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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (79107)	2/6/2026 1:16:55 AM
From: Grommit	Respond to of 79147

MAIN. I'll consider after the dust settles from all earnings reports. ARCC had a lot of discussion on software investments in their conf call. well, let's see what AI says... In the Q4 2025/Year-End earnings call (held on February 4, 2026), Ares Capital (ARCC) management highlighted the software sector as a cornerstone of their portfolio, emphasizing its defensive characteristics and superior growth relative to the broader economy. Software & Services remains ARCC's largest industry exposure, representing 23.8% of the total portfolio at fair value. Key Performance Metrics Faster Growth: President James Miller noted that the software book's LTM (Last Twelve Months) EBITDA growth is currently outperforming the overall portfolio's average growth rate. Low Leverage/High Safety: The software portfolio maintains a conservative loan-to-value (LTV) of 37%, providing a significant equity cushion. Profitability: Management highlighted that the amount of software borrowers with negative EBITDA is "almost de minimis." Less than 2% of the book consists of "recurring revenue" loans (loans made to companies not yet EBITDA-positive), signaling a shift toward more mature, profitable software firms. Granularity: The portfolio is highly diversified with small position sizes, reducing the impact of any single company’s underperformance.