Q4 2024 Source Capital Earnings Call

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Ryan Leggio: It is now my pleasure to turn today's program over to Ryan Leggio. Ryan, the floor is yours. Thanks so much.

Speaker Change: It is now my pleasure to turn today's program over to Ryan Leggio, Ryan the floor is yours.

Ryan Leggio: Thanks, so much.

Ryan Leggio: Thank you for joining us today, everyone, for our annual Source Capital webcast. I notice a few very long-time shareholders on the call. It's nice to have you on.

Ryan Leggio: For joining us today, everyone for annual source capital webcast I noticed a few very longtime shareholders on the call. It's nice to have you on.

Ryan Leggio: My name is Ryan Leggio. I'm a partner at FPA, and I help lead client relations.

Ryan Leggio: My name is Ryan logo on the partnered FPA and I hope lead client relations.

Ryan Leggio: Momentarily, you will hear from Stephen Romick and Abhi Patwardhan. Stephen joined FPA in 1996 and is a managing partner of the firm. He apologizes for coughing just now. Abhi joined in 2010 and is also a partner at the firm. Both have been portfolio managers of Sorks Capital since December 2015.

Ryan Leggio: Momentarily you will hear from Steve enrollment and RV pump Warden, Stephen joined FPA in 1996, and as a managing partner of the firm he apologizes for for coughing just now.

Ryan Leggio: I'll be joined in 2010 and is also a partner at the firm both have been portfolio managers of source capital since December 2015.

Ryan Leggio: We remain really excited about SOURCE's long-term prospects and hope you share that sentiment after today's webcast.

Ryan Leggio: We remain really excited about sources of long term prospects and hope you share that sentiment after todays webcast.

Ryan Leggio: As a reminder, we will not take live questions during the webinar. Still, we are also more than happy to connect with any current or potential shareholders in the coming days, should you have follow-up questions or comments.

Ryan Leggio: As a reminder, we will not take live questions. During the webcast still we're also more than happy to connect with any current or potential shareholders in the coming days should you have follow up questions or comments.

Ryan Leggio: This slide shows the fund's trailing performance as of December 31st, 2024, versus its pertinent illustrative index. Additional details on the fund, including performance, holdings, and commentaries can be found in the Source Capital section of FPA's website. Well, we prefer to focus on complete market cycle and rolling five-year returns. 2024 was another good year for Source Capital. in both absolute and on a relative basis. During the year, the fund outperformed the balanced 60% global MSCI All-Country World Index and 40% Bloomberg Aggregate Blended Index with a roughly 40 percent allocation to equities on average throughout the year.

Ryan Leggio: This slide shows the funds trailing performance as of December 31, 2024 versus this curtain pertinent illustrative indices.

Ryan Leggio: Additional details on the fund, including performance Holdings and commentaries can be found in the source capital section of <unk> website.

Ryan Leggio: While we prefer to focus on complete market cycle and rolling five year returns.

Ryan Leggio: 2024 was another good year for source capital in both absolute and on a relative basis.

Ryan Leggio: During the year the fund outperformed the balance 60% global MSCI, all country World Index and 40% Bloom.

Ryan Leggio: Bloomberg aggregate blended index with a roughly 40%.

Ryan Leggio: Allocation to equities on average throughout the year.

Ryan Leggio: In 2024, Source maintained a 20.8 cent per month fund distribution. equating to approximately a 5.75% unlevered distribution rate based on the fund's year-end closing price. In recognition of the fund's good risk-adjusted performance compared to its allocation peers, Morningstar Rates sourced capital as a five-star fund. We believe the strategy is well positioned to continue to deliver attractive risk adjusted results over the long term.

Ryan Leggio: In 2024 source maintained a 28 cent per month fund distribution.

Ryan Leggio: Equating to approximately a 575% on.

Ryan Leggio: Unlevered distribution rate based on the funds yearend closing price.

