,017
Additional paid-in capital			142,111,125
Total distributable earnings			20,181,281
Total net assets		$	162,398,423
Common shares issued and outstanding (14,787,750 authorized)			10,601,700
Net asset value per share		$	15.32

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENT OF OPERATIONS

For the nine months ended September 30, 2021

(Unaudited)

 

 

Investment Income:
Interest		$	8,019,643
Dividends			166,498
Other			154,232
Total investment income			8,340,373
Expenses:
Investment advisory fees			1,051,201
Interest and other financing fees			469,630
Professional fees			220,694
Trustees’ fees and expenses			207,000
Reports to shareholders			67,500
Custodian fees			18,000
Other			58,744
Total expenses			2,092,769
Investment income - net			6,247,604
Net realized and unrealized gain on investments and foreign currency:
Net realized gain on investments before taxes			6,497,711
Net realized loss on foreign currency transactions before taxes			(102	)
Income tax expense			(47,658	)
Net realized gain on investments and foreign currency transactions after taxes			6,449,951
Net increase/(decrease) in unrealized appreciation/(depreciation) of investments before taxes			9,764,165
Net increase/(decrease) in unrealized appreciation/(depreciation) of foreign currency translation before taxes			4
Net increase/(decrease) in unrealized appreciation/(depreciation) of investments and foreign currency translation after taxes			9,764,169
Net gain on investments and foreign currency			16,214,120
Net increase in net assets resulting from operations		$	22,461,724

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

Barings Participation Investors

CONSOLIDATED STATEMENT OF CASH FLOWS

For the nine months ended September 30, 2021

(Unaudited)

 

 

Net decrease in cash:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio securities, net		$	(996,786	)
Purchases of portfolio securities			(43,745,323	)
Proceeds from disposition of portfolio securities			43,943,058
Interest, dividends and other income received			8,228,939
Interest and other financing expenses paid			(469,630	)
Operating expenses paid			(1,426,801	)
Income taxes paid			(165,803	)
Net cash provided by operating activities			5,367,654
Cash flows from financing activities:
Cash dividends paid from net investment income			(6,361,020	)
Financing fees paid			(52,162	)
Net cash used for financing activities			(6,413,182	)
Net decrease in cash			(1,045,528	)
Cash - beginning of period			12,640,481
Cash - end of period		$	11,594,953
Reconciliation of net increase in net assets to net cash used in operating activities:
Net increase in net assets resulting from operations		$	22,461,724
Increase in investments			(16,777,641	)
Increase in interest receivable			(16,843	)
Increase in receivable for investments sold			(68,161	)
Decrease in other assets			215,635
Decrease in payable for investments purchased			(525,253	)
Increase in investment advisory fee payable			41,447
Decrease in tax payable			(118,145	)
Increase in accrued expenses			154,891
Total adjustments to net assets from operations			17,094,070
Net cash provided by operating activities		$	5,367,654

 

 

 

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

For the nine months ended September 30, 2021

 

 

			For the nine months ended 9/30/2021 (Unaudited)				For the year ended 12/31/2020
Increase in net assets:
Operations:
Investment income - net		$	6,247,604			$	10,630,477
Net realized gain on investments and foreign currency after taxes			6,449,951				240,048
Net change in unrealized appreciation (depreciation) of investments and foreign currency after taxes			9,764,169				(4,521,459	)
Net increase in net assets resulting from operations			22,461,724				6,349,066
Increase from common shares issued on reinvestment of dividends
Common shares issued (2021 - nil; 2020 - 14,472)			—				227,533
Dividends to shareholders from:
Distributable earnings to Common Stock Shareholders (2021 - $0.40 per share; 2020 - $0.80 per share)			(4,240,680	)			(8,481,360	)
Total increase / (decrease) in net assets			18,221,044				(1,904,761	)
Net assets, beginning of period/year			144,177,379				146,082,140
Net assets, end of period/year		$	162,398,423			$	144,177,379

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

Barings Participation Investors

CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS

Selected data for each share of beneficial interest outstanding:

 

 

		For the nine months ended 9/30/2021				For the years ended December 31,
		(Unaudited)				2020				2019				2018				2017
Net asset value:
Beginning of period / year		$	13.60			$	13.80			$	13.18			$	13.91			$	13.15
Net investment income (a)			0.59				1.00				1.00				1.03				1.09
Net realized and unrealized gain (loss) on investments			1.53				(0.40)				0.69				(0.68)				0.75
Total from investment operations			2.12				0.60				1.69				0.35				1.84
Dividends from net investment income to common shareholders			(0.40)				(0.80)				(1.08)				(1.08)				(1.08)
Increase / (Decrease) from dividends reinvested			0.00				0.00 (b)				0.01 (b)				(0.00) (b)				(0.00) (b)
Total dividends			(0.40)				(0.80)				(1.07)				(1.08)				(1.08)
Net asset value: End of period / year		$	15.32			$	13.60			$	13.80			$	13.18			$	13.91
Per share market value:
End of period / year		$	13.80			$	11.88			$	16.13			$	15.05			$	14.10
Total investment return
Net asset value (c)			15.83%				4.66%				13.21%				2.53%				14.29%
Market value (c)			19.71%				(21.11%)				14.72%				15.02%				7.21%
Net assets (in millions):
End of period / year		$	162.40			$	144.18			$	146.08			$	138.75			$	145.48
Ratio of total expenses to average net assets (d)			1.90% (e)				1.47%				2.26%				2.76%				3.23%
Ratio of operating expenses to average net assets			1.44% (e)				1.38%				1.45%				1.56%				1.49%
Ratio of interest expense to average net assets			0.42% (e)				0.43%				0.42%				0.42%				0.43%
Ratio of income tax expense/(benefit) to average net assets			0.04% (e)				(0.34%)				0.39%				0.78%				1.31%
Ratio of net investment income to average net assets			5.54% (e)				7.52%				7.30%				7.47%				7.92%
Portfolio turnover			29%				34%				22%				48%				24%

(a)

Calculated using average shares.

(b)

Rounds to less than $0.01 per share.

(c)

Net asset value return represents portfolio returns based on change in the Trust’s net asset value assuming the reinvestment of all dividends and distributions which differs from the total investment return based on the Trust’s market value due to the difference between the Trust’s net asset value and the market value of its shares outstanding; past performance is no guarantee of future results.

(d)

Total expenses include income tax expense.

