Goldman Sachs BDC, Inc. (GSBD) Q3 2017 Earnings Report, Transcript and Summary

Good morning. This is Dennis, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs BDC, Inc. Third Quarter 2017 Earnings Conference Call. [Operator Instructions]. I will now turn the call over to Ms. Katherine Schneider, Head of Investor Relations at Goldman Sachs BDC. Katherine, you may begin your conference.

Thanks, Dennis. Good morning, everyone. Thanks for joining this morning's call. Before we begin today's call, I would like to remind our listeners that today's remarks may include forward-looking statements. These statements represent the company's belief regarding future events that, by their nature, are uncertain and outside of the company's control. The company's actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements as a result of a number of factors, including those described from time to time in the company's SEC filings. This audio cast is copyright material of Goldman Sachs BDC, Inc. and may not be duplicated, reproduced or rebroadcast without our consent. Yesterday, after the market closed, the company issued an earnings press release and posted the supplemental earnings presentation, both of which can be found on the homepage of our website at www.goldmansachsbdc.com under the Investor Resources section. These documents should be reviewed in conjunction with the company's Form 10-Q filed yesterday with the SEC. This conference call is being recorded today November 3, 2017, for replay purposes. With that, I'll turn the call over to Brendan McGovern, CEO of Goldman Sachs BDC.

Thanks, Katherine. Good morning, everyone, and thank you for joining us for our third quarter earnings conference call. As usual, for the format of the call, I'll start by providing overview of our third quarter results as well as key highlights for the quarter. Jon Yoder will discuss our investment activity and portfolio metrics; and Jonathan Lamm will discuss our financial results in greater detail. And finally, I'll conclude with some closing remarks before opening the line for Q&A. So with that, let's begin. We are pleased to report a solid quarter for our shareholders. Net investment income per share was $0.47 in Q3, equating to an annualized yield on book value of 10.3%. Earnings per share were $0.45. Net asset value was unchanged quarter-over-quarter [and we get] $18.22 per share. As we announced after the close yesterday, our Board declared a $0.45 per share dividend payable to shareholders of record as of December 29th. We are particularly pleased that for the 9 months ended September 30th, our net investment income covered our dividend by 116%. This strong dividend coverage occurred during a period in which we can conduct our first follow-on equity offering since our IPO. As many of our shareholders will recall, we applied 3 criteria when considering the sensibility of raising new equity capital. Namely we consider 1, whether the offering will be accretive to book value per share, net of offering expenses. 2, whether we have a good use for the capital to deploy into new loans. And 3, whether we can accomplish the offering while maintaining our target leverage ratio and thereby avoid a significant drag and the ability of the portfolio to cover the dividend. While the first of those criteria simply whether an offering is accretive to NAV could be measured at the time of the offering, the latter 2 criteria can only be evidenced later after results come in. As we sit here 1 quarter removed from a follow-on offering in the second quarter, I'd like to pause and consider results in light of these criteria. The first objective of issuing shares accretively was met at the time of issuance, when the offering was consummated at a 23% premium to book value, which is a great outcome for our shareholders. The second objective, putting the capital to good use was also met as we had $254 million of gross originations this quarter, our largest gross origination quarter-to-date. Moreover, and despite significant repayments during the quarter, we were able to maintain our leverage ratios as well as average and ending debt equity came in at 0.61x for the quarter. And as a result, our third objective was met, as our net investment income continues to outpace our dividend, inclusively increased dividend obligation and share count. We are pleased to further demonstrate our strong fiduciary focus and commitment to our shareholders and we will continue to maintain the disciplined approach to capital as we go forward. Moving onto investment performance and credit quality. Overall, credit quality across our portfolio companies remained stable during the quarter. The continued growth of the U.S. economy provides an attractive backdrop for portfolio primarily U.S. domiciled middle market companies. On average, our portfolio companies continue to report both revenue and EBITDA growth quarter-over-quarter. However, we did place our investment in Bolttech Mannings on non-accrual during the quarter. As you'll recall, you'll recall this is an investment we have discussed extensively on prior conference calls as we have previously [indiscernible] lower in the face of the company's underperformance. Bolttech provides maintenance and other services to a variety of industries including petrochemical, refinery and power producers. And the company's underperformance has been driven by a softer market environment, particularly for its Canadian operations. At this juncture, based on the current facts and circumstances, we have decided to place this investment on non-accrual and work toward restructuring in the near future. We are currently actively engaged with the company and its sponsor on this initiative and are highly focused on preserving value for our investment. At the end of the quarter, we have Bolttech marked at [$1.43] and represents 1.5% of the portfolio at fair value. With that let me turn it over to Jon Yoder.

