MPV Barings Participation Investors

 

Barings

Participation Investors

Report for the    Three Months Ended March 31, 2021

 

 

 

 

 

 

 

 

 

Barings Participation Investors

 

TO OUR SHAREHOLDERS

April 30, 2021

We are pleased to present the March 31, 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 May 14, 2021 to shareholders of record on May 3, 2021. The Trust paid a $0.20 per share dividend for the preceding quarter. The Trust earned $0.19 per share of net investment income for the first quarter of 2021, compared to $0.35 per share in the previous quarter.

During the first quarter, the net assets of the Trust increased to $150,359,992 or $14.18 per share compared to 144,177,379 or $13.60 per share on December 31, 2020. This translates to a 4.3% 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 15.8%, 8.2%, 9.0%, 10.1% and 11.6% 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 8.8% during the quarter, from $11.88 per share as of December 31, 2020 to $12.93 per share as of March 31, 2021. The Trust’s market price of $12.93 per share equates to an 8.8% discount to the March 31, 2021 net asset value per share of $14.18. The Trust’s average quarter-end premium for the 3, 5 and 10-year periods was 4.1%, 4.2% and 6.2%, 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 2.0% for the quarter, respectively.

PORTFOLIO ACTIVITY

The Trust closed seven new private placement investments and 10 add-on investments to existing portfolio companies during the first quarter. The total amount invested by the Trust in these transactions was $20,316,612. Of note, the new platform investments were floating rate term loans, two of which included equity co-investments, and the add-on investments were eight floating rate term loans and two small equity co-investments.

Improving market conditions and robust investment activity during the fourth quarter of 2020 continued into the first quarter of 2021. As the investment landscape has improved, some key trends have emerged. First, investment activity is now back to (and even beyond) pre-pandemic levels. Momentum continues to build in the private mid-market and appears unaffected by the seasonality we sometimes see this time of year. 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. These trends assisted Barings in being the second most active institutional lender across the U.S. private middle-market in 2020.

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 is well diversified by industry. This was a strategy put in place about four years ago and has provided strong risk adjusted returns for the Trust given their senior position in the capital stack. As of March 31, 2021, 56.0% 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 investment liquidity based on the Trust’s combined available cash balance and short-term investments of $12,775,348 or 7.8%, and low leverage profile at 0.10x as of March 31, 2021. Strong liquidity also provides ample support to our current portfolio companies to the extent the duration of COVID-19 related stress extends. 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.

(Continued)

 

 

 

 

 

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 sits slightly above our most recently reported net investment income of $0.19 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 03/31/21*

 

 

 

* 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

March 31, 2021

(Unaudited)

 

Assets:
Investments (See Consolidated Schedule of Investments)
Corporate restricted securities - private placement investments at fair value (Cost - $131,081,339 )		$	129,665,455
Corporate restricted securities - rule 144A securities at fair value (Cost - $12,394,930 )			13,309,216
Corporate public securities at fair value (Cost - $8,261,155 )			8,398,936
Short-term securities at fair value (Cost - $2,998,691 )			2,998,691
Total investments (Cost - $154,736,115 )			154,372,298
Cash			9,776,657
Interest receivable			1,117,533
Receivable for investments sold			80,783
Other assets			777,792
Total assets			166,125,063
Liabilities:
Note payable			15,000,000
Payable for investments purchased			356,000
Investment advisory fee payable			338,310
Interest payable			27,267
Accrued expenses			43,494
Total liabilities			15,765,071
Commitments and Contingencies (See Note 7)
Total net assets		$	150,359,992
Net Assets:
Common shares, par value $.01 per share		$	106,017
Additional paid-in capital			142,111,125
Total distributable earnings			8,142,850
Total net assets		$	150,359,992
Common shares issued and outstanding (14,787,750 authorized)			10,601,700
Net asset value per share		$	14.18

 

See Notes to Consolidated Financial Statements

 

 

CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended March 31, 2021

(Unaudited)

 

Investment Income:
Interest		$	2,729,431
Dividends			8,594
Other			4,135
Total investment income			2,742,160
Expenses:
Investment advisory fees			338,575
Interest			153,375
Professional fees			73,565
Trustees’ fees and expenses			69,000
Reports to shareholders			22,500
Custodian fees			6,000
Other			19,879
Total expenses			682,894
Investment income - net			2,059,266
Net realized and unrealized gain on investments:
Net realized gain on investments before taxes			141,450
Income tax expenses			(15	)
Net realized gain on investments after taxes			141,435
Net increase (decrease) in unrealized appreciation (depreciation) of investments before taxes			3,981,912
Net increase (decrease) in unrealized appreciation (depreciation) of investments after taxes			3,981,912
Net gain on investments			4,123,347
Net increase in net assets resulting from operations		$	6,182,613

 

See Notes to Consolidated Financial Statements

Barings Participation Investors

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2021

(Unaudited)

 

