Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2022 and December 31, 2021 (in thousands):

	As of June 30, 2022								As of December 31, 2021
Description	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Senior Debt	$	—	$	—	$	176,942	$	176,942	$	—	$	—	$	152,542	$	152,542
Equity	—		—		382,552		382,552		—		—		303,455		303,455
Total investments	$	—	$	—	$	559,494	$	559,494	$	—	$	—	$	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 June 30, 2022 and December 31, 2021 were as follows (in thousands):

June 30, 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	9.5% – 13.5% (11.4%) 7.0x – 14.6x (9.5x) 6.5x – 12.5x (10.9x)	Decrease Increase Increase
	24,400		Transaction Precedent	Transaction Price	N/A	N/A
Equity	325,624		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	9.5% – 13.5% (11.4%) 7.0x – 14.6x (9.5x) 6.5x – 12.5x (10.9x)	Decrease Increase Increase
	56,928		Transaction Precedent	Transaction Price	N/A	N/A
Total	$	559,494

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 six months ended June 30, 2022 and 2021 (in thousands):

	Six Months Ended June 30, 2022
	Senior Debt		Equity		Total
Fair value balance as of January 1, 2022	$	152,542	$	303,455	$	455,997
Additions	24,400		62,050		86,450
Return of capital(1)	—		(237)		(237)
Net change in unrealized appreciation(2)	—		17,284		17,284
Fair value balance as of June 30, 2022	$	176,942	$	382,552	$	559,494
Change in net unrealized appreciation on investments held as of June 30, 2022(2)	$	—	$	17,284	$	17,284

	Six Months Ended June 30, 2021
	Senior Debt		Equity		Total
Fair value balance as of January 1, 2021	$	78,042	$	153,155	$	231,197
Additions	37,000		36,000		73,000
Net change in unrealized appreciation(2)	—		28,787		28,787
Fair value balance as of June 30, 2021	$	115,042	$	217,942	$	332,984
Change in net unrealized appreciation on investments held as of June 30, 2021(2)	$	—	$	28,787	$	28,787

 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