Thanks, Brendan. This quarter was notable for very high levels of transaction activity. As Brendan mentioned, both our gross originations and repayment levels were elevated compared with prior quarters. A significant driver of this was our origination and partial syndication of a $120 million second lien loan to DiscoverOrg. This company is the largest IT data sales intelligence company in the U.S. and has a dominant position in its market. It also has high levels of recurring revenue and strong free cash flow. DiscoverOrg has been in our portfolio since June of 2015 and given our existing relationship with the company, the company sponsor approached us earlier this year to lead a second lien credit facility in order to finance the acquisition of 1 of the company's competitors. Given this mandate, we were able to hold an appropriately sized amount of the loan, while also arranging the syndication of the remainder of the facility to third-parties, while earning syndication fees. While our model continues to be focused on originating and holding loans for our own balance sheet, we believe that this transaction demonstrates our capabilities to leave larger deals and earn syndication fee income when presented with the opportunity. Another transaction to highlight this quarter is the repayment of our first lien investment in Perfect Commerce. This company provides a cloud-based procurement software for the public and private market sectors and has an attractive recurring revenue business model with relatively high switching costs for its customers. This investment is another example of our ability to source proprietary transactions from the family and founder owned businesses, utilizing our firm's network of relationships in this community. In this case, we were able to provide the company with capital in order to finance a transformational acquisition. During the quarter, our investment in Perfect Commerce was paid off in full when a strategic acquired the company. We originate this investment with attractive OID and prepayment fees. And as a result of these terms, as well as the early prepayment, we were able to generate a very attractive economic return for our shareholders over a 2-year investment period. So let's dive into the numbers to quantify this overall elevated activity. New investment commitments and fundings were $254.4 million and $253.5 million respectively, including $0.7 million of net funding activity of previously unfunded commitments. New investment commitments were across 8 new portfolio companies and 3 existing portfolio companies. Sales and repayment totaled $190.4 million, driven primarily by full repayments from 3 portfolio companies and a syndication of investments in 2 portfolio companies including the syndication of the DiscoverOrg loan that I just mentioned. We are very pleased that the net some of this transaction activity allowed us to continue to build single lien diversification in the portfolio as we expanded from 45 to 51 the total portfolio companies during the quarter. Moreover, the average size of our debt investments came down from $25 million per portfolio company to $23 million a quarter-over-quarter. As we've described before, increasing the single lien diversification of the portfolio is an important strategic objective for us, and it's one of the benefits of the exempt of relief that we obtained in January of this year, which allows us to co-invest with certain other affiliated funds that GSAM manages. Turning to the overall investment portfolio. As of the end of the quarter, total investments in our portfolio were $1,178.7 million at fair value, comprised of 89.1% senior secured loans. This includes 30.2% in first lien, 23.3% in first-lien/last-out unitranche, and 35.6% in second lien debt as well as about 30 basis points in unsecured debt, 2.5% in preferred and common stock and 8.1% in the senior credit fund. We also had $14.9 million of unfunded commitments as of September 30, bringing total investments in commitments to $1,193.6 million. Our 51 portfolio companies operate across 28 different industries, and we have no major industry concentrations. Turning to overall portfolio yield and credit quality during the quarter. The weighted average yield of our total investment portfolio at cost was down modestly to 10.3% versus 10.8% in the prior quarter. This decrease in yield was driven primarily by placing Bolttech on non-accrual status, as Brendan mentioned. The weighted average net debt to EBITDA of the companies in our investment portfolio at quarter end was 5.3x versus 5x the prior quarter. While the majority of our portfolio companies delevered quarter-over-quarter, the increase was largely due to the elevated portfolio activity as some of our older investments were repaid. The weighted average interest coverage of the portfolio -- of the companies in our investment portfolio at quarter end was 2.5x, which was essentially stable from the prior quarter. We've been very pleased with the stable performance of our investment in the senior credit fund. The SCF is the company's largest single investment at 8.1% of the company's total investment portfolio and it produced a 13% return on our invested capital over the trailing 12 months. As a reminder, the investment strategy of the SCF is to focus on first lien loans to upper middle market companies. We're seeing relatively tight spreads in this part of the market and in many cases, the loans are coming this covenant light. So given this backdrop, we're continuing to be highly selective and are generally taking a cautious approach. During the quarter, we and our partner originated $49.4 million of investments for the Senior Credit Fund in 2 new companies and 3 existing portfolio companies. The Senior Credit Fund had sales and repayments of $80 million resulting in modest net portfolio decline of $31.5 million during the quarter. As a result of this investment activity, the total size of the investment portfolio and commitments were $485 million at quarter end. We are pleased that we've been able to maintain stable yields on the new investments that are coming into the Senior Credit Fund and those yields are consistent with the yields of the existing portfolio. In fact, the weighted average yield to cost on the total investment portfolio for the senior credit fund was 7.3%, and was relatively unchanged from the prior quarter at 7.2%. First lien loans comprise 97% of the total investment portfolio within the Senior Credit Fund and all of our investments are floating rate with LIBOR floors. The Senior Credit Fund also [indiscernible] with investments in 34 portfolio companies operating across 20 different industries. I'll now turn the call Jonathan to walk through our financial results.