Net decrease in cash:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio securities, net		$	2,001,578
Purchases of portfolio securities			(13,889,002	)
Proceeds from disposition of portfolio securities			9,123,976
Interest, dividends and other income received			2,772,483
Interest expense paid			(153,375	)
Operating expenses paid			(480,984	)
Income taxes paid			(118,160	)
Net cash used in operating activities			(743,484	)
Cash flows from financing activities:
Cash dividends paid from net investment income			(2,120,340	)
Net cash used for financing activities			(2,120,340	)
Net decrease in cash			(2,863,824	)
Cash - beginning of period			12,640,481
Cash - end of period		$	9,776,657
Reconciliation of net increase in net assets to net cash used in operating activities:
Net increase in net assets resulting from operations		$	6,182,613
Increase in investments			(5,894,951	)
Increase in interest receivable			(14,884	)
Increase in receivable for investments sold			(63,303	)
Decrease in other assets			190,721
Decrease in payable for investments purchased			(1,074,070	)
Increase in investment advisory fee payable			14,361
Decrease in tax payable			(118,145	)
Increase in accrued expenses			34,174
Total adjustments to net assets from operations			(6,926,097	)
Net cash used in operating activities		$	(743,484	)

 

See Notes to Consolidated Financial Statements

 

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

For the three months ended March 31, 2021

(Unaudited)

 

		For the three months ended 3/31/2021 (Unaudited)				For the year ended 12/31/2020
Increase in net assets:
Operations:
Investment income - net		$	2,059,266			$	10,630,477
Net realized gain on investments after taxes			141,435				240,048
Net change in unrealized appreciation (depreciation) of investments after taxes			3,981,912				(4,521,459	)
Net increase in net assets resulting from operations			6,182,613				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 - $nil per share; 2020 - $0.80 per share)			—				(8,481,360	)
Total increase / (decrease) in net assets			6,182,613				(1,904,761	)
Net assets, beginning of period/year			144,177,379				146,082,140
Net assets, end of period/year		$	150,359,992			$	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 three months ended 3/31/2021				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)			0.19				1.00				1.00				1.03				1.09
Net realized and unrealized gain (loss) on investments			0.39				(0.40)				0.69				(0.68)				0.75
Total from investment operations			0.58				0.60				1.69				0.35				1.84
Dividends from net investment income to common shareholders			—				(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			0.00				(0.80)				(1.07)				(1.08)				(1.08)
Net asset value: End of period / year		$	14.18			$	13.60			$	13.80			$	13.18			$	13.91
Per share market value: End of period / year		$	12.93			$	11.88			$	16.13			$	15.05			$	14.10
Total investment return
Net asset value (c)			4.26%				4.66%				13.21%				2.53%				14.29%
Market value (c)			8.80%				(21.11%)				14.72%				15.02%				7.21%
Net assets (in millions): End of period / year		$	150.36			$	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			1.47%(e)				1.38%				1.45%				1.56%				1.49%
Ratio of interest expense to average net assets			0.43%(e)				0.43%				0.42%				0.42%				0.43%
Ratio of income tax expense to average net assets			0.00%(e)				(0.34%)				0.39%				0.78%				1.31%
Ratio of net investment income to average net assets			5.71%(e)				7.52%				7.30%				7.47%				7.92%
Portfolio turnover			6%				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		$	11,024			$	10,612			$	10,739			$	10,250			$	10,699

 

See Note to Consolidated Financial Statements

 

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities - 95.09%: (A)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Private Placement Investments - 86.24%: (C)
1WorldSync, Inc.
A product information sharing platform that connects manufacturers/suppliers and key retailers via the Global Data Synchronization Network.
6.25% Term Loan due 6/24/2025 (LIBOR + 5.750%)		$	2,458,804			*		$	2,420,487			$	2,438,002
* 07/01/19 and 12/09/20.
Accelerate Learning
A provider of standards-based, digital science education content of K-12 schools.
6.00% Term Loan due 12/31/2024 (LIBOR + 5.000%)		$	974,753			12/19/18			962,667				961,107
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 1/15/2027 (LIBOR + 6.500%)		$	1,380,288			01/15/21			1,346,978				1,345,781
Limited Liability Company Unit A (B) (F)			613 uts.			01/15/21			61,346				61,953
Limited Liability Company Unit B (B)			304 uts.			01/15/21			—				1,970
									1,408,324				1,409,704
AFC - Dell Holding Corporation
A distributor and provider of inventory management services for “C-Parts” used by OEMs in their manufacturing and production facilities.
13% (1% PIK) Senior Subordinated Note due 02/28/2022		$	1,930,825			*			1,924,165				1,930,825
12% Senior Subordinated Note due 02/28/2023		$	211,040			08/17/20			200,286				211,040
Preferred Stock (B)			73 shs.			**			—				8,029
Preferred Stock Series A (B)			1,155 shs.			***			115,513				200,339
Preferred Stock Series V (B)			53 shs.			12/31/19			5,251				6,433
Common Stock (B)			373 shs.			***			373				103,369
Common Stock Series B (B)			44 shs.			**			—				12,195
* 03/27/15, 11/16/18, 07/1/19, 08/21/19 and 12/05/19.									2,245,588				2,472,230
** 03/27/15, 11/15/18 and 12/31/19.
*** 03/27/15, 11/15/18, 12/31/19 and 08/14/20.

