Ted Koenig - Chief Executive Officer Aaron Peck - Chief Investment Officer and CFO.

Mickey Schleien - Ladenburg Bob Napoli - William Blair Chris York - JMP Securities Christopher Nolan - MLV & Company Bryce Rowe - Robert W. Baird Christopher Testa - National Securities Merrill Ross - Wunderlich Securities Mitchel Penn - Janney.

Good morning. And welcome to Monroe Capital Corporation's First Quarter 2015 Earnings Conference Call.

Before we begin, I would like to take a moment to remind our listeners that remarks made during this call today may contain certain forward-looking statements, including statements regarding our goals, strategies, beliefs, future potential, operating results or cash flows.

Although, we believe these statements are reasonable based on management's estimates, assumptions and projections as of today, May 12, 2015 these statements are not guarantees of future performance. Further, time sensitive information may no longer be accurate as of the time of any replay or listening.

Actual results may differ materially as a result of risks, uncertainties or other factors, including, but not limited to the factors described from time to time in the company's filings with the SEC. Monroe Capital takes no obligation to update or revise these forward-looking statements.

I will now turn the conference over to Ted Koenig, Chief Executive Officer of Monroe Capital Corporation..

Good morning. And thank you to everyone who has joined us on our earnings call today. I'm joined by Aaron Peck, our CFO and Chief Investment Officer. Yesterday we issued our first quarter earnings press release and filed our 10-Q with the SEC.

I will provide a brief overview of the quarter before turning the call over to Aaron to go through the results in more detail. He will then turn the call back to me to provide some closing remarks. On April 20th, we successfully completed a public offering of our stock raising approximately $36.4 million in gross proceeds.

We are very pleased to have been able to complete a capital raise that was accretive to our book value in an environment when so many of our peers are trading at a discount to book value and when some have raised capital at a discount. We are focused on putting this capital to work in an efficient manner in order to continue to grow the portfolio.

As we did after our last capital raise, we're putting this capital to work carefully through a combination of our proprietary originated assets, as well as some select transactions that are more liquid.

Overtime, as in the past, we will optimize those more liquid assets by selling them in favor of higher yielding directly originated and small club transactions. We are very pleased to have announced another strong quarter of financial results.

For the quarter we generated adjusted net investment income of $0.44 per share, comfortably covering our first quarter dividend of $0.35 per share. This represents the fourth consecutive quarter adjusted net investment income has covered our dividend.

We are pleased to be able to continue comfortably out earning our dividend in an environment when a large percentage of other BDCs have either cut their dividends or have been unable to generate net investment income in excess of their most recent dividend.

Our book value per share increased to $14.11 per share as of March 31st, a $0.06 per share increase from the book value per share at December 31st. We have achieved all of this in the quarter while continuing to be focused on safety and security with approximately 94% of our assets, representing first lien loans as of March 31, 2015.

I am now going to turn the call over to Aaron, who is going to discuss the financial results in more detail..

Thank you, Ted. Our investment portfolio continues to grow and we have continued to generate high yielding opportunities which has allowed us to maintain our weighted average yield on the portfolio. As of March 31st, the portfolio was at $252.6 million at fair value, an increase of $19.1 million since the prior quarter end.

At March 31st we had total borrowings of $87.7 million under our revolving credit facility and SBA debentures payable of $34.8 million. Also as of March 31st, our net asset value was $135.9 million, which increased from the $133.7 million in net asset value as of December 31, 2014.

On a per share basis, our NAV per share increased from $14.05 at December 31st to $14.11 per share as of March 31st. Turning to our results, for the quarter ended March 31st adjusted net investment income, a non-GAAP measure was $4.2 million or $0.44 per share, a decrease of $0.04 per share when compared to the prior quarter.

Net investment income was also $4.2 million or $0.44 per share, a decrease of $0.05 when compared to the prior quarter. At this level we continue to comfortably cover our quarterly dividend of $0.35 per share.

Additionally, this quarter we generated net income of $3.9 million or approximately $0.41 per share, a reduction from the net income in the prior quarter of $0.44 per share. Looking to our statement of operations, total investment income for the quarter was $8.1 million, compared to $8.7 million in the prior quarter.

The reduction in investment income is primarily as a result of lower fee income in the quarter as well as slightly lower interest income associated with the paydown of a higher-yielding loan at the end of the fourth quarter.