Ryan Leggio: In recognition of the funds good risk adjusted performance compared to its allocation peers.

Ryan Leggio: Star rates source capital as a five Star fund.

Ryan Leggio: We believe this strategy is well positioned to continue to deliver attractive risk adjusted results over the long term.

Stephen Romick: At this time, it is my pleasure to turn the call over to Stephen Romick. Thank you, Ryan, and thank all of you for listening to this brief update on FBA's Source Capital Closed End Fund. Source Capital is a very opportunistic fund with tremendous flexibility. Its closed-end charter allows for less liquid investment. which was in the service of its goal of balancing capital appreciation and income while being mindful of the downside that is a permanent impairment of capital. Sources discounted net asset value or NAV remain narrow in 2024, averaging less than 6%. As of year-end, its distribution yield was an attractive 5.75%.

Speaker Change: At this time it is my pleasure to turn the call over to Steve enrollment Steven.

Speaker Change: Thank you Ryan and thank all of you for listening to this brief update on Fps source capital inclusive fun.

Speaker Change: First capital was very opportunistic fund with tremendous flexibility. It's closed in charter allows for less liquid investments, which was in the service of the school of balancing capital appreciation and income while being mindful.

Speaker Change: On the downside of that is a permanent impairment of capital <unk>.

Speaker Change: <unk> discount to net asset value or NAV remained narrow in 2024, averaging less than 6%.

Speaker Change: As of year end as distribution yield wasn't attractive five and three quarter percent.

Stephen Romick: Last year's yield was comprised entirely of ordinary income and capital gains, that is, no return of capital. We continue to manage distributable income to a level that delivers a competitive, risk-adjusted distributable yield. One of the benefits of managing a closed-end fund is that we can invest in less liquid securities that offer a different, yet attractive, risk-reward profile compared to public securities. Using public credit is an example of this. The fund's exposure to private credit, including its commitments, will be elevated in 2024, closing the year at 19.5% versus 28.8% at the end of 2022. remain committed to the fund trading at a small NAV discount over a complete market cycle.

Speaker Change: Last year's yield was comprised entirely of ordinary income and capital gains that is no return of capital. We continue to manage distributable income to a level that delivers a competitive risk adjusted distributable yield.

Speaker Change: One of the benefits of managing of closed in fund is that we can invest in less liquid securities that offer different yet attractive risk reward profile compared to public securities using public credit as an example of that.

Speaker Change: <unk> exposure to private credit, including its commitments I mean TV in 2020 for closing the year at 19, 5% versus 28, 8% at the end of 'twenty two.

Speaker Change: Remained committed to the fund triggered a small NAV discount over a complete market cycle to.

Stephen Romick: To accomplish that we may use several levers including looking for ways to increase the fund's distribution yield and in certain circumstances share repurchases. Source's portfolio managers and partners at FPA own over $2 million, reflecting appropriate alignment with our shareholders. We continue to take advantage. Allocating capital to private and public credit and equity, the added flexibility of investing in public and private credit opportunities that can, at the right price, successfully rival public equities will hopefully improve the fund's risk-adjusted returns while allowing for a greater, sustainable distributable yield over a full market cycle. If the fixed income sector offers more attractive opportunities, the fund's underlying risk exposure may shift from equity to debt.

Speaker Change: To accomplish that.

Speaker Change: Several levers, including looking for ways to increase the funds distribution yield and in certain circumstances share repurchases.

Speaker Change: Versus portfolio managers and partners.

Speaker Change: One over $2 million, reflecting.

Speaker Change: Appropriate alignment with our shareholders.

Speaker Change: We continue to take advantage.

A broad investment options.

Speaker Change: Allocating capital to private and public credit and equity the added flexibility of investing in public and private credit opportunities that can at the right price successfully rival public equities will hopefully improve the funds risk adjusted returns, while allowing for greater sustainable just should yield over a fee.

Speaker Change: Full market cycle.

