Form N-CSRS BARINGS PARTICIPATION For: Jun 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barings 

Participation Investors 

 

		Report for the Six Months Ended June 30, 2020
	Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website http://www.barings.com/MPV, and you will be notified by mail each time a report is posted and provided with a website link to access the report.   If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank).   You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account.

 

 

 

 

 

 

 

 

 

 

Barings Participation Investors

 

TO OUR SHAREHOLDERS

July 31, 2020

 

We are pleased to present the June 30, 2020 Quarterly Report of Barings Participation Investors (the “Trust”).

The Board of Trustees declared a quarterly dividend of $0.20 per share, payable on August 14, 2020 to shareholders of record on August 3, 2020. The Trust paid a $0.20 per share dividend for the preceding quarter. The Trust earned $0.19 per share of net investment income for the second quarter of 2020, compared to $0.27 per share in the previous quarter. All of the income earned in the second quarter was recurring in nature, compared to earnings from the previous quarter of which $0.22 per share was recurring and $0.05 per share was related to non-recurring past due interest received.

As of June 30, 2020, the net assets of the Trust were $137,787,791 or $13.00 per share, compared to $137,864,088 or $13.00 per share on March 31, 2020. This translates to a 1.6% 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 0.9%, 5.4%, 6.7%, 10.1% 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 share price increased 9.5% during the quarter, from $11.64 per share as of March 31, 2020 to $12.75 per share as of June 30, 2020. The Trust’s market price of $12.75 per share equates to a 1.9% discount to the June 30, 2020 net asset value per share of $13.00. The Trust’s average quarter-end premium for the 3, 5 and 10-year periods was 8.1%, 6.7% and 8.5%, respectively. U.S. equity markets, as approximated by the Russell 2000 Index, increased 25.4% for the quarter. U.S. fixed income markets, as approximated by the Bloomberg Barclays U.S. Corporate High Yield Index and the Credit Suisse Leverage Loan Index, increased 3.7% and 9.7% for the quarter, respectively.

The Trust closed one new private placement investment and eight add-on investments to existing portfolio companies during the second quarter. The total amount invested by the Trust in these transactions was $2,870,543. Of note, the new private placement investment and add-on investments were floating rate term loans with one small equity co-investment.

Middle market merger and acquisition activity remained slow during the second quarter of 2020 as a result of economic stress and uncertainty caused by COVID-19 in March 2020. The lower M&A activity as well as increased need for internal portfolio company liquidity led to lower new investment activity compared to prior quarters. With fewer opportunities in the market, we anticipate a continued competitive environment. As always, we continue to be selective in our investment choices and maintain our underwriting discipline.

Due to COVID-19, the Trust’s current portfolio is experiencing an increased level of economic stress. During the second quarter, one mezzanine debt issuer deferred its quarterly interest payment and was placed on non-accrual. The new non-accrual investment represents less than $0.01 per share in quarterly income for the Trust. On a go-forward basis, we do anticipate a rise in non-accrual loans.

Realization activity slowed in the second quarter with one private investment exit during the quarter, which resulted in a favorable result. Based on COVID-19 and its underlying economic impact, we would anticipate realizations to remain slow as a result of lower M&A activity.

As has been mentioned in prior reports and investor communications, recurring investment income alone has generally not been sufficient to fully fund the current dividend rate, which has been supplemented by non-recurring income and earnings carry forwards. Recurring investment income has generally been below the dividend rate since 2013 due principally to the reduction in the number of higher yielding junior debt investment opportunities to replace prepayments and realizations in the portfolio, combined with generally lower investment returns available due to declining interest rates and market dynamics in recent years. To the extent the Trust’s portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on the Trust’s future net investment income, the fair value of its portfolio investments, its financial condition and the results of operations and financial condition of the Trust’s portfolio companies.

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

Sincerely,

 

Christina Emery

President

(Continued)

 

Portfolio Composition as of 6/30/20* 

 

* Based on market value of total investments

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

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

June 30, 2020

(Unaudited)

 

Assets:
Investments (See Consolidated Schedule of Investments)
Corporate restricted securities at fair value (Cost - $123,621,587 )		$	113,611,927
Corporate restricted securities at market value (Cost - $16,629,639 )			16,090,153
Corporate public securities at market value (Cost - $10,237,169 )			8,773,449
Short-term securities at amortized cost			1,999,383
Total investments (Cost - $152,487,778 )			140,474,912
Cash			11,837,174
Interest receivable			1,231,118
Receivable for investments sold			23,036
Other assets			13,806
Total assets			153,580,046
Liabilities:
Note payable			15,000,000
Investment advisory fee payable			310,023
Payable for investments purchased			190,742
Interest payable			27,267
Accrued expenses			264,223
Total liabilities			15,792,255
Commitments and Contingencies (See Note 8)
Total net assets		$	137,787,791
Net Assets:
Common shares, par value $.01 per share		$	106,017
Additional paid-in capital			142,250,117
Total distributable earnings			(4,568,343	)
Total net assets		$	137,787,791
Common shares issued and outstanding (14,787,750 authorized)			10,601,700
Net asset value per share		$	13.00

 

 

 

See Notes to Consolidated Financial Statements

 

CONSOLIDATED STATEMENT OF OPERATIONS

For the six months ended June 30, 2020

(Unaudited)

 

Investment Income:
Interest		$	6,084,926
Dividends			98,915
Other			46,506
Total investment income			6,230,347
Expenses:
Investment advisory fees			620,217
Interest			306,750
Trustees’ fees and expenses			240,000
Professional fees			147,130
Custodian fees			12,000
Other			92,650
Total expenses			1,418,747
Investment income - net			4,811,600
Net realized and unrealized loss on investments:
Net realized gain on investments before taxes			1,321,862
Income tax expense			(346,862	)
Net realized gain on investments after taxes			975,454
Net increase (decrease) in unrealized appreciation (depreciation) of investments before taxes			(12,188,596	)
Net increase (decrease) in unrealized appreciation (depreciation) of investments after taxes			(12,188,596	)
Net loss on investments			(11,213,142	)
Net decrease in net assets resulting from operations		$	(6,401,542	)

 

 

 

 

See Notes to Consolidated Financial Statements

 

Barings Participation Investors

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended June 30, 2020

(Unaudited)

 

Net decrease in cash:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio securities, net		$	3,850,032
Purchases of portfolio securities			(21,049,474	)
Proceeds from disposition of portfolio securities			17,261,208
Interest, dividends and other income received			5,455,010
Interest expense paid			(306,750	)
Operating expenses paid			(983,068	)
Income taxes paid			(760,247	)
Net cash provided by operating activities			3,466,711
Cash flows from financing activities:
Cash dividends paid from net investment income			(4,978,892	)
Receipts for shares issued on reinvestment of dividends			227,533
Net cash used for financing activities			(4,751,359	)
Net decrease in cash			(1,284,648	)
Cash - beginning of period			13,121,822
Cash - end of period		$	11,837,174
Reconciliation of net decrease in net assets to net cash used for operating activities:
Net decrease in net assets resulting from operations		$	(6,401,542	)
Decrease in investments			10,152,160
Increase in interest receivable			(259,495	)
Decrease in receivable for investments sold			81,587
Increase in other assets			(11,831	)
Decrease in investment advisory fee payable			(18,662	)
Increase in payable for investments purchased			190,742
Decrease in tax payable			(413,839	)
Increase in accrued expenses			147,591
Total adjustments to net assets from operations			9,868,253
Net cash provided by operating activities		$	3,466,711

