Barings

Participation Investors

Report for the  

Nine Months Ended September 30, 2018  

        

 

Adviser

Barings LLC

300 S Tryon St., Suite 2500

Charlotte, NC 28202

Independent Registered Public Accounting Firm

KPMG LLP

Boston, Massachusetts 02110

Counsel to the Trust

Ropes & Gray LLP

Boston, Massachusetts 02111

Custodian

State Street Bank and Trust Company

Boston, Massachusetts 02110

Transfer Agent & Registrar

DST Systems, Inc.

P.O. Box 219086

Kansas City, Missouri 64121-9086

1-800-647-7374

Internet Website

www.barings.com/mpv

Barings Participation Investors c/o Barings LLC 1500 Main Street, Suite 2200 Springfield, Massachusetts 01115 (413) 226-1516

Investment Objective and Policy

Barings Participation Investors (the "Trust") is a closed-end management investment company, first offered to the public in 1988, whose shares are traded on the New York Stock Exchange under the trading symbol "MPV". The Trust's share price can be found in the financial section of most newspapers under either the New York Stock Exchange listings or Closed-End Fund Listings.

The Trust's investment objective is to maintain a portfolio of securities providing a current yield and, when available, an opportunity for capital gains. The Trust's principal investments are privately placed, below investment grade, long-term debt obligations including bank loans and mezzanine debt instruments. Such direct placement securities may, in some cases, be accompanied by equity features such as common stock, preferred stock, warrants, conversion rights, or other equity features. The Trust typically purchases these investments, which are not publicly tradable, directly from their issuers in private placement transactions. These investments are typically made to small or middle market companies. In addition, the Trust may invest, subject to certain limitations, in marketable debt securities (including high yield and/or investment grade securities) and marketable common stock. Below investment grade or high yield securities have predominantly speculative characteristics with respect to the capacity of the issuer to pay interest and repay capital.

Barings manages the Trust on a total return basis. The Trust distributes substantially all of its net income to shareholders each year. Accordingly, the Trust pays dividends to shareholders in January, May, August, and November. All registered shareholders are automatically enrolled in the Dividend Reinvestment and Cash Purchase Plan unless cash distributions are requested.

Form N-Q

The Trust files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. This information is available (i) on the SEC's website at http://www.sec.gov; and (ii) at the SEC's Public Reference Room in Washington, DC (which information on their operation may be obtained by calling 1-800-SEC-0330). A complete schedule of portfolio holdings as of each quarter-end is available upon request by calling, toll-free, 866-399-1516.

Proxy Voting Policies & Procedures; Proxy Voting Record

The Trustees of the Trust have delegated proxy voting responsibilities relating to the voting of securities held by the Trust to Barings. A description of Barings' proxy voting policies and procedures is available (1) without charge, upon request, by calling, toll-free 866-399-1516; (2) on the Trust's website at www.barings.com/mpv; and (3) on the SEC's website at http://www.sec.gov. Information regarding how the Trust voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (1) on the Trust's website at www.barings.com/mpv; and (2) on the SEC's website at http://www.sec.gov.

Legal Matters

The Trust has entered into contractual arrangements with an investment adviser, transfer agent and custodian (collectively "service providers") who each provide services to the Trust. Shareholders are not parties to, or intended beneficiaries of, these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the Trust.

Under the Trust's Bylaws, any claims asserted against or on behalf of the Trust, including claims against Trustees and officers must be brought in courts located within the Commonwealth of Massachusetts.

The Trust's registration statement and this shareholder report are not contracts between the Trust and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

Barings Participation Investors

TO OUR SHAREHOLDERS

October 31, 2018

We are pleased to present the September 30, 2018 Quarterly Report of Barings Participation Investors (the "Trust").

The Board of Trustees declared a quarterly dividend of $0.27 per share, payable on November 9, 2018 to shareholders of record on October 29, 2018. The Trust paid a $0.27 per share dividend for the preceding quarter. The Trust earned $0.27 per share of net investment income for the third quarter of 2018, compared to $0.26 per share, including $0.01 per share of non-recurring income, in the previous quarter.

During the third quarter, the net assets of the Trust increased to $145,888,297 or $13.88 per share compared to $143,947,536 or $13.72 per share on June 30, 2018. This translates into a 3.2% 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 5.3%, 8.8%, 9.8%, 10.3% and 12.2% 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 share price increased during the quarter, from $14.70 per share as of June 30, 2018 to $14.90 per share as of September 30, 2018, which resulted in a total return for the quarter of 3.3%. The Trust's market price of $14.90 per share equates to a 7.4% premium over the September 30, 2018 net asset value per share of $13.88. The Trust's average quarter-end premium for the 3, 5 and 10-year periods was 5.2%, 1.8% and 6.6%, respectively. U.S. equity markets, as approximated by the Russell 2000 Index, increased 3.6% for the quarter. U.S. fixed income markets, as approximated by the Bloomberg Barclays U.S. Corporate High Yield Index, increased 2.4% for the quarter.

The Trust closed seven new private placement investments and six add-on investments to existing portfolio companies during the third quarter. The seven new platform investments were in BBB Industries LLC, Cadent LLC, DuBois Chemicals Inc., Rock-It Cargo, ROI Solutions, Sara Lee Frozen Foods and Trystar, Inc. The six add-on investments were in Aurora Parts & Accessories LLC, Del Real LLC, New Mountain Learning, LLC, SR Smith LLC, U.S. Retirement and Benefit Partners, Inc. and VP Holding Company. A brief description of these investments can be found in the Consolidated Schedule of Investments. The total amount invested by the Trust in these transactions was $12.4 million. Of note, all of the new platform investments were floating rate term loans. Over the past couple of years, the Trust has increasingly invested in term loans with floating interest rates. If interest rates continue to rise, we would expect interest income to increase due to the base interest rates on the floating rate loans resetting quarterly. Please note that the Trust's $15 million senior note has a fixed rate of 4.09% and therefore, increases in base interest rates will not impact the Trust's cost of borrowing.

It was another strong quarter for the Trust in terms of new investment activity. The expansion of the Trust's target investment criteria in late 2017 into a broader set of the middle market private debt market, along with the expansion of Barings' (the Trust's investment adviser) private debt platform have been key contributors to new investment volume. Overall, market conditions remain extremely competitive with purchase price and leverage multiples remaining at or near historical highs, and there continues to be a large supply of debt capital seeking middle-market investment opportunities. It continues to be difficult to source traditional mezzanine opportunities as both the all-senior and second lien structures remain more attractive to borrowers than traditional mezzanine opportunities in the middle market. As always, we seek to be selective in our investment choices and maintain our underwriting discipline.

The Trust's current portfolio continues to exhibit sound credit quality. Realization activity continued through the third quarter with four private debt investment exits during the quarter, three of which resulted in realized gains and one which returned 100% of principal. In addition, three companies fully prepaid their debt held by the Trust. The Trust also benefited from small dividends paid by several of its equity investments during the quarter. We remain cautiously optimistic about realization activity over the next few quarters as there are several companies in which the Trust has outstanding investments that are in the process of being sold.

The Trust was able to maintain its $0.27 per share quarterly dividend in the third quarter with recurring investment income being sufficient to fully cover this quarter's dividend. As discussed in prior reports, since 2013, recurring investment income alone had generally not been sufficient to fully fund the current dividend rate principally due to the considerable reduction in the number of private debt securities in the portfolio resulting from the high level of exits and prepayment activity that occurred from 2013 through 2015, combined with fewer investment opportunities and lower returns associated with those opportunities due to market and competitive dynamics over the past several years. As referenced above, the Trust's expansion of its target investment criteria in 2017, combined with the amendments

(Continued)

1

to the Trust's fundamental investment guidelines that were approved by shareholder vote in May 2018, has allowed for increased private debt investment opportunities which, in turn, have resulted in higher recurring investment income than the Trust has experienced in recent years. While there can be no guarantee that recurring investment income will continue to be sufficient to cover the current dividend rate, the level of recurring investment income expected to be generated by the Trust in 2018, combined with the availability of earnings carry forwards and other non-recurring income, is expected to be sufficient to maintain the current dividend rate over the next several quarters.

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

Sincerely,

Robert M. Shettle

President

Portfolio Composition as of 9/30/18*

* Based on market value of total investments

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.

2

Barings Participation Investors

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

September 30, 2018

(Unaudited)

Assets:
Investments (See Consolidated Schedule of Investments)
Corporate restricted securities at fair value (Cost - $109,983,886)	$	105,987,170
Corporate restricted securities at market value (Cost - $18,338,379)		18,107,713
Corporate public securities at market value (Cost - $23,205,623)		23,136,206
Short-term securities at amortized cost		1,998,443
Total investments (Cost - $153,526,331)		149,229,532
Cash		12,441,528
Interest receivable		1,694,624
Other assets		30,773
Total assets		163,396,457
Liabilities:
Note payable		15,000,000
Payable for investments purchased		1,567,513
Deferred tax liability		448,095
Investment advisory fee payable		328,249
Interest payable		27,267
Accrued expenses		137,036
Total liabilities		17,508,160
Commitments and Contingencies (See Note 8)
Total net assets	$	145,888,297
Net Assets:
Common shares, par value $.01 per share	$	105,107
Additional paid-in capital		95,225,528
Retained net realized gain on investments, prior years		44,296,000
Undistributed net investment income		3,407,594
Accumulated net realized gain on investments		7,598,962
Net unrealized depreciation of investments		(4,744,894	)
Total net assets	$	145,888,297
Common shares issued and outstanding (14,787,750 authorized)		10,510,689
Net asset value per share	$	13.88

See Notes to Consolidated Financial Statements

3

CONSOLIDATED STATEMENT OF OPERATIONS

For the nine months ended September 30, 2018

(Unaudited)

Investment Income:
Interest	$	9,947,721
Dividends		270,122
Other		89,966
Total investment income		10,307,809
Expenses:
Investment advisory fees		980,452
Interest		460,125
Trustees' fees and expenses		180,000
Professional fees		179,194
Reports to shareholders		76,000
Custodian fees		18,000
Other		74,871
Total expenses		1,968,642
Investment income - net		8,339,167
Net realized and unrealized loss on investments:
Net realized gain on investments before taxes		5,569,705
Income tax expense		(288,677	)
Net realized gain on investments after taxes		5,281,028
Net increase (decrease) in unrealized appreciation (depreciation) of investments before taxes		(8,609,944	)
Net (increase) decrease in deferred income tax expense		321,618
Net increase (decrease) in unrealized appreciation (depreciation) of investments after taxes		(8,288,326	)
Net loss on investments		(3,007,298	)
Net increase in net assets resulting from operations	$	5,331,869