Speaker Change: If the fixed income sector offers more attractive opportunities the funds underlying risk exposure may shift from equity to debt.

Stephen Romick: We will add leverage to the portfolio when the opportunity presents itself on the fixed income side. And that would be a function of yield, spread, and conviction in the underlying collateral. We may have little to no leverage if such opportunities don't exist. We will continue to return capital to shareholders and repurchase shares at a wide NAV discount to increase investor level return. All of this should help drive the fund's distributable yield higher. At the top of my remarks, I mentioned Source's narrower discount to NAV. This chart depicts that favorable trend. The average discount last year was 5.9%, significantly lower than the 9% average in 2023 and the 13% average in 2020.

Speaker Change: We will add leverage to the portfolio when the opportunity presents itself in the fixed income side.

Speaker Change: And that would be a function of yield spread and conviction in the underlying collateral.

Speaker Change: We may have little to no leverage opportunities don't exist.

Speaker Change: We will continue to return capital to shareholders and repurchase shares at a wide discount to increase investor level of return.

Speaker Change: All of this should help drive the funds distributed over yield higher.

Speaker Change: At the top of my remarks, I mentioned sources narrower discount to NAV.

Speaker Change: This chart depicts that favorable trend the average discount last year was five 9%.

Speaker Change: Significantly lower than the 9% average in 'twenty, three and the 13% average in 2020.

Stephen Romick: We hope that the successful execution of the strategy over time, combined with our shareholder-friendly actions such as high dividends and share repurchase, will continue to allow the funds discount to trade closer to NAV over full market cycle. We show year-end positioning on this slide. Swiss Capital ended 2024 with 41% in stocks, 39% in credit, and about 20% in cash. The fund's gross yield is around 4.6%, which is 1.6 percentage points higher than the yield of the Global Balance Index. The portfolio yield has declined slightly from the prior year-end, 2023. That's partly due to good news, given price appreciation in the public credits.

Speaker Change: We hope that the successful execution of the strategy over time.

Speaker Change: Bind with our shareholder friendly actions such as high dividends and share repurchases. We will continue to allow the funds discount to trade closer to an AAV over full market cycles.

Speaker Change: We show year end positioning.

Speaker Change: This line <unk> capital ended.

Speaker Change: 2024 was 41% in stocks, 39% in credit and about 20% in cash.

Speaker Change: <unk> gross yields around four 6%, which is one six percentage points higher from the yield of the global balance index to portfolio yield has described declined slightly from the prior year and 2023, that's partly due to good news given price appreciation in the public credit segment.

Stephen Romick: We continue increasing the fund's yield as we increase the yield of the fund's credit book, draw down cash, and ultimately add leverage via the established credit line. Stocks aren't cheap, especially in the U.S., as depicted here. U.S. stocks traded 22 times earnings, which places them in the 94th percentile. Such a rich valuation helps explain Source's relatively low equity allocation. The rest of the world trades less expensively. at or below their average, though that does not distinguish between the quality of business or industry sector, and the U.S. market ranks higher on both counts. Nevertheless, the valuation gap between the U.S.

Speaker Change: We continue increasing the funds yield as we increase the yield of the funds credit book drawdown cash and ultimately add leverage via the established credit line.

Speaker Change: Stocks are cheap, especially in the U S as depicted here.

Speaker Change: U S stocks traded 22 times earnings, which places them in the 94th percentile sensor rich valuation helps explain sources relatively low equity allocation the rest of the world trades less expensively.

Speaker Change: At or below their average so that does not distinguish between the quality of business or industry sector.

Speaker Change: In the U S market rents higher on both counts.

Nevertheless, the valuation gap between the U S and ex U S is about as wide as it's been.

Stephen Romick: and the next U.S. is about as wide as it's been. since 2000.

Speaker Change: Since 2000.