 

 

 

See Notes to Consolidated Financial Statements

 

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

 

 

 

		For the six months ended 6/30/2020 (Unaudited)				For the year ended 12/31/2019
Increase / (decrease) in net assets:
Operations:
Investment income - net		$	4,811,600			$	10,575,402
Net realized gain on investments after taxes			975,454				769,899
Net change in unrealized appreciation (depreciation) of investments after taxes			(12,188,596	)			6,464,660
Net (decrease) / increase in net assets resulting from operations			(6,401,542	)			17,809,961
Increase from common shares issued on reinvestment of dividends
Common shares issued (2020 - 14,472; 2019 - 60,330)			227,533				933,680
Dividends to shareholders from:
Distributable earnings to Common Stock Shareholders (2020 - $0.20 per share; 2019 - $1.08 per share)			(2,120,340	)			(11,410,602	)
Total (decrease) / increase in net assets			(8,294,349	)			7,333,039
Net assets, beginning of period			146,082,140				138,749,101
Net assets, end of period		$	137,787,791			$	146,082,140

 

 

 

 

 

 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements

 

Barings Participation Investors

CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS

Selected data for each share of beneficial interest outstanding:

  

 

		For the six months ended 6/30/2020				For the years ended December 31,
		(Unaudited)				2019				2018				2017				2016
Net asset value:
Beginning of period / year		$	13.80			$	13.18			$	13.91			$	13.15			$	13.10
Net investment income (a)			0.45				1.00				1.03				1.09				1.00
Net realized and unrealized gain (loss) on investments			(1.06)				0.69				(0.68)				0.75				0.13
Total from investment operations			(0.61)				1.69				0.35				1.84				1.13
Dividends from net investment income to common shareholders			(0.20)				(1.08)				(1.08)				(1.08)				(1.08)
(Decrease) / Increase from dividends reinvested			0.01(b)				0.01(b)				(0.00)(b)				(0.00)(b)				(0.00)(b)
Total dividends			(0.19)				(1.07)				(1.08)				(1.08)				(1.08)
Net asset value: End of period / year		$	13.00			$	13.80			$	13.18			$	13.91			$	13.15
Per share market value: End of period /year		$	12.75			$	16.13			$	15.05			$	14.10			$	14.20
Total investment return
Net asset value (c)			(4.34%)				13.21%				2.53%				14.29%				8.75%
Market value (c)			(19.63%)				14.72%				15.02%				7.21%				11.45%
Net assets (in millions):
End of period/year		$	137.79			$	146.08			$	138.75			$	145.48			$	136.61
Ratio of total expenses to average net assets (d)			2.49%(e)				2.26%				2.76%				3.23%				2.26%
Ratio of operating expenses to average net assets			1.57%(e)				1.45%				1.56%				1.49%				1.35%
Ratio of interest expense to average net assets			0.43%(e)				0.42%				0.42%				0.43%				0.44%
Ratio of income tax expense to average net assets			0.49%(e)				0.39%				0.78%				1.31%				0.47%
Ratio of net investment income to average net assets			6.80%(e)				7.30%				7.47%				7.92%				7.45%
Portfolio turnover			12%				22%				48%				24%				31%

(a)	Calculated using average shares.

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

(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)		$	15			$	15			$	15			$	15			$	15
Asset coverage per $1,000 of indebtedness		$	10,186			$	10,739			$	10,250			$	10,699			$	10,107

 

 

 

See Notes to Consolidated Financial Statements

 

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities - 94.13%: (A)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Private Placement Investments - 82.45%: (C)
1A Smart Start, Inc.
A designer, distributor and lessor of ignition interlock devices (“IIDs”). IIDs are sophisticated breathalyzers wired to a vehicles ignition system.
9.32% Second Lien Term Loan due 08/21/2022 (LIBOR + 8.250%)		$	1,725,000			12/21/17		$	1,709,178			$	1,679,780
1WorldSync, Inc.
A product information sharing platform that connects manufacturers/suppliers and key retailers via the Global Data Synchronization Network.
6.98% Term Loan due 6/24/2025 (LIBOR + 5.750%)		$	1,716,209			07/01/19			1,687,291				1,631,750
Accelerate Learning
A provider of standards-based, digital science education content of K-12 schools.
5.57% Term Loan due 12/31/2024 (LIBOR + 4.500%)		$	974,753			12/19/18			960,230				893,014
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.
AFC - Dell Holding Corporation
A distributor and provider of inventory management services for “C-Parts” used by OEMs in their manufacturing and production facilities.
13% (1% PIK) Senior Subordinated Note due 02/28/2022		$	1,916,416			**			1,904,858				1,916,416
Preferred Stock (B)			73 shs.			**			—				7,453
Preferred Stock Series A (B)			1,122 shs.			**			112,153				181,208
Preferred Stock Series V (B)			53 shs.			12/31/19			5,251				5,993
Common Stock (B)			363 shs.			**			363				19,831
Common Stock Series B (B)			44 shs.			**			—				2,406
* 03/27/15, 11/16/18, 07/1/19, 08/21/19 and 12/05/19.									2,022,625				2,133,307
** 03/27/15, 11/15/18 and 12/31/19.
Aftermath, Inc.
A provider of crime scene cleanup and biohazard remediation services.
8.00% Term Loan due 04/10/2025 (LIBOR + 5.750%)		$	1,246,848			04/09/19			1,224,527				1,186,132

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
American Scaffold, Inc.
A provider of scaffolding and environmental containment solutions.
6.32% Term Loan due 09/06/2025 (LIBOR + 5.250%)		$	1,290,823			09/06/19		$	1,265,741			$	1,225,798
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				142,025
ASC Holdings, Inc.
A manufacturer of capital equipment used by corrugated box manufacturers.
13% (1% PIK) Senior Subordinated Note due 05/18/2021		$	889,395			11/19/15			886,257				849,407
Limited Liability Company Unit (B)			111,100 uts.			11/18/15			111,100				12,221
									997,357				861,628
ASPEQ Holdings
A manufacturer of highly-engineered electric heating parts and equipment for a range of industrial, commercial, transportation and marine applications.
6.25% Term Loan due 10/31/2025 (LIBOR + 5.250%)		$	1,205,566			11/08/19			1,189,429				1,154,923
Audio Precision
A provider of high-end audio test and measurement sensing instrumentation software and accessories.
7.92% Term Loan due 07/27/2024 (LIBOR + 6.000%)		$	1,773,000			10/30/18			1,747,392				1,654,695
Aurora Parts & Accessories LLC
A distributor of aftermarket over-the-road semi-trailer parts and accessories sold to customers across North America.
14% Junior Subordinated Note due 08/17/2022		$	13,342			08/30/18			13,342				13,342
11% Senior Subordinated Note due 02/17/2022		$	1,515,400			08/17/15			1,505,891				1,515,400
Preferred Stock (B)			210 shs.			08/17/15			209,390				209,390
Common Stock (B)			210 shs.			08/17/15			210				17,404
									1,728,833				1,755,536
Avantech Testing Services LLC
A manufacturer of custom Non-Destructive Testing (“NDT”) systems and provider of NDT and inspections services primarily to the oil country tubular goods market.
15% (3.75% PIK) Senior Subordinated Note due 03/31/2021 (D)		$	6,777			07/31/14			6,650				—
Limited Liability Company Unit Class C Preferred (B)(F)			78,358 uts.			09/29/17			484,578				—
* 07/31/14 and 10/14/15.									491,228				—