(e)

Annualized

 

Senior borrowings:
Total principal amount (in millions)		$	15			$	15			$	15			$	15			$	15
Asset coverage per $1,000 of indebtedness		$	11,827			$	10,612			$	10,739			$	10,250			$	10,699

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities - 94.75%: (A)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Private Placement Investments - 88.76%: (C)
1A Smart Start, Inc.
A designer, distributor and lessor of ignition interlock devices (“IIDs”).
9.50% Second Lien Term Loan due 06/02/2028 (LIBOR + 8.500%)		$	1,725,000			06/02/21		$	1,700,349			$	1,701,954
1WorldSync, Inc.
A product information sharing platform that connects manufacturers/suppliers and key retailers via the Global Data Synchronization Network.
7.25% Term Loan due 06/24/2025 (LIBOR + 6.250%)		$	2,440,215			*			2,406,652				2,440,215
* 07/01/19 and 12/09/20.
Accelerate Learning
A provider of standards-based, digital science education content of K-12 schools.
5.75% Term Loan due 12/31/2024 (LIBOR + 4.750%)		$	974,753			12/19/18			964,294				955,258
5.75% Term Loan due 12/20/2024 (LIBOR + 4.750%)		$	750,247			09/30/21			735,242				735,242
									1,699,536				1,690,500
Advanced Manufacturing Enterprises LLC
A designer and manufacturer of large, custom gearing products for a number of critical customer applications.
Limited Liability Company Unit (B)			1,945 uts.			*			207,911				—
* 12/07/12, 07/11/13 and 06/30/15.
Advantage Software
A provider of enterprise resource planning (ERP) software built for advertising and marketing agencies.
7.50% Term Loan due 01/15/2027 (LIBOR + 6.500%)		$	1,373,387			01/15/21			1,343,111				1,370,640
7.50% Term Loan due 01/15/2027 (LIBOR + 6.500%)		$	214,175			05/12/21			209,187				213,746
Limited Liability Company Unit A (F)			613 uts.			01/15/21			61,346				63,383
Limited Liability Company Unit B (F)			304 uts.			01/15/21			1,970				111,248
									1,615,614				1,759,017
Aftermath, Inc.
A provider of crime scene cleanup and biohazard remediation services.
6.00% Term Loan due 04/10/2025 (LIBOR + 5.000%)		$	963,473			04/09/19			950,745				948,569
6.00% Term Loan due 04/10/2025 (LIBOR + 5.000%)		$	761,527			04/23/21			749,259				749,747
									1,700,004				1,698,316
AIT Worldwide Logistics, Inc.
A provider of domestic and international third-party logistics services.
8.50% Second Lien Term Loan due 03/31/2029		$	1,669,355			04/06/21			1,634,087				1,662,677
Limited Liability Company Unit (B)			56 uts.			04/06/21			55,645				81,313
									1,689,732				1,743,990

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
AMS Holding LLC
A leading multi-channel direct marketer of high-value collectible coins and proprietary-branded jewelry and watches.
Limited Liability Company Unit Class A Preferred (B)(F)			114 uts.			10/04/12		$	113,636			$	444,118
ASC Holdings, Inc.
A manufacturer of capital equipment used by corrugated box manufacturers.
13% (1% PIK) Senior Subordinated Note due 11/19/2021		$	752,294			11/19/15			752,289				752,294
Limited Liability Company Unit (B)			111,100 uts.			11/18/15			111,100				32,219
									863,389				784,513
ASPEQ Holdings
A manufacturer of highly-engineered electric heating parts and equipment for a range of industrial, commercial, transportation and marine applications.
6.25% Term Loan due 10/31/2025 (LIBOR + 5.250%)		$	1,157,395			11/08/19			1,145,523				1,157,395
Audio Precision
A provider of high-end audio test and measurement sensing instrumentation software and accessories.
7.00% Term Loan due 07/27/2024 (LIBOR + 6.000%)		$	1,755,000			10/30/18			1,736,970				1,755,000
Aurora Parts & Accessories LLC
A distributor of aftermarket over-the-road semi-trailer parts and accessories sold to customers across North America.
Preferred Stock (B)			210 shs.			08/17/15			209,390				209,390
Common Stock (B)			210 shs.			08/17/15			210				149,036
									209,600				358,426
BDP International, Inc.
A provider of transportation and related services to the chemical and life sciences industries.
6.25% Term Loan due 12/14/2024 (LIBOR + 5.250%)		$	2,397,213			12/18/18			2,371,563				2,397,213
6.25% Incremental Term Loan due 12/19/2024 (LIBOR + 5.250%)		$	42,922			12/07/20			42,237				42,922
6.25% Incremental Term Loan due 12/21/2024 (LIBOR + 5.250%)		$	40,957			03/30/21			40,248				40,957
									2,454,048				2,481,092
Beacon Pointe Advisors, LLC
An integrated wealth management platform with comprehensive financial planning capabilities for high net worth clients with complex financial needs.
5.50% Term Loan due 03/31/2026 (LIBOR + 4.500%)		$	989,250			03/31/20			972,569				968,846

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Blue Wave Products, Inc.
A distributor of pool supplies.
Common Stock (B)			51,064 shs.			10/12/12		$	51,064			$	177,811
Warrant, exercisable until 2022, to purchase common stock at $.01 per share (B)			20,216 shs.			10/12/12			20,216				70,395
									71,280				248,206
Brown Machine LLC
A designer and manufacturer of thermoforming equipment used in the production of plastic packaging containers within the food and beverage industry.
6.25% Term Loan due 10/04/2024 (LIBOR + 5.250%)		$	854,448			10/03/18			848,327				854,448
Cadence, Inc.
A full-service contract manufacturer (“CMO”) and supplier of advanced products, technologies, and services to medical device, life science, and industrial companies.
6.00% First Lien Term Loan due 04/30/2025 (LIBOR + 5.000%)		$	881,698			05/14/18			872,504				851,720
Cadent, LLC
A provider of advertising solutions driven by data and technology.
6.00% Term Loan due 09/07/2023 (LIBOR + 5.000%)		$	890,428			09/04/18			886,954				890,428
Claritas Holdings, Inc.
A market research company that provides market segmentation insights to customers engaged in direct-to-consumer and business-to-business marketing activities.
6.75% Term Loan due 12/31/2023 (LIBOR + 5.750%)		$	1,543,682			12/20/18			1,526,542				1,543,682
CloudWave
A provider of managed cloud hosting and IT services for hospitals.
7.00% Term Loan due 01/04/2027 (LIBOR + 6.000%)		$	1,662,399			01/29/21			1,629,226				1,662,399
Limited Liability Company Unit (B)(F)			55,645 uts.			01/29/21			55,645				49,246
									1,684,871				1,711,645
Clubessential LLC
A leading SaaS platform for private clubs and resorts.
7.25% Term Loan due 11/30/2023 (LIBOR + 6.250%)		$	1,703,438			01/09/20			1,687,559				1,703,438
Command Alkon
A vertical-market software and technology provider to the heavy building materials industry delivering purpose-built, mission critical products that serve as the core operating & production systems for ready-mix concrete producers, asphalt producers, and aggregate suppliers.
9.25% Term Loan due 04/17/2027 (LIBOR + 8.250%)		$	2,063,987			*			2,014,040				2,029,555
Limited Liability Company Unit (B) (F)			18 uts.			04/23/20			18,006				20,113
Limited Liability Company Unit Class B			6,629 uts.			04/23/20			—				1,643
* 04/23/20, 10/30/20 and 11/18/20.									2,032,046				2,051,311

