Good day, ladies and gentlemen and welcome to the Fidus Investment Corporation Second Quarter 2015 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder this conference may be recorded. I would now like to turn the conference over to Jody Burfening. Please go ahead.

Thank you, Candice and good morning everyone. And thank you for joining us for Fidus Investment Corporation's second quarter 2015 earnings conference call. With me this morning are Ed Ross, Fidus Investment Corporation's Chairman and Chief Executive Officer; and Shelby Sherard, Chief Financial Officer. Fidus Investment Corporation issued a press release yesterday afternoon with details of the company's quarterly financial results. A copy of the press release is available on the Investor Relations page of the company's website at fdus.com. I'd like to remind everyone that today's call is being recorded. A replay of today's call will be available by using the telephone numbers and conference ID provided in the earnings press release. In addition, an archived webcast replay will be available on the Investor Relations page of the company's website following the conclusion of this conference call. I'd also like to call your attention to the customary Safe Harbor disclosure regarding forward-looking information. The conference call today will contain certain forward-looking statements including statements regarding the goals, strategies, beliefs, future potential, operating results, and cash flows of Fidus Investment Corporation. Although management believes these statements are reasonable based on estimates, assumptions and projections as of today, August 7, 2015 these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties, and other factors including but not limited to the factors set forth in the company's filings with the SEC. Fidus undertakes no obligation to update or revise any of these forward-looking statements. With that, I would now like to turn the call over to Ed. Good morning Ed.

Good morning Jody and thank you. Good morning everyone. Welcome to our second quarter 2015 earnings call. I will start our call by highlighting our results for the second quarter followed by a discussion of our investment activity and the performance of our investment portfolio, and Shelby will go into more detail about our financial results and liquidity position. After that, we will open the call for questions. Our investment portfolio continued to deliver sound results during the second quarter. As a result our Board of Directors increased the regular quarterly dividend from $0.38 to $0.39 per share. On a year-over-year basis, we grew our adjusted net investment income by 19%. We also realized a $5.3 million capital gain our Connect-Air equity investment. Credit quality remained sound and we exited the quarter with approximately $100 million of liquidity to fund portfolio expansion. As of September 30 (sic) [June 30], 2015, our net asset value was $246.9 million or $15.18 per share. All-in-all, we are pleased with our financial performance for the quarter. From an operating perspective, we generated net investment income of $6 million or $0.37 per share for the second quarter while adjusted net investment income which we define as net investment income excluding any capital gains [infinity] attributable to realized and unrealized gains and losses, was $6.1 million or $0.38 per share. On June 25, 2015 we paid a regular quarterly dividend of $0.38 per share and a special cash dividend of $0.02 per share to stockholders of record on June 11, 2015. For the third quarter of 2015 as I mentioned the Board of Directors has declared a regular quarterly dividend of $0.39 per share which is payable on September 25, 2015 to stockholders of record on September 17, 2015. As a reminder, we have an outstanding…

Thank you Ed and good morning everyone. I will review our second quarter results in more detail and close with comments on our liquidity position. Similar to last quarter, I will be providing comparative commentary versus the prior quarter Q1 2015. Total investment income was 12.8 million for the three months ended June 30, 2015 in line with Q1. Incremental interest income of 0.2 million related to higher average assets under management was offset by a 0.3 million reduction in fee income. The decrease was primarily related to two prepayment fees received in Q1 2015. Total expenses were 6.8 million for the second quarter, approximately 0.2 million higher than the prior quarter. Interest expense increased by 0.2 million and base management fees increased by 0.1 million, which were offset by a 0.1 million decrease in G&A expenses. Interest expense includes the interest paid on Fidus' SBA debentures and line of credit as well as any commitment and unused line fees. As of June 30, 2015 the weighted average interest rate of our outstanding balance was 4.2%. Net investment income or NII for the three months ended June 30, 2015 was 6 million or $0.37 per share versus $0.39 per share in Q1 2015. Adjusted NII was $0.38 per share in [Q1] versus $0.39 per share in Q1. The quarter-over-quarter decrease was driven by [additive] and transaction fees related to investment activity in Q2 versus Q1 and slightly interest expense and management fee. Adjusted NII is defined as net investment income excluding any capital gains, incentive fee expense or reversal attributable to realized and unrealized gains and losses on investment. A reconciliation of NII to adjusted NII can be found in our earnings press release that was issued yesterday afternoon and also posted on the Investor Relations page of our website.…

Thanks, Shelby. As always, I’d like to thank our team and the Board of Directors at Fidus for their dedication and hard work, and our shareholders for their continued support. I will now turn the call back over to Candice for Q&A. Candice?

