MPV Barings Participation Investors

 

Barings

Participation Investors

Report for the    Three Months Ended March 31, 2022

 

 

 

 

 

 

 

 

Barings Participation Investors

 

 

TO OUR SHAREHOLDERS

April 30, 2022

We are pleased to present the March 31, 2022 Quarterly Report of Barings Participation Investors (the “Trust”).

PORTFOLIO PERFORMANCE

The Board of Trustees declared a quarterly dividend of $0.20 per share, payable on June 10, 2022 to shareholders of record on May 31, 2022. The Trust paid a $0.20 per share dividend for the preceding quarter. The Trust earned $0.20 per share of net investment income for the first quarter of 2022, compared to $0.28 per share in the previous quarter.

During the first quarter, the net assets of the Trust increased to $162,516,736.44 or $15.33 per share compared to $161,080,475 or $15.19 per share on December 31, 2021. This translates to a 0.92% 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 14.1%, 11.0%, 9.9%, 10.6% and 11.5% 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 market price decreased 9.5% during the quarter, from $14.80 per share as of December 31, 2021 to $13.39 per share as of March 31, 2022. The Trust’s market price of $13.39 per share equates to a 12.7% discount to the March 31, 2022 net asset value per share of $15.33. The Trust’s average quarter-end discount/premium for the 3, 5 and 10-year periods was -2.0%, 1.3% and 3.0%, respectively. U.S. fixed income markets, as approximated by the Bloomberg Barclays U.S. Corporate High Yield Index and the Credit Suisse Leverage Loan Index, decreased 4.8% and 0.1% for the quarter, respectively.

PORTFOLIO ACTIVITY

The Trust closed eight new private placement investments and ten add-on investments to existing portfolio companies during the first quarter. The total amount invested by the Trust in these transactions was $7,539,084. Of note, the new platform investments included one fixed rate Sr. Subordinated Note and seven floating rate term loans, five of which included equity co-investments, and the add-on investments included eight floating rate term loans and one fixed rate Sr. Subordinated Note that included an equity co-investment.

The investment activity in the first quarter of 2022 was lower than the first quarter of 2021, however, it was in line with historical first quarter investment activity. As the investment landscape remains stable, some key trends have continued. First, investment activity is now back to (and even beyond) pre-pandemic levels. Secondly, in the current market, financial sponsors and other ownership groups are motivated to divest portfolio companies due to the high valuations for strong businesses. With the significant dry powder they have available, financial sponsors are also motivated to acquire high-quality businesses which have outperformed through both good times and the more recent uncertainty. Lastly, private equity clients continue to work with a smaller group of trusted lenders with whom they have long-standing relationships and who can offer certainty of execution and creative solutions.

With demand for products and services continuing to increase, one key question is whether supply chains can keep up with the renewed demand and whether we will see material increases in prices as a result of supply-chain bottlenecks, rising raw material and energy costs and labor shortages. Across the world, and particularly in regions with large manufacturing sectors which depend on international trade, these risks may be key. However, it is important to note that such issues do not affect every geography and sector the same. When constructing portfolios, we focus on investing in high-quality businesses which are leaders in their space and offer defensive characteristics which will allow them to perform through the cycle. Therefore, while segments of the broader economy may be affected by potential supply chain issues, increasing raw material and energy costs and labor shortages, we remain confident in the current diverse portfolio to perform through the potential cycle.

We continue to be selective in our investment choices and maintain our underwriting discipline throughout multiple cycles. First, the Trust continues to invest in first lien senior secured loans in high-quality companies in defensive sectors and remains well diversified by industry. This was a strategy put in place more than five years ago and has provided strong risk adjusted returns for the Trust given their senior position in the capital stack. As of March 31, 2022, 66.0% of the Trust’s investment portfolio is in first lien senior secured loans compared to 2.7% as of December 31, 2017. These

 

(Continued)

 

 

 

 

investments have proven resilient to date and their management teams now have the benefit of having a wealth of knowledge to draw upon from working in such unique and challenging circumstances. Second, we hold meaningful investment liquidity based on the Trust’s combined available cash balance and short-term investments of $5,182,564 or 2.8% of total assets, and low leverage profile at 0.14x as of March 31, 2022. We have strengthened our liquidity position with a $15.0 million committed revolving credit facility with MassMutual (See Note 4). This facility coupled with the current cash balance provides ample liquidity to support our current portfolio as well as invest in new portfolio companies. Third, we continue to be selective in pruning our equity investments and reinvesting the proceeds into first lien senior secured investments further driving investment income. As always, the Trust continues to benefit from strong relationships with our financial sponsor partners which provides clear benefits including potential access to additional capital if needed, strategic thinking alongside their management teams and high-quality and timely information which is only available in a private market setting. This allows us to work constructively together and maximize the portfolio companies’ long-term health and value.

In closing, we believe it is always appropriate to provide views on the Trust’s long-term dividend policy which is to say, ‘we believe that long-term dividends should be a reflection of long-term core earnings power, even when core earnings power is lower as a result of a higher quality asset mix’. The Trust’s recently announced dividend of $0.20 per share is in line with our most recently reported net investment income of $0.20 per share. That said, as we continue to both (1) deploy the Trust’s excess liquidity and (2) seek opportunities to shift the Trust’s non-yielding equity investments to senior secured loans, we expect long-term earnings power to meet the dividend distribution.

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

Sincerely,

 

Christina Emery

President

Portfolio Composition as of 03/31/22*

 

* Based on market value of total investments (including cash)

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.

 

 

 

 

 

Barings Participation Investors

 

 

 

 

 

Average Annual Returns March 31, 2022	1 Year	5 Year	10 Year
Barings Participation Investors	9.85%	6.08%	6.73%
Bloomberg Barclays U.S. Corporate High Yield Index	-0.66%	4.69%	5.75%

Data for Barings Participation Investors (the “Trust”) represents returns based on the change in the Trust’s market price assuming the reinvestment of all dividends and distributions. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on distributions from the Trust or the sale of shares.

 

 

 

 

 

 

 

 

In July 2017, the head of the U.K. Financial Conduct Authority (the “FCA”), announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. In March 2021, the FCA confirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative: (a) immediately after December 31, 2021, in the case of sterling, euro, Swiss franc, and Japanese yen, and the one week and two month U.S. dollar settings; and (b) immediately after June 30, 2023, in the case of the remaining U.S. dollar settings. In addition, as a result of supervisory guidance from U.S. regulators, some U.S. regulated entities will cease to enter into new LIBOR contracts after January 1, 2022. At this time, no consensus exists as to what rate or rates will become accepted alternatives to LIBOR, although the Alternative Reference Rates Committee, a steering committee convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York and comprised of large U.S. financial institutions, has recommended the use of the Secured Overnight Financing Rate, SOFR. There are many uncertainties regarding a transition from LIBOR to SOFR or any other alternative benchmark rate that may be established, including, but not limited to, the timing of any such transition, the need to amend all contracts with LIBOR as the referenced rate and, given the inherent differences between LIBOR and SOFR or any other alternative benchmark rate, how any transition may impact the cost and performance of impacted securities, variable rate debt and derivative financial instruments. In addition, SOFR or another alternative benchmark rate may fail to gain market acceptance, which could adversely affect the return on, value of and market for securities, variable rate debt and derivative financial instruments linked to such rates. The effects of a transition from LIBOR to SOFR or any other alternative benchmark rate on our cost of capital and net investment income cannot yet be determined definitively. All of our loan agreements with our portfolio companies include fallback language in the event that LIBOR becomes unavailable. This language generally either includes a clearly defined alternative reference rate after LIBOR’s discontinuation or provides that the administrative agent may identify a replacement reference rate, typically with the consent of (or prior consultation with) the borrower. In certain cases, the administrative agent will be required to obtain the consent of either a majority of the lenders under the facility, or the consent of each lender, prior to identifying a replacement reference rate. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market value for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us and could have a material adverse effect on our business, financial condition and results of operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

March 31, 2022

(Unaudited)

 