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Concept Machine Tool Sales, LLC
A full-service distributor of high-end machine tools and metrology equipment, exclusively representing a variety of global manufacturers in the Upper Midwest.
6.00% Term Loan due 01/31/2025 (LIBOR + 5.000%)		$	584,016			01/30/20		$	576,229			$	570,000
Limited Liability Company Unit (F)			1,237 shs.			*			49,559				38,941
* 01/30/20 and 03/05/21									625,788				608,941
CTS Engines
A provider of maintenance, repair and overhaul services within the aerospace & defense market.
6.25% Term Loan due 12/22/2026 (LIBOR + 5.250%)		$	1,392,375			12/22/20			1,368,114				1,350,604
Dart Buyer, Inc.
A manufacturer of helicopter aftermarket equipment and OEM Replacement parts for rotorcraft operators, providers and OEMs.
6.00% Term Loan due 04/01/2025 (LIBOR + 5.000%) (H)		$	1,694,506			04/01/19			1,393,573				1,389,609
Del Real LLC
A manufacturer and distributor of fully-prepared fresh refrigerated Hispanic entrees as well as side dishes that are typically sold on a heat-and-serve basis at retail grocers.
11% Senior Subordinated Note due 04/06/2023 (D)		$	1,420,588			10/07/16			1,403,758				1,349,559
Limited Liability Company Unit (B)(F)			368,799 uts.			*			368,928				159,779
* 10/07/16, 07/25/18, 03/13/19 and 06/17/19.									1,772,686				1,509,338
Dunn Paper
A provider of specialty paper for niche product applications.
9.33% Second Lien Term Loan due 08/31/2023 (LIBOR + 9.250%)		$	1,725,000			09/28/16			1,714,183				1,597,350
Dwyer Instruments, Inc.
A designer and manufacturer of precision measurement and control products for use with solids, liquids and gases.
6.25% Term Loan due 07/01/2027 (LIBOR + 5.500%) (H)		$	1,000,000			07/20/21			849,078				848,421
Electric Power Systems International, Inc.
A provider of electrical testing services for apparatus equipment and protection & controls infrastructure.
6.75% Term Loan due 04/19/2028 (LIBOR + 5.750%) (H)		$	1,253,130			04/19/21			1,115,764				1,117,882
Elite Sportswear Holding, LLC
A designer and manufacturer of gymnastics, competitive cheerleading and swimwear apparel in the U.S. and internationally.
11.5% (1% PIK) Senior Subordinated Note due 09/20/2022 (D)		$	1,588,640			10/14/16			1,568,694				—
Limited Liability Company Unit (B)(F)			101 uts.			10/14/16			159,722				—
									1,728,416				—

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Ellkay
A provider of data interoperability solutions for labs, hospitals and healthcare providers.
6.75% Term Loan due 09/14/2027 (LIBOR + 5.750%)		$	707,437			09/23/21		$	693,340			$	693,288
English Color & Supply LLC
A distributor of aftermarket automotive paint and related products to collision repair shops, auto dealerships and fleet customers through a network of stores in the Southern U.S.
11.5% (0.5% PIK) Senior Subordinated Note due 12/31/2023		$	1,355,794			06/30/17			1,345,252				1,349,969
Limited Liability Company Unit (B)(F)			397,695 uts.			06/30/17			397,695				819,505
									1,742,947				2,169,474
ENTACT Environmental Services, Inc.
A provider of environmental remediation and geotechnical services for blue-chip companies with regulatory-driven liability enforcement needs.
6.75% Term Loan due 12/15/2025 (LIBOR + 4.750%)		$	1,017,787			02/09/21			1,008,954				1,010,662
E.S.P. Associates, P.A.
A professional services firm providing engineering, surveying and planning services to infrastructure projects.
Limited Liability Company Unit (B)			273 uts.			*			295,518				252,534
* 06/29/18 and 12/29/20.
F G I Equity LLC
A manufacturer of a broad range of filters and related products that are used in commercial, light industrial, healthcare, gas turbine, nuclear, laboratory, clean room, hotel, educational system, and food processing settings.
Limited Liability Company Unit Class B-1 (B)			49,342 uts.			12/15/10			42,343				662,166
Follett School Solutions
A provider of software for K-12 school libraries.
5.87% First Lien Term Loan due 07/09/2028 (LIBOR + 5.750%)		$	1,714,192			08/31/21			1,680,324				1,679,908
LP Units (B)(F)			881 uts.			08/30/21			8,805				8,805
LP Interest (B)(F)			200 shs.			08/30/21			2,003				2,003
									1,691,132				1,690,716
Foundation Risk Partners, Corp.
A retail insurance brokerage firm focused on providing commercial P&C and employee benefits solution to small and medium-sized clients.
5.75% First Lien Term Loan due 08/31/2026 (LIBOR + 4.750%)		$	661,664			09/30/20			651,573				661,664
9.50% Second Lien Term Loan due 11/10/2024 (LIBOR + 8.500%) (H)		$	333,333			09/30/20			104,178				111,111
									755,751				772,775

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
FragilePAK
A provider of third-party logistics services focused on the full delivery life-cycle for big and bulky products.
6.75% Term Loan due 05/24/2027 (LIBOR + 5.750%) (H)		$	1,614,492			05/21/21		$	1,033,589			$	1,036,045
Limited Liability Company Unit (B)(F)			108 shs.			05/21/21			107,813				106,475
									1,141,402				1,142,520
GD Dental Services LLC
A provider of convenient “onestop” general, specialty, and cosmetic dental services with 21 offices located throughout South and Central Florida.
Limited Liability Company Unit Preferred (B)			76 uts.			10/05/12			75,920				12,927
Limited Liability Company Unit Common (B)			767 uts.			10/05/12			767				—
									76,687				12,927
gloProfessional Holdings, Inc.
A marketer and distributor of premium mineral-based cosmetics, cosmeceuticals and professional hair care products to the professional spa and physician’s office channels.
14% (2% PIK) Senior Subordinated Note due 11/30/2021 (D)		$	1,380,135			03/27/13			989,505				1,311,129
Preferred Stock (B)			295 shs.			03/29/19			295,276				396,826
Common Stock (B)			1,181 shs.			03/27/13			118,110				37,629
									1,402,891				1,745,584
GraphPad Software, Inc.
A provider of data analysis, statistics and graphing software solution for scientific research applications, with a focus on the life sciences and academic end-markets.
7.00% Term Loan due 12/15/2023 (LIBOR + 6.000%)		$	2,403,093			*			2,385,310				2,403,093
6.50% Term Loan due 04/27/2027 (PRIME + 5.500%)		$	84,525			04/27/21			82,956				84,525
Preferred Stock (B)(F)			3,737 shs.			04/27/21			103,147				109,052
* 12/19/17 and 04/16/19.									2,571,413				2,596,670
Halo Technology Bidco Limited
A global supplier, tester and coder of compatible optical transceivers.
6.50% Term Loan due 06/30/2027 (LIBOR + 5.750%)		$	1,720,688			06/30/21			1,695,973				1,697,027
Handi Quilter Holding Company (Premier Needle Arts)
A designer and manufacturer of long-arm quilting machines and related components for the consumer quilting market.
Limited Liability Company Unit Preferred (B)			372 uts.			*			371,644				598,147
Limited Liability Company Unit Common Class A (B)			3,594 uts.			12/19/14			—				13,548
*12/19/14 and 04/29/16.									371,644				611,695