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Aftermath, Inc.
A provider of crime scene cleanup and biohazard remediation services.
6.75% Term Loan due 04/10/2025 (LIBOR + 5.750%)		$	963,473			04/09/19		$	948,935			$	963,473
American Scaffold, Inc.
A provider of scaffolding and environmental containment solutions.
5.92% Term Loan due 09/06/2025 (LIBOR + 5.250%)		$	1,284,320			09/06/19			1,262,976				1,284,320
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				231,538
ASC Holdings, Inc.
A manufacturer of capital equipment used by corrugated box manufacturers.
13% (1% PIK) Senior Subordinated Note due 11/19/2021		$	896,082			11/19/15			895,597				892,332
Limited Liability Company Unit (B)			111,100 uts.			11/18/15			111,100				28,108
									1,006,697				920,440
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%)		$	1,196,479			11/08/19			1,182,706				1,186,907
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%)		$	1,764,000			10/30/18			1,742,932				1,741,879
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				186,738
									209,600				396,128
BBB Industries LLC
A supplier of re-manufactured parts to the North American automotive aftermarket.
8.61% Second Lien Term Loan due 06/26/2026 (LIBOR + 8.500%)		$	1,725,000			08/02/18			1,690,422				1,692,224

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
BDP International, Inc.
A provider of transportation and related services to the chemical and life sciences industries.
6.25% Term Loan due 12/19/2024 (LIBOR + 5.250%)		$	2,409,538			12/18/18		$	2,379,724			$	2,366,431
6.25% Incremental Term Loan due 12/19/2024 (LIBOR + 5.250%)		$	43,030			12/07/20			42,236				42,260
6.25% Incremental Term Loan due 12/21/2024 (LIBOR + 5.250%)		$	41,163			03/30/21			40,340				40,339
									2,462,300				2,449,030
Beacon Pointe Advisors, LLC
An integrated wealth management platform with comprehensive financial planning capabilities for high net worth clients with complex financial needs.
6.00% Term Loan due 03/31/2026 (LIBOR + 5.000%)		$	993,636			03/31/20			975,014				993,636
BEI Precision Systems & Space Company, Inc.
A provider of advanced design, manufacturing, and testing for custom optical encoder-based positioning systems, precision accelerometers, and micro scanners.
12% (1% PIK) Senior Subordinated Note due 04/28/2024		$	1,506,883			04/28/17			1,491,088				1,506,883
Limited Liability Company Unit (B)(F)			4,167 uts.			*			416,654				669,487
* 04/28/17 and 02/07/19.									1,907,742				2,176,370
Blue Wave Products, Inc.
A distributor of pool supplies.
Common Stock (B)			51,064 shs.			10/12/12			51,064				302,803
Warrant, exercisable until 2022, to purchase common stock at $.01 per share (B)			20,216 shs.			10/12/12			20,216				119,878
									71,280				422,681
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%)		$	865,812			10/03/18			858,577				865,812
Cadence, Inc.
A full-service contract manufacturer (“CMO”) and supplier of advanced products, technologies, and services to medical device, life science, and industrial companies.
5.5% First Lien Term Loan due 04/30/2025 (LIBOR + 4.500%)		$	888,511			*			877,970				849,417
* 05/14/18 and 05/31/19.

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Cadent, LLC
A provider of advertising solutions driven by data and technology.
6.50% Term Loan due 09/07/2023 (LIBOR + 5.500%)		$	970,231			09/04/18		$	965,470			$	970,230
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.
7.00% Term Loan due 12/31/2023 (LIBOR +6.000%)		$	1,574,763			12/20/18			1,553,332				1,565,282
CloudWave
A provider of managed cloud hosting and IT services for hospitals.
7.00% Term Loan due 1/4/2027 (LIBOR + 6.000%)		$	1,669,355			01/29/21			1,632,869				1,631,794
Limited Liability Company Unit (B) (F)			55,645 uts.			01/29/21			55,645				54,977
									1,688,514				1,686,771
Clubessential LLC
A leading SaaS platform for private clubs and resorts.
7.25% (1% PIK) Senior Subordinated Note due 11/30/2023 (LIBOR + 6.250%)		$	1,712,062			01/09/20			1,692,589				1,677,821
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%)		$	2,074,428			*			2,019,703				2,031,674
Limited Liability Company Unit			18 uts.			04/23/20			18,006				19,431
Limited Liability Company Unit Class B			6,629 uts.			04/23/20			—				1,969
* 04/23/20, 10/30/20 and 11/18/20.									2,037,709				2,053,074
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%)		$	585,587			01/30/20			576,606				546,353
Limited Liability Company Unit (F)			1,237 shs.			*			49,559				35,492
* 01/30/20 and 03/05/21									626,165				581,845
CORA Health Services, Inc.
A provider of outpatient rehabilitation therapy services.
11.00% (1% PIK) Term Loan due 05/05/2025 (H)		$	1,559,402			*			1,478,643				1,479,300
Preferred Stock Series A (B)			758 shs.			06/30/16			2,647				124,036
Common Stock Class A (B)			3,791 shs.			06/30/16			3,791				37,269
* 05/01/18, 06/28/19 and 09/30/20									1,485,081				1,640,605