See Notes to Consolidated Financial Statements

4

Barings Participation Investors

CONSOLIDATED STATEMENT OF CASH FLOWS

For the nine months ended September 30, 2018

(Unaudited)

Net increase in cash:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio securities, net	$	4,100,942
Purchases of portfolio securities		(42,565,890	)
Proceeds from disposition of portfolio securities		48,788,144
Interest, dividends and other income received		8,178,544
Interest expense paid		(460,125	)
Operating expenses paid		(1,523,897	)
Income taxes paid		(2,102,026	)
Net cash provided by operating activities		14,415,692
Cash flows from financing activities:
Cash dividends paid from net investment income		(8,485,590	)
Receipts for shares issued on reinvestment of dividends		738,249
Net cash used for financing activities		(7,747,341	)
Net increase in cash		6,668,351
Cash - beginning of period		5,773,177
Cash - end of period	$	12,441,528
Reconciliation of net increase in net assets to net cash provided by operating activities:
Net increase in net assets resulting from operations	$	5,331,869
Decrease in investments		10,071,089
Increase in interest receivable		(399,673	)
Increase in other assets		(4,759	)
Increase in payable for investments purchased		1,567,513
Decrease in deferred tax liability		(321,618	)
Increase in investment advisory fee payable		919
Decrease in accrued expenses		(16,299	)
Decrease in tax payable		(1,813,349	)
Total adjustments to net assets from operations		9,083,823
Net cash provided by operating activities	$	14,415,692

See Notes to Consolidated Financial Statements

5

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

	For the ninemonths ended9/30/2018 (Unaudited)			For theyear ended 12/31/2017
Increase in net assets:
Operations:
Investment income - net	$	8,339,167		$	11,340,081
Net realized gain on investments after taxes		5,281,028			2,280,108
Net change in unrealized (depreciation) appreciation of investments after taxes		(8,288,326	)		5,517,329
Net increase in net assets resulting from operations		5,331,869			19,137,518
Increase from common shares issued on reinvestment of dividends
Common shares issued (2018 - 52,527; 2017 - 71,989)		738,249			1,001,726
Dividends to shareholders from:
Net investment income (2018 - $0.54 per share; 2017 - $1.08 per share)		(5,661,886	)		(11,265,910	)
Total increase in net assets		408,232			8,873,334
Net assets, beginning of period/year		145,480,065			136,606,731
Net assets, end of period/year (including undistributed net investment income of $3,407,594 and $730,313, respectively)	$	145,888,297		$	145,480,065

See Notes to Consolidated Financial Statements 6

Barings Participation Investors

CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS

Selected data for each share of beneficial interest outstanding:

	For the ninemonths ended9/30/2018 (Unaudited)			For the years ended December 31,
				2017			2016			2015			2014
Net asset value:
Beginning of period/year	$	13.91		$	13.15		$	13.10		$	13.35		$	12.83
Net investment income (a)		0.80			1.09			1.00			0.95			1.04
Net realized and unrealized gain (loss) on investments		(0.29	)		0.75			0.13			(0.12	)		0.57
Total from investment operations		0.51			1.84			1.13			0.83			1.61
Dividends from net investment income to common shareholders		(0.54	)		(1.08	)		(1.08	)		(1.08	)		(0.96	)
Dividends from realized gain on investments to common shareholders		—			—			—			—			(0.12	)
Increase from dividends reinvested		(0.00	)(b)		(0.00	)(b)		(0.00	)(b)		(0.00	)(b)		(0.01	)
Total dividends		(0.54	)		(1.08	)		(1.08	)		(1.08	)		(1.09	)
Net asset value:
End of period/year	$	13.88		$	13.91		$	13.15		$	13.10		$	13.35
Per share market value:
End of period/year	$	14.90		$	14.10		$	14.20		$	13.75		$	13.23
Total investment return
Net asset value (c)		3.76%			14.29%			8.75%			6.23%			13.61%
Market value (c)		9.75%			7.21%			11.45%			12.66%			12.54%
Net assets (in millions):
End of period/year	$	145.89		$	145.48		$	136.61		$	135.35		$	137.57
Ratio of total expenses to average net assets		2.08%	(d)		3.23%			2.26%			2.17%			2.84%
Ratio of operating expenses to average net assets		1.39%	(d)		1.49%			1.35%			1.49%			1.49%
Ratio of interest expense to average net assets		0.42%	(d)		0.43%			0.44%			0.44%			0.45%
Ratio of income tax expense to average net assets		0.27%	(d)		1.31%			0.47%			0.24%			0.90%
Ratio of net investment income to average net assets		7.66%	(d)		7.92%			7.45%			6.95%			7.82%
Portfolio turnover		30%			24%			31%			30%			32%

(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) Annualized.

Senior borrowings:
Total principal amount (in millions)	$	15	$	15	$	15	$	15	$	15
Asset coverage per $1,000 of indebtedness	$	10,726	$	10,699	$	10,107	$	10,023	$	10,171

See Notes to Consolidated Financial Statements

7

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2018

(Unaudited)

Corporate Restricted Securities - 85.06%: (A)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
Private Placement Investments - 72.65%: (C)
1A Smart Start, Inc.
A designer, distributor and lessor of ignition interlock devices ("IIDs"). IIDs are sophisticated breathalyzers wired to a vehicles ignition system.
10.49% Second Lien Term Loan due 12/22/2022 (LIBOR + 8.250%)	$	1,725,000	12/21/17		$	1,696,233	$	1,691,315
ABC Industries, Inc.
A manufacturer of mine and tunneling ventilation products in the U.S.
13% Senior Subordinated Note due 07/31/2019	$	109,335	08/01/12			107,265		109,140
Preferred Stock Series A (B)	125,000 shs.		08/01/12			125,000		243,046
Warrant, exercisable until 2022, to purchase common stock at $.02 per share (B)	22,414 shs.		08/01/12			42,446		42,137
						274,711		394,323
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		26,868
* 12/07/12, 07/11/13 and 06/30/15.
AFC - Dell Holding Corporation
A distributor and provider of inventory management services for "C-Parts" used by OEMs in their manufacturing and production facilities.
12.5% (1% PIK) Senior Subordinated Note due 09/27/2020	$	1,224,547	02/28/22			1,214,049		1,198,036
Preferred Stock (B)	1,122 shs.		02/28/22			112,154		112,789
Common Stock (B)	346 shs.		02/28/22			346		—
						1,326,549		1,310,825
AM Conservation Holding Corp.
A supplier of energy efficiency ("EE") products, including lighting, shower heads and aerators, and weatherization products such as door seals and weather stripping.
11.5% (1.5% PIK) Senior Subordinated Note due 04/30/2023	$	1,568,182	10/31/16			1,546,468		1,581,507
11.5% (1.25% PIK) Senior Subordinated Note due  04/30/2023	$	206,039	10/06/17			202,471		207,350
Common Stock (B)	156,818 shs.		10/31/16			156,818		180,036
						1,905,757		1,968,893
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		218,719

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Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
API Technologies Corp.
A designer, developer and manufacturer of electronic systems, subsystems, modules and secure communications for technically demanding defense, aerospace and commercial applications in the U.S. and internationally.
Limited Liability Company Unit (B)	0.40% int.		04/20/16		$	240,741	$	451,950
ASC Holdings, Inc.
A manufacturer of capital equipment used by corrugated box manufacturers.
13% (1% PIK) Senior Subordinated Note due 05/18/2021	$	761,884	11/19/15			753,468		699,224
Limited Liability Company Unit (B)	111,100 uts.		11/18/15			111,100		—
						864,568		699,224
Aurora Parts & Accessories LLC
A distributor of aftermarket over-the-road semi-trailer parts and accessories sold to customers across North America.
11% Senior Subordinated Note due 02/17/2022	$	1,515,400	08/17/15			1,497,401		1,466,455
14% Senior Subordinated Note due 08/17/2022	$	10,486	08/30/18			10,486		10,394
Preferred Stock (B)	210 shs.		08/17/15			209,390		109,573
Common Stock (B)	210 shs.		08/17/15			210		—
						1,717,487		1,586,422
Avantech Testing Services LLC
A manufacturer of custom Non-Destructive Testing ("NDT") systems and provider of NDT and inspections services primarily to the oil country tubular goods market.
15% (3.75% PIK) Senior Subordinated Note due 03/31/2021 (D)	$	6,777	07/31/14			6,650		—
Limited Liability Company Unit (B)(F)	45,504 uts.			*		—		—
Limited Liability Company Unit Class C Preferred (B)(F)	78,358 uts.		09/29/17			484,578		—
* 07/31/14 and 10/14/15.						491,228		—
BBB Industries LLC
A supplier of re-manufactured parts to the North American automotive aftermarket.
10.60% Second Lien Term Loan due 06/26/2026 (LIBOR + 8.500%)	$	1,725,000	08/02/18			1,674,221		1,707,750
BCC Software, Inc.
A provider of software and data solutions which enhance mail processing to help direct mail marketers realize discounts from the U.S. Postal Service, avoid penalties associated with mailing errors, and improve the accuracy and efficiency of marketing campaigns.
12% (1% PIK) Senior Subordinated Note due 04/11/2023	$	1,506,408	10/11/17			1,480,542		1,473,033
Preferred Stock Series A (B)	23 shs.		10/11/17			232,373		232,400
Common Stock Class A (B)	735 shs.		10/11/17			735		30,793
						1,713,650		1,736,226

9

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)		Principal Amount,Shares, Units orOwnership Percentage		Acquisition Date		Cost		Fair Value
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		$	1,469,724		04/28/17	$	1,444,823	$	1,447,458
Limited Liability Company Unit (B)(F)	2,760 uts.				04/28/17		276,000		147,864
							1,720,823		1,595,322
Blue Wave Products, Inc.
A distributor of pool supplies.
13% (1% PIK) Senior Subordinated Note due 09/30/2019		$	337,259		10/12/12		332,343		337,259
Common Stock (B)	51,064 shs.				10/12/12		51,064		227,575
Warrant, exercisable until 2022, to purchase common stock at $.01 per share (B)	20,216 shs.				10/12/12		20,216		90,096
							403,623		654,930
BlueSpire Holding, Inc.
A marketing services firm that integrates strategy, technology, and content to deliver customized marketing solutions for clients in the senior living, financial services and healthcare end markets.
Common Stock (B)	29,560 shs.				06/30/15		937,438		—
Cadence, Inc.
A full-service contract manufacturer ("CMO") and supplier of advanced products, technologies, and services to medical device, life science, and industrial companies.
6.74% Lien Term Loan due 04/30/2025 (LIBOR + 4.500%)		$	811,823		05/14/18		796,431		792,814
Cadent, LLC
A provider of advertising solutions driven by data and technology.
9.75% Term Loan due 09/07/2023 (LIBOR + 5.500%)		$	1,026,038		09/04/18		1,015,857		1,020,908
CHG Alternative Education Holding Company
A leading provider of publicly-funded, for profit pre-K-12 education services targeting special needs children at therapeutic day schools and "at risk" youth through alternative education programs.
13.5% (1.5% PIK) Senior Subordinated Note due 06/19/2020		$	800,858		01/19/11		796,616		794,470
14% (2% PIK) Senior Subordinated Note due 06/19/2020		$	212,387		08/03/12		211,377		208,749
Common Stock (B)	375 shs.				01/19/11		37,500		31,716
Warrant, exercisable until 2021, to purchase common stock at $.01 per share (B)	295 shs.				01/19/11		29,250		24,931
							1,074,743		1,059,866