Assets:
Investments (See Consolidated Schedule of Investments)
Corporate restricted securities - private placement investments at fair value (Cost - $160,751,267)		$	166,824,571
Corporate restricted securities - rule 144A securities at fair value (Cost - $7,596,992)			8,006,113
Corporate public securities at fair value (Cost - $4,571,044)			4,612,581
Total investments (Cost - $172,919,303)			179,443,265
Cash			5,175,650
Foreign currencies (Cost - $6,831)			6,914
Dividend and interest receivable			1,896,405
Receivable for investments sold			91,288
Deferred financing fees			63,708
Other assets			142,392
Total assets			186,819,622
Liabilities:
Note payable			15,000,000
Credit facility			8,200,000
Deferred tax liability			365,141
Investment advisory fee payable			355,543
Payable for investments purchased			290,250
Interest payable			33,935
Accrued expenses			58,017
Total liabilities			24,302,886
Commitments and Contingencies (See Note 7)
Total net assets		$	162,516,736
Net Assets:
Common shares, par value $.01 per share		$	106,017
Additional paid-in capital			145,010,902
Total distributable earnings			17,399,817
Total net assets		$	162,516,736
Common shares issued and outstanding (14,787,750 authorized)			10,601,700
Net asset value per share		$	15.33

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

 

CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended March 31, 2022

(Unaudited)

 

Investment Income:
Interest		$	2,935,120
Other			34,933
Total investment income			2,970,053
Expenses:
Investment advisory fees			355,543
Interest			200,689
Professional fees			73,565
Trustees’ fees and expenses			69,000
Reports to shareholders			22,500
Custodian fees			6,000
Other			28,342
Total expenses			755,639
Investment income - net			2,214,414
Income tax, including excise tax expense			52,650
Net investment income after taxes			2,161,764
Net realized and unrealized loss on investments and foreign currency:
Net realized gain on investments before taxes			118,901
Income tax expenses			(21,004	)
Net realized gain on investments after taxes			97,897
Net increase in unrealized depreciation of investments before taxes			(682,652	)
Net increase in unrealized appreciation of foreign currency translation before taxes			77
Net increase in deferred income tax expense			(140,825	)
Net increase in unrealized depreciation of investments and foreign currency transactions after taxes			(823,400	)
Net loss on investments and foreign currency			(725,503	)
Net increase in net assets resulting from operations		$	1,436,261

 

 

 

 

 

See Notes to Consolidated Financial Statements

 

Barings Participation Investors

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2022

(Unaudited)

 

Net decrease in cash & foreign currencies:
Cash flows from operating activities:
Purchases of portfolio securities		$	(9,467,410	)
Proceeds from disposition of portfolio securities			2,579,827
Interest, dividends and other income received			2,410,643
Interest expense paid			(198,536	)
Operating expenses paid			(589,937	)
Income taxes paid			(1,236,229	)
Net cash used for operating activities			(6,501,642	)
Cash flows from financing activities:
Borrowings under credit facility			2,200,000
Cash dividends paid from net investment income			(2,120,340	)
Financing fees paid			(14,279	)
Net cash provided by financing activities			65,381
Net decrease in cash & foreign currencies			(6,436,261	)
Cash & foreign currencies - beginning of period			11,618,748
Effects of foreign currency exchange rate changes on cash and cash equivalents			77
Cash & foreign currencies - end of period		$	5,182,564
Reconciliation of net increase in net assets to net cash used for operating activities:
Net increase in net assets resulting from operations		$	1,436,261
Increase in investments			(6,344,157	)
Increase in interest receivable			(378,596	)
Decrease in receivable for investments sold			349,380
Decrease in other assets			108,330
Increase in deferred tax liability			140,825
Decrease in investment advisory fee payable			(17,430	)
Decrease in payable for investments purchased			(618,199	)
Decrease in accrued expenses			(17,557	)
Increase in interest payable			2,153
Decrease in tax payable			(1,162,575	)
Total adjustments to net assets from operations			(7,937,826	)
Effects of foreign currency exchange rate changes on cash and cash equivalents			(77	)
Net cash used for operating activities			(6,501,642	)

 

 

 

 

 

See Notes to Consolidated Financial Statements

 

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

For the three months ended March 31, 2022

 

 

		For the three months ended 3/31/2021 (Unaudited)				For the year ended 12/31/2021
Increase in net assets:
Operations:
Investment income - net		$	2,161,764			$	9,188,642
Net realized gain on investments and foreign currency after taxes			97,897				4,867,781
Net change in unrealized appreciation (depreciation) of investments and foreign currency after taxes			(823,400	)			11,328,033
Net increase in net assets resulting from operations			1,436,261				25,384,456
Dividends to shareholders from:
Distributable earnings to Common Stock Shareholders (2022 - $0.00 per share; 2021 - $0.80 per share)			—				(8,481,360	)
Total increase in net assets			1,436,261				16,903,096
Net assets, beginning of period/year			161,080,475				144,177,379
Net assets, end of period/year		$	162,516,736			$	161,080,475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

 

Barings Participation Investors

CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS

Selected data for each share of beneficial interest outstanding:

 

 

		For the three months ended 3/31/2022				For the years ended December 31,
		(Unaudited)				2021				2020				2019				2018				2017
Net asset value:
Beginning of period / year		$	15.19			$	13.60			$	13.80			$	13.18			$	13.91			$	13.15
Net investment income (a)			0.20				0.86				1.00				1.00				1.03				1.09
Net realized and unrealized gain (loss) on investments			(0.06)				1.53				(0.40)				0.69				(0.68)				0.75
Total from investment operations			0.14				2.39				0.60				1.69				0.35				1.84
Dividends from net investment income to common shareholders			—				(0.80)				(0.80)				(1.08)				(1.08)				(1.08)
Increase / (Decrease) from dividends reinvested			—				0.00				0.00 (b)				0.01 (b)				(0.00) (b)				(0.00) (b)
Total dividends			—				(0.80)				(0.80)				(1.07)				(1.08)				(1.08)
Net asset value: End of period / year		$	15.33			$	15.19			$	13.60			$	13.80			$	13.18			$	13.91
Per share market value:
End of period / year		$	13.39			$	14.80			$	11.88			$	16.13			$	15.05			$	14.10
Total investment return
Net asset value (c)			0.92%				17.84%				4.66%				13.21%				2.53%				14.29%
Market value (c)			(9.52%)				32.09%				(21.11%)				14.72%				15.02%				7.21%
Net assets (in millions):
End of period / year		$	162.52			$	161.08			$	144.18			$	146.08			$	138.75			$	145.48
Ratio of total expenses to average net assets (d)			2.07%(e)				2.66%				1.47%				2.26%				2.76%				3.23%
Ratio of operating expenses to average net assets			1.39%(e)				1.46%				1.38%				1.45%				1.56%				1.49%
Ratio of interest expense to average net assets			0.50%(e)				0.41%				0.43%				0.42%				0.42%				0.43%
Ratio of income tax expense to average net assets			0.18%(e)				0.79%				(0.34%)				0.39%				0.78%				1.31%
Ratio of net investment income to average net assets			5.40%(e)				5.99%				7.52%				7.30%				7.47%				7.92%
Portfolio turnover			1%				43%				34%				22%				48%				24%

(a)	Calculated using average shares.

(b)	Rounds to less than $0.01 per share. 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

(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)	Total expenses include income tax expense.