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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%)		$	1,399,390			12/22/20		$	1,372,667			$	1,373,935
Dart Buyer, Inc.
A manufacturer of helicopter aftermarket equipment and OEM Replacement parts for rotorcraft operators, providers and OEMs.
5.75% Term Loan due 04/01/2025 (LIBOR + 5.250%) (H)		$	1,701,725			04/01/19			1,397,867				1,409,200
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			1,403,759				1,349,559
Limited Liability Company Unit (B)(F)			368,799 uts.			*			368,928				184,813
* 10/07/16, 07/25/18, 03/13/19 and 06/17/19.									1,772,687				1,534,372
DPL Holding Corporation
A distributor and manufacturer of aftermarket undercarriage parts for medium and heavy duty trucks and trailers.
Preferred Stock (B)			25 shs.			05/04/12			252,434				353,759
Common Stock (B)			25 shs.			05/04/12			28,048				—
									280,482				353,759
Dunn Paper
A provider of specialty paper for niche product applications.
9.75% Second Lien Term Loan due 08/26/2023 (LIBOR + 8.750%)		$	1,725,000			09/28/16			1,712,931				1,697,399
Electronic Power Systems
A provider of electrical testing services for apparatus equipment and protection & controls infrastructure.
4.95% Term Loan due 12/21/2024 (LIBOR + 4.750%)		$	1,395,101			12/21/18			1,382,076				1,395,101
Common Stock (B)			52 shs.			12/28/18			52,176				105,649
									1,434,252				1,500,750
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				—

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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		$	1,352,411			06/30/17		$	1,339,430			$	1,333,667
Limited Liability Company Unit (B)(F)			397,695 uts.			06/30/17			397,695				551,267
									1,737,125				1,884,934
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 + 5.750%)			1,020,344			02/09/21			1,010,434				1,010,140
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				182,322
* 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				627,530
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%) (H)		$	664,997			09/30/20			570,357				576,260
9.50% Second Lien Term Loan due 11/10/2024 (LIBOR + 8.500%) (H)		$	333,333			09/30/20			103,061				106,945
									673,418				683,205
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				—
Limited Liability Company Unit Common (B)			767 uts.			10/05/12			767				—
									76,687				—

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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				374,047
Common Stock (B)			1,181 shs.			03/27/13			118,110				19,311
									1,402,891				1,704,487
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.
6.109% Term Loan due 12/21/2023 (LIBOR + 6.000%)		$	2,415,475			*			2,393,566				2,415,474
* 12/19/17 and 04/16/19.
Handi Quilter Holding Company (Premier Needle Arts)
A designer and manufacturer of long-arm quilting machines and related components for the consumer quilting market.
*12/19/14 and 04/29/16.									371,644				535,007
Happy Floors Acquisition, Inc.
A wholesale importer and value-added distributor of premium European flooring tile to residential and commercial end markets.
12.5% (1% PIK) Senior Subordinated Note due 01/01/2023		$	394,875			07/01/16			392,990				394,875
Common Stock (B)			150 shs.			07/01/16			149,500				410,098
									542,490				804,973
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				587,711
Holley Performance Products
A provider of automotive aftermarket performance products.
5.21% Term Loan due 10/24/2025 (LIBOR + 5.000%)		$	2,415,700			10/24/18			2,391,956				2,415,700
Home Care Assistance, LLC
A provider of private pay non-medical home care assistance services.
6.000% Term Loan due 03/30/2027 (LIBOR + 5.000%) (H)		$	856,037			03/26/21			574,723				574,707

 

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Hyperion Materials & Technologies, Inc.
A producer of specialty hard materials and precision tool components that are used to make precision cutting, grinding and other machining tools used by tool manufacturers and final product manufacturers.
6.50% Term Loan due 08/14/2026 (LIBOR + 5.500%)		$	1,589,392			08/16/19		$	1,567,029			$	1,579,856
IGL Holdings III Corp.
A specialty label and flexible packaging converter.
6.75% Term Loan due 10/23/2026 (LIBOR + 5.750%) (H)		$	1,725,000			11/02/20			1,181,220				1,213,347
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%)		$	1,055,236			11/21/19			1,048,244				874,790
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 1/31/2026 (LIBOR + 5.500%)		$	896,695			02/05/20			882,206				800,749
Kano Laboratories LLC
A producer of industrial strength penetrating oils and lubricants.
6.00% Term Loan due 9/30/2026 (LIBOR + 5.000%) (H)		$	1,253,694			11/18/20			835,039				858,556
Limited Liability Company Unit			20 uts.			11/19/20			19,757				19,476
									854,796				878,032
LAC Acquisition LLC
A provider of center-based applied behavior analysis treatment centers for children diagnosed with autism spectrum disorder.
6.00% Term Loan due 10/01/2024 (LIBOR + 5.750%)		$	1,694,135			10/01/18			1,668,821				1,656,018
Limited Liability Company Unit Class A (F)			22,222 uts.			10/01/18			22,222				46,555
									1,691,043				1,702,573
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%)		$	1,720,688			12/22/20			1,687,832				1,689,388

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)			Principal Amount, Shares, Units or Ownership Percentage			Acquisition Date			Cost				Fair Value
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				—
Limited Liability Company Unit			5 uts.			04/17/15			678,329				—
									1,545,858				—
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%)		$	492,291			11/25/19			484,531				483,676
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				—
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				—
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			907,138				915,819
Limited Liability Company Unit (B)(F)			182 uts.			03/09/18			183,164				167,107
									1,090,302				1,082,926