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Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
Clarion Brands Holding Corp.
A portfolio of six over-the-counter (OTC) pharmaceutical brands whose products are used to treat tinnitus or ringing of the ear, excessive sweating, urinary tract infections, muscle pain, and skin conditions.
Limited Liability Company Unit (B)	1,853 uts.		07/18/16		$	189,267	$	192,807
Clubessential LLC
A leading SaaS platform for private clubs and resorts.
7% (5% PIK) Senior Subordinated Note due 01/12/24	$	1,787,305	01/16/18			1,755,517		1,773,801
Compass Chemical International LLC
A manufacturer and supplier of standard and specialty formulated chemicals, primarily phosphoric acid derivatives called phosphonates.
Limited Liability Company Unit (B)(F)	230 uts.		03/04/15			147,305		244,984
CORA Health Services, Inc.
A provider of outpatient rehabilitation therapy services.
11% (1% PIK) Term Loan due 05/05/2025	$	2,086,422	05/01/18			1,463,052		1,415,430
Preferred Stock Series A (B)	758 shs.		06/30/16			38,258		91,182
Common Stock Class A (B)	3,791 shs.		06/30/16			3,791		20,030
						1,505,101		1,526,642
CTM Holding, Inc.
A leading owner and operator of coin-operated children's rides, penny presses and candy kiosks in the U.S.
15% (3% PIK) Senior Subordinated Note due 12/31/2020	$	1,366,519	11/22/13			1,359,133		1,366,519
14% (2% PIK) Senior Subordinated Note due 06/04/2020	$	337,797	05/08/18			329,577		332,452
Common Stock (B)	90 shs.			*		514,284		997,754
Warrant, exercisable until 2028, to purchase common stock at $.01 per share (B)	2 shs.		05/08/18			—		22,172
* 11/22/13 and 09/16/16.						2,202,994		2,718,897
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	$	1,420,588	10/07/16			1,398,778		1,388,981
Limited Liability Company Unit (B)(F)	336,487 uts.			*		343,121		245,636
* 10/07/16 and 07/25/18.						1,741,899		1,634,617

11

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
Discovery Education, Inc.
A provider of standards-based, digital education content for K-12 schools.
7.04% Term Loan due 04/30/2024 (LIBOR + 4.750%)	$	1,921,590		04/20/18	$	1,885,858	$	1,876,252
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		265,889
Common Stock (B)	25 shs.			05/04/12		28,048		—
						280,482		265,889
DuBois Chemicals, Inc.
A provider of consumable, value-added specialty cleaning chemical solutions to the industrial, transportation paper and water markets.
10.40% Second Lien Term Loan due 08/31/2025 (LIBOR + 8.000%)	$	1,725,000		09/19/18		1,707,750		1,707,750
Dunn Paper
A provider of specialty paper for niche product applications.
10.99% Second Lien Term Loan due 08/26/2023 (LIBOR + 8.750%)	$	1,725,000		09/28/16		1,700,367		1,729,313
ECG Consulting Group
A healthcare management consulting company who provides strategic, financial, operational, and technology related consulting services to healthcare providers.
11.5% (0.5% PIK) Senior Subordinated Note due 06/20/2025	$	758,719		06/20/18		744,139		756,962
11.5% (0.75% PIK) Senior Subordinated Note due 06/20/2025	$	1,328,581		11/21/14		1,314,495		1,325,505
Limited Liability Company Unit (B)(F)	230 uts.			11/19/14		36,199		86,897
						2,094,833		2,169,364
Elite Sportwear 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 01/14/2022 (D)	$	1,588,640		10/14/16		1,568,694		1,509,208
Limited Liability Company Unit (B)(F)	101 uts.			10/14/16		159,722		40,662
						1,728,416		1,549,870
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	$	1,335,621		06/30/17		1,313,102		1,305,319
Limited Liability Company Unit (B)(F)	397,695 uts.			06/30/17		397,695		326,110
						1,710,797		1,631,429

12

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
E.S.P. Associates, P.A.
A professional services firm providing engineering, surveying and planning services to infrastructure projects.
12% (1% PIK) Senior Subordinated Note due 10/04/2023	$	690,226		04/04/18	$	677,375	$	682,313
Limited Liability Company Unit (B)	229 uts.			04/04/18		228,955		247,971
						906,330		930,284
F F C Holding Corporation
A leading U.S. manufacturer of private label frozen novelty and ice cream products.
Limited Liability Company Unit Preferred (B)	171 uts.			09/27/10		58,345		24,100
Limited Liability Company Unit Common (B)	171 uts.			09/27/10		17,073		—
						75,418		24,100
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 Preferred (B)	80,559 uts.			04/15/14		—		80,558
Limited Liability Company Unit Class B-1 (B)	65,789 uts.			12/15/10		65,789		422,290
Limited Liability Company Unit Class B-2 (B)	8,248 uts.			12/15/10		8,248		52,943
Limited Liability Company Unit Class B-3 (B)	6,522 uts.			08/30/12		15,000		43,558
Limited Liability Company Unit Class C (B)	1,575 uts.			12/20/10		16,009		68,206
						105,046		667,555
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		—
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 03/27/2019	$	1,499,222		03/27/13		1,496,582		1,349,300
Common Stock (B)	1,181 shs.			03/27/13		118,110		3,679
						1,614,692		1,352,979
Glynlyon Holding Companies, Inc.
A technology-enabled curriculum provider of K-12 and support services predominantly to small and medium public school districts.
Common Stock (B)	147 shs.			01/15/16		103,205		193,076

13

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
GlynnDevins Acquisition Corporation
A marketing communications agency that services senior living facilities.
Preferred Stock Series A (B)	342 shs.		06/19/15		$	70,683	$	89,256
Common Stock (B)	342 shs.		06/19/15			2,945		147,056
						73,628		236,312
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.
8.39% Term Loan due 12/21/2022 (LIBOR + 6.000%)	$	2,446,513	12/19/17			2,403,942		2,399,013
GTI Holding Company
A designer, developer, and marketer of precision specialty hand tools and handheld test instruments.
12% Senior Subordinated Note due 05/22/2023	$	727,865	02/05/14			706,730		727,865
Common Stock (B)	1,046 shs.			*		104,636		131,843
Warrant, exercisable until 2027, to purchase common stock at $.01 per share (B)	397 shs.		02/05/14			36,816		50,040
* 02/05/14 and 11/22/17.						848,182		909,748
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% (1% PIK) Senior Subordinated Note due 06/19/2021	$	1,725,000		*		1,706,207		1,712,013
Limited Liability Company Unit Preferred (B)	372 uts.			**		371,644		471,646
Limited Liability Company Unit Common Class A (B)	3,594 uts.		12/19/14			—		33,528
* 12/19/14 and 02/21/17.						2,077,851		2,217,187
* *12/19/14 and 04/29/16.
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 07/01/2022	$	993,896	07/01/16			980,155		1,003,835
Common Stock (B)	150 shs.		07/01/16			149,500		213,685
						1,129,655		1,217,520
Hartland Controls Holding Corporation
A manufacturer and distributor of electronic and electromechanical components.
14% (2% PIK) Senior Subordinated Note due 08/14/2020	$	1,145,688	02/14/14			1,138,481		1,145,688
12% Senior Subordinated Note due 08/14/2020	$	431,250	06/22/15			429,584		430,609
Common Stock (B)	821 shs.		02/14/14			822		267,601
						1,568,887		1,843,898

14

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(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.
14% (2% PIK) Senior Subordinated Note due 11/26/2020	$	1,675,777	01/17/14		$	1,665,178	$	1,675,777
Limited Liability Company Unit (B)(F)	102 uts.		01/17/14			101,563		44,253
						1,766,741		1,720,030
Hollandia Produce LLC
A hydroponic greenhouse producer of branded root vegetables.
14.25% (2.75% PIK) Senior Subordinated Note due 12/11/2020	$	1,434,770		*		1,420,640		1,363,031
10.1% Term Loan due 12/12/2020 (LIBOR + 8.000%)	$	109,916	04/06/18			109,916		109,652
10.1% Term Loan due 12/11/2020 (LIBOR + 8.000%)	$	146,780	04/06/18			146,780		146,429
* 12/30/15 and 12/23/16.						1,677,336		1,619,112
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			—		—
						—		—
Impact Confections
An independent manufacturer and marketer of confectionery products including Warheads® brand sour candies, Melster® brand classic candies, and co-manufactured/private label classic candies.
15% (15% PIK) Senior Subordinated Note due 11/10/2020 (D)	$	1,306,594	11/10/14			1,297,147		—
Common Stock (B)	2,300 shs.		11/10/14			230,000		—
						1,527,147		—
JMH Investors LLC
A developer and manufacturer of custom formulations for a wide variety of foods.
Limited Liability Company Unit (B)(F)	1,038,805 uts.		12/05/12			232,207		—
Limited Liability Company Unit Class A-1 (B)(F)	159,048 uts.		10/31/16			159,048		294,064
Limited Liability Company Unit Class A-2 (B)(F)	1,032,609 uts.		10/31/16			—		169,430
						391,255		463,494
K P I Holdings, Inc.
The largest player in the U.S. non-automotive, non-ferrous die casting segment.
Limited Liability Company Unit Class C Preferred (B)	40 uts.		06/30/15			—		89,409
Common Stock (B)	353 shs.		07/15/08			285,619		304,713
						285,619		394,122