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
HHI Group, LLC
A developer, marketer, and distributor of hobby-grade radio control products.
Limited Liability Company Unit (B)(F)			102 uts.			01/17/14		$	101,563			$	554,024
Holley Performance Products
A provider of automotive aftermarket performance products.
5.13% Term Loan due 10/17/2024 (LIBOR + 5.000%)		$	2,397,213			10/24/18			2,376,237				2,397,213
Home Care Assistance, LLC
A provider of private pay non-medical home care assistance services.
6.00% Term Loan due 03/30/2027 (LIBOR + 5.000%) (H)		$	853,078			03/26/21			798,777				800,179
HOP Entertainment LLC
A provider of post production equipment and services to producers of television shows and motion pictures.
Limited Liability Company Unit Class F (B)(F)			47 uts.			10/14/11			—				—
Limited Liability Company Unit Class G (B)(F)			114 uts.			10/14/11			—				—
Limited Liability Company Unit Class H (B)(F)			47 uts.			10/14/11			—				—
Limited Liability Company Unit Class I (B)(F)			47 uts.			10/14/11			—				—
									—				—
IGL Holdings III Corp.
A specialty label and flexible packaging converter.
6.75% Term Loan due 10/23/2026 (LIBOR + 5.750%) (H)		$	1,715,900			11/02/20			1,175,169				1,169,929
IM Analytics Holdings, LLC
A provider of test and measurement equipment used for vibration, noise, and shock testing.
8.00% Term Loan due 11/22/2023 (LIBOR + 7.000%)		$	1,049,893			11/21/19			1,044,252				806,318
Warrant, exercisable until 2026, to purchase common stock at $.01 per share (B)			8,885 shs.			11/25/19			—				—
									1,044,252				806,318
Industrial Service Solutions
A provider of maintenance, repair and overhaul services for process equipment within the industrial, energy and power end-markets.
6.50% Term Loan due 01/31/2026 (LIBOR + 5.500%)		$	888,050			02/05/20			875,183				836,543

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

 

 

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
International Marine and Industrial Applicators
A provider of maintenance, repair and overhaul and new construction services for shipyards.
6.75% Term Loan due 03/31/2027 (LIBOR + 5.750%)		$	1,716,375			04/09/21		$	1,684,801			$	1,706,077
JF Petroleum Group
A provider of repair, maintenance, installation and projection management services to the US fueling infrastructure industry.
6.50% Term Loan due 04/20/2026 (LIBOR + 5.500%)		$	684,852			05/04/21			665,994				673,007
Kano Laboratories LLC
A producer of industrial strength penetrating oils and lubricants.
6.00% Term Loan due 09/30/2026 (LIBOR + 5.000%) (H)		$	1,247,255			11/18/20			830,852				852,117
Limited Liability Company Unit			20 uts.			11/19/20			19,757				22,396
									850,609				874,513
LYNX Franchising
A global franchisor of B2B services including commercial janitorial services, shared office space solutions, and textile and electronics restoration services.
7.25% Term Loan due 12/18/2026 (LIBOR + 6.250%)		$	2,495,688			*			2,450,369				2,445,774
* 12/22/20 and 09/09/21
Manhattan Beachwear Holding Company
A designer and distributor of women’s swimwear.
12.5% Senior Subordinated Note due 05/30/2022 (D)		$	419,971			01/15/10			404,121				—
15% (2.5% PIK) Senior Subordinated Note due 05/30/2022 (D)		$	115,253			10/05/10			114,604				—
Common Stock (B)			35 shs.			10/05/10			35,400				—
Common Stock Class B (B)			118 shs.			01/15/10			117,647				—
Warrant, exercisable until 2023, to purchase common stock at $.01 per share (B)			104 shs.			10/05/10			94,579				—
									766,351				—
Master Cutlery LLC
A designer and marketer of a wide assortment of knives and swords.
13% Senior Subordinated Note due 07/20/2022 (D)		$	868,102			04/17/15			867,529				86,810
Limited Liability Company Unit			5 uts.			04/17/15			678,329				—
									1,545,858				86,810
Media Recovery, Inc.
A global manufacturer and developer of shock, temperature, vibration and other condition indicators and monitors for in-transit and storage applications.
7.00% First Out Term Loan due 11/22/2025 (LIBOR + 6.000%)		$	491,055			11/25/19			484,148				491,055

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

  

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
MES Partners, Inc.
An industrial service business offering an array of cleaning and environmental services to the Gulf Coast region of the U.S.
Preferred Stock Series A (B)			30,926 shs.			07/25/19		$	12,412			$	—
Preferred Stock Series C (B)			1,275 shs.			09/22/20			457,365				49,307
Common Stock Class B (B)			259,252 shs.			*			244,163				—
Warrant, exercisable until 2021, to purchase common stock at $.01 per share (B)			351,890 shs.			09/22/20			—				—
* 09/30/14 and 02/28/18.									713,940				49,307
MeTEOR Education LLC
A leading provider of classroom and common area design services, furnishings, equipment and instructional support to K-12 schools.
12% Senior Subordinated Note due 06/20/2023		$	915,819			03/09/18			909,451				915,819
Limited Liability Company Unit (B)(F)			182 uts.			03/09/18			183,164				249,006
									1,092,615				1,164,825
MNS Engineers, Inc.
A consulting firm that provides civil engineering, construction management and land surveying services.
6.50% Term Loan due 07/30/2027 (LIBOR + 5.500%)		$	1,200,000			08/09/21			1,176,540				1,176,000
Limited Liability Company Unit (B)			100 uts.			08/09/21			100,000				100,000
									1,276,540				1,276,000
Motion Controls Holdings
A manufacturer of high performance mechanical motion control and linkage products.
Limited Liability Company Unit Class B-1 (B)(F)			75,000 uts.			11/30/10			—				13,500
Limited Liability Company Unit Class B-2 (B)(F)			6,801 uts.			11/30/10			—				1,224
									—				14,724
Music Reports, Inc.
An administrator of comprehensive offering of rights and royalties solutions for music and cue sheet copyrights to music and entertainment customers.
6.75% Term Loan due 08/21/2026 (LIBOR + 5.750%)		$	599,118			08/25/20			586,883				599,118
Navia Benefit Solutions, Inc.
A third-party administrator of employee-directed healthcare benefits.
6.25% Term Loan due 02/01/2026 (LIBOR + 5.250%) (H)		$	1,719,825			02/10/21			1,002,915				1,006,111
Omni Logistics, LLC
A specialty freight forwarding business specifically targeting the semiconductor, media, technology and healthcare end markets.
6.00% Term Loan due 12/30/2026 (LIBOR + 5.000%)		$	1,741,250			12/30/20			1,695,569				1,741,250