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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		$	—			$	28,200
Limited Liability Company Unit Class B-2 (B)(F)			6,801 uts.			11/30/10			—				2,557
									—				30,757
Music Reports, Inc.
An administrator of comprehensive offering of rights and royalties solutions for music and cue sheet copyrights to music and entertainment customers.
7.25% Term Loan due 08/21/2026 (LIBOR + 6.250%)		$	603,657			08/25/20			590,068				597,621
Navia Benefit Solutions, Inc.
A third-party administrator of employee-directed healthcare benefits.
6.25% Term Loan due 2/1/2026 (LIBOR + 5.250%) (H)		$	1,725,000			02/10/21			1,005,623				1,004,813
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%)		$	1,750,000			12/30/20			1,699,704				1,701,875
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%) (H)		$	1,595,040			12/23/19			1,234,231				1,240,933
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			1,765,916				1,775,705
Common Stock Class B (B)			380,545 shs.			*			380,545				623,832
* 01/29/16 and 02/17/17.									2,146,461				2,399,537
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			772,998				703,362

 

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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.
7.50% Term Loan due 08/31/2026 (LIBOR + 6.500%)		$	385,704			09/29/20		$	373,342			$	385,704
7.50% Term Loan due 11/17/2024 (LIBOR + 6.250%)		$	1,894,364			11/14/17			1,869,796				1,894,364
									2,243,138				2,280,068
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				3,777
* 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				962,986
Limited Liability Company Unit			148,096 uts.			07/31/14			148,096				—
Limited Liability Company Unit Class F			36,976 uts.			*			24,802				16,402
* 09/28/17 and 02/15/18.									1,237,081				979,388
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 (LIBOR + 16.000%) (D) (H)		$	951,093			07/21/20			683,966				(230,000	)
8.00% Term Loan due 05/28/2023 (LIBOR + 8.000%) (D)		$	693,994			07/21/20			656,840				—
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				—
									1,626,743				(230,000	)
Recovery Point Systems, Inc.
A provider of IT infrastructure, colocation and cloud based resiliency services.
7.50% Term Loan due 7/31/2026 (LIBOR + 6.500%)		$	1,346,340			08/12/20			1,322,265				1,346,340
Limited Liability Company Unit			21,532 uts.			03/05/21			21,532				21,532
									1,343,797				1,367,872
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%)		$	1,725,000			12/09/20			1,684,106				1,694,019

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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			$	854,011
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			1,689,243				1,688,775
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)		$	2,466,919			*			2,433,385				1,915,316
* 07/30/18 and 09/30/20.
ROI Solutions
Call center outsourcing and end user engagement services provider.
6.00% Term Loan due 07/31/2024 (LIBOR + 5.000%) (H)		$	1,617,900			07/31/18			638,359				656,339
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%)		$	1,647,375			10/22/20			1,613,557				1,637,491
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 + 6.000%)		$	1,235,484			01/08/19			1,229,147				1,230,727
Safety Products Holdings, Inc.
A manufacturer of highly engineered safety cutting tools.
Common Stock			29 shs.			12/16/20			29,262				29,260
7.00% Term Loan due 12/15/2026 (LIBOR + 6.000%) (H)		$	1,673,426			12/15/20			1,191,349				1,193,191
									1,220,611				1,222,451

 

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Sandvine Corporation
A provider of active network intelligence solutions.
8.11% Second Lien Term Loan due 11/02/2026 (LIBOR + 8.000%)		$	1,725,000			11/01/18			1,694,877				1,718,255
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%)		$	1,498,789			07/27/18		$	1,477,938			$	1,408,862
Scaled Agile, Inc.
A provider of training and certifications for IT professionals focused on software development.
5.75% Term Loan due 06/28/2024 (LIBOR + 4.750%)		$	657,741			06/27/19			653,478				657,741
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)		$	1,721,315			12/30/20			1,428,324				1,468,375
Smart Bear
A provider of web-based tools for software development, testing and monitoring.
8.75% Term Loan due 11/10/2028 (LIBOR + 7.750%)		$	1,725,000			03/20/21			1,677,578				1,677,045
Soliant Holdings, LLC
A healthcare staffing platform focused on placing highly skilled professionals in the education, nursing/allied health, life sciences and pharmacy end-markets.
6.50% Term Loan due 11/30/2026 (LIBOR + 5.500%)		$	917,556			12/27/19			902,485				911,042
Specified Air Solutions
A manufacturer and distributor of heating, dehumidification and other air quality solutions.
Limited Liability Company Unit			531,730 uts.			02/20/19			539,795				3,052,795
									539,795				3,052,795
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)		$	1,643,041			12/23/19			1,171,400				1,189,995

 

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
SR Smith LLC
A manufacturer of mine and tunneling ventilation products in the United States.
11% Senior Subordinated Note due 03/27/2022 (D)		$	1,084,565			*		$	1,047,502			$	1,071,214
Limited Liability Company Unit Series A			1,072 uts.			*			1,060,968				2,611,547
* 03/27/17 and 08/07/18.									2,108,470				3,682,761
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				237,960
Preferred Stock Series A-2 (B)			26,543 shs.			09/10/15			29,994				39,732
									188,961				277,692
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		$	1,989,234			*			1,963,742				1,989,234
Preferred Stock Series A			28 shs.			12/21/20			71,176				71,170
Common Stock (B)			68 shs.			**			104,986				164,298
* 07/31/15 and 12/21/20.									2,139,904				2,224,702
** 07/31/15 and 11/08/17.
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)		$	1,717,793			*			1,565,562				1,543,560
* 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.
4.95% Term Loan due 02/10/2025 (LIBOR + 4.750%) (H)		$	1,560,620			02/13/20			759,184				703,840