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
BBB Industries LLC
A supplier of re-manufactured parts to the North American automotive aftermarket.
9.58% Second Lien Term Loan due 06/26/2026 (LIBOR + 8.500%)		$	1,725,000			08/02/18		$	1,685,557			$	1,485,498
BCC Software, Inc.
A provider of software and data solutions which enhance mail processing to help direct mail marketers realize discounts from the U.S. Postal Service, avoid penalties associated with mailing errors, and improve the accuracy and efficiency of marketing campaigns.
12% (1% PIK) Senior Subordinated Note due 04/11/2023		$	1,929,914			*			1,906,969				1,952,836
Preferred Stock Series A (B)			27 shs.			*			272,162				272,200
Common Stock Class A (B)			783 shs.			*			861				629,198
* 10/11/17 and 01/28/19.									2,179,992				2,854,234
BDP International, Inc.
A provider of transportation and related services to the chemical and life sciences industries.
5.06% Term Loan due 12/14/2024 (LIBOR + 4.750%)		$	2,428,025			12/18/18			2,391,899				2,317,535
Beacon Pointe Advisors, LLC
An integrated wealth management platform with comprehensive financial planning capabilities for high net worth clients with complex financial needs.
6.44% Term Loan due 03/31/2026
Term Loan (LIBOR + 5.000%)		$	998,409			03/31/20			612,908				612,385
BEI Precision Systems & Space Company, Inc.
A provider of advanced design, manufacturing, and testing for custom optical encoder-based positioning systems, precision accelerometers, and micro scanners.
12% (1% PIK) Senior Subordinated Note due 04/28/2024		$	1,495,638			04/28/17			1,476,814				1,495,638
Limited Liability Company Unit (B)(F)			4,167 uts.			*			416,654				298,576
* 04/28/17 and 02/07/19.									1,893,468				1,794,214
Blue Wave Products, Inc.
A distributor of pool supplies.
13% (1% PIK) Senior Subordinated Note due 12/31/2020		$	75,070			10/12/12			75,063				56,303
Common Stock (B)			51,064 shs.			10/12/12			51,064				—
Warrant, exercisable until 2022, to purchase common stock at $.01 per share (B)			20,216 shs.			10/12/12			20,216				—
									146,343				56,303

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
BlueSpire Holding, Inc.
A marketing services firm that integrates strategy, technology, and content to deliver customized marketing solutions for clients in the senior living, financial services and healthcare end markets.
Common Stock (B)			2,956 shs.			06/30/15		$	937,438			$	15,563
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%)		$	680,840			10/03/18			674,798				626,960
Cadence, Inc.
A full-service contract manufacturer (“CMO”) and supplier of advanced products, technologies, and services to medical device, life science, and industrial companies.
4.68% First Lien Term Loan due 04/30/2025 (LIBOR + 4.500%)		$	893,054			*			880,536				849,188
* 05/14/18 and 05/31/19.
Cadent, LLC
A provider of advertising solutions driven by data and technology.
6.25% Term Loan due 09/07/2023 (LIBOR + 5.250%)		$	1,004,432			09/04/18			997,991				960,129
CHG Alternative Education Holding Company
A leading provider of publicly-funded, for profit pre-K-12 education services targeting special needs children at therapeutic day schools and “at risk” youth through alternative education programs.
13.5% (1.5% PIK) Senior Subordinated Note due 03/31/2023		$	822,426			01/19/11			822,106				822,426
14% (2% PIK) Senior Subordinated Note due 03/31/2023		$	220,043			08/03/12			219,948				215,495
Common Stock (B)			375 shs.			01/19/11			37,500				21,635
Warrant, exercisable until 2021, to purchase common stock at $.01 per share (B)			295 shs.			01/19/11			29,250				17,007
									1,108,804				1,076,563
Clarion Brands Holding Corp.
A portfolio of six over-the-counter (OTC) pharmaceutical brands whose products are used to treat tinnitus or ringing of the ear, excessive sweating, urinary tract infections, muscle pain, and skin conditions.
Limited Liability Company Unit (B)			1,853 uts.			07/18/16			189,267				346,122
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.
7.00% Term Loan due 12/31/2023 (LIBOR +6.000%)		$	1,595,483			12/20/18			1,567,785				1,518,911

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Clubessential LLC
A leading SaaS platform for private clubs and resorts.
7.25% (1% PIK) Senior Subordinated Note due 11/30/2023 (LIBOR + 6.250%)		$	1,725,000			01/09/20		$	1,699,790			$	1,646,965
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.
9.25% Term Loan due 04/17/2027 (LIBOR + 8.250%)		$	1,706,994			04/23/20			1,657,170				1,680,266
Limited Liability Company Unit (F)			18 uts.			04/23/20			18,006				18,006
									1,675,176				1,698,272
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%)		$	626,836			01/30/20			615,342				575,855
Limited Liability Company Unit (F)			1,171 shs.			01/30/20			46,910				36,199
									662,252				612,054
CORA Health Services, Inc.
A provider of outpatient rehabilitation therapy services.
11.00% (1% PIK) Term Loan due 05/05/2025		$	1,545,164			*			1,458,565				1,325,858
Preferred Stock Series A (B)			758 shs.			06/30/16			2,647				113,098
Common Stock Class A (B)			3,791 shs.			06/30/16			3,791				29,247
* 05/01/18 and 06/28/19.									1,465,003				1,468,203
Dart Buyer, Inc.
A manufacturer of helicopter aftermarket equipment and OEM Replacement parts for rotorcraft operators, providers and OEMs.
6.32% Term Loan due 04/01/2025 (LIBOR + 5.250%)		$	1,712,554			04/01/19			1,400,689				1,351,809
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				1,278,529
Limited Liability Company Unit (B)(F)			368,799 uts.			*			368,928				18,289
* 10/07/16, 07/25/18, 03/13/19 and 06/17/19.									1,772,687				1,296,818

