Midcap Financial Investment Corporation · NASDAQ:MFIC
Midcap Financial Investment — Investor Presentation (March 2025)
45 slides from Midcap Financial Investment's investor presentation, March 2025
Slide 1: MidCap Financial Investment Corporation Investor Presentation
MidCap Financial Investment Corporation Investor Presentation March 2025 Unless otherwise noted, information as of December 31, 2024. Confidential and Proprietary - Not for distribution, in whole or in part, without the express written consent of Apollo Global Management, Inc. It should not be assum
Slide 2: Disclaimers, Definitions and Important Notes
Disclaimers, Definitions and Important Notes Forward-Looking Statements Additional Important Disclosure We make forward-looking statements in this presentation and other filings we make with the Securities and Exchange This presentation is confidential and may not be distributed, transmitted or othe
Slide 3: Table of Contents
Introduction Private Credit Environment Table of Contents MidCap Financial MidCap Financial Investment Corporation’s (MFIC) Investment Strategy and Portfolio Conclusion Appendix 3
Slide 4: Introduction
APOLLO Introduction
Slide 5: MidCap Financial Investment Corporation (MFIC) is a Middle Market BDC
INTRODUCTION MidCap Financial Investment Corporation (“MFIC”) is a Middle Market BDC Managed by an affiliate of Apollo, and focused on investing primarily in loans sourced by Midcap Financial Apollo is a high growth MFIC is a publicly Apollo traded is a high (NASDAQ: growth MFIC is MidCap a publicly
Slide 6: Apollo Today: Integrated Asset Management and Retirement Services Capabilities
INTRODUCTION Apollo Today: Integrated Asset Management and Retirement Services Capabilities GL OBA L M A NA GEMENT $93B 5,000+ ASSET Market Employees RETIREMENT M A N AG E M E N T Capitalization1 Globally SERVICES A2 / A / A Rated by Moody’s, Fitch, S&P A SSET MA N A GEM ENT $751B A2 / A / A ~$30B A
Slide 7: Private Credit Environment
Private Credit Environment 7
Slide 8: Credit Spreads Remain Tight but Yields are Still Elevated
PRIVATE CREDIT ENVIRONMENT Credit Spreads Remain Tight but Yields are Still Elevated Marginal demand for U.S. credit is strong thanks to high all-in yields and supportive technical backdrop Yield-Driven Demand Likely to Limit the Extent of Any Spread Widening Yields Are Attractive, Even if Spread Va
Slide 9: Secular Trends Impacting Public and Private Markets
PRIVATE CREDIT ENVIRONMENT Secular Trends Impacting Public and Private Markets We Believe That Liquidity in Public Markets is Not What it Seems Sacrificing Liquidity in Public Markets No Longer Provides Meaningful Excess Spread Dealer Balance Sheets are a Fraction of Their Pre-Great Financial Crisis
Slide 10: Bank Continued Retrenchment from Middle Market Lending & Strong Demand for Loans
PRIVATE CREDIT ENVIRONMENT Bank Continued Retrenchment from Middle Market Lending & Strong Demand for Loans to Middle Market Companies Total Number of U.S. Banks Continues to Decline 1 Banks’ Reduced Participation in Loan Market 2, 3 12,000 50%+ decline since 2000 100% ~ 65%+ reduction in bank share
Slide 11: We Believe Now is an Opportune Time to Invest in Directly Originated Loans
PRIVATE CREDIT ENVIRONMENT We Believe Now is an Opportune Time to Invest in Directly Originated Loans Significant and growing Structural shift from bank Elevated interest Substantial private equity dry Consideration demands from transformational lending to private solutions rate environment powder a
Slide 12: Why We Believe Private Credit Can Produce Better Outcomes for Lenders