 

 

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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%)		$	1,725,000			02/25/21		$	1,695,377			$	1,694,813
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				—
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%)		$	1,709,409			12/13/19			1,681,569				1,705,990
Trystar, Inc.
A niche manufacturer of temporary power distribution products for the power rental, industrial, commercial utility and back-up emergency markets.
5.75% Term Loan due 10/01/2023 (LIBOR + 4.750%)		$	2,279,962			09/28/18			2,257,393				2,270,842
Limited Liability Company Unit (B)(F)			49 uts.			09/28/18			49,676				46,731
									2,307,069				2,317,573
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%)		$	2,158,116			*			2,072,418				1,984,591
* 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 + 5.75%)		$	2,419,398			*			2,392,669				2,419,398
* 01/04/19 and 10/01/19.
U.S. Retirement & Benefits Partners, Inc.
A leading independent provider of outsourced benefit design and administration and retirement services, primarily to K-12 school districts, employee unions, and governmental agencies.
9.75% Second Lien Term Loan due 09/29/2025 (LIBOR + 8.750%)		$	1,698,817			03/05/18			1,677,423				1,675,033

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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		$	1,540,147			$	1,557,102
UroGPO, LLC
A group purchasing organization that connects pharmaceutical companies with urology practices to facilitate the purchase of pharmaceutical drugs for discounted prices.
7.25% Term Loan due 12/15/2026 (LIBOR + 6.250%)		$	2,500,000			12/14/20			2,452,442				2,465,000
VP Holding Company
A provider of school transportation services for special-needs and homeless children in Massachusetts and Connecticut.
5.75% Lien Term Loan due 05/22/2024 (LIBOR + 4.750%)		$	2,408,360			05/17/18			2,383,160				2,365,010
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 08/03/2021 (D)		$	383,062			08/03/15			382,227				—
Limited Liability Company Unit (B)(F)			370,241 uts.			08/03/15			370,241				—
									752,468				—
Whitebridge Pet Brands Holdings, LLC
A manufacturer and marketer of branded, all-natural treats and foods for dogs and cats.
Limited Liability Company Unit Class A (B)(F)			123 uts.			04/18/17			148,096				172,262
Limited Liability Company Unit Class B (B)(F)			123 uts.			04/18/17			—				232,317
									148,096				404,579
Wolf-Gordon, Inc.
A designer and specialty distributor of wallcoverings and related building products, including textiles, paint, and writeable surfaces.
12.5% (1.5% PIK) Senior Subordinated Note due 07/22/2021 Common Stock (B)			$ 157 shs.			01/22/16			62,177				118,187
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%)		$	380,062			09/21/20			369,785				380,062
5.75% Term Loan due 12/31/2025 (LIBOR + 4.750%)		$	1,215,567			01/09/20			1,191,369				1,191,255
									1,561,154				1,571,317
WP Supply Holding Corporation
A distributor of fresh fruits and vegetables to grocery wholesalers and foodservice distributors in the upper Midwest.
Common Stock (B)			1,500 shs.			11/03/11			150,000				189,463

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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				165,836
* 03/04/15 and 02/07/18.									494,034				459,436
Total Private Placement Investments (E)								$	131,081,339			$	129,665,455

 

 

 

Corporate Restricted Securities: (A) (Continued)			Interest Rate			Maturity Date			Principal Amount				Cost				Market Value
Rule 144A Securities - 8.85%:
Bonds - 8.85%
Altice Financing S.A.			7.500	%		05/15/26		$	308,000			$	308,000			$	321,860
American Airlines Inc			11.750			07/15/25			500,000				495,589				618,125
Boyne USA, Inc.			7.250			05/01/25			129,000				129,000				134,096
BWAY Holding Company			7.250			04/15/25			750,000				700,265				749,999
CGG SA			8.750			04/01/27			356,000				356,000				358,741
Cleveland-Cliffs Inc.			9.875			10/17/25			331,000				359,326				387,783
CommScope Finance LLC			8.250			03/01/27			500,000				478,134				535,000
CVR Energy Inc.			5.750			02/15/28			500,000				456,011				486,250
Diebold Nixdorf			9.375			07/15/25			350,000				371,156				389,813
First Quantum Minerals Ltd.			7.500			04/01/25			500,000				478,583				516,250
First Quantum Minerals Ltd.			7.250			04/01/23			385,000				382,867				391,738
GRD Holding III Corp.			8.750			09/01/25			375,000				378,112				409,219
Houghton Mifflin Harcourt			9.000			02/15/25			500,000				492,188				535,000
LBC Tank Terminals Holding Netherlands B.V.			6.875			05/15/23			511,000				515,033				511,000
Neptune Energy Bondco PLC			6.625			05/15/25			500,000				493,967				501,875
OPE KAG Finance Sub			7.875			7/31/23			385,000				391,504				384,038
Panther BF Aggregator 2 LP			8.500			05/15/27			100,000				93,182				107,676
PBF Holding Company LLC			9.250			05/15/25			115,000				113,654				117,263
Picou Holdings LLC			10.000			12/31/25			500,000				447,601				458,750
Prime Security Services, LLC			6.250			01/15/28			885,000				780,210				921,275
Solera Holdings Inc.			10.500			03/01/24			667,000				693,043				689,078
Suncoke Energy			7.500			06/15/25			500,000				487,913				519,375
Terrier Media Buyer, Inc.			8.875			12/15/27			530,000				509,072				570,307
The Manitowoc Company, Inc.			9.000			04/01/26			500,000				488,636				539,375
Trident TPI Holdings Inc.			9.250			08/01/24			500,000				488,743				530,000
Veritas US, Inc.			10.500			02/01/24			750,000				681,126				767,812
Verscend Holding Corp			9.750			08/15/26			482,000				509,166				516,810