15

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(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 04/30/2019 (D)	$	419,971	01/15/10		$	404,121	$	377,974
15% (2.5% PIK) Senior Subordinated Note due 04/30/2019 (D)	$	115,253	10/05/10			114,604		103,727
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 2019, to purchase common stock at $.01 per share (B)	104 shs.		10/05/10			94,579
						766,351		481,701
Master Cutlery LLC
A designer and marketer of a wide assortment of knives and swords.
13% Senior Subordinated Note due 04/17/2020	$	868,102	04/17/15			864,572		390,646
Limited Liability Company Unit	5 uts.		04/17/15			678,329		—
						1,542,901		390,646
Merex Holding Corporation
A provider of after-market spare parts and components, as well as maintenance, repair and overhaul services for "out of production" or "legacy" aerospace and defense systems that are no longer effectively supported by the original equipment manufacturers.
16% Senior Subordinated Note due 10/30/2019 (D)	$	454,295	09/22/11			449,013		159,003
15% PIK Senior Subordinated Note due 04/30/2022 (D)	$	23,839	08/18/15			23,839		—
14% PIK Senior Subordinated Note due 06/30/2019	$	68,718		*		68,718		68,406
Common Stock Class A (B)	83,080 shs.			**		170,705		—
* 10/21/16, 01/27/17 and 10/13/17.						712,275		227,409
** 08/18/15, 10/20/16 and 01/27/17.
MES Partners, Inc.
An industrial service business offering an array of cleaning and environmental services to the Gulf Coast region of the U.S.
12% (1% PIK) Senior Subordinated Note due 09/30/2021	$	1,126,148	09/30/14			1,114,606		1,126,148
12% Senior Subordinated Note due 09/30/2021	$	302,537	02/28/18			297,340		308,633
Common Stock Class B (B)	259,252 shs.			*		244,163		71,799
* 09/30/14 and 02/28/18.						1,656,109		1,506,580
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 6/20/23	$	915,819	03/09/18			899,352		888,430
Limited Liability Company Unit (B)(F)	182 uts.		03/09/18			183,164		10,873
						1,082,516		899,303

16

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
Midwest Industrial Rubber, Inc.
A supplier of industrial maintenance, repair, and operations ("MRO") products, specializing in the fabrication and distribution of lightweight conveyor belting and related conveyor components and accessories.
12% (1% PIK) Senior Subordinated Note due 12/02/2022	$	1,582,309		12/02/16	$	1,558,411	$	1,573,613
Preferred Stock (B)	1,711 shs.			12/02/16		171,116		163,792
Common Stock (B)	242 shs.			12/02/16		242		—
						1,729,769		1,737,405
Money Mailer Equity LLC
A leading provider of hyperlocal shared direct mail advertising as well as interactive and online advertising solutions through its nationwide production and distribution network.
12% (1% PIK) Senior Subordinated Note due 10/29/2021	$	1,765,786		04/29/16		1,743,894		882,893
Motion Controls Holdings
A manufacturer of high performance mechanical motion control and linkage products.
14.25% (1.75% PIK) Senior Subordinated Note due 08/15/2020	$	287,973		11/30/10		286,721		287,739
Limited Liability Company Unit Class B-1 (B)(F)	75,000 uts.			11/30/10		—		51,922
Limited Liability Company Unit Class B-2 (B)(F)	6,801 uts.			11/30/10		—		4,708
						286,721		344,369
New Mountain Learning, LLC
A leading provider of blended learning solutions to the K-12 and post-secondary school market.
7.89% Term Loan due 3/16/2024 (LIBOR + 5.500%)	$	1,792,448		03/15/18		1,665,813		1,658,725
NSi Industries Holdings, Inc.
A manufacturer and distributer of electrical components and accessories to small to mid-sized electrical wholesalers.
12.75% (1.75% PIK) Senior Subordinated Note due 05/17/2023	$	1,527,814		06/30/16		1,505,322		1,517,821
Common Stock (B)	207 shs.			05/17/16		207,000		259,612
						1,712,322		1,777,433
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		1,752,299		1,758,924
Common Stock Class B (B)	380,545 shs.			*		380,545		588,612
* 01/29/16 and 02/17/17.						2,132,844		2,347,536

17

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(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.
11.25% Term Loan due 11/16/2022	$	366,862	11/14/17		$	358,380	$	356,514
8.49% Term Loan due 11/17/2024 (LIBOR + 6.250%)	$	2,112,710	11/14/17			1,931,550		1,927,066
						2,289,930		2,283,580
Petroplex Inv Holdings LLC
A leading provider of acidizing services to E&P customers in the Permian Basin.
Limited Liability Company	0.40% int.			*		175,339		19,255
* 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% (1% PIK) Senior Subordinated Note due 01/31/2020	$	1,157,051	07/31/14			1,150,158		867,788
Limited Liability Company Unit	148,096 uts.		07/31/14			148,096		—
Limited Liability Company Unit Class F	36,976 uts.			*		24,802		—
* 09/28/17 and 02/15/18.						1,323,056		867,788
Power Stop Holdings LLC
A supplier of performance upgrade aftermarket brake products.
Limited Liability Company Unit Preferred (B)(F)	1,149 uts.		05/29/15			114,900		122,055
Limited Liability Company Unit Common (B)(F)	1,149 uts.		05/29/15			—		137,824
						114,900		259,879
PPC Event Services
A special event equipment rental business.
14% (2% PIK) Senior Subordinated Note due 05/20/2020	$	1,208,352	11/20/14			1,199,910		1,208,352
Limited Liability Company Unit (B)	3,450 uts.		11/20/14			172,500		286,265
Limited Liability Company Unit Series A-1 (B)	339 uts.		03/16/16			42,419		28,822
						1,414,829		1,523,439
Randy's Worldwide Automotive
A designer and distributor of automotive aftermarket parts.
Common Stock (B)	118 shs.		05/12/15			118,476		305,572

18

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(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.
10.5% (0.5% PIK) Senior Subordinated Note due 02/28/2023	$	1,437,794	11/13/17		$	1,437,794	$	1,465,747
Limited Liability Company Unit Class B	293,617 uts.		11/13/17			184,688		274,295
						1,622,482		1,740,042
Rock-it Cargo
A provider of specialized international logistics solutions to the music touring, performing arts, live events, fine art and specialty industries.
7.09% Term Loan due 06/22/2024 (LIBOR + 4.750%)	$	2,465,000	07/30/18			2,405,150		2,400,844
ROI Solutions
Call center outsourcing and end user engagement services provider.
7.17% Term Loan due 07/31/2024 (LIBOR + 5.000%)	$	1,634,653	07/31/18			640,774		638,646
Sara Lee Frozen Foods
A provider of frozen bakery products, desserts and sweet baked goods.
6.74% Lien Term Loan due 07/31/2024 (LIBOR + 4.500%)	$	1,533,288	07/27/18			1,499,780		1,496,970
Signature Systems Holding Company
A seller and installer of a variety of modular surfaces, industrial matting and related products used for ground protection.
Common Stock (B)	76 shs.		03/15/13			75,509		258,220
Warrant, exercisable until 2023, to purchase common stock A at $.01 per share (B)	31 shs.		03/15/13			28,316		105,497
						103,825		363,717
Smart Source Holdings LLC
A short-term computer rental company.
Limited Liability Company Unit (B)	328 uts.			*		261,262		479,594
Warrant, exercisable until 2020, to purchase common stock at $.01 per share (B)	83 shs.			*		67,467		121,481
* 08/31/07 and 03/06/08.						328,729		601,075
SMB Machinery Holdings, Inc.
A reseller of used, rebuilt and refurbished packaging and processing equipment, primarily serving the bottling and food manufacturing industries.
14% (2% PIK) Senior Subordinated Note due 10/18/2019 (D)	$	738,694	10/18/13			726,147		—
Common Stock (B)	841 shs.		10/18/13			84,100		—
						810,247		—

19

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
Software Paradigms International Group, LLC
An outsourced IT services provider focused on the retail industry.
12.5% (1.5% PIK) Senior Subordinated Note due 11/23/2021	$	1,725,000	05/23/16		$	1,702,400	$	1,715,276
SR Smith LLC
A manufacturer of mine and tunneling ventilation products in the United States.
11% Senior Subordinated Note due 03/27/2022	$	1,084,565		*		1,076,389		1,073,751
Limited Liability Company Unit Series A (B)	229 uts.			*		1,060,968		1,295,171
* 03/27/07 and 08/07/18.						2,137,357		2,368,922
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		291,958
Preferred Stock Series A-2 (B)	26,543 shs.		09/10/15			29,994		48,749
						188,961		340,707
Strategic Insight, Inc.
A provider of largely proprietary data, market research, and business intelligence to the global asset management industry.
11.64% Second Lien Term Loan due 12/21/2024 (LIBOR + 9.250%)	$	1,725,000	12/28/17			1,690,390		1,633,554
Sunrise Windows Holding Company
A manufacturer and marketer of premium vinyl windows exclusively selling to the residential remodeling and replacement market.
16% Senior Subordinated Note due 05/28/2020 (D)	$	1,812,109		*		1,358,229		1,540,293
Common Stock (B)	38 shs.		12/14/10			38,168		—
Warrant, exercisable until 2020, to purchase common stock at $.01 per share (B)	37 shs.		12/14/10			37,249		—
* 12/14/10, 08/17/12 and 03/31/16.						1,433,646		1,540,293
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 07/31/2021 (D)	$	1,405,417	07/31/15			1,392,548		1,194,605
Common Stock (B)	68 shs.			*		104,986		—
* 07/31/15 and 11/08/17.						1,497,534		1,194,605

 

20

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
Team Drive-Away Holdings LLC
An asset-light provider of over the road driveaway services for class 8 trucks and specialized equipment.
Limited Liability Company Unit (B)	95,800 uts.			10/15/15	$	95,800	$	203,000
Therma-Stor Holdings LLC
A designer and manufacturer of dehumidifiers and water damage restoration equipment for residential and commercial applications.
10.5% (0.5% PIK) Senior Subordinated Note due 11/30/2023	$	1,371,399		11/30/17		1,371,399		1,341,465
Limited Liability Company Unit	359,375 uts.			11/30/17		342,851		238,796
						1,714,250		1,580,261
Torrent Group Holdings, Inc.
A contractor specializing in the sales and installation of engineered drywells for the retention and filtration of stormwater and nuisance water flow.
15% (7.5% PIK) Senior Subordinated Note due 12/05/2020	$	47,044		12/05/13		93,430		47,514
Warrant, exercisable until 2023, to purchase common stock at $.01 per share (B)	28,079 shs.			12/05/13		—		23,305
						93,430		70,819
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.
7.89% Term Loan due 04/30/2024 (LIBOR + 5.500%)	$	2,465,000		05/14/18		2,412,597		2,400,931
Tristar Global Energy Solutions, Inc.
A hydrocarbon and decontamination services provider serving refineries worldwide.
12.5% (1.5% PIK) Senior Subordinated Note due 07/31/2020	$	1,173,744		01/23/15		1,164,561		1,113,391
Trystar, Inc.
A niche manufacturer of temporary power distribution products for the power rental, industrial, commercial utility and back-up emergency markets.
7.39% Term Loan due 10/01/2023 (LIBOR + 5.000%)	$	2,304,813		09/28/18		2,264,479		2,264,479
Limited Liability Company Unit (B) (F)	47 uts.			09/28/18		46,562		46,560
						2,311,041		2,311,039
U.S. Retirement and Benefit 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.
10.89% Second Lien Term Loan due 2/14/2023 (LIBOR + 8.500%)	$	1,725,000		03/05/18		1,486,379		1,480,026