(e)	Annualized

Senior borrowings:
Total principal amount (in millions)		$	23.2			$	21			$	15			$	15			$	15			$	15
Asset coverage per $1,000 of indebtedness		$	8,005			$	8,670			$	10,612			$	10,739			$	10,250			$	10,699

 

 

 

 

See Notes to Consolidated Financial Statements

 

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities - 107.58%: (A)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Private Placement Investments - 102.65%: (C)
1WorldSync, Inc.
A product information sharing platform that connects manufacturers/suppliers and key retailers via the Global Data Synchronization Network.
6.75% Term Loan due 06/24/2025 (LIBOR + 5.750%)		$	2,434,019			*		$	2,404,969			$	2,429,647
* 07/01/19 and 12/09/20.
Accelerate Learning
A provider of standards-based, digital science education content of K-12 schools.
6.01% Term Loan due 12/31/2024 (LIBOR + 5.000%)		$	974,753			12/19/18			965,913				958,507
6.00% Term Loan due 12/20/2024 (LIBOR + 5.000%)		$	746,495			09/30/21			733,876				734,053
									1,699,789				1,692,560
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				—
* 12/07/12, 07/11/13 and 06/30/15.
Advantage Software
A provider of enterprise resource planning (ERP) software built for advertising and marketing agencies.
Limited Liability Company Unit Class A (F)			766 uts.			10/01/21			24,353				79,188
Limited Liability Company Unit Class A (F)			197 uts.			10/01/21			6,320				20,424
Limited Liability Company Unit Class B (F)			766 uts.			10/01/21			784				513
Limited Liability Company Unit Class B (F)			197 uts.			10/01/21			202				132
									31,659				100,257
Aftermath, Inc.
A provider of crime scene cleanup and biohazard remediation services.
6.00% Term Loan due 04/10/2025 (LIBOR + 5.000%)		$	963,473			04/09/19			952,545				943,240
6.00% Term Loan due 04/10/2025 (LIBOR + 5.000%)		$	757,719			04/23/21			747,239				741,807
									1,699,784				1,685,047
AIT Worldwide Logistics, Inc.
A provider of domestic and international third-party logistics services.
8.75% Second Lien Term Loan due 03/31/2029 (LIBOR + 7.750%)		$	1,669,355			04/06/21			1,636,431				1,633,180
Limited Liability Company Unit (B)			56 uts.			04/06/21			55,645				109,548
									1,692,076				1,742,728
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				244,986

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Amtech Software
A provider of enterprise resource planning software and technology solutions for packaging manufacturers.
6.25% First Lien Term Loan due 11/02/2027 (LIBOR + 5.500%) (G)		$	1,000,000			11/02/21		$	526,824			$	528,214
ASC Holdings, Inc.
A manufacturer of capital equipment used by corrugated box manufacturers.
13% Senior Subordinated Note due 12/31/2024		$	805,872			11/19/15			805,858				718,838
Limited Liability Company Unit (B)			111,100 uts.			11/18/15			111,100				18,576
									916,958				737,414
ASPEQ Holdings
A manufacturer of highly-engineered electric heating parts and equipment for a range of industrial, commercial, transportation and marine applications.
6.26% Term Loan due 10/31/2025 (LIBOR + 5.250%)		$	1,131,056			11/08/19			1,120,862				1,131,056
Audio Precision
A provider of high-end audio test and measurement sensing instrumentation software and accessories.
7.00% Term Loan due 07/27/2024 (LIBOR + 6.000%)		$	1,746,000			10/30/18			1,730,961				1,746,000
Aurora Parts & Accessories LLC
A distributor of aftermarket over-the-road semi-trailer parts and accessories sold to customers across North America.
Preferred Stock (B)			210 shs.			08/17/15			209,390				209,390
Common Stock (B)			210 shs.			08/17/15			210				145,107
									209,600				354,497
BDP International, Inc.
A provider of transportation and related services to the chemical and life sciences industries.
6.25% Term Loan due 12/14/2024 (LIBOR + 5.250%)		$	2,384,888			12/18/18			2,363,340				2,384,888
6.25% Incremental Term Loan due 12/19/2024 (LIBOR + 5.250%)		$	42,598			12/07/20			42,024				42,598
6.25% Incremental Term Loan due 12/21/2024 (LIBOR + 5.250%)		$	40,854			03/30/21			40,256				40,854
									2,445,620				2,468,340
Best Lawyers (Azalea Investment Holdings, LLC)
A global digital media company that provides ranking and marketing services to the legal community.
12.00% HoldCo PIK Note due 05/19/2028		$	289,712			11/30/21			284,217				284,561
6.25% First Lien Term Loan due 11/19/2027 (LIBOR + 5.250%) (G)		$	1,391,058			11/30/21			1,033,063				1,034,597
Limited Liability Company Unit			44,231 uts.			11/30/21			44,231				44,231
									1,361,511				1,363,389

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)			Principal Amount, Shares, Units or Ownership Percentage			Acquisition Date		Cost				Fair Value
Blue Wave Products, Inc.
A distributor of pool supplies.
Common Stock (B)			51,064 shs.			10/12/12		$	51,064			$	138,521
Warrant, exercisable until 2022, to purchase common stock at $.01 per share (B)			20,216 shs.			10/12/12			20,216				54,638
									71,280				193,159
BrightSign
A provider of digital signage hardware and software solutions, serving a variety of end markets, including retail, restaurants, government, sports, and entertainment.
6.75% Term Loan due 10/14/2027 (LIBOR + 5.750%) (G)		$	1,424,643			10/14/21			1,277,263				1,266,221
Limited Liability Company Unit (F)			111,835 uts.			10/14/21			111,835				111,835
									1,389,098				1,378,056
Brown Machine LLC
A designer and manufacturer of thermoforming equipment used in the production of plastic packaging containers within the food and beverage industry.
6.25% Term Loan due 10/04/2024 (LIBOR + 5.250%)		$	808,993			10/03/18			804,158				808,993
Cadence, Inc.
A full-service contract manufacturer (“CMO”) and supplier of advanced products, technologies, and services to medical device, life science, and industrial companies.
6.00% First Lien Term Loan due 04/30/2025 (LIBOR + 5.000%)		$	879,427			05/14/18			871,513				844,250
Cadent, LLC
A provider of advertising solutions driven by data and technology.
6.00% Term Loan due 09/07/2023 (LIBOR + 5.000%)		$	890,428			09/04/18			887,844				890,428
CAi Software
A vendor of mission-critical, production-oriented software to niche manufacturing and distribution sectors.
7.25% Term Loan due 12/10/2028 (LIBOR + 6.250%) (G)		$	2,500,000			12/13/21			2,216,388				2,219,254
Cash Flow Management
A software provider that integrates core banking systems with branch technology and creates modern retail banking experiences for financial institutions.
6.25% Term Loan due 12/27/2027 (LIBOR + 5.250%) (G)		$	986,967			12/28/21			893,448				894,300
Claritas Holdings, Inc.
A market research company that provides market segmentation insights to customers engaged in direct-to-consumer and business-to-business marketing activities.
6.76% Term Loan due 12/31/2023 (LIBOR + 5.750%)		$	1,533,322			12/20/18			1,520,117				1,533,322

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
CloudWave
A provider of managed cloud hosting and IT services for hospitals.
7.00% Term Loan due 01/04/2027 (LIBOR + 6.000%)		$	1,652,661			01/29/21		$	1,622,807			$	1,563,418
Limited Liability Company Unit (B) (F)			55,645 uts.			01/29/21			55,645				34,305
									1,678,452				1,597,723
Cogency Global
A provider of statutory representation and compliance services for corporate and professional services clients.
6.25% Term Loan due 12/28/2027 (LIBOR + 5.500%)		$	972,449			02/14/22			892,807				892,389
Preferred Stock			28 shs.			02/14/22			27,551				27,550
									920,358				919,939
Command Alkon
A vertical-market software and technology provider to the heavy building materials industry delivering purpose-built, mission critical products that serve as the core operating & production systems for ready-mix concrete producers, asphalt producers, and aggregate suppliers.
8.00% Term Loan due 04/17/2027 (LIBOR + 7.000%) (G)		$	2,489,559			*			2,000,152				2,045,868
Limited Liability Company Unit (B)(F)			18 uts.			04/23/20			18,006				20,113
Limited Liability Company Unit Class B			6,629 uts.			04/23/20			—				39,486
* 04/23/20, 10/30/20 and 11/18/20.									2,018,158				2,105,467
Concept Machine Tool Sales, LLC
A full-service distributor of high-end machine tools and metrology equipment, exclusively representing a variety of global manufacturers in the Upper Midwest.
6.00% Term Loan due 01/31/2025 (LIBOR + 5.000%)		$	584,016			01/30/20			577,393				548,683
Limited Liability Company Unit (F)			1,237 shs.			*			49,559				10,210
* 01/30/20 and 03/05/21									626,952				558,893
CTS Engines
A provider of maintenance, repair and overhaul services within the aerospace & defense market.
6.26% Term Loan due 12/22/2026 (LIBOR + 5.250%)		$	1,388,868			12/22/20			1,366,976				1,329,147
Dart Buyer, Inc.
A manufacturer of helicopter aftermarket equipment and OEM Replacement parts for rotorcraft operators, providers and OEMs.
6.25% Term Loan due 04/01/2025 (LIBOR + 5.250%) (G)		$	1,689,077			04/01/19			1,537,636				1,554,527
Decks Direct
An eCommerce direct-to-consumer seller of specialty residential decking products in the United States.
7.00% Term Loan due 12/28/2026 (LIBOR + 6.000%) (G)		$	1,630,909			12/29/21			1,499,589				1,500,736
Limited Liability Company Unit			2,209 uts.			12/29/21			94,091				94,097
									1,593,680				1,594,833