PRIVATE CREDIT ENVIRONMENT Why We Believe Private Credit Can Produce Better Outcomes for Lenders Broadly Syndicated Direct Origination Loans Credit Documentation Control Due Diligence Access Partial Full Relationship with Borrower Limited Comprehensive Origination and Spread Economics Syndication Co
Slide 13: MidCap Financial
APOLLO MidCap Financial
Slide 14: MidCap Financial is a Leading Middle Market Lender
MIDCAP FINANCIAL MidCap Financial1 is a Leading Middle Market Lender Key Members of Management Team Working Together 2 25+ Years Full-Service Finance Company Scaled Platform with Strong Credit Track Record • Founded in 2008 • Focused on senior debt solutions to middle • Well-established provider of
Slide 15: MidCap Financial's Strong Strategic Partnership with Apollo
MIDCAP FINANCIAL MidCap Financial’s1 Strong Strategic Partnership with Apollo Apollo Platforms Yield Origination MidCap Financial is Apollo’s primary direct origination Assets + Capabilities platform ² in private middle market credit Demand Full service finance company focused on senior debt needs
Slide 16: MidCap Financial Offers a Broad Suite of Products
MIDCAP FINANCIAL MidCap Financial1 Offers a Broad Suite of Products, Providing Solutions to Nearly All Financing Needs of Middle Market Clients Business Segments Asset Based Real Estate Lender Life Sciences and Franchise Leveraged Lending Lending Finance Technology Lending Lending Lending Product Ca
Slide 17: MidCap Financial is a Leading Middle Market Lender
MIDCAP FINANCIAL MidCap Financial1 is a Leading Middle Market Lender 2024 Middle Market Lending League Table2 Rank Lender Number of Deals 1 Antares Capital 234 2 MidCap Financial 190 3 TPG Twin Brook 160 4 Churchill 134 5 Ares Management 124 6 Morgan Stanley 120 7 Monroe Capital 112 8 Man Varagon (f
Slide 18: MidCap Financial Investment Corporation's Investment Strategy and Portfolio
MidCap Financial Investment Corporation’s (“MFIC”) Investment Strategy and Portfolio 18
Slide 19: MFIC Positioned to be a Pure Play Senior Secured Middle Market BDC
MFIC’S INVESTMENT STRATEGY AND PORTFOLIO MFIC Positioned to be a Pure Play Senior Secured Middle Market BDC 1 2 3 Focused on First Lien Loans Assets Primarily Sourced Prudent Portfolio Construction to Middle Market from MidCap Financial’s1 Companies Portfolio and Investments Focused on true first li
Slide 20: MidCap Financial Demonstrated Ability to Source Investment Opportunities
MFIC’S INVESTMENT STRATEGY AND PORTFOLIO MidCap Financial¹ Demonstrated Ability to Source Investment Opportunities MidCap Financial Commitments Closed 2 ($ in Billions) MidCap Financial and MFIC Commitments Closed 20243 $21.3 $20.0 $19.6 $16.4 $15.5 $15.0 MFIC MidCap Financial Commitments $10.0 Comm
Slide 21: MFIC Senior Secured Diversified Investment Portfolio
MFIC’S INVESTMENT STRATEGY AND PORTFOLIO MFIC Senior Secured Diversified Investment Portfolio Portfolio Snapshot Portfolio by Strategy Portfolio by Industry Portfolio $3.01 bn # of Portfolio Companies 233 8% 2% # of Industries 25 3% 21% 3% Direct Origination and Other1 % Total Portfolio 90% 3% Non-A
Slide 22: MFIC Credit Quality Remains Resilient
MFIC’S INVESTMENT STRATEGY AND PORTFOLIO MFIC Credit Quality Remains Resilient Median LTM EBITDA, $ in millions 1 Net Leverage and Attachment Point2 Net Leverage Attachment Point $52 5.27 x 5.36 x 5.38 x 5.43 x 5.50 x $47 $47 $46 $48 0.09 x 0.04 x 0.04 x 0.03 x 0.00 x Dec-23 Mar-24 Jun-24 Sep-24 Dec
Slide 23: MFIC Compares Favorably to BDC Averages on Select Key Metrics
MFIC’S INVESTMENT STRATEGY AND PORTFOLIO MFIC Compares Favorably to BDC Averages on Select Key Metrics We believe MFIC’s portfolio is more senior when We believe MFIC’s revenue quality is higher compared compared to BDC peers which should mitigate to peers with far less contribution from non-cash so