Stephen Romick: This chart offers more granularity concerning the private credit suite within SOAR. In the current rate environment, we have underwritten the fund's private credit exposure, a mix of private funds and individual loans, toward a targeted yield of at least a percent. which is higher than the 6.9% of the high-yield ETF. We also expect there should be less downside and volatility in our private credit investment.

Speaker Change: This chart.

Speaker Change: <unk> more granularity concerning the private credit suite within source.

Speaker Change: And the current rate environment, we have underwritten the funds private credit exposure and mix of private funds and individual loans towards targeted yield of at least 8%.

Speaker Change: Which is higher than the six 9% of the high yield Etfs.

Speaker Change: We also expect there should be less downside and volatility in our private credit investments.

Stephen Romick: Private credit exposure would be 19 and a half percent. today if all commitments were drawn. Increased exposure and hopefully good performance in our credit book will bolster the fund's distributable yield. Given the greater allocation of private credit...

Speaker Change: Private credit exposure would be 19, 5%.

Speaker Change: Today, if all commitments were drawn.

Speaker Change: Increased exposure and hopefully good performance in our credit book will bolster the funds distributable yield.

Speaker Change: Given the greater allocation of private credit.

Stephen Romick: We would like to run through an example to give you a better idea of how we are executing on our strategy. We have curated a portfolio of differentiated private credit managers, including a new commitment to this $260 million real estate lender. Since 2012, this firm has successfully bought and originated bridge and distressed senior secured real estate loans across residential, multifamily, and small commercial office real estate markets in the southeastern U.S. from its inception through Q3 last year, it deployed $445 million across 129 investments with only one small loss. We have underwritten a mid-teens rate of return for our aggregate investment with them.

Speaker Change: We would like to run through an example to give you a better idea of how we are executing on our strategy.

Speaker Change: We've curated a portfolio of differentiated private credit managers, including a new commitment to this $260 million real estate lender.

Speaker Change: Since 2012. This firm has successfully bought an originated.

Speaker Change: Rich and distress senior secured real estate loans across residential multifamily and small commercial office real estate markets in the southeastern U S.

Speaker Change: From its inception through Q3 last year it deployed.

Speaker Change: $445 million across 129 investments with only one small loss.

Speaker Change: We have underwritten a mid teens rate of return for our aggregate aggregate investment with them.

Stephen Romick: Source committed $14 million, which is about a 4% position of the fund. And we hope to have co-investment opportunities with them over time.

Speaker Change: Source committed $40 million, which is about a 4% position of fund and we hope to have co investment opportunities with them overtime.

Stephen Romick: One of our private credit investments paid off in Q4. In April of 23, we co-invested in an accounts receivable credit facility of the second largest fuel refinery in the UK. Quality Credits collateralize these accounts receivable, including those of national transportation companies, international oil companies, and some airlines. added an additional layer of protection. additional support in the form of credit insurance against the entire receivables portfolio. With our downside appropriately protected, we felt we were happy to be invited to participate in a loan that we underwrote to a gross 12.75% yield to maturity. The company's business improved, allowing them to refinance our loan, which they took us out of last October, in line with their underwriting expectations, netting the fund an 11.9% IRR.

Speaker Change: One of our private credit investments paid off in Q4 <unk>.

Speaker Change: In April of 'twenty, three we co invested in an accounts receivable credit facility of the second largest fuel refinery in the U K.

Speaker Change: Quality credits collateralized these accounts receivable, including those of National transportation companies International oil companies and some Merrill Lynch.

Speaker Change: Added an additional layer of protection and.

<unk> one <unk>.

Speaker Change: Additional support in the form of credit insurance against the entire receivables portfolio.

Speaker Change: With our downside.

Speaker Change: Appropriately protected we felt we were happy to be invited to participate in alone that we underwrote it to a gross 12 and three quarter percent yield to maturity.

Speaker Change: The companys business improved allowing them to refinance our loan which took us out of last October in line with our underwriting expectations, netting the fund and 11, 9% IRR.