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)			Interest Rate			Maturity Date			Principal Amount				Cost				Market Value
Warrior Met Coal, Inc.			8.000	%		11/01/24		$	161,000			$	161,000			$	165,025
WESCO International, Inc.			7.250			06/15/28			157,000				155,849				175,683
Total Bonds													12,394,930				13,309,216
Common Stock - 0.00%
TherOX, Inc. (B)									2				—				—
Touchstone Health Partnership (B)									292				—				—
Total Common Stock													—				—
Total Rule 144A Securities												$	12,394,930			$	13,309,216
Total Corporate Restricted Securities												$	143,476,269			$	142,974,671

 

 

 

Corporate Public Securities - 5.59%: (A)		LIBOR Spread				Interest Rate				Maturity Date		Principal Amount				Cost				Market Value
Bank Loans - 3.06%
Almonde, Inc.			3.500	%			4.500	%		06/13/24		$	353,286			$	315,592			$	345,881
Almonde, Inc.			7.250				8.250			06/13/25			500,000				505,000				501,875
AHEAD DB Holdings, LLC			8.500				9.500			10/14/27			1,172,650				1,139,402				1,137,470
BMC Software Finance, Inc.			3.750				3.859			10/02/25			435,720				435,776				433,541
Confie Seguros Holding II Co.			8.500				8.615			10/31/25			446,131				440,269				434,978
Edelman Financial Services			6.750				6.860			06/08/26			128,178				127,752				127,897
Golden Nugget, Inc.			2.500				3.250			10/04/23			433,094				373,705				425,840
ION Trading Technologies Sarl			4.000				5.000			11/21/24			269,221				265,272				269,032
PS Logistics LLC			4.750				5.750			03/01/25			472,929				475,634				472,182
STS Operating, Inc.			8.000				9.000			04/25/26			500,000				505,000				450,500
Total Bank Loans																	4,583,402				4,599,196
Bonds - 2.04%
Clear Channel Worldwide Holdings, Inc.							9.250			02/15/24			432,000				439,474				449,410
Dish DBS Corporation							7.750			07/01/26			385,000				406,996				424,078
Genesis Energy LP							6.500			10/01/25			337,000				321,559				330,344
Hecla Mining Company							7.250			02/15/28			500,000				473,145				536,250
Hughes Satellite Systems Corporation							7.625			06/15/21			500,000				500,189				505,750
PBF Holding Company LLC							7.250			06/15/25			385,000				393,687				313,621
Triumph Group, Inc.							7.750			08/15/25			500,000				502,942				502,500
Total Bonds																	3,037,992				3,061,953
Common Stock - 0.15%
Tourmaline Oil Corp													52,194				139,761				220,187
Total Common Stock																	139,761				220,187

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

Corporate Public Securities - 5.59%: (A)		LIBOR Spread					Interest Rate			Maturity Date		Principal Amount				Cost				Market Value
Preferred Stock - 0.34%
B. Riley Financial Inc.												$	20,000			$	500,000			$	517,600
Total Preferred Stock																	500,000				517,600
Total Corporate Public Securities																$	8,261,155			$	8,398,936

 

 

 

Short-Term Security:		Interest Rate/Yield^				Maturity Date		Principal Amount				Cost				Market Value
Commercial Paper - 1.99%
EI Dupont			0.213	%		05/17/21		$	1,000,000			$	999,732			$	999,732
Macquarie Bank Limited			0.162			05/26/21			1,000,000				999,755				999,755
Standard Chartered Bank			0.155			10/05/21			1,000,000				999,204				999,204
Total Short-Term Securities												$	2,998,691			$	2,998,691
Total Investments			102.67	%								$	154,736,115			$	154,372,298
Other Assets			7.82														11,752,765
Liabilities			(10.49	)													(15,765,071	)
Total Net Assets			100.00	%												$	150,359,992

(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 March 31, 2021 the values of these securities amounted to $129,665,455 or 86.24% of net assets.

(F)

Held in PI Subsidiary Trust

(G)

PIK non-accrual

(H)

A portion of these securities contain unfunded commitments. As of March 31, 2021, total unfunded commitments amounted to $6,096,263 and had unrealized depreciation of $(201,726) or (0.13)% of net assets. See Note 7.