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Options Technology Ltd
A provider of vertically focused financial technology managed services and IT infrastructure products for the financial services industry.
5.50% Term Loan due 12/18/2025 (LIBOR + 4.500%)		$	1,587,825			12/23/19		$	1,565,403			$	1,587,825
PANOS Brands LLC
A marketer and distributor of branded consumer foods in the specialty, natural, better-for-you,“free from” healthy and gluten-free categories.
12% (1% PIK) Senior Subordinated Note due 08/17/2022		$	1,775,705			02/17/17			1,769,188				1,775,705
Common Stock Class B (B)			380,545 shs.			*			380,545				526,928
* 01/29/16 and 02/17/17.									2,149,733				2,302,633
PB Holdings LLC
A designer, manufacturer and installer of maintenance and repair parts and equipment for industrial customers.
6.25% Term Loan due 02/28/2024 (LIBOR + 5.250%)		$	783,253			03/06/19			774,306				715,893
Pegasus Transtech Corporation
A provider of end-to-end document, driver and logistics management solutions, which enable its customers (carriers, brokers, and drivers) to operate more efficiently, reduce manual overhead, enhance compliance, and shorten cash conversion cycles.
7.75% Term Loan due 08/31/2026 (LIBOR + 6.500%)		$	383,766			09/29/20			372,604				383,765
6.88% Term Loan due 11/17/2024 (LIBOR + 6.750%)		$	1,894,364			11/14/17			1,873,184				1,894,364
									2,245,788				2,278,129
Petroplex Inv Holdings LLC
A leading provider of acidizing services to E&P customers in the Permian Basin.
Limited Liability Company Unit			0.40% int.			*			174,669				6,787
* 11/29/12 and 12/20/16.
Polytex Holdings LLC
A manufacturer of water based inks and related products serving primarily the wall covering market.
13.9% (7.9% PIK) Senior Subordinated Note due 12/31/2021 (D)		$	1,069,985			07/31/14			1,064,183				1,016,486
Limited Liability Company Unit			148,096 uts.			07/31/14			148,096				33,988
Limited Liability Company Unit Class F			36,976 uts.			*			24,802				32,439
* 09/28/17 and 02/15/18.									1,237,081				1,082,913

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
PPC Event Services
A special event equipment rental business.
Preferred Stock Series P-1 (B)			71 shs.			07/21/20		$	71,018			$	—
Common Stock (B)			170,927 shs.			07/21/20			—				—
16.00% Term Loan due 05/28/2023 (D)		$	1,015,367			07/21/20			846,461				—
8.00% Term Loan due 05/28/2023 (D)		$	750,912			07/21/20			616,911				—
Limited Liability Company Unit (B)			3,450 uts.			11/20/14			172,500				—
Limited Liability Company Unit Series A-1 (B)			339 uts.			03/16/16			42,419				—
									1,749,309				—
Recovery Point Systems, Inc.
A provider of IT infrastructure, colocation and cloud based resiliency services.
7.50% Term Loan due 07/31/2026 (LIBOR + 6.500%)		$	1,342,949			08/12/20			1,321,177				1,342,949
Limited Liability Company Unit (B)(F)			21,532 uts.			03/05/21			21,532				18,410
									1,342,709				1,361,359
RedSail Technologies
A provider of pharmacy management software solutions for independent pharmacies and long-term care facilities.
6.25% Term Loan due 10/27/2026 (LIBOR + 5.500%)		$	1,672,858			12/09/20			1,636,766				1,672,858
ReelCraft Industries, Inc.
A designer and manufacturer of heavy-duty reels for diversified industrial, mobile equipment OEM, auto aftermarket, government/military and other end markets.
Limited Liability Company Unit Class B			293,617 uts.			11/13/17			184,689				926,689
Resonetics, LLC
A provider of laser micro-machining manufacturing services for medical device and diagnostic companies.
7.75% Second Lien Term Loan due 04/28/2029 (LIBOR + 7.000%)		$	1,725,000			04/28/21			1,692,342				1,695,356
REVSpring, Inc.
A provider of accounts receivable management and revenue cycle management services to customers in the healthcare, financial and utility industries.
9.25% Second Lien Term Loan due 10/11/2026 (LIBOR + 8.250%)		$	1,725,000			10/11/18			1,692,483				1,725,000
Rock-it Cargo
A provider of specialized international logistics solutions to the music touring, performing arts, live events, fine art and specialty industries.
6.00% Term Loan due 06/22/2024 (LIBOR + 5.000% Cash & 2.750% PIK) (G)		$	2,454,594			*			2,426,244				1,921,947
* 07/30/18 and 09/30/20.

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)  

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
ROI Solutions
Call center outsourcing and end user engagement services provider.
6.00% Term Loan due 07/31/2024 (LIBOR + 5.000%) (H)		$	1,592,918			07/31/18		$	616,315			$	631,357
RPX Corp
A provider of subscription services that help member companies mitigate the risk of patent disputes and reduce the cost of patent litigation.
7.00% Term Loan due 10/23/2025 (LIBOR + 6.000%)		$	2,500,000			*			2,450,517				2,443,750
* 10/22/20 and 09/28/21.
Ruffalo Noel Levitz
A provider of enrollment management, student retention and career services, and fundraising management for colleges and universities.
7.00% Term Loan due 05/29/2022 (LIBOR + 5.500%)		$	1,229,180			01/08/19			1,225,603				1,229,180
Safety Products Holdings, Inc.
A manufacturer of highly engineered safety cutting tools.
7.00% Term Loan due 12/15/2026 (LIBOR + 6.000%)		$	1,673,426			12/15/20			1,640,742				1,635,774
Common Stock			29 shs.			12/16/20			29,262				37,868
									1,670,004				1,673,642
Sandvine Corporation
A provider of active network intelligence solutions.
8.08% Second Lien Term Loan due 11/02/2026 (LIBOR + 8.000%)		$	1,725,000			11/01/18			1,697,578				1,725,000
Sara Lee Frozen Foods
A provider of frozen bakery products, desserts and sweet baked goods.
5.50% Lien Term Loan due 07/30/2025 (LIBOR + 4.500%)		$	1,491,123			07/27/18			1,472,779				1,404,637
Scaled Agile, Inc.
A provider of training and certifications for IT professionals focused on software development.
4.58% Term Loan due 06/28/2025 (LIBOR + 4.500%)		$	531,087			06/27/19			528,178				531,087
SEKO Worldwide, LLC
A third-party logistics provider of ground, ocean, air and home delivery forwarding services.
6.00% Term Loan due 12/30/2026 (LIBOR + 5.000%) (H)		$	1,713,944			12/30/20			1,424,787				1,445,896