Total expenses of $3.9 million included $1.1 million of interest and other debt financing expenses, $1.1 million of base management fees, $1 million in incentive fees and $701,000 in general administrative and other expenses.

Of the $1.1 million in interest and other debt financing expense, approximately $880,000 was cash interest expense with the remainder representing non-cash amortization of the upfront costs associated with establishing our credit facility and our SBA debentures as well as the interest expense associated with the secured borrowings we recorded under ASC 860.

We also had a net depreciation on investments and secured borrowings of approximately $291,000 in the quarter due to some net unrealized markdowns in the fair value of certain portfolio assets.

Turning to the portfolio, we've continued to be focused on first lien lending with approximately 94% of our investments representing senior secured first lien loans. The remaining 6% of the portfolio investments were junior secured loans and equity securities. We believe our portfolio of investments is well positioned in this current business cycle.

As for our liquidity, as of March 31st, we had approximately $22 million of capacity under our revolving credit facility and approximately $5 million in undrawn SBIC debentures. We plan to utilize this availability and the proceeds from our April 20th capital is to fuel future growth in the portfolio.

I will now turn the call back to Ted for some closing remarks before we open the line for questions..

Thanks Aaron. In our last four quarterly calls, we told you that we were singularly focused on, generating net investment income in excess of our dividends. We have continued to demonstrate the success we have had of fulfilling that commitment.

In a very competitive market for lending today, we’ve been able to grow our portfolio while maintaining our average effective yield at 11.6% as of March 31.

We have grown our quarterly adjusted net investment income per share on a year-over-year basis, up by $0.11 when compared to the first quarter of 2014 when many of our peers have experienced decline in net investment income trends.

We attribute this to our differentiated origination platform and the depth of the entire Monroe Capital platform which has supported a high effective yield on our portfolio at a time when many others have experienced declining yields. We remain very excited about our company's prospects.

Our BDC manager has continued to invest in high quality origination and underwriting staff as well as operations and accounting personnel.

These capital investments will continue to provide the company with unique high quality, high-yielding investment opportunities and the personnel to help manage the growth in our platform, with a dividend yield greater than 9%, fully supported by net investment income in a stable book value.

We believe that Monroe Capital Corporation provides a very attractive investment opportunity for investors and continues to be significantly undervalued. Thank you all for your time today. And with that, I'm going to ask the operator to open the call up for questions..

[Operator Instructions] Our first question comes from the line of Mickey Schleien from Ladenburg..

Yeah, good morning, Ted and Aaron. Wanted to ask you about unitranche, you're obviously quite involved in the unitranche market as is GE.

So I'm curious what your thoughts are with GE's announcement as to how you've seen or have you seen any change in borrower behavior when you're competing with GE on a unitranche deal?.

Good question, Mickey. Lots has been written about this over the last 30 days or so. Unitranche market hasn't really been affected yet. It may, depending upon who ultimately acquires the [Atheros] [ph] platform from GE. But today, GE continues to be in business. We continue to be very much in business.

And in our markets, which is the predominantly $25 million EBITDA and below, we really haven't seen much changes. GE really starts at about $15 million and $20 million of EBITDA and goes up from there. The market has accepted the unitranche financing product in virtually most all M&A transactions right now in the middle market.

So I don't anticipate much if any changes to that. We'll have to wait and see what happens with the GE business, the sponsor business, but as of today it's pretty much business as usual..

Thanks for that. And one follow-up question, Ted, now that we’ve seen a lot of BDC earnings announced. I’m just getting the sense despite the fact that spreads compressed in the middle market pretty meaningfully in the quarter.

We’re seeing quite a bit of distress in some portfolios and it’s starting to make me wonder where are we really are in the credit cycle and your thoughts going into the year, we were sort of the middle. But I’m getting the sense maybe it’s later than I initially believed and what the market believe.

Where do you think we are in terms of the credit cycle?.

I was asked this question at a conference last week in New York for BDCs and I think we were at the top of eighth inning right now. I think that we are definitely in the very mature part of the cycle and depending upon what happens in the future with rates and performance.

You look at the large cap companies, their earnings reports for the first quarter have generally been down and we positioned our portfolio as Aaron mentioned at 94% senior secured. So, I like where we sit right now but I definitely think we are in the last third of the cycle..

And of that 90% what proportion’s first lien?.

94% of the portfolio is in first lien senior secured credit securities..

Great. Thanks for your time..

Thank you. Our next question comes from the line of Bob Napoli from William Blair..