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Discovery Education, Inc.
A provider of standards-based, digital education content for K-12 schools.
4.18% Term Loan due 04/30/2024 (LIBOR + 4.250%)		$	1,902,180			04/20/18		$	1,877,899			$	1,800,955
DPL Holding Corporation
A distributor and manufacturer of aftermarket undercarriage parts for medium and heavy duty trucks and trailers.
Preferred Stock (B)			25 shs.			05/04/12			252,434				361,144
Common Stock (B)			25 shs.			05/04/12			28,048				—
									280,482				361,144
Dunn Paper
A provider of specialty paper for niche product applications.
9.75% Second Lien Term Loan due 08/26/2023 (LIBOR + 8.750%)		$	1,725,000			09/28/16			1,709,161				1,633,076
Electronic Power Systems
A provider of electrical testing services for apparatus equipment and protection & controls infrastructure.
5.06% Term Loan due 12/21/2024 (LIBOR + 4.750%)		$	1,684,075			12/21/18			1,665,184				1,604,776
Common Stock (B)			52 shs.			12/28/18			52,176				94,803
									1,717,360				1,699,579
Elite Sportswear Holding, LLC
A designer and manufacturer of gymnastics, competitive cheerleading and swimwear apparel in the U.S. and internationally.
11.5% (1% PIK) Senior Subordinated Note due 09/20/2022 (D)		$	1,588,640			10/14/16			1,568,694				—
Limited Liability Company Unit (B)(F)			101 uts.			10/14/16			159,722				—
									1,728,416				—
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		$	1,347,352			06/30/17			1,331,153				1,323,810
Limited Liability Company Unit (B)(F)			397,695 uts.			06/30/17			397,695				408,399
									1,728,848				1,732,209
E.S.P. Associates, P.A.
A professional services firm providing engineering, surveying and planning services to infrastructure projects.
Limited Liability Company Unit (B)			229 uts.			04/04/18			228,955				275,569

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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)		$	65,789 uts.			12/15/10		$	56,457			$	681,360
Limited Liability Company Unit Class B-2 (B)			8,248 uts.			12/15/10			7,078				85,422
Limited Liability Company Unit Class B-3 (B)			6,522 uts.			08/30/12			13,844				69,240
Limited Liability Company Unit Class C (B)			1,575 uts.			12/20/10			8,832				95,224
									86,211				931,246
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				—
Limited Liability Company Unit Common (B)			767 uts.			10/05/12			767				—
									76,687				—
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.
14% (2% PIK) Senior Subordinated Note due 11/30/2021 (D)		$	1,380,135			03/27/13			989,505				1,173,115
Preferred Stock (B)			295 shs.			03/29/19			295,276				342,306
Common Stock (B)			1,181 shs.			03/27/13			118,110				21,248
									1,402,891				1,536,669
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.
7.22% Term Loan due 12/21/2023 (LIBOR + 6.000%)		$	2,427,857			*			2,399,766				2,369,743
* 12/19/17 and 04/16/19.
GTI Holding Company
A designer, developer, and marketer of precision specialty hand tools and handheld test instruments.
Common Stock (B)			1,046 shs.			*			104,636				140,464
Warrant, exercisable until 2027, to purchase common stock at $.01 per share (B)			397 shs.			02/05/14			36,816				53,312
* 02/05/14 and 11/22/17.									141,452				193,776
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				351,615
Limited Liability Company Unit Common Class A (B)			3,594 uts.			12/19/14			—				—
* 12/19/14 and 04/29/16.									371,644				351,615

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Happy Floors Acquisition, Inc.
A wholesale importer and value-added distributor of premium European flooring tile to residential and commercial end markets.
12.5% (1% PIK) Senior Subordinated Note due 01/01/2023		$	391,928			07/01/16		$	388,848			$	390,598
Common Stock (B)			150 shs.			07/01/16			149,500				297,231
									538,348				687,829
Hartland Controls Holding Corporation
A manufacturer and distributor of electronic and electromechanical components.
14% (2% PIK) Senior Subordinated Note due 12/01/2023		$	1,186,400			02/14/14			1,185,473				1,186,400
14% Senior Subordinated Note due 12/01/2023		$	431,969			06/22/15			431,755				431,969
Common Stock (B)			821 shs.			02/14/14			822				209,487
									1,618,050				1,827,856
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				244,351
Holley Performance Products
A provider of automotive aftermarket performance products.
5.76% Term Loan due 10/24/2025 (LIBOR + 5.000%)		$	2,428,025			10/24/18			2,400,237				2,229,637
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			—				—
									—				—
Hyperion Materials & Technologies, Inc.
A producer of specialty hard materials and precision tool components that are used to make precision cutting, grinding and other machining tools used by tool manufacturers and final product manufacturers.
6.50% Term Loan due 08/14/2026 (LIBOR + 5.500%)		$	1,605,487			08/16/19			1,577,833				1,544,202
IM Analytics Holdings, LLC
A provider of test and measurement equipment used for vibration, noise, and shock testing.
7.57% Term Loan due 11/22/2023 (LIBOR + 6.500%)		$	1,063,250			11/21/19			1,054,211				908,550
Warrant, exercisable until 2026, to purchase common stock at $.01 per share (B)			8,885 shs.			11/25/19			—				—
									1,054,211				908,550

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Industrial Service Solutions
A provider of maintenance, repair and overhaul services for process equipment within the industrial, energy and power end-markets.
6.74% Term Loan due 01/31/2026 (LIBOR + 5.500%)		$	905,753			02/05/20		$	888,856			$	830,617
K P I Holdings, Inc.
The largest player in the U.S. non-automotive, non-ferrous die casting segment.
Limited Liability Company Unit Class C Preferred (B)			40 uts.			06/30/15			—				—
Common Stock (B)			353 shs.			07/15/08			285,619				—
									285,619				—
LAC Acquisition LLC
A provider of center-based applied behavior analysis treatment centers for children diagnosed with autism spectrum disorder.
6.06% Term Loan due 10/01/2024 (LIBOR + 5.750%)		$	1,728,180			10/01/18			1,301,484				1,237,790
Limited Liability Company Unit Class A (F)			22,222 uts.			10/01/18			22,222				24,907
									1,323,706				1,262,697
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				—
Master Cutlery LLC
A designer and marketer of a wide assortment of knives and swords.
13% Senior Subordinated Note due 07/31/2020 (D)		$	868,102			04/17/15			867,529				—
Limited Liability Company Unit			5 uts.			04/17/15			678,329				—
									1,545,858				—
Media Recovery, Inc.
A global manufacturer and developer of shock, temperature, vibration and other condition indicators and monitors for in-transit and storage applications.
6.75% First Out Term Loan due 11/22/2025 (LIBOR + 5.750%)		$	370,880			11/25/19			364,204				344,494