Abhi Patwardhan: I'm going to turn it over to my partner, Avi, to chat about what he and his team are seeing in the public credit market. Happy? Thank you, Stephen. Echoing Stephen's comment from earlier, public credit markets are not cheap. Spreads have been increasing for several quarters. This chart shows the yield and spread on the high yield index and the BB component of the index excluding energy. We find that this BB component is a more consistent indicator of high yield market pricing over time because it removes some of the impact of composition changes in the overall index.

I'm going to turn it over to my partner Avi to chat about what he and his team are seeing and the public credit markets.

Speaker Change: Ravi.

Ravi: Thank you Steven.

Speaker Change: Echoing Steve's comments from earlier public credit markets are not cheap.

Speaker Change: Spreads have been increasing for several quarters.

This chart shows the yields and spreads on the high yield index and the double B component of the index excluding entity.

Speaker Change: We find that the double b component is a market existing indicator of high yield market pricing overtime, because it removes some of the impact composition changes in the overall index.

Abhi Patwardhan: Over the past 12 months, the spread on the High Yield Index has decreased from 346 basis points to 313 basis points. and the spread on this double B index shown here has decreased from 228 basis points to 200 basis points. Shown on the right side of this chart, as of year end, spreads on the high yield index were at the 4th percentile and spreads on this BB component were at the 5th percentile. The lower the percentile, the more expensive the market is. not shown is that the decrease in spreads was more significant for lower credit quality debt.

Speaker Change: Over the past 12 months the spread on the high yield index has decreased from 346 basis points to 313 basis points and the spread on this double B index shown here has decreased from 220 basis points to 200 basis points.

Speaker Change: Shown on the right side of this chart as of year end spreads on the high yield index, where at the <unk> percentile and spreads on this double b component where at the <unk> percentile.

Speaker Change: Lower than percentile and more expensive the market is.

Speaker Change: Not shown is that the decrease in spreads and more significant for lower credit quality debt.

Abhi Patwardhan: For example, one measure of CCC bonds saw spreads decrease by approximately 200 basis points over the past year. We don't invest based on charts like this, but this is an indication of what we've been seeing when we evaluate individual investments. Yields on high yield and other lower-rated debt are mere levels that we've seen only a few times in the past 15 or so years, but much of that yield is coming from generationally higher risk-free rates. Our eyes are drawn to attractive headline yields, but we typically find that low spreads don't offer enough compensation above risk-free rates to compensate us for the credit risk.

Speaker Change: For example, one measure of Triple C bonds saw spreads decreased by approximately 200 basis points over the past year.

Speaker Change: We don't invest based on charts like this but this is an indication of what we've been seeing when we evaluate individual investments.

Speaker Change: You also in high yield and other lower rated that are near levels that we've seen only a few times in the past six years seven years, but much of that yield is coming from generationally higher risk free rates.

Speaker Change: Our eyes are drawn to attracted headline yields, but we typically find that low spreads don't offer enough compensation above risk free rates to compensate us for the credit risk.

Abhi Patwardhan: As a result, we have not deployed much capital in public credit investments. In fact, over the past 12 months, we've added only approximately 80 basis points of exposure to the portfolio. Meanwhile, the decrease in spreads has created an opportunity for issuers to refinance debt that was issued in prior years when spreads were much higher. Consequently, a lot of our investments, which we had made during those periods of higher spreads, left the portfolio in the past year. Approximately 5% of the portfolio was called by issuers in the past 12 months and not replaced. In addition, we sold investments representing approximately 2.5% of the portfolio because spreads decreased to a level where the prospective returns were no longer attractive.

Speaker Change: As a result, we have not deployed much capital in public credit investments.

Speaker Change: In fact over the past 12 months, we've added only approximately 80 basis points of exposure to the portfolio.