Thank you [Operator Instructions]. And our first question comes from Bryce Rowe of Robert W. Baird. Your line is now open.

I just wanted to ask about the potential for us and buyback activity, you’ve now reported earnings especially with the stock down here at a pretty significant discount to books value.

It’s a great question Bryce, and we have discussed it at the Board level. And I think it’s what I would call an ongoing discussion. I don’t think it’s something we’re looking to do imminently but if what I would call the overhang or whatever words you want to use continues and it’s clearly a discussion that we have thought about and talked about and I think continuing to think about quite frankly. So I don’t have anything more than that. But it’s definitely a discussion topic.

And then just wanted to touch on Paramount and the moves to non-accrual, do you foresee any kind of resolution or restructuring over the near term, curious how you’re thinking -- it could play out over the near term given the new economic rule status? Thanks.

Paramount has been in our portfolio for quite some time before we went public actually. And the company clearly had some ups and downs. We did go through a restructuring last fall in October and we are -- and there were other institutional investors and we are continuing as a group to support the growth of the business. So there is nothing eminent there at all. I think we’ve had some good operating progress recently but we are -- so we’re continuing as a group to support the business. But what I would say is the valuation on our books reflects the risk of this situation.

Thank you [Operator Instructions]. And our next question comes from Robert Dodd of Raymond James. Your line is now open.

On Westminster every time we look it in the books, at the end of the quarter was marked at about $600,000 unrealized gain and then you sold it a month later at $1.7 million gain. So I mean that’s a delta so it implies that your fair value -- valuation in the quarter 30 days and eventually this kind of player Paramount. Did you catch it by surprise I am just trying to get a feel or is there an indication of just how conservatively you value the equity position certainly?

I wouldn’t say it caught by surprise. We knew a transaction was being worked on. We were not given the valuation information by the control party of that transaction, that’s why they’re asking some question, I think they were pretty careful with it. So our valuations reflected what we do to is the fair value of the business. But clearly in today market for strategic assets and I think this was viewed as a strategic asset people were willing to pay up for it. And it’s the transaction, where we knew there was something potentially going on, so there is no guarantees in life because we all know but we did not know the valuation levels, and so that’s what I would say. We’re actually pleased with the outcome. We’ve got a premium valuation to kind of how we’ve been looking at.

Just next on kind of microbiology research, looking the investments there you’ve got a three and six quarter million 6% senior loan. That’s the lowest coupon piece of paper on your books by a pretty descent margin. Can you give us any color on was that the decision to do that, rather than just the sub-pieces at 12. Was that the requirement to get the deal, I just wanted one lender or is there any intention to maybe move that piece or expectation sort of that, the 6% piece will get refinanced out or anything like that. Just a little bit more color on the decision or the process as to why restructured that way which is a little unusual on the coupon on those pieces for you guys?

Sure, it's a great question Robert. I guess first I would start with, we go to market as a solution provider. So we are looking for what we believe is very high quality businesses, A type businesses if you will, and we try to provide solutions for those companies. In this case, providing the senior debt was something that was a desire of the control party here and so we looked at the overall equation and the quality of the asset and said we will do that. I will also tell you the intent is for us not to hold that piece of paper over the long-term but when I say long-term I am talking 18 months to 24 months. But it's not meant to be on our books for the next whatever, two to five years. But we do go to market as the solution provider and make those decisions when the underlying quality of the asset makes sense. So that’s, that was the decision thought process.

Got it, great. And obviously the blended coupon on all the debt and there was like 10% which is pretty reasonable. Anyway, just circling back to kind of jumping around, the first one, I mean earlier in the year, for comments, where you pointed that it looked like the potential over gains equity evaluations had been up particularly for strategic not kind of aligns with your comments on Westminster. I mean it appears obviously with the Westminster that it's continuing or playing out as you expected. I mean is there any additional commentary on that and what we, I don’t want to turn, should you comment on what to expect the rest of your equity book going forward but any additional color that would be really helpful?