21

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Principal Amount,Shares, Units or Ownership Percentage		Acquisition Date		Cost		Fair Value
Velocity Technology Solutions, Inc.
A provider of outsourced hosting services for enterprise resource planning software applications and information technology infrastructure to mid and large-sized enterprises.
8.39% Lien Term Loan due 12/07/2023 (LIBOR + 6.000%)	$	2,089,500		12/07/17	$	2,071,414	$	2,070,793
VP Holding Company
A provider of school transportation services for special-needs and homeless children in Massachusetts and Connecticut.
7.89% Lien Term Loan due 05/22/2024 (LIBOR + 5.500%)	$	2,465,000		05/17/18		1,724,521		1,713,097
Wellborn Forest Holding Company
A manufacturer of semi-custom kitchen and bath cabinetry.
10% Senior Subordinated Note due 09/30/2019 (D)	$	1,778,423		11/30/06		1,336,280		1,778,422
Common Stock (B)	101 shs.			11/30/06		101,250		14,279
Warrant, exercisable until 2019, to purchase common stock at $.01 per share (B)	51 shs.			11/30/06		45,790		7,129
						1,483,320		1,799,830
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 02/03/2021	$	382,106		08/03/15		378,589		372,745
Limited Liability Company Unit (B)(F)	370,241 uts.			08/03/15		370,241		362,921
						748,830		735,666
Whitebridge Pet Brands Holdings, LLC
A manufacturer and marketer of branded, all-natural treats and foods for dogs and cats.
11.5% (0.5% PIK) Senior Subordinated Note due 08/18/2021	$	1,491,901		04/18/17		1,476,267		1,473,961
Limited Liability Company Unit Class A (B)(F)	123 uts.			04/18/17		148,096		141,720
Limited Liability Company Unit Class B (B)(F)	123 uts.			04/18/17		—		2,655
						1,624,363		1,618,336
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		156,818		217,507
WP Supply Holding Corporation
A distributor of fresh fruits and vegetables to grocery wholesalers and foodservice distributors in the upper Midwest.
14.5% (2.5% PIK) Senior Subordinated Note due 06/12/2020	$	1,009,773		11/03/11		1,009,428		989,071
Common Stock (B)	1,500 shs.			11/03/11		150,000		104,057
						1,159,428		1,093,128

22

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(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.
14.5% (1.5% PIK) Senior Subordinated Note due 03/04/2021 (D)	$	1,946,834	03/04/15		$	1,549,582	$	1,810,024
Common Stock (B)	2,046 shs.			*		200,418		94,758
* 03/04/15 and 02/07/18						1,750,000		1,904,782
Total Private Placement Investments (E)					$	109,983,886	$	105,987,170

23

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Interest Rate		Maturity Date	Principal Amount		Cost		Market Value
Rule 144A Securities - 12.41%:
Bonds - 12.41%
Acrisure, LLC	7.000	%	11/15/25	$	500,000	$	455,914	$	466,225
Alliance Residential Company	7.500		05/01/25		500,000		518,975		532,500
Altice Financing S.A.	7.500		05/15/26		400,000		400,000		390,000
Amsted Industries	5.375		09/15/24		240,000		240,000		237,600
Avantor Inc.	6.000		10/01/24		406,000		406,000		412,090
Avantor Inc.	9.00		10/01/25		500,000		516,722		516,250
Beacon Roofing Supply, Inc.	4.875		11/01/25		406,000		406,000		374,027
Boyne USA, Inc.	7.250		05/01/25		167,000		167,000		176,603
Cimpress N.V.	7.000		06/15/26		500,000		500,000		508,065
CITGO Petroleum Corporation	6.250		08/15/22		425,000		425,000		423,937
CVR Partners, L.P.	9.250		06/15/23		500,000		490,744		530,000
Endo Finance LLC	6.000		02/01/25		480,000		394,500		413,760
Endo Finance LLC	6.000		07/15/23		250,000		223,125		221,875
Enterprise Merger Sub Inc.	8.750		10/15/26		500,000		500,000		500,000
EP Energy LLC / Everest Acquisition Finance Inc.	9.375		05/01/24		406,000		249,444		334,950
Financial & Risk US Holdings, Inc.	6.250		05/15/26		151,000		151,000		151,557
Financial & Risk US Holdings, Inc.	8.250		11/15/26		195,000		195,000		193,818
First Quantum Minerals Ltd.	7.500		04/01/25		500,000		483,616		474,375
First Quantum Minerals Ltd.	7.250		04/01/23		500,000		494,414		477,813
Flex Acquisition Co Inc.	7.875		07/15/26		386,000		386,000		381,175
Hertz Corporation	7.625		06/01/22		500,000		500,000		493,750
Hilcorp Energy Company	5.000		12/01/24		335,000		335,000		326,876
IAMGOLD Corporation	7.000		04/15/25		500,000		500,000		496,150
JBS USA Lux S.A.	6.750		02/15/28		476,000		476,000		473,025
Jonah Energy LLC	7.250		10/15/25		500,000		427,580		382,500
Jupiter Resources Inc.	8.500		10/01/22		500,000		469,920		237,500
LBC Tank Terminals Holding Netherlands B.V.	6.875		05/15/23		663,000		674,940		658,028
Mattamy Group Corp.	6.500		10/01/25		500,000		490,127		485,000
Mattel, Inc.	6.750		12/31/25		500,000		482,102		490,000
Moog Inc.	5.250		12/01/22		500,000		502,401		503,750
New Enterprise Stone & Lime Co., Inc.	6.250		03/15/26		500,000		508,406		503,750
New Gold Inc.	6.250		11/15/22		500,000		501,890		436,250
OPE KAG Finance Sub	7.875		07/31/23		500,000		516,241		517,188
Prime Security Services Borrower	9.250		05/15/23		608,000		617,951		650,256
Sinclair Broadcast Group, Inc.	5.875		03/15/26		204,000		204,000		198,920
Sinclair Television Group, Inc.	5.125		02/15/27		500,000		500,000		459,375
Suncoke Energy	7.500		06/15/25		500,000		493,229		515,000
Teine Energy Ltd.	6.875		09/30/22		500,000		506,250		503,750
Topaz Marine S.A.	9.125		07/26/22		500,000		500,000		512,480

24

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Restricted Securities: (A) (Continued)	Interest Rate		Maturity Date	Principal Amount		Cost		Market Value
Valeant Pharmaceuticals International	7.000	%	03/15/24	$	173,000	$	173,000	$	182,775
Vine Oil & Gas, LP	8.750		04/15/23		500,000		463,614		488,750
Virgin Media Secured Finance PLC	5.250		01/15/26		500,000		501,274		488,895
VRX Escrow Corp.	6.125		04/15/25		182,000		182,000		172,900
Warrior Met Coal, Inc.	8.000		11/01/24		209,000		209,000		214,225
Total Bonds							18,338,379		18,107,713
Common Stock - 0.00%
TherOX, Inc. (B)					2		—		—
Touchstone Health Partnership (B)					292		—		—
Total Common Stock							—		—
Total Rule 144A Securities							18,338,379		18,107,713

Corporate Public Securities - 15.86%: (A)	LIBOR Spread		Interest Rate		Maturity Date	Principal Amount		Cost		Market Value
Bank Loans - 4.25%
Argon Medical Devices, Inc.	8.000	%	10.242	%	01/23/26	$	500,000	$	503,750	$	503,125
Big River Steel LLC.	5.000		7.386		08/11/23		118,173		117,206		119,798
BMC Software Finance, Inc.	4.250		6.586		06/26/25		500,000		495,000		504,685
CenturyLink Inc.	2.750		5.148		05/15/25		498,744		495,180		495,128
Coronado Coal LLC	6.500		8.886		03/29/25		223,269		216,995		225,223
Coronado Coal LLC	6.500		8.886		03/29/25		61,044		59,339		61,578
Edelman Financial Services	6.750		9.092		07/20/26		128,178		127,552		130,742
Getty Images, Inc.	3.500		5.742		10/18/19		389,592		379,779		386,494
Gulf Finance, LLC	5.250		7.640		08/25/23		251,510		249,772		210,280
ION Trading Technologies Sarl	4.000		6.386		11/21/24		276,243		269,410		274,947
Murray Energy Corporation	7.250		9.492		10/17/22		39,087		36,902		35,785
OCI Beaumont LLC	4.000		6.386		02/14/25		121,675		121,534		123,299
PowerSchool	7.000		8.854		05/29/26		500,000		495,096		500,000
Prospect Medical Holdings, Inc.	5.500		7.652		02/13/24		255,441		250,835		258,634
PS Logistics LLC	5.250		7.398		03/01/25		500,000		504,853		500,625
Schenectady International Group Inc.	4.750		4.750		08/10/25		307,325		295,032		308,093
Seadrill Partners Finco, LLC	6.000		8.386		02/21/21		464,734		325,525		440,452
STS Operating, Inc.	8.000		10.242		04/25/26		500,000		505,000		498,750
Summit Midstream Holdings, LLC	6.000		8.242		05/15/22		116,885		116,060		118,420
Unifrax Corporation	7.500		9.886		10/31/25		499,067		508,424		504,058
Total Bank Loans									6,073,244		6,220,116
Bonds - 11.27%
AMC Entertainment Holdings Inc.			6.125	%	05/15/27	$	500,000	$	487,410	$	478,750
Anchorage Capital Group, L.L.C.	7.250		9.598		01/15/29		500,000		517,187		506,927