Thanks, Jon. We ended the third quarter of 2017 with total portfolio investments at fair value of $1,179 million, outstanding debt of $448 million and net assets of $731 million. Our net investment income per share was $0.47 as compared to $0.64 in the prior quarter. Earnings per share were $0.45 as compared to $0.12 in the prior quarter. During the quarter, our average debt to equity ratio was 0.61x, as we deployed capital into new income producing assets and we're able to maintain a stable leverage profile throughout the quarter notwithstanding sales and repayment activity that occurred throughout the quarter. We ended the third quarter with a debt to equity ratio of 0.61x, up from 0.56x at the end of Q2. Turning to the income statement. Our total investment income for the third quarter was $34.4 million, down from $36 million last quarter. The decrease quarter-over-quarter was primarily driven by lower prepayment related income, which had been at a record high in Q2. Total expenses before taxes were $15.1 million for the third quarter as compared to $11.6 million in the prior quarter. [indiscernible] were up quarter-over-quarter, primarily driven by an increase in incentive fees. Incentive fees may vary quarter-to- quarter, as we net our capital losses whether realized or unrealized against pre-incentive NII in the calculation. We believe this feature provides the proper alignment of shareholder and investment adviser as the fee is based on total return. We ended the quarter with net asset value per share at $18.23 per share, which is unchanged from the prior quarter. Our supplemental earnings presentation provides a NAV bridge to walk you through these changes. The company had $34.2 million in accumulated undistributed net investment income at quarter end, resulting from net investment income that has exceeded our dividend in past quarters. This equates to $0.85 per share on current shares outstanding. With that I will turn it back to Brendan.

Thanks, Jonathan. Overall, we are pleased to produce another solid quarter for shareholders. As discussed, this quarter demonstrated strong execution of our strategy, we produced net investment income that exceeded our dividend and maintained a stable NAV, all while digesting the capital we raised in Q2. With ending leverage of 0.61x, the company remains well positioned to compete for attractive new lending opportunities and gross earning asset base. As always, we thank you for your continued support and trust in managing your capital. And now Dennis, please open up the line for questions.

[Operator Instructions]. And your first question is from the line of Jonathan Block with Wells Fargo Securities.

Good morning, Joe Mazzoli filling in for Jonathan Bock. So for the first question, there is no doubt that you have an incredibly strong capital markets platform, but you also have the benefit of the private client group that has been very beneficial for BDC shareholders when gaining access to kind of more of the unsponsored family owned businesses. For the new originations this quarter, are there any deals that fall into that private client group?

Hey Joe, it's Jon Yoder here. So we talked a little bit about this on last quarter's conference call. So what we're seeing right now in the market is frankly pretty considerable activity from private equity sponsors. I think you know as probably many of the folks on the call know, there's been a pretty robust environment for raising private equity dollars. And as a result, those dollars are being put to work and we're seeing quite a bit of elevated activity levels in sponsored deals. That is, quite honestly, putting some pressure on the ability to do non-sponsored deals simply because companies that are in the past probably would have required a little bit more ageing and a little bit more size and scale before they'd be attractive to a private equity buyer or being purchased earlier in their life cycle. So we're seeing much more of our activity at the moment weighted towards sponsor activity, not to say that we're not still active in the non-sponsored world, particularly through our private wealth and other sort of family founder networks. But this quarter, we were definitely doing sponsored deals, and -- but I would say, I think the way we think about it is, the sponsored business and the non-sponsored business in some ways are symbiotic because when there is more sponsored activity, we can avail ourselves of that channel, when there's less sponsor activity, we can avail ourselves more of the non-sponsored side. But as I say, right now, we're definitely seeing a lot more on the sponsored side than the non-sponsored side.