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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 (D)		$	1,420,588			10/07/16		$	1,403,759			$	1,275,688
Limited Liability Company Unit (B)(F)			368,799 uts.			*			368,928				29,467
* 10/07/16, 07/25/18, 03/13/19 and 06/17/19.									1,772,687				1,305,155
DistroKid (IVP XII DK Co-Invest, LP)
A subscription-based music distribution platform that allows artists to easily distribute, promote, and monetize their music across digital service providers, such as Spotify and Apple Music.
6.75% Term Loan due 09/30/2027 (LIBOR + 5.750%)		$	1,647,467			10/01/21			1,617,256				1,620,008
Limited Liability Company Unit (F)			73,333 uts.			10/01/21			73,404				73,333
									1,690,660				1,693,341
Dunn Paper
A provider of specialty paper for niche product applications.
10.26% Second Lien Term Loan due 08/31/2023 (LIBOR + 9.250%)		$	1,725,000			09/28/16			1,714,183				1,223,025
Dwyer Instruments, Inc.
A designer and manufacturer of precision measurement and control products for use with solids, liquids and gases.
6.51% Term Loan due 07/01/2027 (LIBOR + 5.500%)		$	1,000,000			07/20/21			850,739				853,051
Echo Logistics
A provider of tech-enabled freight brokerage across various modes including Truckload, Less-than-Truckload, Parcel, and Intermodal, as well as managed (contracted) transportation services.
7.75% Second Lien Term Loan due 11/05/2029 (LIBOR + 7.250%)		$	1,679,204			11/22/21			1,651,133				1,653,300
Limited Liability Company Unit			46 uts.			11/22/21			45,796				45,800
									1,696,929				1,699,100
EFI Productivity Software
A provider of ERP software solutions purpose-built for the print and packaging industry.
6.76% Term Loan due 12/30/2027 (LIBOR + 5.75%) (G)		$	1,000,000			12/30/21			907,828				908,655
Electric Power Systems International, Inc.
A provider of electrical testing services for apparatus equipment and protection & controls infrastructure.
6.75% Term Loan due 04/19/2028 (LIBOR + 5.750%) (G)		$	1,247,434			04/19/21			1,111,950				1,116,464

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Elite Sportswear Holding, LLC
A designer and manufacturer of gymnastics, competitive cheerleading and swimwear apparel in the U.S. and internationally.
Limited Liability Company Unit (B)(F)			1,218,266 uts.			10/14/16		$	159,722			$	—
Ellkay
A provider of data interoperability solutions for labs, hospitals and healthcare providers.
6.85% Term Loan due 09/14/2027 (LIBOR + 5.750%)		$	703,900			09/14/21			691,048				692,389
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		$	1,359,186			06/30/17			1,350,803				1,359,186
Limited Liability Company Unit (B)(F)			397,695 uts.			06/30/17			397,695				783,936
									1,748,498				2,143,122
ENTACT Environmental Services, Inc.
A provider of environmental remediation and geotechnical services for blue-chip companies with regulatory-driven liability enforcement needs.
7.76% Term Loan due 12/15/2025 (LIBOR + 6.750%)		$	1,012,672			02/09/21			1,004,925				988,368
eShipping
An asset-life third party logistics Company that serves a broad variety of end markets and offers service across all major transportation modes.
6.75% Term Loan due 11/05/2027 (LIBOR + 5.750%) (G)		$	1,721,847			11/05/21			1,301,938				1,304,283
E.S.P. Associates, P.A.
A professional services firm providing engineering, surveying and planning services to infrastructure projects.
Limited Liability Company Unit (B)			273 uts.			*			295,518				247,797
* 06/29/18 and 12/29/20.
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 Class B-1 (B)			49,342 uts.			12/15/10			42,343				736,278

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)			Principal Amount, Shares, Units or Ownership Percentage			Acquisition Date		Cost				Fair Value
Follett School Solutions
A provider of software for K-12 school libraries.
6.50% First Lien Term Loan due 07/09/2028 (LIBOR + 5.750%)		$	1,705,621			08/31/21		$	1,672,446			$	1,678,142
LP Units (B)(F)			881 uts.			08/30/21			8,805				8,805
LP Interest (B)(F)			200 shs.			08/30/21			2,003				2,003
									1,683,254				1,688,950
FragilePAK
A provider of third-party logistics services focused on the full delivery life-cycle for big and bulky products.
5.96% Term Loan due 05/24/2027 (LIBOR + 5.750%) (G)		$	1,611,797			05/21/21			1,034,652				984,085
Limited Liability Company Unit (B)(F)			108 shs.			05/21/21			107,813				92,948
									1,142,465				1,077,033
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				28,399
Limited Liability Company Unit Common (B)			767 uts.			10/05/12			767				—
									76,687				28,399
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.
Preferred Stock (B)			650 shs.			03/29/19			649,606				814,392
Common Stock (B)			1,181 shs.			03/27/13			118,110				22,023
									767,716				836,415
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.
7.01% Term Loan due 12/15/2023 (LIBOR + 6.000%)		$	2,390,711			*			2,376,990				2,402,665
6.50% Term Loan due 04/27/2027 (LIBOR + 5.500%)		$	84,102			04/27/21			82,681				84,523
Preferred Stock (B)(F)			3,737 shs.			04/27/21			103,147				121,966
* 12/19/17 and 04/16/19.									2,562,818				2,609,154
Handi Quilter Holding Company (Premier Needle Arts)
A designer and manufacturer of long-arm quilting machines and related components for the consumer quilting market.
Limited Liability Company Unit Preferred (B)			372 uts.			*			371,644				530,231
Limited Liability Company Unit Common Class A (B)			3,594 uts.			12/19/14			—				—
*12/19/14 and 04/29/16.									371,644				530,231

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Heartland Veterinary Partners
A veterinary support organization that provides a comprehensive set of general veterinary services as well as ancillary services such as boarding and grooming.
11.00% Opco PIK Note due 11/09/2028 (G)		$	1,725,000			11/17/21		$	1,570,925			$	1,573,869
HHI Group, LLC
A developer, marketer, and distributor of hobby-grade radio control products.
Limited Liability Company Unit (B)(F)			102 uts.			01/17/14			101,563				553,889
Home Care Assistance, LLC
A provider of private pay non-medical home care assistance services.
5.75% Term Loan due 03/30/2027 (LIBOR + 4.750%)		$	850,872			03/26/21			836,705				836,518
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			—				—
									—				—
IGL Holdings III Corp.
A specialty label and flexible packaging converter.
6.75% Term Loan due 10/23/2026 (LIBOR + 5.750%) (G)		$	1,708,189			11/02/20			1,499,333				1,498,852
IM Analytics Holdings, LLC
A provider of test and measurement equipment used for vibration, noise, and shock testing.
8.01% Term Loan due 11/22/2023 (LIBOR + 7.000%)		$	1,044,550			11/21/19			1,040,238				826,761
Warrant, exercisable until 2026, to purchase common stock at $.01 per share (B)			8,885 shs.			11/25/19			—				—
									1,040,238				826,761
Industrial Service Solutions
A provider of maintenance, repair and overhaul services for process equipment within the industrial, energy and power end-markets.
6.51% Term Loan due 01/31/2026 (LIBOR + 5.500%)		$	885,785			02/05/20			874,422				847,697