25

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Corporate Public Securities: (A) (Continued)	Interest Rate		Maturity Date	Principal Amount		Cost		Market Value
Anixter, Inc.	5.125	%	10/01/21	$	165,000	$	165,000	$	167,888
Beazer Homes USA, Inc.	8.750		03/15/22		160,000		160,000		169,200
Brunswick Corporation	7.125		08/01/27		500,000		503,516		568,893
Bunge Limited Finance Corp.	3.250		08/15/26		600,000		601,793		542,933
Calumet Specialty Products Partners, L.P.	7.750		04/15/23		500,000		498,765		500,000
Clearwater Paper Corporation	4.500		02/01/23		489,000		486,564		454,770
CVR Refining LLC	6.500		11/01/22		350,000		343,550		355,250
CVS Health Corp.	4.300		03/25/28		345,000		340,192		342,295
Discovery Communications	4.900		03/11/26		600,000		644,753		615,805
Dish DBS Corporation	7.750		07/01/26		500,000		539,202		471,650
Expedia Inc.	4.500		08/15/24		600,000		621,815		603,449
Ferrellgas Partners, L.P.	6.750		01/15/22		265,000		267,058		231,213
Ferrellgas Partners, L.P.	8.625		06/15/20		650,000		650,212		617,500
Ford Motor Credit Co. LLC	4.375		08/06/23		600,000		636,141		593,192
General Motors Financial Co. Inc.	4.000		01/15/25		500,000		506,972		483,658
Genesis Energy, L.P.	5.625		06/15/24		500,000		472,841		472,500
Hospital Corporation of America	5.375		02/01/25		100,000		101,283		102,000
Hospital Corporation of America	5.250		06/15/26		174,000		174,000		179,003
Hewlett Packard Enterprise Company	4.900		10/15/25		500,000		498,800		513,971
Hughes Satellite Systems Corporation	6.625		08/01/26		500,000		497,029		483,750
Laredo Petroleum, Inc.	5.625		01/15/22		500,000		481,625		496,250
Laredo Petroleum, Inc.	6.250		03/15/23		500,000		501,193		500,000
M/I Homes, Inc.	5.625		08/01/25		500,000		475,989		470,000
NRG Energy, Inc.	7.250		05/15/26		500,000		502,720		542,500
Oasis Petroleum Inc.	6.875		03/15/22		474,000		455,776		482,286
PBF Holding Company LLC	6.997		11/15/23		33,000		33,000		34,320
PBF Holding Company LLC	7.250		06/15/25		500,000		516,701		525,000
Pitney Bowes Inc.	3.625		10/01/21		500,000		498,296		476,875
Reinsurance Group of America	3.950		09/15/26		500,000		502,671		485,000
SM Energy Company	6.750		09/15/26		750,000		744,811		779,062
Sprint Corporation	7.125		06/15/24		155,000		155,000		160,812
Trinity Acquisition Plc	4.400		03/15/26		500,000		514,006		497,478
William Lyon Homes	7.000		08/15/22		500,000		500,000		509,375
WPX Energy, Inc.	5.250		09/15/24		425,000		425,000		427,125
Xlit Ltd.	4.450		03/31/25		600,000		611,508		594,410
Total Bonds							16,632,379		16,435,090
Preferred Stock - 0.34%
B. Riley Financial Inc.					20,000		500,000		501,000
Total Preferred Stock							500,000		501,000
Total Corporate Public Securities						$	23,205,623	$	23,136,206

26

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Short-Term Security:	Interest Rate/Yield^		Maturity Date	Principal Amount		Cost		Market Value
Commercial Paper - 1.37%
Aon Corp.	2.280	%	10/10/18	$	1,000,000	$	999,430	$	999,430
Comcast Corporation	2.370		10/16/18		1,000,000		999,013		999,013
Total Short-Term Security						$	1,998,443	$	1,998,443
Total Investments	102.29	%				$	153,526,331	$	149,229,532
Other Assets	9.71								14,166,925
Liabilities	(12.00	)							(17,508,160	)
Total Net Assets	100.00	%						$	145,888,297

(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, 2018 the values of these securities amounted to $105,987,170 or 72.65% of net assets.

(F) Held in PI Subsidiary Trust

PIK - Payment-in-kind

27

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Industry Classification:	Fair Value/ Market Value
AEROSPACE & DEFENSE - 4.02%
API Technologies Corp.	$	451,950
BEI Precision Systems & Space Company, Inc.		1,595,322
Merex Holding Corporation		227,409
Sunvair Aerospace Group Inc.		1,194,605
Trident Maritime Systems		2,400,931
		5,870,217
AUTOMOTIVE - 5.03%
Aurora Parts & Accessories LLC		1,586,422
BBB Industries LLC		1,707,750
DPL Holding Corporation		265,889
English Color & Supply LLC		1,631,429
Ford Motor Credit Co. LLC		593,192
General Motors Financial Co. Inc.		483,658
Moog Inc.		503,750
Power Stop Holdings LLC		259,879
Randy's Worldwide Automotive		305,572
		7,337,541
BUILDING MATERIALS - 5.39%
Beacon Roofing Supply, Inc.		374,027
Happy Floors Acquisition, Inc.		1,217,520
New Enterprise Stone & Lime Co., Inc.		503,750
NSi Industries Holdings, Inc.		1,777,433
Signature Systems Holding Company		363,717
Sunrise Windows Holding Company		1,540,293
Torrent Group Holdings, Inc.		70,819
Wellborn Forest Holding Company		1,799,830
Wolf-Gordon, Inc.		217,507
		7,864,896
CABLE & SATELLITE - 1.35%
Comcast Corporation		999,013
Hughes Satellite Systems Corporation		483,750
Virgin Media Secured Finance PLC		488,895
		1,971,658
CHEMICALS - 3.39%
Compass Chemical International LLC		244,984
CVR Partners, L.P.		530,000
DuBois Chemicals, Inc.		1,707,750

	Fair Value/ Market Value
LBC Tank Terminals Holding Netherlands B.V.	$	658,028
OCI Beaumont LLC		123,299
Polytex Holdings LLC		867,788
Schenectady International Group Inc.		308,093
Unifrax Corporation		504,058
		4,944,000
CONSUMER CYCLICAL SERVICES - 3.61%
CHG Alternative Education Holding Company		1,059,866
MeTEOR Education LLC		899,303
PPC Event Services		1,523,439
Prime Security Services Borrower		650,256
PS Logistics LLC		500,625
ROI Solutions		638,646
		5,272,135
CONSUMER PRODUCTS - 10.40%
AMS Holding LLC		218,719
Blue Wave Products, Inc.		654,930
Elite Sportwear Holding, LLC		1,549,870
gloProfessional Holdings, Inc.		1,352,979
GTI Holding Company		909,748
Handi Quilter Holding Company		2,217,187
HHI Group, LLC		1,720,030
Manhattan Beachwear Holding Company		481,701
Master Cutlery LLC		390,646
Mattel, Inc.		490,000
New Mountain Learning, LLC		1,658,725
Whitebridge Pet Brands Holdings, LLC		1,618,336
York Wall Holding Company		1,904,782
		15,167,653
DIVERSIFIED MANUFACTURING - 7.13%
ABC Industries, Inc.		394,323
Advanced Manufacturing Enterprises LLC		26,868
Amsted Industries		237,600
F G I Equity LLC		667,555
K P I Holdings, Inc.		394,122
Motion Controls Holdings		344,369
Reelcraft Industries, Inc.		1,740,042
SR Smith LLC		2,368,922

See Notes to Consolidated Financial Statements

28

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Industry Classification: (Continued)	Fair Value/ Market Value
Strahman Holdings Inc.	$	340,707
Therma-Stor Holdings LLC		1,580,261
Trystar, Inc.		2,311,039
		10,405,808
ELECTRIC - 1.72%
AM Conservation Holding Corp.		1,968,893
NRG Energy, Inc.		542,500
		2,511,393
FINANCIAL OTHER - 4.16%
Acrisure, LLC		466,225
Anchorage Capital Group, L.L.C.		506,927
Aon Corp.		999,430
B. Riley Financial Inc.		501,000
Edelman Financial Services		130,742
Financial & Risk US Holdings, Inc.		345,375
Strategic Insight, Inc.		1,633,554
U.S. Retirement and Benefit Partners, Inc.		1,480,026
		6,063,279
FOOD & BEVERAGE - 7.15%
Bunge Limited Finance Corp.		542,933
Del Real LLC		1,634,617
F F C Holding Corporation		24,100
Hollandia Produce LLC		1,619,112
Impact Confections		—
JBS USA Lux S.A.		473,025
JMH Investors LLC		463,494
PANOS Brands LLC		2,347,536
Sara Lee Frozen Foods		1,496,970
Westminster Acquisition LLC		735,666
WP Supply Holding Corporation		1,093,128
		10,430,581
GAMING - 1.86%
CTM Holding, Inc.		2,718,897
HEALTHCARE - 5.02%
Argon Medical Devices, Inc.		503,125
Avantor Inc.		928,340
Cadence, Inc.		792,814
CORA Health Services, Inc.		1,526,642
ECG Consulting Group		2,169,364

	Fair Value/ Market Value
Enterprise Merger Sub Inc.	$	500,000
GD Dental Services LLC		—
Hospital Corporation of America		281,003
Prospect Medical Holdings, Inc.		258,634
TherOX, Inc.		—
Touchstone Health Partnership		—
Valeant Pharmaceuticals International		182,775
VRX Escrow Corp.		172,900
		7,315,597
HEALTH INSURANCE - 0.33%
Reinsurance Group of America		485,000
HOME CONSTRUCTION - 1.12%
Beazer Homes USA, Inc.		169,200
Mattamy Group Corp.		485,000
M/I Homes, Inc.		470,000
William Lyon Homes		509,375
		1,633,575
INDEPENDENT - 1.71%
Jupiter Resources Inc.		237,500
Laredo Petroleum, Inc.		996,250
Oasis Petroleum Inc.		482,286
SM Energy Company		779,062
		2,495,098
INDUSTRIAL OTHER - 5.14%
AFC - Dell Holding Corporation		1,310,825
Brunswick Corporation		568,893
E.S.P. Associates, P.A.		930,284
Hartland Controls Holding Corporation		1,843,898
Midwest Industrial Rubber, Inc.		1,737,405
Smart Source Holdings LLC		601,075
SMB Machinery Holdings, Inc.		—
STS Operating, Inc.		498,750
		7,491,130
MEDIA & ENTERTAINMENT - 5.01%
AMC Entertainment Holdings Inc.		478,750
BlueSpire Holding, Inc.		—
Boyne USA, Inc.		176,603
Cimpress N.V.		508,065
Cross MediaWorks Inc.		1,020,908