That's, that's very helpful. And clearly, it's nice to have the choice to kind of move within each channel. And the second question, just in reference to the senior credit fund. So repayment succeeded new investments, but of course this fund has delivered very strong returns for shareholders. And we know the upper middle market, especially the kind of more syndicated upper middle market can be pretty competitive and you mentioned that you're taking a very cautious approach there which of course is the right thing to do. But just kind of more of a thematic question going forward, right, if we were to see volatility in the market, would you seek to grow this fund as a percentage of the portfolio? So here we see, it's about 8.1%. Is there the ability and willingness from your joint venture sponsor to kind of increase this, if the opportunity presented itself? Acknowledging that today may not be the right time.

Yes Joe, for sure. Yes, I would describe our [indiscernible] right now is really being thoughtful and circumspect, there's always timing issues associated with new originations, so this quarter we did see some slight portfolio shrinkage but there's still a very good opportunity set there and we remain quite engaged with [indiscernible] on that opportunity set. So sitting here today, by virtue of some of the shrinkage of that portfolio, we can actually add more earning assets without putting more equity capital, it's like vehicles that actually will benefit and actually provide a better run rate income even better than the very strong one that we produced so far and absolutely our partner is very much engaged in the interest in growing that opportunity with us. I think we may have mentioned this last quarter, we have begun discussions with them about upsizing each of our commitments to the joint venture, it has been an excellent return, it's been our single best investment, also been quite a good experience for our partner as well. So we anticipate certainly having the opportunity to grow that, but as importantly in the short term, we don't need new capital to avail ourselves with those opportunities, just given that we've had some portfolio shrinkage and we would hope and we anticipate continuing to see good opportunities in the coming quarters.

Your next question from the line of Leslie Vandegrift with Raymond James.

Just a quick question on Perfect Commerce to start off, what where the fees on that one?

The fees were almost $1.3 million, Leslie. And that would be the combination of accelerated accretion as well as prepayment related income.

And then so, obviously prepayment activity last quarter was at high level, the highs of what you guys are seeing and it started to normalize a bit this quarter, what's the outlook for the next year?

I mean -- so look, I think it's -- quite honestly, it's always difficult to predict with precision prepayments, sometimes you get calls that are you not expecting on being prepaid and sometimes things you're expecting to be prepaid get -- they slip the quarter or whatever. I'd say 1 observation is that I'm not sure if it's attributable to people looking forward to seeing what happens with the potential tax reform or not, but overall, I would say we're probably anticipating perhaps slightly lower transaction activities into in the fourth quarter including repayments. Obviously, we're still reasonably early in the quarter so for sure that's a forward-looking statement that could change, but I'd say overall, in terms of the transaction activity and including prepayments, which is a big part of that, I suspect that the fourth quarter across the industry maybe a little bit lighter, just again as people try to dig into the tax reform details and start to handicap and understand better whether that tax reform is really going to come to fruition because it does obviously affect valuations going forward. So that's kind of an opinion, but that's kind of what we're seeing at the moment.

And then on the DiscoverOrg syndication, whether fees associated with that as well?

There were approximately $0.5 million.

And then last 1 from me, on the new investments this quarter, how many were co-investments with the other funds?

So Leslie, every investment that we made this quarter other than DiscoverOrg was a co-investment and the reason for that is, as Jon described, DiscoverOrg was an existing in portfolio company at the BDC. I think coming into the quarter, we had a $39 million investment. So the order does not allow us to use different pools of capital to refi our existing investments in the BDC. So as Jon described, rather than invest that $120 million across the vehicles, we put the entirety of it into the BDC, but given that, from a risk perspective that whole size would be inappropriate, we then took the opportunity to syndicate down about half of that position and left with a $60 million position pro forma.

Your next question is from the line of Douglas Mewhirter with SunTrust.

Most of my questions have been answered actually, but generally, on the deal flow that you've talked a lot about it already, but I'm just trying to get a feel for the dynamic right now. With private equity fund, as you noted, raising a tremendous amount of dry powder, but there's also a lot of money going to private credit funds and also into your -- the BDC sector as well. And so that seems to have increased the deal flow both in and out. So I know that there might be a pause for other reasons in the fourth quarter, but do you sort of expect those higher -- basically higher general churn where you get a lot more inflow, lot of new deals but also a lot of big -- you also get a lot of ticking out of a lot of deals, so the net effect is probably the same as the normal environment.