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
JF Petroleum Group
A provider of repair, maintenance, instalation and projection management servicese to the US fueling infrastructure industry.
6.50% Term Loan due 04/20/2026 (LIBOR + 5.500%)		$	681,428			05/04/21		$	664,702			$	651,445
Jones Fish
A provider of lake management services, fish stocking and pond aeration sales and services.
6.50% First Lien Term Loan due 12/20/2027 (LIBOR + 5.500%) (G)		$	1,261,603			02/28/22			1,072,196				1,071,814
Common Stock (F)			384 shs.			02/28/22			38,397				38,397
									1,110,593				1,110,211
Kano Laboratories LLC
A producer of industrial strength penetrating oils and lubricants.
6.00% Term Loan due 09/30/2026 (LIBOR + 5.000%) (G)		$	1,245,108			11/18/20			830,858				828,365
6.00% Term Loan due 10/31/2027 (LIBOR + 5.000%) (G)		$	452,766			11/08/21			269,845				270,446
Limited Liability Company Unit			20 uts.			11/19/20			19,757				19,760
									1,120,460				1,118,571
LeadsOnline
A nationwide provider of data, technology and intelligence tools used by law enforcement agencies, investigators, and businesses.
6.00% Term Loan due 12/23/2027 (LIBOR + 5.000%) (G)		$	1,721,258			02/07/22			1,467,368				1,466,624
Limited Liability Company Unit (F)			4,528 uts.			02/07/22			4,528				4,528
									1,471,896				1,471,152
LYNX Franchising
A global franchisor of B2B services including commercial janitorial services, shared office space solutions, and textile and electronics restoration services.
7.25% Term Loan due 12/18/2026 (LIBOR + 6.250%)		$	2,483,144			*			2,442,360				2,438,356
* 12/22/20 and 09/09/21
Manhattan Beachwear Holding Company
A designer and distributor of women’s swimwear.
12.5% Senior Subordinated Note due 05/30/2022 (D)		$	419,971			01/15/10			404,121				—
15% (2.5% PIK) Senior Subordinated Note due 05/30/2022 (D)		$	115,253			10/05/10			114,604				—
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 2023, to purchase common stock at $.01 per share (B)			104 shs.			10/05/10			94,579				—
									766,351				—

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Marshall Excelsior Co.
A designer, manufacturer and supplier of mission critical, highly engineered flow control products used in the transportation, storage and consumption of liquified petroleum gas, liquified anhydrous ammonia, refined industrial and cryogenic gasses.
6.50% Term Loan due 02/18/2028 (SOFR + 5.500%) (G)		$	580,882			02/24/22		$	520,718			$	520,550
									520,718				520,550
Master Cutlery LLC
A designer and marketer of a wide assortment of knives and swords.
13.00% Senior Subordinated Note due 07/20/2022 (D)		$	868,102			04/17/15			867,529				58,163
Limited Liability Company Unit			5 uts.			04/17/15			678,329				—
									1,545,858				58,163
Media Recovery, Inc.
A global manufacturer and developer of shock, temperature, vibration and other condition indicators and monitors for in-transit and storage applications.
7.00% First Out Term Loan due 11/22/2025 (SOFR + 6.000%)		$	488,583			11/25/19			482,536				488,583
MES Partners, Inc.
An industrial service business offering an array of cleaning and environmental services to the Gulf Coast region of the U.S.
Preferred Stock Series A (B)			30,926 shs.			07/25/19			12,412				—
Preferred Stock Series C (B)			1,275 shs.			09/22/20			457,365				—
Common Stock Class B (B)			259,252 shs.			*			244,163				—
Warrant, exercisable until 2030, to purchase common stock at $.01 per share (B)			351,890 shs.			09/22/20			—				—
* 09/30/14 and 02/28/18.									713,940				—
MeTEOR Education LLC
A leading provider of classroom and common area design services, furnishings, equipment and instructional support to K-12 schools.
12.00% Senior Subordinated Note due 03/20/2024		$	915,819			03/09/18			911,064				897,503
12.00% Senior Subordinated Debt due 03/31/2025		$	351,088			03/31/22			344,066				344,066
Limited Liability Company Unit (B)(F)			190 uts.			03/09/18			200,718				412,709
									1,455,848				1,654,278
MNS Engineers, Inc.
A consulting firm that provides civil engineering, construction management and land surveying services.
5.96% Term Loan due 07/30/2027 (LIBOR + 5.500%)		$	1,197,000			08/09/21			1,175,600				1,177,848
Limited Liability Company Unit (B)			100,000 uts.			08/09/21			100,000				100,000
									1,275,600				1,277,848

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Music Reports, Inc.
An administrator of comprehensive offering of rights and royalties solutions for music and cue sheet copyrights to music and entertainment customers.
7.00% Incremental Term Loan due 08/21/2026 (LIBOR + 6.000%)		$	820,507			11/05/21		$	805,475			$	802,767
7.00% Term Loan due 08/21/2026 (LIBOR + 6.000%)		$	597,605			08/25/20			586,642				584,685
									1,392,117				1,387,452
Narda-MITEQ (JFL-Narda Partners, LLC)
A manufacturer of radio frequency and microwave components and assemblies.
6.25% First Lien Term Loan due 11/30/2027 (LIBOR + 5.250%) (G)		$	763,436			12/06/21			543,090				543,545
6.25% Incremental Term Loan due 12/06/2027 (LIBOR + 5.250%)		$	873,738			12/28/21			859,110				859,764
Limited Liability Company Unit Class A Preferred			790 uts.			12/06/21			79,043				80,608
Limited Liability Company Unit Class B Common			88 uts.			12/06/21			8,783				8,783
									1,490,026				1,492,700
National Auto Care
A provider of professional finance and insurance products and consulting services to auto, RV, and powersports dealerships.
6.26% First Lien Term Loan due 09/28/2024 (LIBOR + 5.250%) (G)		$	998,707			12/20/21			533,232				533,143
Navia Benefit Solutions, Inc.
A third-party administrator of employee-directed healthcare benefits.
6.25% Term Loan due 02/01/2026 (LIBOR + 5.250%) (G)		$	1,717,238			02/10/21			1,149,145				1,154,875
Northstar Recycling
A managed service provider for waste and recycling services, primarily targeting food and beverage end markets.
5.75% Term Loan due 09/30/2027 (LIBOR + 4.750%)		$	749,313			10/01/21			735,571				736,822
Office Ally (OA TOPCO, LP)
A provider of medical claims clearinghouse software to office-based physician providers and healthcare insurance payers.
7.00% Term Loan due 12/10/2028 (LIBOR + 6.000%) (G)		$	983,176			12/20/21			830,494				832,226
Limited Liability Company Unit			21,092 uts.			09/29/17			21,092				21,092
									851,586				853,318
Omega Holdings
A distributor of aftermarket automotive air conditioning products.
6.00% Term Loan due 03/31/2029 (SOFR + 5.000%)		$	645,704			03/31/22			544,324				544,324
									544,324				544,324

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Omni Logistics, LLC
A specialty freight forwarding business specifically targeting the semiconductor, media, technology and healthcare end markets.
6.00% Term Loan due 12/30/2026 (LIBOR + 5.000%)		$	1,736,897			12/30/20		$	1,695,658			$	1,705,989
Options Technology Ltd
A provider of vertically focused financial technology managed services and IT infrastructure products for the financial services industry.
5.76% Term Loan due 12/18/2025 (LIBOR + 4.750%)		$	1,582,958			12/23/19			1,563,235				1,555,756
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			1,772,646				1,775,705
Common Stock Class A (B)			380,545 shs.			*			380,545				336,135
* 01/29/16 and 02/17/17.									2,153,191				2,111,840
PB Holdings LLC
A designer, manufacturer and installer of maintenance and repair parts and equipment for industrial customers.
6.26% Term Loan due 02/28/2024 (LIBOR + 5.250%)		$	783,253			03/06/19			775,607				751,923
Pearl Holding Group
A managing general agent that originates, underwrites, and administers non-standard auto insurance policies for carries in Florida.
7.00% First Lien Term Loan due 12/16/2026 (LIBOR + 6.000%) (G)		$	1,739,980			12/20/21			1,554,971				1,551,596
Warrant - Class A, to purchase common stock at $.01 per share			924 uts.			12/22/21			—				—
Warrant - Class B, to purchase common stock at $.01 per share			312 uts.			12/22/21			—				—
Warrant - Class CC, to purchase common stock at $.01 per share			32 uts.			12/22/21			—				—
Warrant - Class D, to purchase common stock at $.01 per share			82 uts.			12/22/21			—				—
									1,554,971				1,551,596