Meanwhile, the decrease in spreads has created an opportunity for issuers to refinance debt that was issued in prior years when spreads were much higher.

Speaker Change: Consequently, a lot of our investments, which we had made during those periods of higher spreads let the portfolio in the past year.

Speaker Change: Approximately 5% of the portfolio is caused by issuers in the past 12 months and not replaced.

Speaker Change: In addition, we sold investments representing approximately two 5% of the portfolio.

Speaker Change: Spreads decreased to a level, where the prospective returns were no longer attractive.

Abhi Patwardhan: The net result is that the overall exposure to public credit has decreased. Stepping back, this makes sense, is one would expect to own less exposure when the market is expensive.

Speaker Change: The net result is that the overall exposure to public credit has decreased.

Speaker Change: Stepping back this makes sense as one would expect to own less exposure when the market is expensive.

Abhi Patwardhan: Going forward, we expect that this positioning will leave us well-placed to opportunistically invest if and when pricing becomes more attractive.

Speaker Change: Going forward, we expect that this positioning will leave us well placed to opportunistically invest if and when pricing becomes more attractive.

Ryan Leggio: Ryan, over to you. Thanks Stephen and Avi.

Brian: Brian over to you.

Brian: Thanks, Steven and Amit.

Ryan Leggio: We'll now answer the pre-submitted questions. We only received two pre-submitted questions.

Brian: We will now answer the pre submitted questions. We only received two pre submitted questions. If we missed your question or if you have additional questions. After the webcast. Please feel free to either email me personally.

Ryan Leggio: If we missed your question or if you have additional questions after the webcast, please feel free to either email me personally, which my website is on the screen right now, you can email our general email mailbox which is crm at fpa.com or you can email your FPA representative.

Brian: My Web site is on the screen right now you can E mail, our general E Mail mailbox, which is C. R. M at FPA Dot com or you can E mail your FTA representative.

Ryan Leggio: The first question we received was, what did management do in the fourth quarter of 2024 to close the discount to almost par? Well, we appreciate the question, and as Stephen mentioned earlier, we're really proud of the work we've done in terms of narrowing the discount to NAV over the last few years.

Brian: The first question. We received was what did management due in the fourth quarter of 2024 to close the discount to almost par.

While we appreciate the question and as Steven mentioned earlier, we're really proud of the work we've done in terms of narrowing the discount to NAV.

Brian: Over the last few years.

Ryan Leggio: The short answer is we don't know for sure, but let me offer a few observations. And let me start with what we didn't do.

Brian: The short answer is we don't know for sure, but let me offer a few observations.

Brian: And let me start with what we didn't do.

Ryan Leggio: In the fourth quarter of 2024, there were no share repurchases given the meager discount to NAV over that period. What did happen in the fourth quarter of 2024? All for three observations. The first is we've been talking to a lot of clients and prospective clients about source over the last few years, and we've continued that work last year and into this year. In addition, I attended a CEF closed and fund only conference at the end of last year to help further get the word out. The second thing I'd mention, which I mentioned at the beginning of the webcast, is I think a lot of shareholders are beginning to appreciate both the strong absolute performance and risk-adjusted performance.

Brian: In the fourth quarter of 2024, there were no share repurchases given the meager discount to NAV.

Brian: Over that period.

Brian: What did happen in the fourth quarter of 2020 for.

Brian: Offer three observations.

Brian: The first is we've been talking to a lot of clients and prospective clients about source over the last few years and we've continued that work last year and into this year. In addition, I attended a CES closed in fund only conference at the end of last year to help further get the word out.

Brian: The second thing I would mention which I mentioned at the beginning of the webcast is I think a lot of shareholders are beginning to appreciate both the strong absolute performance and risk adjusted performance and Thats not only just over the last year, but if you look over the last three years sources risk adjusted returns.

Ryan Leggio: And that's not only just over the last year, but if you look over the last three years, sources risk-adjusted returns and high sustainable distribution yield have been really compelling to a lot of investors as we've talked to them.