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
MES Partners, Inc.
An industrial service business offering an array of cleaning and environmental services to the Gulf Coast region of the U.S.
12% (1% PIK) Senior Subordinated Note due 09/30/2021 (D)		$	1,140,295			09/30/14		$	1,133,062			$	285,074
12% (1% PIK) Senior Subordinated Note due 09/30/2021 (D)		$	306,338			02/28/18			303,093				76,584
Preferred Stock Series A (B)			30,926 shs.			07/25/19			12,412				—
Common Stock Class B (B)			259,252 shs.			*			244,163				—
* 09/30/14 and 02/28/18.									1,692,730				361,658
MeTEOR Education LLC
A leading provider of classroom and common area design services, furnishings, equipment and instructional support to K-12 schools.
12% Senior Subordinated Note due 06/20/2023		$	915,819			03/09/18			904,709				909,966
Limited Liability Company Unit (B)(F)			182 uts.			03/09/18			183,164				80,479
									1,087,873				990,445
Motion Controls Holdings
A manufacturer of high performance mechanical motion control and linkage products.
Limited Liability Company Unit Class B-1 (B)(F)			75,000 uts.			11/30/10			—				51,998
Limited Liability Company Unit Class B-2 (B)(F)			6,801 uts.			11/30/10			—				4,715
									—				56,713
New Mountain Learning, LLC
A leading provider of blended learning solutions to the K-12 and post-secondary school market.
7.00% Term Loan due 03/16/2024 (LIBOR + 6.000%)		$	1,655,030			03/15/18			1,632,713				1,602,962
7.00% Super Priority Delayed Draw Term Loan (LIBOR + 6.000% Cash & 2.000% PIK)		$	432,615			11/10/14			289,070				289,070
									1,921,783				1,892,032
Options Technology Ltd
A provider of vertically focused financial technology managed services and IT infrastructure products for the financial services industry.
4.81% Term Loan due 12/18/2025 (LIBOR + 4.500%)		$	1,607,794			12/23/19			1,242,189				1,195,746
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			1,761,392				1,764,546
Common Stock Class B (B)			380,545 shs.			*			380,545				373,209
* 01/29/16 and 02/17/17.									2,141,937				2,137,755

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
PB Holdings LLC
A designer, manufacturer and installer of maintenance and repair parts and equipment for industrial customers.
6.32% Term Loan due 03/06/2025 (LIBOR + 5.250%)		$	848,126			03/06/19		$	834,696			$	785,604
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.
7.25% Term Loan due 11/17/2024 (LIBOR + 6.250%)		$	1,894,364			11/14/17			1,864,723				1,829,791
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				19,112
* 11/29/12 and 12/20/16.
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 12/31/2021 (D)		$	1,069,985			07/31/14			1,064,183				802,489
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				802,489
PPC Event Services
A special event equipment rental business.
14% (2% PIK) Senior Subordinated Note due 05/28/2023 (D)		$	1,333,513			11/20/14			1,233,372				—
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				—
									1,448,291				—
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			184,688				490,014
REVSpring, Inc.
A provider of accounts receivable management and revenue cycle management services to customers in the healthcare, financial and utility industries.
8.43% Second Lien Term Loan due 10/11/2026 (LIBOR + 8.250%)		$	1,725,000			10/11/18			1,684,390				1,591,454

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Rock-it Cargo
A provider of specialized international logistics solutions to the music touring, performing arts, live events, fine art and specialty industries.
5.06% Term Loan due 06/22/2024 (G) (LIBOR + 4.750% Cash & 2.750% PIK)		$	2,461,942			07/30/18		$	2,420,652			$	1,962,069
ROI Solutions
Call center outsourcing and end user engagement services provider.
6.09% Term Loan due 07/31/2024 (LIBOR + 5.000%)		$	1,622,911			07/31/18			633,116				581,401
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%)		$	1,244,939			01/08/19			1,234,417				1,213,293
Sandvine Corporation
A provider of active network intelligence solutions.
8.18% Second Lien Term Loan due 11/02/2026 (LIBOR + 8.000%)		$	1,725,000			11/01/18			1,690,834				1,588,464
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%)		$	1,510,289			07/27/18			1,485,636				1,398,821
Scaled Agile, Inc.
A provider of training and certifications for IT professionals focused on software development.
5.75% Term Loan due 06/28/2024 (LIBOR + 4.750%)		$	660,811			06/27/19			655,537				635,115
Soliant Holdings, LLC
A healthcare staffing platform focused on placing highly skilled professionals in the education, nursing/allied health, life sciences and pharmacy end-markets.
6.50% Term Loan due 11/30/2026 (LIBOR + 5.500%)		$	1,015,879			12/27/19			997,016				967,803
Specified Air Solutions
A manufacturer and distributor of heating, dehumidification and other air quality solutions.
10.5% (0.5% PIK) Senior Subordinated Note due 06/19/2024		$	1,234,249			12/19/18			1,224,929				1,246,592
Limited Liability Company Unit			531,730 uts.			02/20/19			539,795				1,364,097
									1,764,724				2,610,689

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Springbrook Software
A provider of vertical-market enterprise resource planning software and payments platforms focused on the local government end-market.
6.75% Term Loan due 12/20/2026 (LIBOR + 5.750%)			1,651,981			12/23/19		$	1,176,460			$	1,129,843
SR Smith LLC
A manufacturer of mine and tunneling ventilation products in the United States.
11% Senior Subordinated Note due 03/27/2022 (D)		$	1,084,565			*			1,078,968				967,632
Limited Liability Company Unit Series A			1,072 uts.			*			1,060,968				1,727,562
* 03/27/17 and 08/07/18.									2,139,936				2,695,194
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				322,028
Preferred Stock Series A-2 (B)			26,543 shs.			09/10/15			29,994				53,770
									188,961				375,798
Sunrise Windows Holding Company
A manufacturer and marketer of premium vinyl windows exclusively selling to the residential remodeling and replacement market.
16% Senior Subordinated Note due 05/28/2021 (D)		$	2,211,310			*			1,358,229				1,769,048
Common Stock (B)			38 shs.			12/14/10			38,168				—
Warrant, exercisable until 2020, to purchase common stock at $.01 per share (B)			37 shs.			12/14/10			37,249				—
* 12/14/10, 08/17/12 and 03/31/16.									1,433,646				1,769,048
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 (D)		$	1,393,644			07/31/15			1,385,865				1,323,962
Common Stock (B)			68 shs.			*			104,986				93,316
* 07/31/15 and 11/08/17.									1,490,851				1,417,278
The Hilb Group, LLC
An insurance brokerage platform that offers insurance and benefits programs to middle-market companies throughout the Eastern seaboard.
6.75% Term Loan due 09/30/2026 (LIBOR + 5.750%)		$	1,519,017			12/02/19			1,211,314				1,167,767