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(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.
6.96% Term Loan due 08/31/2026 (LIBOR + 6.500%)		$	382,796			09/29/20		$	372,791			$	373,227
6.96% Term Loan due 11/17/2024 (LIBOR + 6.500%)		$	1,894,364			11/14/17			1,876,553				1,847,005
									2,249,344				2,220,232
Petroplex Inv Holdings LLC
A leading provider of acidizing services to E&P customers in the Permian Basin.
Limited Liability Company Unit			0.40% int.			*			174,669				13,647
* 11/29/12 and 12/20/16.
Polara (VSC Polara LLC)
A manufacturer of pedestrian traffic management and safety systems, including accessible pedestrian signals, “push to walk” buttons, and related “traffic” control units.
5.75% First Lien Term Loan due 12/03/2027 (LIBOR + 4.750%) (G)		$	950,713			12/03/21			824,466				808,221
Limited Liability Company Unit (F)			759 uts.			12/03/21			75,861				75,861
									900,327				884,082
Polytex Holdings LLC
A manufacturer of water based inks and related products serving primarily the wall covering market.
13.9% (7.9% PIK) Senior Subordinated Note due 12/31/2024 (D)		$	1,069,985			07/31/14			1,064,183				967,801
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.									1,237,081				967,801
Portfolio Group
A provider of professional finance and insurance products to automobile dealerships, delivering a suite of offerings that supplement earnings derived from vehicle transactions.
7.00% First Lien Term Loan due 12/02/2025 (LIBOR + 6.000%) (G)		$	1,205,775			11/15/21			943,413				938,435
									943,413				938,435

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)			Principal Amount, Shares, Units or Ownership Percentage			Acquisition Date		Cost				Fair Value
PPC Event Services
A special event equipment rental business.
16.00% Term Loan due 05/28/2023 (D)		$	791,691			07/21/20		$	616,461			$	687,980
8.00% Term Loan due 05/28/2023 (D)		$	781,249			07/21/20			616,911				651,562
Preferred Stock Series P-1 (B)			71 shs.			07/21/20			71,018				211,129
Common Stock (B)			170,927 shs.			07/21/20			—				10,962
Limited Liability Company Unit (B)			3,450 uts.			11/20/14			172,500				—
Limited Liability Company Unit Series A-1 (B)			339 uts.			03/16/16			42,419				—
									1,519,309				1,561,633
ProfitOptics
A software development and consulting company that delivers solutions via its proprietary software development platform, Catalyst.
6.50% Term Loan due 02/15/2028 (LIBOR + 5.750%) (G)		$	901,452			03/15/22			690,015				689,874
8% Senior Subordinated Note due 02/15/2029		$	32,258			03/15/22			32,258				32,258
Limited Liability Company Unit			96,774 uts.			03/15/22			64,516				64,548
									786,789				786,680
Recovery Point Systems, Inc.
A provider of IT infrastructure, colocation and cloud based resiliency services.
7.50% Term Loan due 07/31/2026 (LIBOR + 6.500%)		$	1,336,166			08/12/20			1,316,724				1,325,477
Limited Liability Company Unit (F)			21,532 uts.			03/05/21			21,532				14,450
									1,338,256				1,339,927
RedSail Technologies
A provider of pharmacy management software solutions for independent pharmacies and long-term care facilities.
5.50% Term Loan due 10/27/2026 (LIBOR + 4.750%)		$	1,639,207			12/09/20			1,607,316				1,622,815
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.
Limited Liability Company Unit Class B			293,617 uts.			11/13/17			184,689				747,696
Renovation Brands (Renovation Parent Holdings, LLC)
A portfolio of seven proprietary brands that sell various home improvement products primarily through the e-Commerce channel.
6.50% Term Loan due 08/16/2027 (LIBOR + 5.500%)		$	970,874			11/15/21			948,185				949,658
Limited Liability Company Unit			39,474 uts.			09/29/17			39,474				39,474
									987,659				989,132

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Resonetics, LLC
A provider of laser micro-machining manufacturing services for medical device and diagnostic companies.
7.75% Second Lien Term Loan due 04/28/2029 (LIBOR + 7.000%)		$	1,725,000			04/28/21		$	1,694,491			$	1,694,845
7.75% Secomd Lien Term Loan due 04/28/2029 (LIBOR + 7.000%)		$	552,000			11/15/21			541,516				542,350
									2,236,007				2,237,195
REVSpring, Inc.
A provider of accounts receivable management and revenue cycle management services to customers in the healthcare, financial and utility industries.
9.26% Second Lien Term Loan due 10/11/2026 (LIBOR + 8.250%)		$	1,725,000			10/11/18			1,695,707				1,725,000
Rock-it Cargo
A provider of specialized international logistics solutions to the music touring, performing arts, live events, fine art and specialty industries.
6.00% Term Loan due 06/22/2024 (LIBOR + 5.000% Cash)		$	2,448,431			*			2,425,131				2,071,373
* 07/30/18 and 09/30/20.
ROI Solutions
Call center outsourcing and end user engagement services provider.
6.00% Term Loan due 07/31/2024 (LIBOR + 5.000%) (G)		$	1,592,918			07/31/18			1,045,893				1,058,290
RPX Corp
A provider of subscription services that help member companies mitigate the risk of patent disputes and reduce the cost of patent litigation.
7.00% Term Loan due 10/23/2025 (LIBOR + 6.000%)		$	2,477,283			*			2,434,320				2,430,983
* 10/22/20 and 09/28/21.
Ruffalo Noel Levitz
A provider of enrollment management, student retention and career services, and fundraising management for colleges and universities.
7.00% Term Loan due 05/29/2022 (LIBOR + 6.000%)		$	1,226,029			01/08/19			1,225,166				1,226,029
Safety Products Holdings, Inc.
A manufacturer of highly engineered safety cutting tools.
7.00% Term Loan due 12/15/2026 (LIBOR + 6.000%)		$	1,672,310			12/15/20			1,642,775				1,668,965
Common Stock			29 shs.			12/16/20			29,262				40,236
									1,672,037				1,709,201

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Sandvine Corporation
A provider of active network intelligence solutions.
8.46% Second Lien Term Loan due 11/02/2026 (LIBOR + 8.000%)		$	1,725,000			11/01/18		$	1,700,264			$	1,725,000
Sara Lee Frozen Foods
A provider of frozen bakery products, desserts and sweet baked goods.
5.50% Lien Term Loan due 07/30/2025 (LIBOR + 4.500%)		$	1,483,456			07/27/18			1,467,583				1,364,780
Scaled Agile, Inc.
A provider of training and certifications for IT professionals focused on software development.
6.50% Term Loan due 12/15/2027 (LIBOR + 5.500%) (G)		$	1,725,000			12/16/21			1,173,077				1,190,537
SEKO Worldwide, LLC
A third-party logistics provider of ground, ocean, air and home delivery forwarding services.
6.00% Term Loan due 12/30/2026 (LIBOR + 5.000%) (G)		$	1,710,259			12/30/20			1,450,597				1,463,760
Smart Bear
A provider of web-based tools for software development, testing and monitoring.
8.51% Second Lien Term Loan due 11/10/2028 (LIBOR + 7.500%)		$	1,725,000			03/02/21			1,683,547				1,694,533
Smartling, Inc.
A provider in SaaS-based translation management systems and related translation services.
6.75% Term Loan due 10/26/2027 (LIBOR + 5.750%) (G)		$	1,725,000			11/03/21			1,388,369				1,390,816
Specified Air Solutions (dba Madison Indoor Air Solutions)
A manufacturer and distributor of heating, dehumidification and other air quality solutions.
Limited Liability Company Unit (B)			726,845 uts.			02/20/19			2,298,574				11,039,545
Springbrook Software
A provider of vertical-market enterprise resource planning software and payments platforms focused on the local government end-market.
6.76% Term Loan due 12/20/2026 (LIBOR + 5.750%) (G)		$	1,633,473			12/23/19			1,309,447				1,300,168