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Smart Bear
A provider of web-based tools for software development, testing and monitoring.
8.00% Second Lien Term Loan due 11/10/2028 (LIBOR + 7.500%)		$	1,725,000			03/20/21		$	1,680,560			$	1,687,305
Specified Air Solutions
A manufacturer and distributor of heating, dehumidification and other air quality solutions.
Limited Liability Company Unit (B)			726,845 uts.			02/20/19			2,298,574				11,600,451
Springbrook Software
A provider of vertical-market enterprise resource planning software and payments platforms focused on the local government end-market.
6.75% Term Loan due 12/20/2026 (LIBOR + 5.750%) (H)		$	1,636,857			12/23/19			1,310,752				1,332,137
Stackline
An e-commerce data company that tracks products sold through online retailers.
8.75% Term Loan due 07/30/2028 (LIBOR + 7.750%)		$	1,682,927			07/29/21			1,650,097				1,649,268
Common Stock (B)			1,036 shs.			07/30/21			42,078				42,078
									1,692,175				1,691,346
Strahman Holdings Inc.
A manufacturer of industrial valves and wash down equipment for a variety of industries, including chemical, petrochemical, polymer, pharmaceutical, food processing, beverage and mining.
Preferred Stock Series A (B)			158,967 shs.			12/13/13			158,967				280,640
Preferred Stock Series A-2 (B)			26,543 shs.			09/10/15			29,994				46,859
									188,961				327,499
Stratus Unlimited
A nationwide provide of brand implementation services, including exterior and interior signage, refresh and remodel, and facility maintenance and repair.
6.50% Term Loan due 06/08/2027 (LIBOR + 6.000%) (H)		$	585,893			07/02/21			760,565				760,928
Limited Liability Company Unit (B)			75 uts.			06/30/21			74,666				74,670
									835,231				835,598
Sunvair Aerospace Group Inc.
An aerospace maintenance, repair, and overhaul provider servicing landing gears on narrow body aircraft.
12% (1% PIK) Senior Subordinated Note due 08/01/2024		$	2,000,650			*			1,978,556				1,994,340
Preferred Stock Series A			28 shs.			12/21/20			71,176				88,640
Common Stock (B)			68 shs.			**			104,986				213,660
* 07/31/15 and 12/21/20.									2,154,718				2,296,640
** 07/31/15 and 11/08/17.

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
The Hilb Group, LLC
An insurance brokerage platform that offers insurance and benefits programs to middle-market companies throughout the Eastern seaboard.
6.75% Term Loan due 09/30/2026 (LIBOR + 5.750%) (H)		$	1,709,692			*		$	1,584,406			$	1,583,399
* 12/02/19 and 12/15/20.
Therma-Stor Holdings LLC
A designer and manufacturer of dehumidifiers and water damage restoration equipment for residential and commercial applications.
Limited Liability Company Unit (B)			19,696 uts.			11/30/17			—				10,698
Transit Technologies LLC
A software platform for the transportation market that offers end-to-end software solutions focused on operations, fleet management and telematics services.
4.87% Term Loan due 02/10/2025 (LIBOR + 4.750%) (H)		$	1,020,405			02/13/20			768,288				753,780
Trident Maritime Systems
A leading provider of turnkey marine vessel systems and solutions for government and commercial new ship construction as well as repair, refurbishment, and retrofit markets worldwide.
6.50% Term Loan due 02/19/2026 (LIBOR + 5.500%)		$	1,716,375			02/25/21			1,689,922				1,692,291
Tristar Global Energy Solutions, Inc.
A hydrocarbon and decontamination services provider serving refineries worldwide.
12.5% (1.5% PIK) Senior Subordinated Note due 03/31/2022 (D)		$	1,204,904			01/23/15			1,203,934				301,226
Truck-Lite
A leading provider of harsh environment LED safety lighting, electronics, filtration systems, and telematics for a wide range of commercial vehicles, specialty vehicles, final mile delivery vehicles, off-road/off-highway, marine, and other adjacent harsh environment markets.
7.25% Term Loan due 12/02/2026 (LIBOR + 6.250%)		$	1,696,471			12/13/19			1,671,269				1,696,471
Trystar, Inc.
A niche manufacturer of temporary power distribution products for the power rental, industrial, commercial utility and back-up emergency markets.
6.00% Term Loan due 10/01/2023 (LIBOR + 5.000%)		$	2,279,962			09/28/18			2,261,917				2,266,281
Limited Liability Company Unit (B)(F)			49 uts.			09/28/18			49,676				43,164
									2,311,593				2,309,445

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date			Cost				Fair Value
Turnberry Solutions, Inc.
A provider of technology consulting services.
7.00% Term Loan due 07/30/2026 (LIBOR + 6.000%)		$	1,628,981			07/29/21		$	1,597,525			$	1,596,401
U.S. Legal Support, Inc.
A provider of court reporting, record retrieval and other legal supplemental services.
6.75% Term Loan due 11/12/2024 (LIBOR + 5.750%)		$	2,089,362			*			2,067,306				2,087,041
* 11/29/18 and 03/25/19.
U.S. Oral Surgery Management
An operator of oral surgery practices providing medically necessary treatments.
6.75% Term Loan due 12/31/2023 (LIBOR + 5.750%) (H)		$	2,491,087			*			2,445,216				2,430,750
* 01/04/19, 10/01/19 and 07/02/21.
UBEO, LLC
A dealer and servicer of printers and copiers to medium sized businesses.
11.00% Term Loan due 10/03/2024		$	1,558,661			11/05/18			1,542,792				1,558,661
UroGPO, LLC
A group purchasing organization that connects pharmaceutical companies with urology practices to facilitate the purchase of pharmaceutical drugs for discounted prices.
6.75% Term Loan due 12/15/2026 (LIBOR + 5.750%)		$	2,366,667			12/14/20			2,325,598				2,366,667
VitalSource
A provider of digital fulfillment software for the higher education sector.
6.75% Term Loan due 06/01/2028 (LIBOR + 6.000%)		$	1,702,753			06/01/21			1,670,323				1,672,451
Limited Liability Company Unit (B)(F)			1,891 uts.			06/01/21			18,909				20,488
									1,689,232				1,692,939
VP Holding Company
A provider of school transportation services for special-needs and homeless children in Massachusetts and Connecticut.
5.63% Term Loan due 05/22/2024 (LIBOR + 5.500%)		$	2,402,339			05/17/18			2,381,214				2,384,321
Westminster Acquisition LLC
A manufacturer of premium, all-natural oyster cracker products sold under the Westminster and Olde Cape Cod brands.
12% (1% PIK) Senior Subordinated Note due 04/30/2022 (D)		$	383,062			08/03/15			382,227				—
Limited Liability Company Unit (B)(F)			370,241 uts.			08/03/15			370,241				—
									752,468				—

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)  

 

