Spectra Capital

We have been invested with Spectra since right around the time of their inception. I was impressed with the leadership team and their foresight on a growing need in the market - special situation lending. From the onset, leadership took an institutional approach to reporting and fund administration. Returns were in the high-teens for the first few years. Year three has seen their default rate pick-up a bit, but is still within the perimeters of their pro forma projections. Because they originate first position, lower leverage loans, there is imbedded liquidation value in the assets that are on their books. While the steady income we were used to may be a bit more volatile moving forward, the overall long-term returns should be very good. They have maintained their lending discipline, choosing to mute returns with cash drag at times, versus just deploying into subpar loans. A few partial redemptions - been pretty quickly honored. Overall, happy with performance and the team.