Thank you. Good morning and looks like an excellent quarter.

I guess the question, Ted and I think you explained it a little bit, top of the eighth inning but your credit looks pretty strong and you matched that with combination of steady yields at pretty attractive levels and how long can -- if we are at that, top of the eighth inning, is this sustainable for you and why would it be sustainable if you think it is?.

Good question. The answer is yes. It’s sustainable and the reason why, Bob as we lived through unlike other platforms, I live through the crisis in ’07, ’08 and ’09 and we know what is needed to do.

And what we’ve done here is we’ve gotten ourselves in position to hunker down and to protect the portfolio and that’s why we’ve rotated into senior secured first lien for 94%. I think if you look at many of our peers, the average BDC I think today is somewhere around 55% first lien senior secured.

And ‘08 and ‘09 were our best years as a firm in terms of overall returns and there's plenty of product in the market. And transactions happen in good markets, in stable markets and also in bad markets and unstable markets.

And the key that our platform has always been able to deliver on is because of the wide breadth of our origination, we're able to pick the very best transactions with the best management teams and the best structures and put those into our portfolio and since we originate so much of what we do, we're not dependent on the underwriters and the distributors and chasing transactions in the market by others and taking kind of the least common denominator in terms of credit and pricing.

So, when I tell you that I'm very confident that our platform is solid, our portfolio is solid and that we'll continue on the path that you've seen us on for the last 18 months, I do that because I've got 15 years experience with this platform, with our people, and with our business..

Okay.

I mean, how many of your loans do you have bank partners with or have you syndicated a piece of the loan out to is -- I think it’s been part of your strategy?.

I mean, Aaron’s going to dig in and get you the exact numbers. But I will tell you that you know this and I think others do is that what we do is we originate the loans we put into our book and then on occasion what we will do is we have a dozen bank partners regional bank partners that are strategic to us.

And we may from time to time sell them pieces of our loans, not syndicating but we may from time to time in a bilateral transaction sell a piece of our loan to that bank partner, the effect of which will be to increase the overall yield to our shareholders..

Bob, when you look at the scheduled investments, the loans that are called unitranche, those are the loans that we bought in, a bank partner and sold them a piece of our loan as Ted described..

Okay. Great. Thank you very much..

Thanks Bob..

Thank you. And our next question comes from the line of Chris York from JMP Securities..

Good afternoon, guys and thanks for taking my questions. So it looks like in the quarter you issued about $50 million in SBA debentures and it looks like you have about $5,000 in a commitment letter from SBA.

Just wondering to get an understanding given your capita raise, what you guys were thinking going forward of additional SBA debentures for the remainder of the year?.

Yeah. So, Chris, you are right. We’ve drawn about, just shy of $35 million of debentures. We’ve allocated $40 in total to the BDC. So that $5,000 is actually $5 million of remaining debentures that are available. So that’s what’s available on the current regime.

As you probably have heard in a lot of movements and effort being made in Washington with regards to the possibility of raising the family of firm’s limits for SBICs, we feel and Ted and I were down in DC, meeting with a bunch of folks on the hill.

And we feel pretty good about that possibility of that getting through at some point in near future, which will allow family of funds to have more debentures, at which point the BDC would be allocated more debentures and therefore have more access to SBIC funding..

Got it.

So just to clarify, so expectations are $40 million for MRCC and debentures, and then if the family of funds limit is past, then there is upside there?.

Correct..

Okay. And then secondly on pipeline, I mean, we are maybe half way through second quarter here, you raised some capital.

Could you provide some commentary maybe about originations quarter to date?.

Sure. I won’t give any specifics about quarter to date, but I will tell you that we are seeing originations pick up, the pipeline which has always been pretty strong, is growing. We have a lot of locked in terms of opportunities.

And so we are starting to see some nice pickup in the second quarter and we expect to be in a good position for some money to work in new assets.

The market generally if you have been rehearing conference calls and talking to other managers, everyone is sort of I think seeing some nice velocity this quarter and we are not any different, we are definitely seeing some pick up and we are definitely putting some money to work from the new capital raise.

As you probably imagine, we took that capital and we paid down our revolver. And we are now redrawing on that revolver as we ramp the portfolio.

And we will probably, you will see this quarter a combination of direct originated transactions as always as well as some more liquid club transactions to try to get that capital to work accretively to NII during the quarter.

But you will see us it would be surprising if you didn’t see the average yield come down a little bit in the quarter as we put some liquid assets from both until we can get that capital fully ramped and to work in direct originated book..