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
Therma-Stor Holdings LLC
A designer and manufacturer of dehumidifiers and water damage restoration equipment for residential and commercial applications.
10.5% (0.5% PIK) Senior Subordinated Note due 11/30/2023		$	1,383,617			11/30/17		$	1,383,616			$	1,397,453
Limited Liability Company Unit (B)			19,696 uts.			11/30/17			3,172				7,153
									1,386,788				1,404,606
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.
4.94% Term Loan due 02/10/2025 (LIBOR + 4.750%)		$	1,560,620			02/13/20			754,040				703,540
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.
5.67% Term Loan due 06/04/2024 (LIBOR + 5.500%)		$	2,339,897			05/14/18			2,305,751				2,212,801
Tristar Global Energy Solutions, Inc.
A hydrocarbon and decontamination services provider serving refineries worldwide.
12.5% (1.5% PIK) Senior Subordinated Note due 12/31/2020		$	1,204,904			01/23/15			1,204,024				1,084,414
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.
7.25% Term Loan due 12/02/2026 (LIBOR + 6.250%)		$	1,717,481			12/13/19			1,464,329				1,387,996
Trystar, Inc.
A niche manufacturer of temporary power distribution products for the power rental, industrial, commercial utility and back-up emergency markets.
5.82% Term Loan due 10/01/2023 (LIBOR + 4.750%)		$	2,014,150			09/28/18			1,991,275				1,949,270
Limited Liability Company Unit (B)(F)			47 uts.			09/28/18			46,562				63,617
									2,037,837				2,012,887
U.S. Legal Support, Inc.
A provider of court reporting, record retrieval and other legal supplemental services.
6.82% Term Loan due 11/12/2024 (LIBOR + 5.750%)		$	2,116,196			*			2,082,922				1,937,647
* 11/29/18 and 03/25/19.

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
U.S. Oral Surgery Management
An operator of oral surgery practices providing medically necessary treatments.
7.00% Term Loan due 12/31/2023 (LIBOR + 6.000%)		$	2,447,446			*		$	2,404,876			$	2,209,678
* 01/04/19 and 10/01/19.
U.S. Retirement and Benefit Partners, Inc.
A leading independent provider of outsourced benefit design and administration and retirement services, primarily to K-12 school districts, employee unions, and governmental agencies.
9.75% Second Lien Term Loan due 09/29/2025 (LIBOR + 8.750%)		$	1,607,700			03/05/18			1,583,853				1,502,470
UBEO, LLC
A dealer and servicer of printers and copiers to medium sized businesses.
11.00% Term Loan due 10/03/2024		$	1,558,661			11/05/18			1,535,147				1,399,107
Velocity Technology Solutions, Inc.
A provider of outsourced hosting services for enterprise resource planning software applications and information technology infrastructure to mid and large-sized enterprises.
7.45% Lien Term Loan due 12/07/2023 (LIBOR + 6.000%)		$	2,052,750			12/07/17			2,040,980				1,970,715
VP Holding Company
A provider of school transportation services for special-needs and homeless children in Massachusetts and Connecticut.
6.57% Lien Term Loan due 05/22/2024 (LIBOR + 5.500%)		$	2,427,343			05/17/18			2,389,789				2,266,906
Westminster Acquisition LLC
A manufacturer of premium, all-natural oyster cracker products sold under the Westminster and Olde Cape Cod brands.
12% (1% PIK) Senior Subordinated Note due 08/03/2021		$	470,880			08/03/15			469,614				117,720
Limited Liability Company Unit (B)(F)			370,241 uts.			08/03/15			370,241				—
									839,855				117,720
Whitebridge Pet Brands Holdings, LLC
A manufacturer and marketer of branded, all-natural treats and foods for dogs and cats.
Limited Liability Company Unit Class A (B)(F)			123 uts.			04/18/17			148,096				162,222
Limited Liability Company Unit Class B (B)(F)			123 uts.			04/18/17			—				62,033
									148,096				224,255

 

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Principal Amount, Shares, Units or Ownership Percentage				Acquisition Date		Cost				Fair Value
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			$	148,553
World 50, Inc.
A provider of exclusive peer-to-peer networks for C-suite executives at leading corporations.
5.75% Term Loan due 12/31/2025 (LIBOR + 4.750%)		$	1,224,775			01/09/20			1,196,570				1,178,453
WP Supply Holding Corporation
A distributor of fresh fruits and vegetables to grocery wholesalers and foodservice distributors in the upper Midwest.
Common Stock (B)			1,500 shs.			11/03/11			150,000				126,155
York Wall Holding Company
A designer, manufacturer and marketer of wall covering products for both residential and commercial wall coverings.
Preferred Stock Series A (B)			2,936 shs.			02/05/19			293,616				293,600
Common Stock (B)			2,046 shs.			*			200,418				92,900
* 03/04/15 and 02/07/18.									494,034				386,500
Total Private Placement Investments (E)								$	123,621,587			$	113,611,927

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Restricted Securities: (A) (Continued)		Interest Rate				Maturity Date		Principal Amount				Cost				Market Value
Rule 144A Securities - 11.68%:
Bonds - 11.68%
Acrisure, LLC			7.000	%		11/15/25		$	757,000			$	708,881			$	723,881
Alliance Residential Company			7.500			05/01/25			259,000				266,610				174,178
Altice Financing S.A.			7.500			05/15/26			308,000				308,000				322,630
American Airlines Inc			11.750			07/15/25			500,000				495,002				473,595
Avantor Inc.			6.000			10/01/24			313,000				313,000				327,085
Boyne USA, Inc.			7.250			05/01/25			129,000				129,000				135,127
BWAY Holding Company			7.250			04/15/25			750,000				692,890				680,077
Calumet Specialty Products Partners, L.P.			11.000			04/15/25			500,000				500,000				482,500
Cleveland-Cliffs Inc.			6.750			03/15/26			500,000				449,855				482,500
CommScope Finance LLC			8.250			03/01/27			500,000				476,116				513,850
CVR Partners, L.P.			9.250			06/15/23			363,000				358,440				355,740
Dominion Diamond (D)			7.125			11/01/22			500,000				279,489				5,125
Financial & Risk US Holdings, Inc.			6.250			05/15/26			116,000				116,000				122,960
First Quantum Minerals Ltd.			7.500			04/01/25			500,000				480,188				478,750
First Quantum Minerals Ltd.			7.250			04/01/23			385,000				382,169				367,675
Gates Global LLC			6.250			01/15/26			600,000				533,140				589,500
Genesys Telecommunications Laboratories, Inc.			10.000			11/30/24			500,000				485,662				520,000
Golden Nugget, Inc.			8.750			10/01/25			500,000				442,444				282,500
Houghton Mifflin Harcourt			9.000			02/15/25			500,000				490,945				482,500
Jonah Energy LLC			7.250			10/15/25			385,000				339,686				47,163
LBC Tank Terminals Holding Netherlands B.V.			6.875			05/15/23			511,000				516,338				515,737
New Gold Inc.			6.250			11/15/22			500,000				501,117				505,313
OPE KAG Finance Sub			7.875			07/31/23			385,000				393,414				338,800
Ortho Clinical Diagnostics, Inc.			7.250			02/01/28			245,000				223,492				249,038
Panther BF Aggregator 2 LP			8.500			05/15/27			100,000				92,590				100,495
Prime Security Services, LLC			6.250			01/15/28			885,000				772,217				834,112
Spirit AeroSystems, Inc.			7.500			04/15/25			500,000				493,936				493,125
Suncoke Energy			7.500			06/15/25			385,000				380,863				325,402
Terrier Media Buyer, Inc.			8.875			12/15/27			530,000				507,522				508,137
The Manitowoc Company, Inc.			9.000			04/01/26			863,000				857,594				854,370
TransDigm Group, Inc.			6.250			03/15/26			500,000				493,979				498,760
Trident TPI Holdings Inc.			9.250			08/01/24			500,000				486,719				512,500
Univision Communications Inc.			6.625			06/01/27			253,000				253,000				241,615
Veritas US, Inc.			10.500			02/01/24			750,000				667,183				671,250
Verscend Holding Corp.			9.750			08/15/26			482,000				512,106				517,837
VICI Properties, Inc.			4.625			12/01/29			750,000				621,288				731,250
VRX Escrow Corp.			6.125			04/15/25			140,000				140,000				141,998
Warrior Met Coal, Inc.			8.000			11/01/24			161,000				161,000				156,975
WESCO International, Inc.			7.125			06/15/25			152,000				152,000				160,076