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Wolf-Gordon, Inc.
A designer and specialty distributor of wallcoverings and related building products, including textiles, paint, and writeable surfaces.
Common Stock (B)			157 shs.			01/22/16		$	62,177			$	149,167
World 50, Inc.
A provider of exclusive peer-to-peer networks for C-suite executives at leading corporations.
6.25% Term Loan due 01/10/2026 (LIBOR + 5.250%)		$	378,152			09/21/20			368,999				378,152
5.50% Term Loan due 12/31/2025 (LIBOR + 4.500%)		$	1,209,427			01/09/20			1,187,874				1,185,238
									1,556,873				1,563,390
WP Supply Holding Corporation
A distributor of fresh fruits and vegetables to grocery wholesalers and food service distributors in the upper Midwest.
Common Stock (B)			1,500 shs.			11/03/11			150,000				211,119
York Wall Holding Company
A designer, manufacturer and marketer of wall covering products for both residential and commercial wall coverings.
Preferred Stock Series A (B)			2,936 shs.			02/05/19			293,616				293,600
Common Stock (B)			2,046 shs.			*			200,418				321,343
* 03/04/15 and 02/07/18.									494,034				614,943
Total Private Placement Investments (E)								$	139,783,087			$	144,146,843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)

 

 

 

Corporate Restricted Securities: (A) (Continued)		Interest Rate				Maturity Date		Shares or Principal Amount				Cost				Market Value
Rule 144A Securities - 5.99%:
Bonds - 5.99%
American Airlines Inc			11.750	%		07/15/25		$	500,000			$	496,010			$	618,750
BWAY Holding Company			7.250			04/15/25			750,000				705,474				745,428
Cleveland-Cliffs Inc.			9.875			10/17/25			331,000				356,647				379,823
CommScope Finance LLC			8.250			03/01/27			500,000				479,550				523,363
Coronado Finance Pty Ltd.			10.750			05/15/26			274,000				269,161				298,660
CVR Energy Inc.			5.750			02/15/28			500,000				458,540				495,430
Diebold Nixdorf			9.375			07/15/25			350,000				368,943				383,033
First Quantum Minerals Ltd.			7.500			04/01/25			500,000				477,462				512,915
First Quantum Minerals Ltd.			7.250			04/01/23			385,000				383,356				391,738
Houghton Mifflin Harcourt			9.000			02/15/25			500,000				493,075				531,775
LBC Tank Terminals Holding Netherlands B.V.			6.875			05/15/23			511,000				514,131				510,290
Neptune Energy Bondco PLC			6.625			05/15/25			500,000				494,601				514,375
Panther BF Aggregator 2 LP			8.500			05/15/27			100,000				93,599				106,375
Picou Holdings LLC			10.000			12/31/24			500,000				452,487				504,700
Prime Security Services, LLC			6.250			01/15/28			885,000				785,845				914,894
Terrier Media Buyer, Inc.			8.875			12/15/27			530,000				510,171				560,411
The Manitowoc Company, Inc.			9.000			04/01/26			500,000				489,527				535,535
Trident TPI Holdings Inc.			9.250			08/01/24			500,000				490,187				525,430
Verscend Holding Corp			9.750			08/15/26			482,000				507,082				507,908
Warrior Met Coal, Inc.			8.000			11/01/24			161,000				161,000				163,415
Total Bonds													8,986,848				9,724,248
Common Stock - 0.00%
TherOX, Inc. (B)									2				—				—
Touchstone Health Partnership (B)									292				—				—
Total Common Stock													—				—
Total Rule 144A Securities												$	8,986,848			$	9,724,248
Total Corporate Restricted Securities												$	148,769,935			$	153,871,091

 

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)  

 

 

 

Corporate Public Securities - 3.32%: (A)		LIBOR Spread				Interest Rate				Maturity Date		Shares or Principal Amount				Cost				Market Value
Bank Loans - 1.94%
Almonde, Inc.			7.250	%			8.250	%		06/13/25		$	500,000			$	505,000			$	502,330
Alpine US Bidco LLC			9.000				9.750			04/28/29			628,215				610,258				631,356
Edelman Financial Services			6.750				6.834			06/08/26			128,178				127,792				129,019
Kenan Advantage Group Inc.			7.250				8.000			08/17/27			264,317				259,082				261,674
Magenta Buyer LLC			8.250				9.000			05/03/29			503,333				498,011				502,704
PS Logistics LLC			4.500				5.500			03/01/25			407,063				409,096				406,216
STS Operating, Inc.			8.000				9.000			04/25/26			500,000				505,000				488,335
Syncsort Incorporated			7.250				8.000			04/23/29			222,222				220,590				222,129
Total Bank Loans																	3,134,829				3,143,763
Bonds - 0.84%
Genesis Energy LP							6.500			10/01/25			337,000				323,020				335,315
Hecla Mining Company							7.250			02/15/28			500,000				474,599				538,580
Triumph Group, Inc.							7.750			08/15/25			500,000				502,637				494,613
Total Bonds																	1,300,256				1,368,508
Common Stock - 0.22%
Tourmaline Oil Corp													51,632				131,743				356,037
Total Common Stock																	131,743				356,037
Preferred Stock - 0.32%
B. Riley Financial Inc.													20,000				500,000				515,800
Total Preferred Stock																	500,000				515,800
Total Corporate Public Securities																$	5,066,828			$	5,384,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)  

 

 

 

Short-Term Security:			Interest Rate/Yield^			Maturity Date			Principal Amount				Cost				Market Value
Commercial Paper - 3.69%
American Honda Finance Corp.			0.160			10/12/21		$	1,000,000			$	999,951			$	999,951
Aon plc			0.110			10/07/21			1,000,000				999,982				999,982
BASF Aktiengesellschaft			0.100			10/04/21			1,000,000				999,992				999,992
Duke Energy Corporation			0.120			10/18/21			1,000,000				999,943				999,943
Tampa Electric			0.170			10/07/21			1,000,000				999,972				999,972
VW Credit Inc.			0.150			10/14/21			1,000,000				999,949				999,949
Total Short-Term Securities												$	5,999,789			$	5,999,789
Total Investments			101.76	%								$	159,836,552			$	165,254,988
Other Assets			8.38														13,605,126
Liabilities			(10.14	)													(16,461,691	)
Total Net Assets			100.00	%												$	162,398,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(A)

In each of the convertible note, warrant, and common stock investments, the issuer has agreed to provide certain registration rights.

(B)

Non-income producing security.

(C)

Security valued at fair value using methods determined in good faith by or under the direction of the Board of Trustees.

(D)

Defaulted security; interest not accrued.

(E)

Illiquid security. As of September 30, 2021 the values of these securities amounted to $144,146,843 or 88.76% of net assets.

(F)

Held in PI Subsidiary Trust

(H)

A portion of these securities contain unfunded commitments. As of September 30, 2021, total unfunded commitments amounted to $4,968,849 and had unrealized depreciation of $29,985 or 0.02% of net assets. See Note 7.