Slide 24: MFIC Has One of the Lowest Fee Structures Among Listed BDCs
MFIC’S INVESTMENT STRATEGY AND PORTFOLIO MFIC Has One of the Lowest Fee Structures Among Listed BDCs MFIC charges a management fee of 1.75% on net assets (i.e., equity) (equates to ~0.75% on gross assets assuming a net leverage ratio of 1.40x) while all comparable listed BDCs charge a management fee
Slide 25: Conclusion
APOLLO Conclusion
Slide 26: Reasons to Own MFIC
CONCLUSION Reasons to Own MFIC 1 Secular tailwinds create attractive environment for middle market direct lending Robust origination capabilities of Midcap Financial1 / Apollo can have the potential to provide attractive and 2 significant deal flow 3 Significant investment capacity to deploy into at
Slide 27: Appendix
APOLLO Appendix
Slide 28: MFIC Senior Leadership Team
APPENDIX MFIC Senior Leadership Team Howard T. Widra Executive Chairman Mr. Widra has been with Apollo and/or its affiliates since 2013 and serves as Apollo’s Head of Direct Origination. He was appointed Executive Chairman in August 2022. He served as the Company’s Chief Executive Officer from May 2
Slide 29: MFIC Senior Leadership Team (continued)
APPENDIX MFIC Senior Leadership Team (continued) Kristin Hester Chief Legal Officer and Secretary Ms. Hester joined Apollo in 2015 and currently serves as Senior Counsel for Apollo. She was promoted to Chief Legal Officer for the Company in August 2022 and served as General Counsel for the Company f
Slide 30: MFIC Top Direct Origination Portfolio Companies as of December 31, 2024
APPENDIX MFIC Top Direct Origination Portfolio Companies1 as of December 31, 2024 Fair Value % of Total ($ in millions) Portfolio 1 ChyronHego Corporation 2 $ 141 4.7% 2 LashCo $ 46 1.5% 3 Lending Point $ 45 1.5% 4 Beacon Mobility $ 38 1.3% Top 10 5 Medical Guardian $ 36 1.2% 15.7% Direct Originatio
Slide 31: Financial Highlights
APPENDIX Financial Highlights ($ in thousands, except per share data) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Financial Highlights Net investment income per share $0.40 $0.44 $0.45 $0.44 $0.46 Net realized and unrealized gains (losses) from investments 2 ($0.14) ($0.10) ($0.11) ($0.05) $0.05 Net realized
Slide 32: Portfolio Highlights
APPENDIX Portfolio Highlights ($ in thousands) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Portfolio by Strategy, at fair value ($) Leveraged lending $2,312,147 $2,253,723 $1,898,044 $1,819,089 $1,788,586 Life sciences 186,923 182,261 149,601 155,128 153,666 Asset based, franchise finance and lender finance
Slide 33: Direct Origination Portfolio Detail
APPENDIX Direct Origination Portfolio Detail1 ($ in thousands) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Portfolio by Asset Class, measured at fair value ($) First Lien $2,621,427 $2,550,292 $2,144,973 $2,051,724 $2,016,930 Second lien 4,851 $13,692 $13,401 $13,459 $31,886 Other 41,408 $41,563 $53,166 $52,
Slide 34: Direct Origination Commitments
APPENDIX Direct Origination Commitments1 ($ in thousands) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Gross Commitments Made by Asset Class First lien $254,511 $370,025 $285,238 $149,153 $174,923 Second lien and other 317 710 77 118 16 Gross commitments made $254,828 $370,734 $285,316 $149,270 $174,939 Gross
Slide 35: Funded Investment Activity
APPENDIX Funded Investment Activity ($ in thousands) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Fundings, excluding Merx Aviation, Revolvers, and AFT / AIF Gross fundings $248,332 $287,963 $214,029 $128,925 $113,518 Sales and syndications - (1,567) - - - Repayments (158,204) (70,103) (130,682) (95,398) (152
Slide 36: Funded Investment Activity (Cont.)
