Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Investments Categorization in Fair Value Hierarchy

The Company’s investments were categorized in the fair value hierarchy described in Note 2. “Significant Accounting Policies,” as follows as of March 31, 2022 and December 31, 2021 (in thousands):

	As of March 31, 2022								As of December 31, 2021
Description	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Senior Debt	$	—	$	—	$	152,542	$	152,542	$	—	$	—	$	152,542	$	152,542
Equity	—		—		316,112		316,112		—		—		303,455		303,455
Total investments	$	—	$	—	$	468,654	$	468,654	$	—	$	—	$	455,997	$	455,997

Unobservable Inputs Used in Fair Value Measurement of Investments

The ranges of unobservable inputs used in the fair value measurement of the Company’s Level 3 investments as of March 31, 2022 and December 31, 2021 were as follows (in thousands):

March 31, 2022
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input(2)
Senior Debt	$	152,542	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	9.0% – 13.5% (11.3%) 5.0x – 14.3x (10.0x) 6.5x – 13.0x (10.5x)	Decrease Increase Increase
Equity	316,112		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	9.0% – 13.5% (11.3%) 5.0x – 14.3x (10.0x) 6.5x – 13.0x (10.5x)	Decrease Increase Increase
Total	$	468,654

December 31, 2021
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input(2)
Senior Debt	$	130,042	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	8.5% – 13.0% (11.4%) 4.1x – 15.2x (8.9x) 6.0x – 12.5x (9.6x)	Decrease Increase Increase
	22,500		Transaction Precedent	Transaction Price	N/A	N/A
Equity	256,695		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	8.5% – 13.0% (11.4%) 4.1x – 15.2x (8.9x) 6.0x – 12.5x (9.6x)	Decrease Increase Increase
	46,760		Transaction Precedent	Transaction Price	N/A	N/A
Total	$	455,997

FOOTNOTES:

(1)    Discount rates are relative to the enterprise value of the portfolio companies and are not the market yields on the associated debt investments. Unobservable inputs were weighted by the relative fair value of the investments.

(2)    This column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

Reconciliations of Investments of Level 3 Inputs

The following tables provide a reconciliation of investments for which Level 3 inputs were used in determining fair value for the three months ended March 31, 2022 and 2021 (in thousands):

	Three Months Ended March 31, 2022
	Senior Debt		Equity		Total
Fair value balance as of January 1, 2022	$	152,542	$	303,455	$	455,997
Additions	—		1,125		1,125
Return of capital(1)	—		(237)		(237)
Net change in unrealized appreciation(2)	—		11,769		11,769
Fair value balance as of March 31, 2022	$	152,542	$	316,112	$	468,654
Change in net unrealized appreciation on investments held as of March 31, 2022(2)	$	—	$	11,769	$	11,769

	Three Months Ended March 31, 2021
	Senior Debt		Equity		Total
Fair value balance as of January 1, 2021	$	78,042	$	153,155	$	231,197
Net change in unrealized appreciation(2)	—		13,912		13,912
Fair value balance as of March 31, 2021	$	78,042	$	167,067	$	245,109
Change in net unrealized appreciation on investments held as of March 31, 2021(2)	$	—	$	13,912	$	13,912

 FOOTNOTES:

(1)     Represents portion of distributions received which were accounted for as a return of capital. See Note 2. “Significant Accounting Policies” for information on the accounting treatment of distributions from portfolio companies.

(2)    Included in net change in unrealized appreciation on investments in the condensed consolidated statements of operations