See Notes to Consolidated Financial Statements

29

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Industry Classification: (Continued)	Fair Value/ Market Value
Discovery Communications	$	615,805
Discovery Education, Inc.		1,876,252
Dish DBS Corporation		471,650
Getty Images, Inc.		386,494
GlynnDevins Acquisition Corporation		236,312
HOP Entertainment LLC		—
Money Mailer Equity LLC		882,893
Sinclair Broadcast Group, Inc.		198,920
Sinclair Television Group, Inc.		459,375
		7,312,027
METALS & MINING - 2.46%
Alliance Residential Company		532,500
Big River Steel LLC.		119,798
Coronado Coal LLC		286,801
First Quantum Minerals Ltd.		952,188
IAMGOLD Corporation		496,150
Murray Energy Corporation		35,785
New Gold Inc.		436,250
Suncoke Energy		515,000
Warrior Met Coal, Inc.		214,225
		3,588,697
MIDSTREAM - 1.23%
CVR Refining LLC		355,250
Ferrellgas Partners, L.P.		848,713
Genesis Energy, L.P.		472,500
Summit Midstream Holdings, LLC		118,420
		1,794,883
OIL FIELD SERVICES - 2.50%
Avantech Testing Services LLC		—
EP Energy LLC / Everest Acquisition Finance Inc.		334,950
Gulf Finance, LLC		210,280
Hilcorp Energy Company		326,876
Jonah Energy LLC		382,500
Petroplex Inv Holdings LLC		19,255
Seadrill Partners Finco, LLC		440,452
Teine Energy Ltd.		503,750
Topaz Marine S.A.		512,480
WPX Energy, Inc.		427,125
Vine Oil & Gas, LP		488,750
		3,646,418

	Fair Value/ Market Value
PACKAGING - 0.74%
ASC Holdings, Inc.	$	699,224
Flex Acquisition Co Inc.		381,175
		1,080,399
PAPER - 1.50%
Clearwater Paper Corporation		454,770
Dunn Paper		1,729,313
		2,184,083
PHARMACEUTICALS - 0.80%
Clarion Brands Holding Corp.		192,807
CVS Health Corp.		342,295
Endo Finance LLC		635,635
		1,170,737
PROPERTY & CASUALTY - 0.75%
Trinity Acquisition Plc		497,478
Xlit Ltd.		594,410
		1,091,888
REFINING - 2.81%
Calumet Specialty Products Partners, L.P.		500,000
CITGO Petroleum Corporation		423,937
MES Partners, Inc.		1,506,580
PBF Holding Company LLC		559,320
Tristar Global Energy Solutions, Inc.		1,113,391
		4,103,228
TECHNOLOGY - 10.02%
1A Smart Start, Inc.		1,691,315
Anixter, Inc.		167,888
BCC Software, Inc.		1,736,226
BMC Software Finance, Inc.		504,685
Clubessential LLC		1,773,801
Expedia Inc.		603,449
Glynlyon Holding Companies, Inc.		193,076
GraphPad Software, Inc.		2,399,013
Hewlett Packard Enterprise Company		513,971
ION Trading Technologies Sarl		274,947
Pitney Bowes Inc.		476,875
PowerSchool		500,000

See Notes to Consolidated Financial Statements

30

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

September 30, 2018

(Unaudited)

Industry Classification: (Continued)	Fair Value/ Market Value
Software Paradigms International Group, LLC	$	1,715,276
Velocity Technology Solutions, Inc.		2,070,793
		14,621,315
TELECOMMUNICATIONS - 0.27%
Altice Financing S.A.		390,000
TRANSPORTATION SERVICES - 5.22%
Hertz Corporation		493,750
OPE KAG Finance Sub		517,188
Pegasus Transtech Corporation		2,283,580
Rock-it Cargo		2,400,844
Team Drive-Away Holdings LLC		203,000
VP Holding Company		1,713,097
		7,611,459

	Fair Value/ Market Value
WIRELESS - 0.45%
CenturyLink Inc.	$	495,128
Sprint Corporation		160,812
		655,940
Total Investments - 102.29% (Cost - $153,526,331)	$	149,229,532

See Notes to Consolidated Financial Statements

31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. History

Barings Participation Investors (the "Trust") was organized as a Massachusetts business trust under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust dated April 7, 1988.

The Trust is a diversified closed-end management investment company. Barings LLC ("Barings"), a wholly-owned indirect subsidiary of Massachusetts Mutual Life Insurance Company ("MassMutual"), acts as its investment adviser. The Trust's investment objective is to maintain a portfolio of securities providing a current yield and, when available, an opportunity for capital gains. The Trust's principal investments are privately placed, below investment grade, long-term debt obligations including bank loans and mezzanine debt instruments. Such direct placement securities may, in some cases, be accompanied by equity features such as common stock, preferred stock, warrants, conversion rights, or other equity features. The Trust typically purchases these investments, which are not publicly tradable, directly from their issuers in private placement transactions. These investments are typically made to small or middle market companies. In addition, the Trust may invest, subject to certain limitations, in marketable debt securities (including high yield and/or investment grade securities) and marketable common stock. Below investment grade or high yield securities have predominantly speculative characteristics with respect to the capacity of the issuer to pay interest and repay capital.

On January 27, 1998, the Board of Trustees authorized the formation of a wholly-owned subsidiary of the Trust ("PI Subsidiary Trust") for the purpose of holding certain investments. The results of the PI Subsidiary Trust are consolidated in the accompanying financial statements. Footnote 2.D below discusses the Federal tax consequences of the PI Subsidiary Trust.

2. Significant Accounting Policies

The following is a summary of significant accounting policies followed consistently by the Trust in the preparation of its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").

The Trustees have determined that the Trust is an investment company in accordance with Accounting Standards Codification ("ASC") 946, Financial Services – Investment Companies, for the purpose of financial reporting.

A. Fair Value Measurements:

Under U.S. GAAP, fair value represents the price that should be received to sell an asset (exit price) in an orderly transaction between willing market participants at the measurement date.

Determination of Fair Value

The determination of the fair value of the Trust's investments is the responsibility of the Trust's Board of Trustees (the

"Trustees"). The Trustees have adopted procedures for the valuation of the Trust's securities and have delegated responsibility for applying those procedures to Barings. Barings has established a Pricing Committee which is responsible for setting the guidelines used in following the procedures adopted by the Trustees ensuring that those guidelines are being followed. Barings considers all relevant factors that are reasonably available, through either public information or information available to Barings, when determining the fair value of a security. The Trustees meet at least once each quarter to approve the value of the Trust's portfolio securities as of the close of business on the last business day of the preceding quarter. This valuation requires the approval of a majority of the Trustees of the Trust, including a majority of the Trustees who are not interested persons of the Trust or of Barings. In approving valuations, the Trustees will consider reports by Barings analyzing each portfolio security in accordance with the procedures and guidelines referred to above, which include the relevant factors referred to below. Barings has agreed to provide such reports to the Trust at least quarterly. The consolidated financial statements include private placement restricted securities valued at $105,987,170 (72.65% of net assets) as of September 30, 2018 whose values have been estimated by the Trustees based on the process described above in the absence of readily ascertainable market values. Due to the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material.

Following is a description of valuation methodologies used for assets recorded at fair value.

Corporate Public Securities – Bank Loans, Corporate Bonds, Preferred Stocks and Common Stocks

The Trust uses external independent third-party pricing services to determine the fair values of its Corporate Public Securities. At September 30, 2018, 100% of the carrying value of these investments was from external pricing services. In the event that the primary pricing service does not provide a price, the Trust utilizes the pricing provided by a secondary pricing service.

Public debt securities generally trade in the over-the-counter market rather than on a securities exchange. The Trust's pricing services use multiple valuation techniques to determine fair value. In instances where significant market activity exists, the pricing services may utilize a market based approach through which quotes from market makers are used to determine fair value. In instances where significant market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, option adjusted spreads, credit spreads, estimated default rates, coupon rates, anticipated timing of principal underlying prepayments, collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.

32

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

The Trust's investments in bank loans are normally valued at the bid quotation obtained from dealers in loans by an independent pricing service in accordance with the Trust's valuation policies and procedures approved by the Trustees.

Public equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sales price of that day.

Annually, Barings conducts reviews of the primary pricing vendors to validate that the inputs used in that vendors' pricing process are deemed to be market observable as defined in the standard. While Barings is not provided access to proprietary models of the vendors, the reviews have included on-site walk-throughs of the pricing process, methodologies and control procedures for each asset class and level for which prices are provided. The review also includes an examination of the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels and various durations, a process Barings continues to perform annually. In addition, the pricing vendors have an established challenge process in place for all security valuations, which facilitates identification and resolution of prices that fall outside expected ranges. Barings believes that the prices received from the pricing vendors are representative of prices that would be received to sell the assets at the measurement date (exit prices) and are classified appropriately in the hierarchy.

Corporate Restricted Securities – Bank Loans, Corporate Bonds

The fair value of certain notes is determined using an internal model that discounts the anticipated cash flows of those notes using a specific discount rate. Changes to that discount rate are driven by changes in general interest rates, probabilities of default and credit adjustments. The discount rate used within the models to discount the future anticipated cash flows is considered a significant

unobservable input. Increases/(decreases) in the discount rate would result in a (decrease)/increase to the notes' fair value.

The fair value of certain distressed notes is based on an enterprise waterfall methodology which is discussed in the equity security valuation section below.

Corporate Restricted Securities – Common Stock, Preferred Stock and Partnerships & LLC's

The fair value of equity securities is determined using an enterprise waterfall methodology. Under this methodology, the enterprise value of the company is first estimated and that value is then allocated to the company's outstanding debt and equity securities based on the documented priority of each class of securities in the capital structure. Generally, the waterfall proceeds from senior debt tranches of the capital structure to senior then junior subordinated debt, followed by each class of preferred stock and finally the common stock.

To estimate a company's enterprise value, the company's trailing twelve months earnings before interest, taxes, depreciation and amortization ("EBITDA") is multiplied by a valuation multiple.

Both the company's EBITDA and valuation multiple are considered significant unobservable inputs. Increases/(decreases) to the company's EBITDA and/or valuation multiple would result in increases/(decreases) to the equity value.

Short-Term Securities

Short-term securities, of sufficient credit quality, with more than sixty days to maturity are valued at fair value, using external independent third-party services. Short-term securities having a maturity of sixty days or less are valued at amortized cost, which approximates fair value.

33

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, 2018:

	Fair Value	Valuation Technique	Unobservable Inputs	Range	Weighted
Bank Loans	$7,898,384	Broker Quote	Single Broker	98.3% to 102.0%	99.4%
	$28,936,730	Discounted cash Flows	Discount Rate	5.4% to 12.9%	7.4%
Corporate Bonds	$47,200,233	Discounted cash Flows	Discount Rate	8.0% to 18.1%	12.5%
	$9,618,382	Market Approach	Valuation Multiple	3.8x to 9.7x	7.1x
			EBITDA	$0.2 million to $15.4 million	$5.8 million
Equity Securities	$14,530,285	Market Approach	Valuation Multiple	3.8x to 14.1x	8.9x
			EBITDA	$0.2 million to $272.8 million	$38.5 million

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)

34

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

The following table summarizes the levels in the fair value hierarchy into which the Trust's financial instruments are categorized as of September 30, 2018.