Let me make a few comments, and Brendan I'm sure has comments too. One thing that I would say is, and it's probably obvious, but churn is generally a good thing for private credit because we generally speaking, and then this is true probably across the industry, people generally do have prepayment fees, as you know, most of these loans are originated with OID, which means that when you have an early prepayment, you're accelerating that OID and bring that forward. So obviously churn is generally speaking, a good thing for private credit. To make -- address your sort of broader observation and comment around the amount equity dollars, I mean, I think, 1 of things that we see from working with some of these unsponsored companies that we see through our internal channels is that there is now a strong preference and a trend towards wanting to monetize a business through a sale of the private equity and if that trend is getting stronger and moving away from in prior years, more of an openness to an IPO or a public exit to get liquidity on a business that's owned by a family or a founder. And I guess, you can sort of see that in the data, if you go back and you look at the data, you'll see that there are a lot fewer listed companies in the U.S. today than they were in years past and the size of those companies continues to get larger. And so the middle market is -- the middle market size business is just really for the most part not looking to do an IPO, rather than much easier and path to do that is through a sale of the private equity. There are certain circumstances, I think in the past 1 of the main drivers of why you would go IPO was because you could oftentimes get a better valuation in the public markets than you could get in the private. But I think as has been widely reported, valuations on the private sale transactions have crept up over the years and so today the discount between a private sale and a public exit are really not necessarily all that significant. And so that's the broader trend that I think is going on in the middle market, is that these companies are simply moving more to private equity ownership and away from public ownership. So in that context, I think again that's a good trend and long-term trend and fits well with people that are doing private credit like us, it also fits well with private equity firms. But -- so overall, I think it bodes well and obviously as capital comes into private equity, there needs to be a corresponding increase in the capacity of private debt. If you think about most companies today, when a private equity firm buys it, loans to value might be in the call it, 50% range, I mean, obviously at very similar, more highly levered -- or less levered on loan to value basis, but on average probably today, you're looking at 50% or so loans to value. And so that would imply that for every dollar of private equity, you need something like $1 of private debt. So we think that again those long-term fund raising trends in private equity are quite symbiotic with the private debt fund raising.

Yes, the only -- I would add is that -- so it's [indiscernible] a lot of sweeping generalizations that take our experience and broadly apply it across the industry, we've had elevator repayments for a couple of quarters, I think, which is part and parcel of the overall industry dynamic. So if you look at this quarter, 190 compared to 160 the prior quarter, as Jon alluded, probably slows down a bit prospectively, I detach that a little bit from on the investing side, where I think the power platform's evolution is really benefiting us in a way that's different than some of the overall market trends. We've talked about our exempt of order and we think that's really been a tremendous benefit to the origination capabilities of the platform. Bigger scale pool of capital, the ability to really speak for much bigger size is really helping us win transactions in a way that's quite beneficial to all the vehicles. And so, looking again at this quarter for the BDC, we've talked extensively in the prepared remarks, notwithstanding big prepayments and an equity offering coming in, still able to grow the portfolio. And so I think that's a little bit detached from overall what's going on in the space and competitively what we hear from other guys. We feel very good, we feel like we're competing quite well in the marketplace, and finding really good opportunities and overall managing the balance sheets of these vehicles in a way that can continue to grow earnings and cover our dividend and that's really the goal there.

And maybe a simpler question, was there any -- related to the environment, any material benefit to the increase in LIBOR over the quarter? I know because you're both your yield and your cost of funds went up, but I think hopefully your yield went up a little bit more?

Yes, not usually material, but certainly because the yields on the entire portfolio and on the debt side, it's only on your debt financing, there is some benefit. But nothing significant.

Your next question is from the line of Christopher Testa with National Securities.

I know in your prepared remarks you had said that this quarter you had 8 new and 3 existing portfolio companies that you finance. Just wondering if you could break down the volume of commitment between new and existing companies?

On a dollar basis?

Yes.

Yes, hold on a second here.

We can, definitely, Christoph, offline give you exact numbers, but it's -- the one transaction that [indiscernible] Jon describing in detail was DiscoverOrg, so that was an existing transaction, we had $39 million, we ended up doing a $120 million financing which is in that gross $254 million number, and also in $60 million in repayment number. But apart from that, on a dollar basis, really skewed towards new investments. DiscoverOrg was really the one significant existing portfolio company, I think we had an add-on to [net class] as well for about $ 8 million. But the vast majority of the new gross originations were two brand new portfolio companies.