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Stackline
An e-commerce data company that tracks products sold through online retailers.
8.75% Term Loan due 07/30/2028 (LIBOR + 7.750%)		$	1,758,600			07/29/21		$	1,728,166			$	1,731,236
Common Stock (B)			1,340 shs.			07/30/21			42,078				63,588
									1,770,244				1,794,824
Standard Elevator Systems
A scaled manufacturer of elevator components combining four elevator companies, Standard Elevator Systems, EMI Porta, Texacone, and ZZIPCO.
6.50% First Lien Term Loan due 12/02/2027 (LIBOR + 5.750%) (G)		$	1,725,000			12/02/21			1,023,440				1,025,353
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				179,633
Preferred Stock Series A-2 (B)			26,543 shs.			09/10/15			29,994				29,994
									188,961				209,627
Stratus Unlimited
A nationwide provide of brand implementation services, including exterior and interior signage, refresh and remodel, and facility maintenance and repair.
6.51% Term Loan due 06/08/2027 (LIBOR + 5.500%) (G)		$	946,707			07/02/21			756,975				759,549
Limited Liability Company Unit (B)			75 uts.			06/30/21			74,666				73,394
									831,641				832,943
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 08/01/2024		$	2,012,135			*			1,993,015				1,980,878
Preferred Stock Series A			28 shs.			12/21/20			71,176				78,309
Common Stock (B)			68 shs.			**			104,986				231,297
* 07/31/15 and 12/21/20.									2,169,177				2,290,484
** 07/31/15 and 11/08/17.
Syntax Systems Ltd
A cloud management service provider.
6.25% Term Loan due 10/14/2028 (LIBOR + 5.500%) (G)		$	998,236			10/28/21			750,813				750,184

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Tank Holding
A manufacturer of proprietary rotational molded polyethylene and steel storage tanks and containers.
6.75% Term Loan due 03/31/2028 (SOFR + 6.000%) (G)		$	500,000			03/31/22		$	466,937			$	466,932
									466,937				466,932
Tencarva Machinery Company
A distributor of mission critical, engineered equipment, replacement parts and services in the industrial and municipal end-markets.
6.51% Term Loan due 12/20/2027 (LIBOR + 5.500%) (G)		$	1,977,260			12/20/21			1,413,180				1,414,806
The Caprock Group (aka TA/TCG Holdings, LLC)
A wealth manager focused on ultra-high-net-worth individuals, who have $25-30 million of investable assets on average.
8.05% HoldCo PIK Note due 10/21/2028		$	1,150,000			10/28/21			1,128,390				1,130,258
5.26% Term Loan due 12/15/2027 (LIBOR + 4.250%) (G)		$	575,000			12/21/21			98,134				100,761
									1,226,524				1,231,019
The Hilb Group, LLC
An insurance brokerage platform that offers insurance and benefits programs to middle-market companies throughout the Eastern seaboard.
6.76% Term Loan due 09/30/2026 (LIBOR + 5.750%)		$	1,705,581			*			1,676,529				1,667,324
* 12/02/19 and 12/15/20.
Therma-Stor Holdings LLC
A designer and manufacturer of dehumidifiers and water damage restoration equipment for residential and commercial applications.
Limited Liability Company Unit (B)			19,696 uts.			11/30/17			—				10,698
Transit Technologies LLC
A software platform for the transportation market that offers end-to-end software solutions focused on operations, fleet management and telematics services.
5.75% Term Loan due 02/10/2025 (LIBOR + 4.750%)		$	780,310			02/13/20			772,479				752,219
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.
6.51% Term Loan due 02/19/2026 (LIBOR + 5.500%)		$	1,712,063			02/25/21			1,688,673				1,712,063

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Tristar Global Energy Solutions, Inc.
A hydrocarbon and decontamination services provider serving refineries worldwide.
12.5% (1.5% PIK) Senior Subordinated Note due 06/30/2024 (D)		$	1,204,904			01/23/15		$	1,203,934			$	1,085,618
Truck-Lite
A leading provider of harsh environment LED safety lighting, electronics, filtration systems, and telematics for a wide range of commercial vehicles, specialty vehicles, final mile delivery vehicles, off-road/off-highway, marine, and other adjacent harsh environment markets.
7.26% Term Loan due 12/02/2026 (LIBOR + 6.250%)		$	1,692,159			12/13/19			1,669,429				1,665,083
7.26% First Lien Term Loan due 04/28/2029 (LIBOR + 6.250%) (G)		$	802,272			11/15/21			486,431				488,649
									2,155,860				2,153,732
Trystar, Inc.
A niche manufacturer of temporary power distribution products for the power rental, industrial, commercial utility and back-up emergency markets.
6.25% Term Loan due 10/01/2023 (LIBOR + 5.250%)		$	2,271,264			09/28/18			2,257,770				2,234,923
6.25% Third Amendment Term Loan due 09/28/2023 (LIBOR + 5.250%)		$	215,038			10/27/21			212,044				211,598
Limited Liability Company Unit (B)(F)			56 uts.			09/28/18			60,413				50,794
									2,530,227				2,497,315
Turnberry Solutions, Inc.
A provider of technology consulting services.
7.00% Term Loan due 07/30/2026 (SOFR + 6.000%)		$	1,624,908			07/29/21			1,596,770				1,592,410
U.S. Legal Support, Inc.
A provider of court reporting, record retrieval and other legal supplemental services.
6.26% Term Loan due 11/12/2024 (LIBOR + 5.250%)		$	2,083,995			*			2,065,454				2,042,316
* 11/29/18 and 03/25/19.
UroGPO, LLC
A group purchasing organization that connects pharmaceutical companies with urology practices to facilitate the purchase of pharmaceutical drugs for discounted prices.
6.75% Term Loan due 12/15/2026 (LIBOR + 5.750%)		$	2,316,667			12/14/20			2,280,315				2,316,667
VitalSource
A provider of digital fulfillment software for the higher education sector.
6.25% Term Loan due 06/01/2028 (LIBOR + 5.500%)		$	1,694,196			06/01/21			1,664,341				1,694,195
Limited Liability Company Unit (B)(F)			1,891 uts.			06/01/21			18,909				32,570
									1,683,250				1,726,765

 

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
VP Holding Company
A provider of school transportation services for special-needs and homeless children in Massachusetts and Connecticut.
5.96% Term Loan due 05/22/2024 (LIBOR + 5.500%)		$	2,396,318			05/17/18		$	2,379,226			$	2,348,392
Westminster Acquisition LLC
A manufacturer of premium, all-natural oyster cracker products sold under the Westminster and Olde Cape Cod brands.
Limited Liability Company Unit (B)(F)			370,241 uts.			08/03/15			370,241				74,381
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			62,177				262,270
Woodland Foods, Inc.
A provider of specialty dry ingredients such as herbs & spices, rice & grains, mushrooms & truffles, chilies, and other ingredients to customers within the industrial, foodservice, and retail end-markets.
6.50% Term Loan due 11/30/2027 (LIBOR + 5.500%) (G)		$	1,205,684			12/01/21			1,030,941				1,032,287
Limited Liability Company Unit (F)			146 uts.			09/29/17			145,803				145,803
									1,176,744				1,178,090
World 50, Inc.
A provider of exclusive peer-to-peer networks for C-suite executives at leading corporations.
6.25% Term Loan due 01/10/2026 (LIBOR + 5.250%)		$	303,267			09/21/20			296,782				302,661
5.50% Term Loan due 12/31/2025 (LIBOR + 4.500%)		$	1,206,358			01/09/20			1,187,361				1,187,257
									1,484,143				1,489,918
Ziyad
An end-to-end importer, brand manager, value-added processor, and distributor of Middle Eastern and Mediterranean foods.
6.00% First Lien Term Loan due 02/09/2028 (LIBOR + 5.000%) (G)		$	1,003,440			02/09/22			534,020				533,554
Limited Liability Company Unit (F)			31 uts.			02/09/22			31,256				31,260
									565,276				564,814
Total Private Placement Investments (E)								$	160,751,267			$	166,824,571