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, 2018 are as follows:

Assets:	Total		Level 1		Level 2		Level 3
Restricted Securities
Corporate Bonds	$	74,926,328	$	—	$	18,107,713	$	56,818,615
Bank Loans		34,638,270		—		—		34,638,270
Common Stock - U.S.		5,150,763		—		—		5,150,763
Preferred Stock		1,648,633		—		—		1,648,633
Partnerships and LLCs		7,730,889		—		—		7,730,889
Public Securities
Bank Loans		6,200,116		—		4,003,272		2,196,844
Corporate Bonds		16,435,090		—		16,435,090		—
Common Stock - U.S.		—		—		—		—
Preferred Stock		501,000		501,000		—		—
Short-term Securities		1,998,443		—		1,998,443		—
Total	$	149,229,532	$	501,000	$	40,544,518	$	108,184,014
See information disaggregated by security type and industry classification in the Consolidated Schedule of Investments.

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

Assets:	Beginningbalance at 12/31/2017		Included in earnings			Purchases			Sales			Prepayments			Transfersinto Level 3		Transfersout of Level 3			Endingbalance at 9/30/2018
Restricted Securities
Corporate Bonds	$	68,182,386	$	(1,333,207	)	$	5,136,820		$	(7,102,372	)	$	(8,065,012	)	$	—	$	—		$	56,818,615
Bank Loans		15,737,992		(46,706	)		22,920,214			(9,928	)		(3,963,302	)		—		—			34,638,270
Common Stock - U.S.		6,911,240		1,132,551			968,769			(3,861,797	)		—			—		—			5,150,763
Preferred Stock		2,525,813		(682,970	)		(146,595	)		(47,615	)		—			—		—			1,648,633
Partnerships and LLCs		14,061,127		(404,554	)		722,256			(6,647,940	)		—			—		—			7,730,889
Public Securities
Bank Loans		523,461		23,602			2,113,411			(209,789	)		(401,237	)		1,723,930		(1,576,534	)		2,196,844
	$	107,942,019	$	(1,311,284	)	$	31,714,875		$	(17,879,441	)	$	(12,429,551	)	$	1,723,930	$	(1,576,534	)	$	108,184,014

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Income, Gains and Losses on Level 3 assets included in Net Increase in Net Assets resulting from Operations for the year are presented in the following accounts on the Statement of Operations:

	Net Increase in Net Assets Resulting from Operations			Change inUnrealizedGains &(Losses) inNet Assetsfrom assets still held
Interest (Amortization)	$	527,759			—
Net realized gain on investments before taxes	$	5,334,456			—
Net change in unrealized appreciation of investments before taxes	$	(7,178,630	)		(3,998,828	)

B. Accounting for Investments:

Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis, including the amortization of premiums and accretion of discounts on bonds held using the yield-to-maturity method. The Trust does not accrue income when payment is delinquent and when management believes payment is questionable.

Realized gains and losses on investment transactions and unrealized appreciation and depreciation of investments are reported for financial statement and Federal income tax purposes on the identified cost method.

C. Use of Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the differences could be material.

D. Federal Income Taxes:

The Trust has elected to be taxed as a "regulated investment company" under the Internal Revenue Code, and intends to maintain this qualification and to distribute substantially all of its net taxable income to its shareholders. In any year when net long-term capital gains are realized by the Trust, management, after evaluating the prevailing economic conditions, will recommend that Trustees either designate the net realized long-term gains as undistributed and pay the federal capital gains taxes thereon, or distribute all or a portion of such net gains.

The Trust is taxed as a regulated investment company and is therefore limited as to the amount of non-qualified income that it may receive as the result of operating a trade or business, e.g. the Trust's pro rata share of income allocable

to the Trust by a partnership operating company. The Trust's violation of this limitation could result in the loss of its status as a regulated investment company, thereby subjecting all of its net income and capital gains to corporate taxes prior to distribution to its shareholders. The Trust, from time-to-time, identifies investment opportunities in the securities of entities that could cause such trade or business income to be allocable to the Trust. The PI Subsidiary Trust (described in Footnote 1, above) was formed in order to allow investment in such securities without adversely affecting the Trust's status as a regulated investment company.

The PI Subsidiary Trust is not taxed as a regulated investment company. Accordingly, prior to the Trust receiving any distributions from the PI Subsidiary Trust, all of the PI Subsidiary Trust's taxable income and realized gains, including non-qualified income and realized gains, is subject to taxation at prevailing corporate tax rates. As of September 30, 2018, the PI Subsidiary Trust has incurred income tax expense of $288,677.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of the existing assets and liabilities and their respective tax basis. As of September 30, 2018, the PI Subsidiary Trust has a deferred tax liability of $448,095.

E. Distributions to Shareholders:

The Trust records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Trust's net investment income dividend is declared four times per year, in April, July, October, and December. The Trust's net realized capital gain distribution, if any, is declared in December.

3. Investment Advisory and Administrative Services Contract

A. Services:

Under an Investment Advisory and Administrative Services Contract (the "Contract") with the Trust, Barings has agreed to use its best efforts to present to the Trust a continuing and suitable investment program consistent with the investment objectives and policies of the Trust. Barings represents the Trust in any negotiations with issuers, investment banking firms, securities brokers or dealers and other institutions or investors relating to the Trust's investments. Under the Contract, Barings also provides administration of the day-to-day operations of the Trust and provides the Trust with office space and office equipment, accounting and bookkeeping services, and necessary executive, clerical and secretarial personnel for the performance of the foregoing services.

B. Fee:

For its services under the Contract, Barings is paid a quarterly investment advisory fee equal to 0.225% of the value of the Trust's net assets as of the last business day of each fiscal quarter, an amount approximately equivalent to 0.90% on an

36

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

annual basis. A majority of the Trustees, including a majority of the Trustees who are not interested persons of the Trust or of Barings, approve the valuation of the Trust's net assets as of such day.

4. Senior Indebtedness

MassMutual holds the Trust's $15,000,000 Senior Fixed Rate Convertible Note (the "Note") issued by the Trust on December 13, 2011. The Note is due December 13, 2023 and accrues interest at 4.09% per annum. MassMutual, at its option, can convert the principal amount of the Note into common shares. The dollar amount of principal would be converted into an equivalent dollar amount of common shares based upon the average price of the common shares for ten business days prior to the notice of conversion. For the nine months ended September 30, 2018, the Trust incurred total interest expense on the Note of $460,125.

The Trust may redeem the Note, in whole or in part, at the principal amount proposed to be redeemed together with the accrued and unpaid interest thereon through the redemption date plus the Make Whole Premium. The Make Whole Premium equals the excess of (i) the present value of the scheduled payments of principal and interest which the Trust would have paid but for the proposed redemption, discounted at the rate of interest of U.S. Treasury obligations whose maturity approximates that of the Note plus 0.50% over (ii) the principal of the Note proposed to be redeemed.

5. Purchases and Sales of Investments

	For the ninemonths ended09/30/2018
	Cost ofInvestmentsAcquired		Proceedsfrom Sales orMaturities
Corporate restricted securities	$	35,760,943	$	33,937,689
Corporate public securities		8,372,460		14,850,455

The aggregate cost of investments is substantially the same for financial reporting and Federal income tax purposes as of September 30, 2018. The net unrealized depreciation of investments for financial reporting and Federal tax purposes as of September 30, 2018 is $(4,296,799) and consists of $7,957,876 appreciation and $12,254,675 depreciation.

Net unrealized depreciation of investments on the Statement of Assets and Liabilities reflects the balance net of a deferred tax liability of $448,095 on net unrealized gains on the PI Subsidiary Trust.

6. Quarterly Results of Investment Operations

	March 31, 2018
	Amount			Per Share
Investment income	$	3,392,477
Net investment income		2,738,514		$	0.26
Net realized and unrealized loss on investments (net of taxes)		(2,552,957	)		(0.24	)

	June 30, 2018
	Amount			Per Share
Investment income	$	3,359,783
Net investment income		2,713,074		$	0.26
Net realized and unrealized loss on investments (net of taxes)		(2,104,355	)		(0.20	)

	September 30, 2018
	Amount		Per Share
Investment income	$	3,555,549
Net investment income		2,887,579	$	0.28
Net realized and unrealized gain on investments (net of taxes)		1,650,014		0.15

7. Investment Risks

In the normal course of its business, the Trust trades various financial instruments and enters into certain investment activities with investment risks. These risks include: (i) market risk, (ii) volatility risk and (iii) credit, counterparty and liquidity risk. It is the Trust's policy to identify, measure and monitor risk through various mechanisms including risk management strategies and credit policies. These include monitoring risk guidelines and diversifying exposures across a variety of instruments, markets and counterparties. There can be no assurance that the Trust will be able to implement its credit guidelines or that its risk monitoring strategies will be successful.

8. Commitments and Contingencies

During the normal course of business, the Trust may enter into contracts and agreements that contain a variety of representations and warranties. The exposure, if any, to the Trust under these arrangements is unknown as this would involve future claims that may or may not be made against the Trust and which have not yet occurred. The Trust has no history of prior claims related to such contracts and agreements.

At September 30, 2018, the Trust had the following unfunded commitments:

Investment	Unfunded Amount
ROI Solutions	$	961,561
VP Holding Company	$	693,100
CORA Health Services, Inc.	$	623,370
U.S. Retirement & Benefit Partners	$	207,000
Pegasus Transtech Corporation	$	136,944
New Mountain Learning, LLC	$	93,362
Polytex Holdings LLC	$	14,274

 

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THIS PRIVACY NOTICE IS BEING PROVIDED ON BEHALF OF BARINGS LLC AND ITS AFFILIATES:

BARINGS SECURITIES LLC; BARINGS AUSTRALIA PTY LTD; BARINGS ADVISERS (JAPAN) KK; BARINGS INVESTMENT ADVISERS (HONG KONG) LIMITED; BARINGS FUNDS TRUST; BARINGS GLOBAL SHORT DURATION HIGH YIELD FUND; 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.

January 2017

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Barings Participation Investors

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Members of the Board ofTrustees   Michael H. Brown*   Barbara M. Ginader*   Edward P. Grace III*   Robert E. Joyal   Clifford M. Noreen   Susan B. Sweeney*   Maleyne M. Syracuse*     *Member of the Audit Committee       Officers   Clifford M. Noreen Chairman   Robert M. Shettle President   James M. Roy Vice President & Chief Financial Officer   Janice M. Bishop Vice President, Secretary & Chief Legal Officer   Sean Feeley Vice President   Christopher D. Hanscom Treasurer
  Melissa M. LaGrant Chief Compliance Officer   Kristin Goodchild Associate Secretary 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

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