Yes. Another way to say that is to Brenden's point, the gross is skewed because of that big origination to DiscoverOrg of $1020 million. So if you look at on a pure gross basis, it's probably roughly half and half between existing and new, but to Brendan's point because we sold off much of that investment, or half of the origination to DiscoverOrg or if you look at our net originations for the quarter, it's going to be much more skewed towards -- much more skewed to new companies as supposed to existing ones.

Chris, there is a table in the MD&A where we disclose the exact amount. So it's roughly 50-50 gross and existing versus sales.

And are you expecting the kind of new and existing mixes that somewhat held constant through the pipeline as you look ahead or do you think you're going to find better opportunities with existing companies, just curious how you guys are looking at that?

Yes, so I mean it's really hard to predict. I'd say that we -- as you can tell from this quarter, we added a number of new portfolio companies going from 45 to 51 overall companies. So pretty significant increase there in the number of new companies. I mean, it is as I mentioned in the prepared remarks, I think that is a strategic objective that we have, which is to continue to add single liens to the portfolio and reduce single lien concentration. So that's still something that we look forward to doing in the coming quarters. But that being said, there will of course be opportunities with our existing portfolio companies, whether that ratio turns out to be half and half or that ratio turns out to be 1/3, 2/3s, it's probably going to vary quarter-by-quarter, but certainly there will be a meaningful very material component of new originations that's always going to be working with your existing portfolio companies as they upsize to do acquisitions or as they upsize for growth reasons or what have you. So that -- I mean, I think for sure you can expect that will continue to be a meaningful component of our new originations.

The reason I ask is because I think everyone on the call knows the sponsors have been pushing on the [loan] so much with structures and leverage on the loans that sometimes in environments like this it's just typically is easier to do follow-ons in terms of sourcing activity. And I'm just curious to -- of the total sponsor book you have and obviously you guys were the lead on the Discover loan and syndication, how much of the sponsor book are you the lead on?

We're the lead on the super majority of what we're doing in the sponsor world. I don't have the exact figure in front of me at the moment, but it is definitely the super majority of what we're doing, we're leading.

And again Chris, we can come back and give you exact numbers. Historically, I think when you look across the portfolio, 80% plus of the book was in transactions where we were the lead investor, we were direct lenders just most of our platform. And so certainly I would -- when you think about the new deals that we're doing, by and large, these are transactions that our platform is leading. We're not generally speaking, taking participations as a means to grow the portfolio. In fact, you heard a very specific example where we were able to syndicate to others this quarter. So certainly for this quarter and generally speaking strategically, the goal is to use the capital that we have across the platform to really help us drive that deal flow to help us lead those transactions.

And last one for me just -- since you guys received the exempt to relief to co-invest, how many more deals are -- if you just give me just kind of an estimate, I don't need an exact number, but just how much more in terms of deal flow are you able to actually commit to that would have been too large to hold all in GSBD are bear the syndication risk? I am just curious how much you've had all that's kind of augmented the funnel for you guys?

I wouldn't view it as -- I mean, certainly it has some impact on the funnel, but I think the difference is whether or not in years past before we had the exempt of relief, we were frequently looking to bring in partners when we're doing deals that were especially ones that were larger. Whereas today, there's no need for us in most cases to bring in partners, we generally -- because we've got, we can co-invest with our affiliated funds, we can take down the entirety of a deal just by ourselves. And that helps in certain circumstances just providing -- as I know you've heard probably a lot of people in the industry say but it's true, I mean sometimes sponsors really do value that certainty with a single party, that certainty of execution versus, hey I got to bring in a guy or a girl to help me finish this deal. So I think it's modestly helped in terms of our competitive positioning. But I think the big difference is today as I said, we're taking down the full deal and spread it across our funds, whereas before when we were leading, we were we having to bring in partners for larger deals.

And at this time, there are no further questions, please continue with any closing remarks.

Thanks, Dennis. And thank you all for joining us for the call. As always, if you have any follow-up calls, please reach out to the team and we look forward to hearing back. Have a great day.

Ladies and gentlemen, this does conclude the Goldman Sachs BDC, Inc. third quarter 2017 earnings conference call. Thank you for your participation. You may now disconnect.