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Interest Rate					Maturity Date			Principal Amount				Cost				Market Value
Rule 144A Securities - 4.93%: (H)
Bonds - 4.93%
American Airlines Inc.			11.750				07/15/25			$	500,000			$	496,452			$	583,745
Cleveland-Cliffs Inc.			9.875				10/17/25				331,000				353,867				369,065
Coronado Finance Pty Ltd.			10.750				05/15/26				247,000				243,012				264,599
CVR Energy Inc.			5.750				02/15/28				500,000				461,128				474,205
First Quantum Minerals Ltd.			7.500				04/01/25				500,000				476,300				507,500
First Quantum Minerals Ltd.			7.250				04/01/23				238,000				237,290				237,586
Houghton Mifflin Harcourt			9.000				02/15/25				500,000				493,991				522,500
Neptune Energy Bondco PLC			6.625				05/15/25				500,000				495,259				502,745
Panther BF Aggregator 2 LP			8.500				05/15/27				100,000				94,037				103,750
Picou Holdings LLC			10.000				12/31/25				500,000				457,704				513,125
Prime Security Services, LLC			6.250				01/15/28				885,000				791,678				866,056
Terrier Media Buyer, Inc.			8.875				12/15/27				530,000				511,319				539,275
The Manitowoc Company, Inc.			9.000				04/01/26				500,000				490,463				521,345
Trident TPI Holdings Inc.			9.250				08/01/24				500,000				491,687				502,500
Verscend Holding Corp			9.750				08/15/26				482,000				504,941				501,280
CSC Holdings LLC			5.000				11/15/31				625,000				517,864				523,663
Scientific Games Holdings LP			6.625				03/01/30				480,000				480,000				473,174
Total Bonds															7,596,992				8,006,113
Common Stock - 0.00%
TherOX, Inc. (B)											2				—				—
Touchstone Health Partnership (B)											292				—				—
Total Common Stock															—				—
Total Rule 144A Securities														$	7,596,992			$	8,006,113
Total Corporate Restricted Securities														$	168,348,259			$	174,830,684

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

  

Corporate Public Securities - 2.85%: (A)		LIBOR Spread				Interest Rate				Maturity Date		Principal Amount				Cost				Market Value
Bank Loans - 1.99%
Almonde, Inc.			7.250				8.250			06/13/25		$	500,000			$	505,000			$	491,015
Alpine US Bidco LLC			9.000				9.750			04/28/29			628,215				611,440				609,369
Edelman Financial Services			6.750				7.199			06/08/26			128,178				127,832				126,127
Kenan Advantage Group Inc.			7.250				8.250			08/17/27			564,317				549,773				544,566
Magenta Buyer LLC			8.250				9.000			05/03/29			503,333				498,347				497,671
STS Operating, Inc.			8.000				9.000			04/25/26			500,000				505,000				483,750
Front Line Power Construction LLC			12.500				13.500			11/01/28			250,000				241,864				242,500
Syncsort Incorporated			7.250				8.000			04/23/29			222,222				220,698				217,889
Total Bank Loans																	3,259,954				3,212,887
Bonds - 0.84%
Genesis Energy LP							6.500			10/01/25			337,000				324,538				332,383
Hecla Mining Company							7.250			02/15/28			500,000				476,092				523,830
Triumph Group, Inc.							7.750			08/15/25			500,000				502,324				503,690
Total Bonds																	1,302,954				1,359,903
Common Stock - 0.02%
Tourmaline Oil Corp													42,397				—				33,943
Front Line Power Construction LLC													3,178				8,136				5,848
Total Common Stock																	8,136				39,791
Preferred Stock - 0.00%
Total Corporate Public Securities																$	4,571,044			$	4,612,581
Total Investments							110.41	%								$	172,919,303			$	179,443,265
Other Assets							4.54													$	7,376,357
Liabilities							(14.95	)												$	(24,302,886	)
Total Net Assets							100.00	%												$	162,516,736

 

(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 March 31, 2022 the values of these securities amounted to $166,824,571 or 102.65% of net assets.

(F)	Held in PI Subsidiary Trust

(G)	A portion of these securities contain unfunded commitments. As of March 31, 2022, total unfunded commitments amounted to $11,370,297 and had unrealized appreciation of $8,212 or 0.01% of net assets. See Note 7.

(H)	Security exempt from registration under Rule 144a of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

PIK - Payment-in-kind

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

 

 

See Notes to Consolidated Financial Statements

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

March 31, 2022

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

 

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

 

 

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

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)

The following table summarizes the levels in the fair value hierarchy into which the Trust’s financial instruments are categorized as of March 31, 2022.

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 March 31, 2022 are as follows:

 

Assets:		Total				Level 1				Level 2				Level 3
Restricted Securities
Corporate Bonds		$	18,125,493			$	—			$	8,006,113			$	10,119,380
Bank Loans			136,667,522				—				—				136,667,522
Common Stock - U.S.			1,343,175				—				—				1,343,175
Preferred Stock			1,550,396				—				—				1,550,396
Partnerships and LLCs			17,144,098				—				—				17,144,098
Public Securities
Bank Loans			3,212,887				—				1,816,452				1,396,435
Corporate Bonds			1,359,903				—				1,359,903				—
Common Stock - U.S.			39,791				5,848				—				33,943
Preferred Stock			—				—				—				—
Short-term Securities			—				—				—				—
Total		$	179,443,265			$	5,848			$	11,182,468			$	168,254,949

 

See information disaggregated by security type and industry classification in the Consolidated Schedule of Investments. 

 

 

 

 

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 March 31, 2022.

 

	Fair Value	Valuation Technique	Unobservable Inputs	Range	Weighted*
Bank Loans	$  116,741,698	Income Approach	Implied Spread	8.8% - 9.7%	9.3%
Corporate Bonds	$  8,503,040	Income Approach	Implied Spread	16.0% - 17.2%	16.6%
Equity Securities**	$  20,443,776	Enterprise Value Waterfall Approach	Valuation Multiple	5.5x to 55.0x	13.5x

Certain of the Trust’s Level 3 equity securities investments may be valued using unadjusted inputs that have not been internally developed by the Trust, including recently purchased securities held at cost. As a result, fair value of assets of $22,5566,435 have been excluded from the preceding table.

*

The weighted averages disclosed in the table above were weighted by relative fair value

**

Including partnerships and LLC’s

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

Assets:		Beginning balance at 12/31/2021				Included in earnings				Purchases				Sales				Prepayments				Transfers into Level 3				Transfers out of Level 3				Ending balance at 03/31/2022
Restricted Securities
Corporate Bonds		$	9,549,244			$	510,991			$	59,145			$	—			$	—			$	—			$	—			$	10,119,380
Bank Loans			130,187,625				(425,650	)			7,468,625				—				(563,078	)			—				—				136,667,522
Common Stock - U.S.			1,257,986				119,019				38,397				(72,227	)			—				—				—				1,343,175
Preferred Stock			1,608,973				(86,128	)			27,551				—				—				—				—				1,550,396
Partnerships and LLCs			17,285,572				(248,965	)			117,854				(10,363	)			—				—				—				17,144,098
Public Securities
Bank Loans			1,127,428				(21,244	)			290,251				—				—				—				—				1,396,435
Common Stock - U.S.			33,565				378				—				—				—				—				—				33,943
Corporate Bonds			—				—				—				—				—				—				—				—
		$	161,050,393			$	(151,599	)		$	8,001,823			$	(82,590	)		$	(563,078	)		$	—			$	—			$	168,254,949

 

*

For the three months ended March 31, 2022, transfers into and out of Level 3 were the result of changes in the observability of significant inputs for certain portfolio companies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

 

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Barings Participation Investors

 

 

 

This privacy notice is being provided on behalf of Barings LLC and its affiliates: Barings Securities LLC; Barings Australia Pty Ltd; Barings Japan Limited; Barings Investment Advisers (Hong Kong) Limited; Barings Funds Trust; Barings Global Short Duration High Yield Fund; Barings BDC, Inc.; 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.

April 2019

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Members of the Board of Trustees Clifford M. Noreen Chairman Michael H. Brown* Barbara M. Ginader* Edward P. Grace III* Eric J. Lloyd Susan B. Sweeney* Maleyne M. Syracuse* *Member of the Audit Committee   Officers Christina Emery President Jonathan Bock Chief Financial Officer Jill Dinerman Chief Legal Officer Michael Cowart Chief Compliance Officer Elizabeth Murray Principal Accounting Officer Christopher D. Hanscom Treasurer Ashlee Steinnerd Secretary Alexandra Pacini Assistant Secretary Sean Feeley Vice President Jonathan Landsberg Vice President

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PI6217

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