Sure. That makes sense. Excuse me.

And then lastly here, I don’t believe I saw in the K, what did you guys have for undistributed income as of year end? And is there an update that you can share for the quarter end and then kind of how you guys are thinking about dividend policy because to your point the prepared remarks last four quarters covered the dividend well in excess from that investment income and then potentially with spillover and growth ahead kind of your thoughts on the policy?.

Yes. I will talk about the policy first. We are looking to provide some color on to the spillover. You can see it actually in the 10-Q, if you look on page 5 there is call on undistributed net investment income and you will see that at March 31, there is about -- we will come back to you on that.

But the dividend policy is that right now we are paying $0.35 a quarter. We haven’t made any decisions with regards to what we’re going to do yet going forward. Our plan and our hope is to distribute most of NII during the year. We do have some spillover and we will give you an update on that number.

We are not excited about the prospects of paying a big excise tax if you are in. We don’t think that’s been official to shareholders. So we will be monitoring that as the year goes on and making sure that we are in a position to distribute as much of the NII that is prudent. We also don’t want to do anything imprudent with regards to the dividend.

So we are going to take a look at and continue to monitor as the year goes on and we will make a decision with the Board at the right time whether we want to do anything with the base dividend or just consider special dividend in the future in order to avoid paying an excess tax. But we haven’t made the decision as of yet on that..

Great. Thanks for sharing your thought process on that. And that’s it. Thanks, Aaron. And thanks, Ted..

Yes.

And I will follow up with you and anyone else who is interested on the undistributed numbers post the fall?.

Thank you. And our next question comes from the line of Christopher Nolan from MLV & Company..

Hey, guys.

Ted, given that we’re at the top of the inning, how does that inform on your sort of outlook in terms of interest rates?.

I gave a statements about three months ago to private debt investor magazine that I think interest rates will get increased in the fall and I believe that it could happen sooner, but my gut is it will happen in the fall. And if you look what happened to you in the last couple of days, interest rates shot up a little bit.

And it’s causing some havoc with bond yields. And I think you are going to start to see interest rates move over the next three months, which is good for us. It will be good for our business because we are in absolute return business and as interest rates move, it will flow through to our shareholders..

Given expectations for rising rates and given the recent equity raises, should we expect a debt issuance some sort of baby bond, some thing fixed rates?.

That’s a good question. We haven’t really made any decisions. I think that we are going to monitor the situation. I would like to grow the portfolio frankly a little more before we entertain that, but certainly in the future it’s something that we would look at as well as other things to book..

On this margin, Chris we obviously also have the SBA debentures which are fixed so we do think about that we are looking at our mix and we like the idea being match funded which to some extent w are with the floating rate revolver as most of our assets are floating, virtually all of them are floating rate today.

But we do also recognize that rates are likely to move up in the future and so we sort of fulfill some of that need to fix some rates by having access to the SBA debentures which are fixed.

So, we’ll consider to everything under the sun with regards to possible financing and we’ll keep looking at the market and deciding what we think is a right thing to do. As you probably know, we had a pretty substantial give up in terms of cost of funds if we do the fixed rate daily bond right now versus our revolving credit facility.

And so we have to really think about where we think rates are going to go in the long term before we consider such a thing..

And I guess final question and follows on Chris York's question is, if you guys decide you want to start blocking in your debt cost, does that start informing in terms of your dividend decisions because it sort of sounds like you guys are sort of angling little bit more towards the supplemental dividend raise that -- excuse me, rather than raising the e base dividend?.

Well, here is what I will say about that. We haven’t signal -- we’re not trying to signal anything with regards to that. I think what we’re trying to say is that we’re going to continue to watch where NII is and where it’s going. And we think that our dividend should be reflective of a sustainable level of NII over time, our core NII.

And that’s inflected at this moment as we’re raising capital or putting it to work and we have to see as the yields fall through where the yields wind down. And so we’re going to see little more patient about what decision we’ll make with regards to the dividend policy.

But we’re not likely to ever do is to raise the dividend to the full NII if we got fee income in that, substantial fee income in the NIIs because we don’t think that’s the wise decision. We can then exposes us to be some fair point in the future, disturbing more than earning, which is not something we want to be doing.

So I don’t mean to signal on anyway that we’re not considering ever a raise in the base dividend. We’re just not sure yet and we’ll continue to monitor and make decision when it make sense..