Brian: And high sustainable distribution yield have been really compelling to a lot of investors as we've talked to them.

Ryan Leggio: The last thing I would mention, but this really would only encompass the last few weeks of the quarter, is we did announce, as we've done in the last few years, a special distribution around December 23rd for shareholders of record, December 30th. So that may explain part of the trading action, the last few weeks of the year.

The last thing I would mention but this really would only encompassed the last few weeks of the quarter is we did announce as we've done in the last few years, a special distribution around December 23rd for shareholders of record December 30th So that may explain part of the trading action. The last few weeks of the year.

Ryan Leggio: The second question we received was a question about the bid-ask spread of source capital. So the first thing I'd mention is as we've gotten to know the shareholders of source better over the last few years. It's clear that many shareholders have owned Source, not only more than the three to five years we recommend for Source shareholders, but I've talked to many shareholders who have owned Source for over a decade.

Brian: The second question. We received was a question about the bid ask spread of source capital.

Brian: And here.

Brian: It's about trading source.

Brian: So the first thing I'd mention is as we've gotten to know the shareholders of source better over the last few years. It's.

Brian: It's clear that many shareholders have one source not only more than the three to five years, we recommend for <unk> shareholders, but I've talked to many shareholders, who have owned source for over a decade and so the trading activity of source.

Ryan Leggio: And so the trading activity of Source is maybe less than you would expect for a $365 odd million dollar closed-end fund that's only been around the last few years and that may have a mandate with shareholders that frankly churn their portfolio more often than short shareholders. The second observation I would make is, while SOURCE often trades more than $400,000 in any given day, we've talked to shareholders who've been able to successfully purchase hundreds of thousands of dollars in stock of SOURCE in any given day using their institutional trading desk. And so for those financial advisors on the line, I'd highly encourage you to reach out to the institutional trading desk on your platform that is used to trading closed end funds.

Brian: Is maybe less than you would expect.

For 365 odd million dollars closed end fund thats only been around the last few years and that may have a mandate with shareholders that frankly churn their portfolio more often then sure shareholders do.

Brian: The second observation I would make is while source often trades more than $400000 in any given day, we've talked to shareholders who've been able to successfully purchase hundreds of thousands of dollars in stock of source in any given day using their institutional trading desk and so for those financial advisors on the.

Brian: <unk> I would highly encourage you to reach out to the institutional trading desk on your platform that is used to trading closed end funds and they can really help you get best pricing from market impact perspective again.

Ryan Leggio: And they can really help you get best pricing from a market impact perspective.

Ryan Leggio: Again, if you have any other questions or would like to talk through this, I am available and please feel free to reach out.

Brian: Again, if you have any other questions we'd like to talk through this.

Brian: I'm available and please feel free to reach out to me.

Ryan Leggio: So those were the only two questions we received in advance. Again, if we missed your question or if you have additional questions, we'd love to hear from you.

Brian: So those were the only two questions. We received in advance again, if we missed your question or if you have additional questions we'd love to hear from you.

Operator: And with that, we would like to thank everyone for joining our annual source webcast today, and we'll turn the call back over to the moderator for closing disclosures. Have a great day, everyone. Thank you for your participation in today's webcast.

Brian: And with that we would like to thank everyone for joining our annual source webcast today, and we'll turn the call back over to the moderator for closing disclosures have a great day everyone.

Brian: Thank you for your participation in today's webcast. We invite you your colleagues and shareholders to listen to the playback of this recording and view the presentation slides that will be available on our website typically within a few weeks at FPA Dot com.

Operator: We invite you, your colleagues, and shareholders to listen to the playback of this recording and view the presentation slides that will be available on our website, typically within a few weeks, at fpa.com. We urge you to visit the website for additional information about the fund, such as complete portfolio holdings, historical returns, and after-tax returns.