^    Effective yield at purchase

PIK - Payment-in-kind

 

 

  Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

 

See Notes to Consolidated Financial Statements

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2021

(Unaudited)

 

 

 

 

 

See Notes to Consolidated Financial Statements

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 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 March 31, 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 March 31, 2021 are as follows:

 

Assets:		Total				Level 1				Level 2				Level 3
Restricted Securities
Corporate Bonds		$	28,954,483			$	—			$	13,309,216			$	15,645,267
Bank Loans			98,453,963				—				—				98,453,963
Common Stock - U.S.			2,588,186				—				—				2,588,186
Preferred Stock			1,918,497				—				—				1,918,497
Partnerships and LLCs			11,059,542				—				—				11,059,542
Public Securities
Bank Loans			4,599,196				—				3,026,747				1,572,449
Corporate Bonds			3,061,953				—				3,061,953				—
Common Stock - U.S.			220,187				186,454				—				33,733
Preferred Stock			517,600				—				517,600				—
Short-term Securities			2,998,691				999,204				1,999,487				—
Total		$	154,372,298			$	1,185,658			$	21,915,003			$	131,271,637

 

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 March 31, 2021.

 

	Fair Value	Valuation Technique	Unobservable Inputs	Range	Weighted*
Bank Loans	$ 85,697,672	Market Yield	Yield Analysis	5.2% - 18.2%	8.0%
	$ 1,249,300	Income Approach	Implied Spread	7.2% - 15.2%	11.0%
Corporate Bonds	$ 7,890,495	Income Approach	Implied Spread	10.4% - 15.7%	11.6%
Equity Securities**	$ 15,544,693	Enterprise Value Waterfall Approach	Valuation Multiple	5.0x to 17.8x	10.8x
			EBITDA	$(8.4) million to $334.8 million	$32.9 million

 

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 $20,889,477 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 3/31/2021
Restricted Securities
Corporate Bonds		$	18,359,723			$	140,895			$	16,647			$	(2,871,998	)		$	—			$	—			$	—			$	15,645,267
Bank Loans			88,124,979				283,954				9,919,700				—				(3,011,761	)			3,137,091				—				98,453,963
Common Stock - U.S.			2,767,599				718,129				—				(926,802	)			—				29,260				—				2,588,186
Preferred Stock			2,252,826				(334,113	)			—				(216	)			—				—				—				1,918,497
Partnerships and LLCs			8,261,019				3,023,308				141,172				(365,957	)			—				—				—				11,059,542
Public Securities
Bank Loans			1,137,471				36,387				—				—				—				398,591				—				1,572,449
Common Stock - U.S.			—				33,733				—				—				—				—								33,733
Corporate Bonds			—				—				—				—				—				—				—				—
		$	120,903,617			$	3,902,293			$	10,077,519			$	(4,164,973	)		$	(3,011,761	)		$	3,564,942			$	—			$	131,271,637

 

*

For the three months ended March 31, 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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       Barings Participation Investors

 

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Members of the Board of Trustees Clifford M. Noreen Chairman Michael H. Brown* Barbara M. Ginader* Edward P. Grace III* Robert E. Joyal Susan B. Sweeney* Maleyne M. Syracuse* *Member of the Audit Committee Officers   Christina Emery President Jonathan Bock Chief Financial Officer Jill Dinerman Chief Legal Officer Michael Cowart Chief Compliance Officer Elizabeth Murray Principal Accounting Officer Christopher D. Hanscom Treasurer Ashlee Steinnerd Secretary Alexandra Pacini Assistant Secretary Sean Feeley Vice President Jonathan Landsberg Vice President		DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN Barings Participation Investors (the “Trust”) offers a Dividend Reinvestment and Cash Purchase Plan (the “Plan”). The Plan provides a simple and automatic way for shareholders to add to their holdings in the Trust through the receipt of dividend shares issued by the Trust or through the reinvestment of cash dividends in Trust shares purchased in the open market. The dividends of each shareholder will be automatically reinvested in the Trust by DST Systems, Inc., the Transfer Agent, in accordance with the Plan, unless such shareholder elects not to participate by providing written notice to the Transfer Agent. A shareholder may terminate his or her participation by notifying the Transfer Agent in writing. Participating shareholders may also make additional contributions to the Plan from their own funds. Such contributions may be made by personal check or other means in an amount not less than $100 nor more than $5,000 per quarter. Cash contributions must be received by the Transfer Agent at least five days (but no more then 30 days) before the payment date of a dividend or distribution. Whenever the Trust declares a dividend payable in cash or shares, the Transfer Agent, acting on behalf of each participating shareholder, will take the dividend in shares only if the net asset value is lower than the market price plus an estimated brokerage commission as of the close of business on the valuation day. The valuation day is the last day preceding the day of dividend payment. When the dividend is to be taken in shares, the number of shares to be received is determined by dividing the cash dividend by the net asset value as of the close of business on the valuation date or, if greater than net asset value, 95% of the closing share price. If the net asset value of the shares is higher than the market value plus an estimated commission, the Transfer Agent, consistent with obtaining the best price and execution, will buy shares on the open market at current prices promptly after the dividend payment date. The reinvestment of dividends does not, in any way, relieve participating shareholders of any federal, state or local tax. For federal income tax purposes, the amount reportable in respect of a dividend received in newly-issued shares of the Trust will be the fair market value of the shares received, which will be reportable as ordinary income and/or capital gains. As compensation for its services, the Transfer Agent receives a fee of 5% of any dividend and cash contribution (in no event in excess of $2.50 per distribution per shareholder.) Any questions regarding the Plan should be addressed to DST Systems, Inc., Transfer Agent for Barings Participation Investors’ Dividend Reinvestment and Cash Purchase Plan, P.O. Box 219086, Kansas City, MO 64121-9086.

 

 

 

 

 

 

 

Barings Participation Investors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PI6217

 

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