Okay. Thanks for detail there..

Sure..

Thank you. [Operator Instructions] Our next question comes from the line of Bryce Rowe from Robert W. Baird..

Hi. Thanks. Most of my questions were asked. I wanted to follow-up on the comment about velocity here post first quarter. Can you guys talk a little bit about potential for repayment activity given that at increase in velocity, just curious on the repayment side I think? Thanks..

Sure. As we would expect there is a reasonable amount of repayment activity in the market in general and for us to particular. Part of it is just the natural progression of our business. Remember that we’ve raised our first capital in late 2012 and put it to work in May 2012 and in the early part of 2013.

And so the natural life cycle that we see for deals like our is that they tend stay out between 18 months and two years, even though they tend to be 5 year a pieces of paper. So we have seen some prepayment activity, as you saw some improve this quarter and the previous quarter, which is expected.

I don’t know if we’re seeing any sort of otherwise a natural level of prepayment activity across the portfolio. I think we’re seeing the natural sort of average life of deals like ours, which tend to anywhere from 18 to 24 months. It’s fairly typical to see some pickup in prepayment and that’s what we’ve seen and we expect to continue to see.

And that’s okay. We’re good with that because we have pretty substantial prepayment penalties on most our transactions and that between the upfront fees. So, we can trust on new transaction.

It’s not a bad trade for us to have a borrower prepaying us going to a new asset that gives us a new upfront and a new prepayment schedule, that’s not a bad thing for shareholders..

Yeah. The only thing I will add to that Bryce is that, I believe we’re going into a period of higher velocity in the second half of the year than we experienced in the first half of the year in terms of new transactions. Historically, the first of the year is anywhere in the kind of 30% to 40% of the total pie of transactions that we book.

So, I would expect the second half of the year to be a busier year for the Monroe platforms than the first half..

Okay. That’s helpful. Thank you, guys..

Thank, Bryce..

Thank you. And our next question comes from the line of Christopher Testa from National Securities..

Good afternoon. Thank you for taking my questions.

Just some housekeeping, were there any one-time or non-recurring items on the first quarter in terms of fees or anything?.

I will point you to something that we are disclosing separately in our Q in the table for the first time this quarter, as a response to many of people on the phones requests.

You’ll find on page 32 of the Q, we break out for you the sources of income and so we have interest income and we have fee income and prepayment gains and losses and those things broken out for you. Your question is about the non-recurring nature. That’s a very difficult question to answer because there is fee income in the quarter.

In some quarters, we have more, in some quarters we have less. And so we seem to have some fee income but we may not, one quarter have much of the way of fee income. So it’s just difficult to say whether it’s recurring or non-recurring.

The one thing I do want to point out for those of you who are going to try to run a model and look at average assets and you are going to have a hard time this quarter because it’s going to appear that our yields lower.

In the period, if you run that it will be published and that’s because we did have one asset that came on right at the very end of the quarter. So it’s a pretty good side of asset and it has a pretty nice yield to it. But it doesn’t have any investment income in the quarter associated with it.

It’s the investment in Rockdale Blackhawk you'll see on here. So when you are running your modeling, consider the best investment came on literally at the last day of the quarter and will not have created any investment income in the period..

Okay. Thanks Aaron. That's helpful.

And also what was the sponsored and non-sponsored mix this quarter? And where did you see the opportunities in terms of that for the remainder of the year?.

We don’t track and publish that number. On average, we typically see about 50-50 mix between sponsored and non-sponsored. And I am just thinking off the top of my head the deals we closed in the quarter and I think it was a nice mix.

So I think we are going to stay consistent around that amount for the foreseeable future when I think about the portfolio that tends to be the way it works. So I think you expect to see the 50 should be about average maybe it trends a little bit towards non-sponsored. But other than that we haven’t really published that breakout..

Okay.

And just with regards to the unrealized loss on the unitranche loans marks this quarter were those for any specific investments, or is that from spreads widening, just any detail on there is helpful?.

Yeah. I mean we -- you can see if you sort of track quarter-to-quarter in the SOI. You can see that there were some marks up and down on certain assets, some is in spread widening but some is individual credit’s being moved one way or another by a couple of points here and there.

But nothing specifically substantial or anything meaningful, we haven’t seen any major credit changes that would be worthy of any discussion sort of a little here and a little over there..

Okay. Great.

And just one final one is, if the loan growth continues to be very strong, would you consider raising the commitments on the credit facility or tapping the accordion?.