^

Effective yield at purchase

PIK

- Payment-in-kind

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)  

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)  

 

 

 

 

 

See Notes to Consolidated Financial Statements

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2021

(Unaudited)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

 

 

 

 

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

Fair Value Hierarchy

The Trust categorizes its investments measured at fair value in three levels, based on the inputs and assumptions used to determine fair value. These levels are as follows:

Level 1 – quoted prices in active markets for identical securities

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Trust’s own assumptions in determining the fair value of investments)

The following table summarizes the levels in the fair value hierarchy into which the Trust’s financial instruments are categorized as of September 30, 2021.

The fair values of the Trust’s investments disaggregated into the three levels of the fair value hierarchy based upon the lowest level of significant input used in the valuation as of September 30, 2021 are as follows:

 

Assets:		Total				Level 1				Level 2				Level 3
Restricted Securities
Corporate Bonds		$	20,577,584			$	—			$	9,724,248			$	10,853,336
Bank Loans			112,696,112				—				—				112,696,112
Common Stock - U.S.			1,937,035				—				—				1,937,035
Preferred Stock			1,365,262				—				—				1,365,262
Partnerships and LLCs			17,295,098				—				—				17,295,098
Public Securities
Bank Loans			3,143,763				—				1,748,029				1,395,734
Corporate Bonds			1,368,508				—				1,368,508				—
Common Stock - U.S.			356,037				322,571				—				33,466
Preferred Stock			515,800				—				515,800				—
Short-term Securities			5,999,789				5,999,789				—				—
Total		$	165,254,988			$	6,322,360			$	13,356,585			$	145,576,043

 

See information disaggregated by security type and industry classification in the Consolidated Schedule of Investments.

 

 

 

 

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

Quantitative Information about Level 3 Fair Value Measurements

The following table represents quantitative information about Level 3 fair value measurements as of September 30, 2021.

 

	Fair Value	Valuation Technique	Unobservable Inputs	Range	Weighted*
Bank Loans	$  90,605,215	Market Yield	Yield Analysis	5.6% - 29.6%	8.0%
Corporate Bonds	$  10,853,336	Income Approach	Implied Spread	10.6% - 21.5%	14.6%
Equity Securities**	$  20,369,838	Enterprise Value Waterfall Approach	Valuation Multiple	5.0x to 25.3x	13.4x

  

Certain of the Trust’s Level 3 equity securities investments may be valued using unadjusted inputs that have not been internally developed by the Trust, including recently purchased securities held at cost. As a result, fair value of assets of $23,747,654 have been excluded from the preceding table.

 

*

The weighted averages disclosed in the table above were weighted by relative fair value

**

Including partnerships and LLC’s

 

Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:

 

Assets:		Beginning balance at 12/31/2020				Included in earnings				Purchases				Sales				Prepayments				Transfers into Level 3				Transfers out of Level 3				Ending balance at 9/30/2021
Restricted Securities
Corporate Bonds		$	18,359,723			$	606,140			$	39,506			$	(4,104,643	)		$	(4,047,390	)		$	—			$	—			$	10,853,336
Bank Loans			88,124,979				1,008,218				36,113,739				—				(15,687,915	)			3,137,091				—				112,696,112
Common Stock - U.S.			2,767,599				1,308,038				42,078				(2,209,940	)			—				29,260				—				1,937,035
Preferred Stock			2,252,826				(122,265	)			—				(765,299	)			—				—				—				1,365,262
Partnerships and LLCs			8,261,019				13,131,001				2,372,908				(6,469,830	)			—				—				—				17,295,098
Public Securities
Bank Loans			1,137,471				112,145				1,366,308				—				(1,618,781	)			398,591				—				1,395,734
Common Stock - U.S.			—				33,466				—				—				—				—				—				33,466
Corporate Bonds			—				—				—				—				—				—				—				—
		$	120,903,617			$	16,076,743			$	39,934,539			$	(13,549,712	)		$	(21,354,086	)		$	3,564,942			$	—			$	145,576,043

*

For the six months ended September 30, 2021, transfers into and out of Level 3 were the result of changes in the observability of significant inputs for certain portfolio companies.

 

 

 

 

 

 

 

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

 

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

Barings Participation Investors

 

 

 

This privacy notice is being provided on behalf of Barings LLC and its affiliates: Barings Securities LLC; Barings Australia Pty Ltd; Barings Japan Limited; Barings Investment Advisers (Hong Kong) Limited; Barings Funds Trust; Barings Global Short Duration High Yield Fund; Barings BDC, Inc.; Barings Corporate Investors and Barings Participation Investors (together, for purposes of this privacy notice, “Barings”).

When you use Barings you entrust us not only with your hard-earned assets but also with your personal and financial data. We consider your data to be private and confidential, and protecting its confidentiality is important to us. Our policies and procedures regarding your personal information are summarized below.

We may collect non-public personal information about you from:

•

Applications or other forms, interviews, or by other means;

•

Consumer or other reporting agencies, government agencies, employers or others;

•

Your transactions with us, our affiliates, or others; and

•

Our Internet website.

We may share the financial information we collect with our financial service affiliates, such as insurance companies, investment companies and securities broker-dealers. Additionally, so that we may continue to offer you products and services that best meet your investment needs and to effect transactions that you request or authorize, we may disclose the information we collect, as described above, to companies that perform administrative or marketing services on our behalf, such as transfer agents, custodian banks, service providers or printers and mailers that assist us in the distribution of investor materials or that provide operational support to Barings. These companies are required to protect this information and will use this information only for the services for which we hire them, and are not permitted to use or share this information for any other purpose. Some of these companies may perform such services in jurisdictions other than the United States. We may share some or all of the information we collect with other financial institutions with whom we jointly market products. This may be done only if it is permitted by the state in which you live. Some disclosures may be limited to your name, contact and transaction information with us or our affiliates.

Any disclosures will be only to the extent permitted by federal and state law. Certain disclosures may require us to get an “opt-in” or “opt-out” from you. If this is required, we will do so before information is shared. Otherwise, we do not share any personal information about our customers or former customers unless authorized by the customer or as permitted by law.

We restrict access to personal information about you to those employees who need to know that information to provide products and services to you. We maintain physical, electronic and procedural safeguards that comply with legal standards to guard your personal information. As an added measure, we do not include personal or account information in non-secure e-mails that we send you via the Internet without your prior consent. We advise you not to send such information to us in non-secure e-mails.

This joint notice describes the privacy policies of Barings, the Funds and Barings Securities LLC. It applies to all Barings and the Funds accounts you presently have, or may open in the future, using your social security number or federal taxpayer identification number - whether or not you remain a shareholder of our Funds or as an advisory client of Barings. As mandated by rules issued by the Securities and Exchange Commission, we will be sending you this notice annually, as long as you own shares in the Funds or have an account with Barings.

Barings Securities LLC is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). Investors may obtain information about SIPC including the SIPC brochure by contacting SIPC online at www.sipc.org or calling (202)-371-8300. Investors may obtain information about FINRA including the FINRA Investor Brochure by contacting FINRA online at www.finra.org or by calling (800) 289-9999.

April 2019

 

 

 

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