 

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

Corporate Restricted Securities: (A) (Continued)		Interest Rate				Maturity Date		Principal Amount				Cost				Market Value
WESCO International, Inc.			7.250	%		06/15/28		$	157,000			$	155,764			$	166,027
Total Bonds													16,629,639				16,090,153
Common Stock - 0.00%
TherOX, Inc. (B)									2				—				—
Touchstone Health Partnership (B)									292				—				—
Total Common Stock													—				—
Total Rule 144A Securities												$	16,629,639			$	16,090,153
Total Corporate Restricted Securities												$	140,251,226			$	129,702,080

 

 

Corporate Public Securities - 6.37%: (A)			LIBOR Spread				Interest Rate			Maturity Date		Principal Amount				Cost				Market Value
Bank Loans - 2.15%
Almonde, Inc.			3.500	%			4.500	%		06/13/24		$	356,179			$	309,268			$	310,524
BMC Software Finance, Inc.			4.250				4.428			06/26/25			492,500				488,800				464,797
Confie Seguros Holding II Co.			8.500				8.673			10/31/25			446,131				439,309				299,278
Edelman Financial Services			6.750				6.930			06/08/26			128,178				127,692				116,402
Envision Healthcare Corp.			3.750				3.928			10/10/25			498,734				324,989				325,424
Fieldwood Energy LLC (D)			7.250				—			04/01/22			977,612				949,869				5,866
Golden Nugget, Inc.			2.500				3.250			10/04/23			437,350				359,860				345,506
ION Trading Technologies Sarl			4.000				5.072			11/21/24			271,349				266,550				259,719
PS Logistics LLC			4.750				5.750			03/01/25			491,250				494,594				447,038
STS Operating, Inc.			8.000				9.000			04/25/26			500,000				505,000				372,500
Total Bank Loans																	4,265,931				2,947,054
Bonds - 3.87%
Brunswick Corporation							7.125			08/01/27			500,000				502,962				586,897
Century Communities, Inc.							5.875			07/15/25			715,000				630,908				711,425
Clear Channel Worldwide Holdings, Inc.							9.250			02/15/24			139,000				132,608				128,936
Dish DBS Corporation							7.750			07/01/26			385,000				409,594				408,100
Genesis Energy LP							6.500			10/01/25			337,000				319,458				288,135
Hecla Mining Company							7.250			02/15/28			500,000				471,090				507,500
Hughes Satellite Systems Corporation							7.625			06/15/21			500,000				500,947				515,000
Jupiter Resources Inc.							13.000			02/05/24			50,428				50,428				45,385
Laredo Petroleum, Inc.							10.125			01/15/28			500,000				391,358				345,000
PBF Holding Company LLC							7.250			06/15/25			385,000				395,014				349,388
Targa Resources Partners LP							4.250			11/15/23			600,000				518,200				573,000
Triumph Group, Inc.							7.750			08/15/25			500,000				503,376				375,625
United Rentals (North America), Inc.							4.625			10/15/25			500,000				444,856				502,500
Total Bonds																	5,270,799				5,336,891

 

 

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

Corporate Public Securities: (A) (Continued)								Principal Amount				Cost				Market Value
Common Stock - 0.02%
Jupiter Resources Inc.								$	41,472			$	200,439			$	31,104
Total Common Stock													200,439				31,104
Preferred Stock - 0.33%
B. Riley Financial Inc.									20,000				500,000				458,400
Total Preferred Stock													500,000				458,400
Total Corporate Public Securities												$	10,237,169			$	8,773,449
Short-Term Security:			Interest Rate/Yield^			Maturity Date		Principal Amount				Cost				Market Value
Commercial Paper - 1.45%
Daimler North America Corporation			0.270	%		07/13/20		$	1,000,000			$	999,450			$	999,450
Fidelity National Information Services, Inc.			0.270	%		07/10/20			1,000,000				999,933				999,933
Total Short-Term Securities												$	1,999,383			$	1,999,383
Total Investments			101.95	%								$	152,487,778			$	140,474,912
Other Assets			9.51														13,105,134
Liabilities			(11.46	)													(15,792,255	)
Total Net Assets			100.00	%												$	137,787,791

(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 June 30, 2020 the values of these securities amounted to $113,611,927 or 82.45% of net assets.

(F)	Held in PI Subsidiary Trust

(G)	PIK non-accrual

^ Effective yield at purchase

PIK - Payment-in-kind

 

 

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

See Notes to Consolidated Financial Statements

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

 

See Notes to Consolidated Financial Statements

Barings Participation Investors

CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2020

(Unaudited)

 

 

 

 

 

See Notes to Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

 

 

 

 

 

Barings Participation Investors

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 June 30, 2020.

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 June 30, 2020 are as follows:

 

Assets:		Total				Level 1				Level 2				Level 3
Restricted Securities
Corporate Bonds		$	42,457,314			$	—			$	16,090,153			$	26,367,161
Bank Loans			75,539,079				—				—				75,539,079
Common Stock - U.S.			2,402,969				—				—				2,402,969
Preferred Stock			2,513,806				—				—				2,513,806
Partnerships and LLCs			6,788,912				—				—				6,788,912
Public Securities
Bank Loans			2,947,054				—				2,947,054				—
Corporate Bonds			5,336,891				—				5,291,506				45,385
Common Stock - U.S.			31,104				—				31,104				—
Preferred Stock			458,400				—				458,400				—
Short-term Securities			1,999,383				—				1,999,383				—
Total		$	140,474,912			$	—			$	26,817,600			$	113,657,312
See information disaggregated by security type and industry classification in the Consolidated Schedule of Investments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barings Participation Investors

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 June 30, 2020.