Yes, I think we are going to monitor that. We are also watching to see what happens with the family of funds limit. And so we are fine right now but we have been in dialog with our lenders and they are very supportive of raising that accordion and taking some more debt.

And so all things being equal, if there is no family funds increase, I think we would expect overtime to exercise the cushion around the accordion to put more revolving availability for our portfolio..

Okay. Great. Thanks for taking my questions..

Thanks Chris..

Thank you. And our next question comes from the line of Merrill Ross from Wunderlich Securities..

Hi. Good afternoon. I am wondering of the $18 million in pay downs roughly shows in cash flow statement.

How much of that might have been sales as opposed to repayment or prepayment?.

We didn’t have any sales in the quarter..

Okay perfect.

Can you give us a weighted average yield on the investments made in the quarter of the $36.4 million because that would help me to understand how much of that was the more in liquid transactions as opposed to the really proprietary?.

Yeah. Unfortunately I can’t because I haven’t disclosed that, but we have not been active we -- we were not active in the first quarter in sort of market transactions..

Thank you..

Thank you. And our next question is a follow-up from the line of Bob Napoli from William Blair..

Thank you.

Just a quick question on the new loans in the floors that are embedded within new loans are, all new loans have interest rates floors and I think, you maybe probably have a little bit of NIM compression in the first 100 basis points or so that Fed raises rates before you get the benefit, is that right?.

I think that's fair. I think we tend to have about 1% floor give or take on average and so there is -- for small movement there is some expectation of potential NIM compression..

Yeah. The counter veiling side to that Bob is we are in new funded transactions. We are minimizing the effects of any floors going forward..

Okay. Great.

Then the family of funds, I am sorry, I missed, I am not sure if you gave -- did you say when you hope to have an answer and what size potential you could possibly get under any discussions on timing and size of increase in family of funds from the SBA?.

Well, I can give you a current state of where things are as of lest Friday, if that helps you..

That would be great..

I was in DC, a little over a week ago, when we meet with the number of senators on the banking committee in the House. We met with lots of Congressmen on the finance committee.

And if the bill that the SBIA which is the trade association for the BDCs and for the SBICs has been advancing a bill that is limited to increasing the size of the family of funds, limitations for the debentures from 225 to 350.

And that bill almost got passed last year, was very close, one senator held it up, because if it was unanimous it gets treated in one way, if it is not unanimous it gets treated in the different way and the senator that held it up was Rand Paul. Mr. Paul is now running for President and he has chosen not to hold up this bill again.

So now that we have his blessing, the bill has cleared the senate and was presented to the House last week on Thursday for a markup in committee, it has moved out of the committee. And so the understanding is as of last Friday, it has now passed the senate.

It has moved out of the House and it is prepared to be introduced by a Congressman from South Carolina very soon and we expected that to get done in the near future and I’m hopeful, it will happen in the next 60, 90 days, 120 days, but we have no control over the government process. But I believe it is certainly something that will happen by fall.

And if it does, it will help the number of the BDC platforms, especially us, because this is a -- we are very active originator and as Aaron mentioned earlier, the overall fix rate cost for these funds is about 3% for 10 years and that’s better than any baby bonds that we would be able to achieve in the market today..

Great. That’s very helpful.

It’s your understanding that President would sign off on the bill presented in House and senate?.

Yes. He told me that last week at the White House..

Thank you. Perfect. Thanks Ted..

Thank you. And our next question comes from the line of Mitchel Penn from Janney..

Yeah. Thanks guys. Quick question, if we do get into a rate rising environment.

Do you think that will impact a hurdle rates on incentives fees for externally managed BDCs?.

I don’t think so. I think what will happen is that the absolute returns will go up and the hurdle rates stayed relatively constant for the less 25, 30 years in a variety of economic cycles, so I don’t think Mitchel that will change much..

Okay. Thanks..

Thank you. And that concludes our question-and-answer session for today. I would like to turn the conference back over to the company for any closing comments.

As always, I would just like to thank all of you for your time today. We -- I know you’re stretched. There’s lot of companies reporting. So we appreciate your focus and as I always say, we are always transparent. To the extent you have any questions, feel free to contact Aaron directly and we will try to answer them.

Other than that have a Good Friday and the nice weekend. It’s not Friday yet today, sorry, it’s only Tuesday. It seems Friday for me. I have already had a full week. You guys have a nice day. Thanks..

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone have a good day..