Sure. Now it's I would say it's a great question, it's one that we're obviously paying very close attention to. We very much like the quality of our portfolio which includes the quality of our equity portfolio and given the M&A environment and I will tell you M&A is driving both originations and repayments. And so any projected repayments if they involve a sale of a business and we would hope to participate from an equity perspective at least in most of our portfolio companies, and so I do think that's going to be part of the equation as we continue to move forward is at least right now as we look at M&As driving a lot of the market, the outlook looks pretty good. And so our hope is continue to participate in the market from that perspective.

Okay. Got it. Thanks you.

Yes. Nice talking to you Robert.

Hey, [different view].

Thank you. And our next question comes from Chris Kotowski of Oppenheimer. Your line is now open.

Hi, good morning. Most of my questions were asked but just one thing we hear from kind of the big private equity sponsors is that this is great environment in which to sell assets but a tough environment to put new money to work because equity evaluations everywhere kind of stretched and so again and in the large space where it's a bit more visible the amount of new LBO activity has come down quite a bit. And I am wondering is that, are you seeing that also in the middle market space that it's a good time to take gains but not a good time to put money to work?

It's a great question and quite frankly Chris it depends it's deal-by-deal right? But as I look at it on an overall basis, I think the -- our market the valuations are lower so we are not participating very much or at all really in the what I call the large LBO market. So greater than 50 million in EBITDA but really greater than 25 million so we are under that and that’s been one for us. And so in that market valuations are lower, one of the opportunities we have as we invest in these more lower middle market business is to grow them obviously professionalize them if you will and hopefully you get an higher mark on the way out than way you went in. and that's one of our strategies quite frankly. I think the other thing that’s different than the market, the larger market is our leverage levels in the larger market are pretty high, right? They are right up there with the peak previously and I would tell you and some of it has to do with kind of the regulatory environment I think banks are less aggressive from a leverage perspective. And so when you look at our overall leverage at 3 times now part of that is just a deleveraging of the portfolio meaning EBITDA is growing and cash flow is payback debt but I think that’s indicative of the fact that the leverage profile of our market is very different than the leverage profile of the larger market. And so valuations are in line with that, right, as they limit on how much equity to put in a deal. So I do think valuations are lower. But these businesses are also less diverse and smaller, so there is region behind that. So hopefully that tells more to the equation for you but no, I don’t…

Thank you. And our next question comes from Vernon Plack of BB&T Capital Markets. Your line is now open.

Thanks very much. Ed, sorry if I missed it but -- can you give me your latest thoughts on funding continued growth assuming that the equity market cost that accommodated for quite some time. How are you thinking about that, how are you thinking about accessing additional capital deferral?

Obviously we have I think it’s around $45 million of availability in our SBIC license, our second license. So that’s clearly the focus. We have about $40 million of availability under our line of credit and then we have some cash. So I think as you move forward, the options include growing the line of credit and obviously raising equity if the markets get a little bit better. And then also doing I think a baby bond dealers in option as well if we deem that to make sense for the Company and for the shareholders. So, those are the three options that I see today. I do think there is continues to be at least positive redirect regarding the whole SBIC family of funds issue or maybe that goes up and you can increase your exposure to 3.50 from 2.25 but that’s to be figured out and we’re not counting on that. But I thought I would highlight it because there seems to be some pretty positive redirect regarding that getting approved.

And another has been and with any luck hopefully that will come true. I know that are you still thinking in terms of keeping some availability? I know the cost we’ve talked about to you keeping let’s say next 12 month versus regular dividends from a liquidity standpoint?

Yes, that’s how we think about it. I mean we wouldn’t purposely use up all of our liquidity just to make investments. I think keeping 20 to 25 or roughly a full year’s worth of regular dividends make sense from our perspective, that’s the only important thing to do. So you are correct in your thinking.

Thank you [Operator Instructions]. And I am showing no further questions at this time, I‘d like to turn the conference back over to Mr. Ross for closing remarks.

Thank you, Candice. And thank you everyone for joining us this morning. We look forward to speaking with you on our third quarter call in early November. Have a great day and a great weekend.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Have a great day everyone.