 

	Fair Value	Valuation Technique	Unobservable Inputs	Range	Weighted**
Bank Loans	$ 75,539,078	Discounted Cash Flows	Discount Rate	5.8% to 15.3%	8.5%
Corporate Bonds	$ 18,399,923	Discounted Cash Flows	Discount Rate	8.5% to 20.7%	12.1%
	$ 7,967,238	Market Approach	Valuation Multiple	4.9x to 9.8x	7.4x
			EBITDA	$0.0 million to $18.1 million	$7.9 million
Equity Securities**	$ 11,705,688	Market Approach	Valuation Multiple	4.9x to 16.7x	9.5x
			EBITDA	$0.0 million to $279.2 million	$38.5 million

*	Excludes Level 3 assets of $45,385 which are valued based upon unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

**	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 12/31/2019				Included in earnings				Purchases				Sales				Prepayments				Transfers into Level 3				Transfers out of Level 3				Ending balance at 06/30/2020
Restricted Securities
Corporate Bonds		$	42,798,389			$	(4,761,717	)		$	776,260			$	(7,291,043	)		$	(5,154,728	)		$	—			$	—			$	26,367,161
Bank Loans			70,255,151				(3,343,062	)			8,822,007				(333,652	)			(475,229	)			613,864				—				75,539,079
Common Stock - U.S.			3,993,481				(50,646	)			—				(1,539,866	)			—				—				—				2,402,969
Preferred Stock			2,836,867				(151,944	)			—				(171,117	)			—				—				—				2,513,806
Partnerships and LLCs			7,510,960				(745,424	)			64,916				(41,540	)			—				—				—				6,788,912
Public Securities
Bank Loans			1,168,841				(5,000	)			—				(489,999	)			—				—				(673,842	)			—
Common Stock - U.S.			—				—				—				—				—				—				—				—
Corporate Bonds			—				(5,043	)			50,428				—				—				—				—				45,385
		$	128,563,689			$	(9,062,836	)		$	9,713,611			$	(9,867,217	)		$	(5,629,957	)		$	613,864			$	(673,842	)		$	113,657,312

 

 

 

 

 

 

 

 

 

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

 

 

 

 

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*   Robert E. Joyal   Susan B. Sweeney*   Maleyne M. Syracuse*     *Member of the Audit Committee       Officers   Christina Emery President   Jonathan Bock Vice President & Chief Financial Officer   Jill Dinerman Secretary & Chief Legal Officer   Sean Feeley Vice President   Elizabeth Murray Principal Accounting Officer   Christopher D. Hanscom Treasurer   Michael Cowart Chief Compliance Officer   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

 

ITEM 2. CODE OF ETHICS.

Not applicable for this filing.

 

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable for this filing

 

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable for this filing.

 

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable for this filing.

 

ITEM 6. SCHEDULE OF INVESTMENTS.

(a)

A schedule of investments for the Registrant is included as part of this report to shareholders under Item 1 of this Form N-CSR.

(b)

Not applicable for this filing.

 

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable for this filing.

 

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable for this filing.

 

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable for this filing.

 

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable for this filing.

 

ITEM 11. CONTROLS AND PROCEDURES.

(a)

The principal executive officer and principal financial officer of the Registrant evaluated the effectiveness of the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing date of this report and based on that evaluation have concluded that such disclosure controls and procedures are effective to provide reasonable assurance that material information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b)

There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) during the Registrant's second fiscal half year that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

 

ITEM 12. SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

(a)

Not applicable.

(b)

Not applicable.

 

ITEM 13. EXHIBITS.

(a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF AN EXHIBIT.

Not applicable for this filing.

(a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE 30a-2 UNDER THE ACT.

Attached hereto as EX-99.31.1

Attached hereto as EX-99.31.2

(a)(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23c-1 UNDER THE ACT (17 CFR 270.23c-1) SENT OR GIVEN DURING THE PERIOD COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR MORE PERSONS.

Not applicable for this filing.

(b) CERTIFICATIONS PURSUANT TO RULE 302-2(b) UNDER THE ACT.

Attached hereto as EX-99.32

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant):	Barings Participation Investors
By:	/s/ Christina Emery
	Christina Emery, President
Date:	September 4, 2020

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ Christina Emery
	Christina Emery, President
Date:	September 4, 2020
By:	/s/ Jonathan Bock
	Jonathan Bock, Vice President and Chief Financial Officer
Date:	September 4, 2020

 

 

 

 

 

EXHIBIT-99.31.1

 

CERTIFICATION



ITEM
13(a)(2) PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

 

I,
Christina Emery, certify that:



 



    
1.
    
I have reviewed this report on Form N-CSR of Barings Participation Investors;

    
 
    
 

    
2.
    
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

    
 
    
 

    
3.
    
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

    
 
    
 

    
4.
    
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 



    
 
    
a)
    
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

    
 
    
 
    
 

    
 
    
b)
    
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

    
 
    
 
    
 

    
 
    
c)
    
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

    
 
    
 
    
 

    
 
    
d)
    
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and





    
5.
    
The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):





    
 
    
a)
    
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

    
 
    
 
    
 

    
 
    
b)
    
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 





    
 
    
 
    
 
    
 

    
Date:  September 4, 2020
    
By
    
/s/ Christina Emery
    
 

    
 
    
 
    
Christina Emery
    
 

    
 
    
 
    
President
    
 

    
 
    
 
    
Barings Participation Investors
    
 

EXHIBIT-99.31.2

 

CERTIFICATION



ITEM
13(a)(2) PRINCIPAL FINANCIAL OFFICER CERTIFICATION

 

I,
Jonathan Bock, certify that:

 





    
1.
    
I have reviewed this report on Form N-CSR of Barings Participation Investors;

    
 
    
 

    
2.
    
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

    
 
    
 

    
3.
    
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

    
 
    
 

    
4.
    
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:





    
 
    
a)
    
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

    
 
    
 
    
 

    
 
    
b)
    
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

    
 
    
 
    
 

    
 
    
c)
    
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

    
 
    
 
    
 

    
 
    
d)
    
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and





    
5.
    
The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):





    
 
    
a)
    
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

    
 
    
 
    
 

    
 
    
b)
    
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.





    
 
                           
 
    
 
    
 
    
 

    
Date:  September 4, 2020
    
By
    
/s/ Jonathan Bock
    
 

    
 
    
 
    
Jonathan Bock
    
 

    
 
    
 
    
Vice President and Chief Financial Officer
    
 

    
 
    
 
    
Barings Participation Investors
    
 

EXHIBIT-99.32

 

 

ITEM
13(b)

To my knowledge, this
periodic report containing the financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and that the information contained in the periodic report fairly presents, in all material respects, the financial
condition and results of operations of the issuer.

 

 



    
 
    
 
    
 
    
 
    
 

    
/s/ Christina Emery
    
 
    
 
    
 
    
 

    
Christina Emery
    
 
    
 
    
 
    
 

    
President
    
 
    
 
    
 
    
 

    
Barings Participation Investors
    
 
    
 
    
 
    
 

    

        
 
        
 
    
 
    
 
    
 
    
 

    
/s/ Jonathan Bock
    
 
    
 
    
 
    
 

    
Jonathan Bock
    
 
    
 
    
 
    
 

    
Vice President and Chief Financial Officer
    
 
    
 
    
 
    
 

    
Barings Participation Investors
    
 
    
 
    
 
    
 

    
 
    
 
    
 
    
 
    
 

    
September 4, 2020