Brian: We urge you to visit the website for additional information about the funds such as complete portfolio Holdings historical returns and after tax returns.

Operator: Following today's webcast, you will have the opportunity to provide your feedback and submit any comments or suggestions. We encourage you to complete this portion of the webcast. We know your time is valuable and we do appreciate and review all of your comments.

Brian: Following today's webcast you will have the opportunity to provide your feedback and submit any comments or suggestions.

Brian: We encourage you to complete this portion of the webcast.

We know your time is valuable and we do appreciate and review all of your comments.

Operator: Please visit fpa.com for future webcast information, including replays. We post the date and time of upcoming webcasts towards the end of each current quarter, and webcasts are typically held three to four weeks following each quarter end.

Brian: Please visit FPA dot com for future webcast information, including replays, we post the date and time of upcoming webcast towards the end of each current quarter and webcast are typically held three to four weeks following each quarter end.

Operator: If you did not receive an invitation via email for today's webcast and would like to receive them, please email us at crm at fpa.com. We hope that our quarterly commentaries, webcasts, and special commentaries will continue to keep you appropriately informed on the strategies discussed today. We do want to make sure you understand that the views expressed on this call are as of today and are subject to change without notice based on market and other conditions. These views may differ from other portfolio managers and analysts at the firm as a whole, and are not intended to be a forecast of future events, a guarantee of future results, or investment advice.

Brian: If you did not receive an invitation via email for todays webcast and would like to receive them. Please email us at CRM at FPA Dot com.

Brian: We hope that our quarterly commentaries Webcasts and special commentaries will continue to keep you appropriately informed on the strategy as discussed today.

Brian: We do want to make sure you understand that the views expressed on this call are as of today and are subject to change without notice based on market and other conditions.

Brian: These views may differ from other portfolio managers and analysts at the firm as a whole and are not intended to be a forecast of future events, a guarantee of future results or investment advice.

Operator: Past performance is no guarantee, nor is it indicative of future results. Any mention of individual securities or sectors should not be construed as a recommendation to purchase or sell such securities or invest in such sectors. and any information provided is not a sufficient basis upon which to make an investment decision. It should not be assumed that future investments will be profitable or will equal the performance of the security or sector examples discussed. Any statistics or market data mentioned during this webcast have been obtained from sources believed to be reliable, but the accuracy and completeness cannot be guaranteed.

Brian: Past performance is no guarantee nor is it indicative of future results any mention of individual securities or sectors should not be construed as a recommendation to purchase or sell such securities or invest in such sectors and any information provided is not a sufficient basis upon which to make an investment decision.

Brian: It should not be assumed that future investments will be profitable or will equal the performance of the security or sector. Examples discussed.

Brian: Any statistics or market data I mentioned during this webcast have been obtained from sources believed to be reliable, but the accuracy and completeness cannot be guaranteed.

Operator: You should consider the fund's investment objectives, risks, and charges and expenses carefully before you invest. As with any stock, the price of the fund's common shares will fluctuate with market conditions and other factors. Shares of the fund may trade at a price that is less than a discount or more than a premium of its net asset value. You can obtain additional information about the fund by visiting the website at fpa.com, by email at crm at fpa.com. toll free by calling 1-800-982-4372 or by contacting the fund in writing.

Brian: You should consider the fund's investment objectives risks and charges and expenses carefully before you invest.

Brian: As with any stock the price of the funds common shares will fluctuate with market conditions and other factors.

Brian: Shares of the fund May trade at a price that is less than a discount or more than a premium of its net asset value.

Brian: You can obtain additional information about the fund by visiting the website at FPA Dot com by E mail at CRM at FBA Dot com.

Brian: Toll free by calling one 898, Q4 372 or.

Brian: Or by contacting the funding writing.

Operator: This concludes today's call.

Brian: This concludes today's call. Thank you and enjoy the rest of your day.

Operator: Thank you and enjoy the rest of your day.