APPENDIX Funded Investment Activity (Cont.) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Number of Portfolio Companies Number of portfolio companies, at beginning of period 250 165 154 152 149 Number of new portfolio companies, (ex AFT / AIF) 11 27 18 7 10 Number of new portfolio companies, AFT / AIF - 104 -
Slide 37: Credit Quality
APPENDIX Credit Quality As of December 31, 2024, 2.1% of total investments at amortized cost, or 1.3% of total investments at fair value, were on non-accrual status ($ in thousands) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Investments on Non-Accrual Status, at amortized cost Non-accrual investments 1 $57,
Slide 38: Net Asset Value Rollforward
APPENDIX Net Asset Value Rollforward ($ in thousands, except per share data) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Per Share NAV, beginning of period $15.10 $15.38 $15.42 $15.41 $15.28 Net investment income 0.40 0.44 0.45 0.44 0.46 Net realized and unrealized gains (losses) from investments (ex. AFT /
Slide 39: Quarterly Operating Results
APPENDIX Quarterly Operating Results ($ in thousands, except per share data) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Total investment income Interest income (excluding PIK) $76,648 $77,880 $65,513 $65,681 $70,065 Dividend income 237 241 277 12 473 PIK interest income 4,674 2,974 2,473 930 930 Other incom
Slide 40: Quarterly Balance Sheet
APPENDIX Quarterly Balance Sheet ($ in thousands, except share and per share data) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Assets Investments at fair value $3,014,416 $3,027,094 $2,444,352 $2,352,836 $2,334,199 Cash and cash equivalents (including foreign currencies) 75,786 84,806 67,037 49,612 122,127 I
Slide 41: Funding Sources as of December 31, 2024
APPENDIX Funding Sources as of December 31, 2024 Debt Facilities ($ in thousands) Debt Issued/ Final Maturity Interest Principal Amount Amended Date Rate Outstanding Secured Facilities: Senior Secured Facility ($1.660 billion) 10/17/2024 10/17/2029 SOFR + 187.5 +10bps $ 970,148 MFIC Bethesda CLO I L
Slide 42: Interest Rate Exposure as of December 31, 2024
APPENDIX Interest Rate Exposure as of December 31, 2024 1 Investment Portfolio by Interest Rate Type Funding Sources by Interest Rate Type Variable rate assets Fixed rate debt 1% Fixed rate assets 18% Non yielding and 3% non-accrual assets 7% Common equity 44% Floating rate Floating rate debt assets
Slide 43: Realized and Change in Unrealized Gains (Losses) by Strategy
APPENDIX Realized and Change in Unrealized Gains (Losses) by Strategy ($ in millions) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Leveraged lending ($13.9) ($7.2) ($4.7) ($4.0) $4.5 Life sciences ($0.0) $0.8 $0.1 ($0.5) ($3.3) Franchise finance ($0.3) ($0.0) $0.0 ($0.0) $0.0 Asset based and lender finance ($
Slide 44: Outstanding Commitments
APPENDIX Outstanding Commitments ($ in thousands) Dec-24 Sep-24 Jun-24 Mar-24 Dec-23 Revolver Obligations and Bridge Loans Funded 1 $96,403 $102,156 $86,561 $75,762 $89,089 Unfunded 1, 2 244,674 227,492 195,345 182,695 176,723 Par $341,077 $329,648 $281,906 $258,457 $265,811 Unfunded Revolver and Br
Slide 45: Contact Information
APPENDIX Contact Information Elizabeth Besen Gregory W. Hunt Investor Relations Manager Chief Financial Officer and Treasurer Phone: (212) 822-0625 Phone: (212) 822-0655 Email: ebesen@apollo.com Email: ghunt@apollo.com 45
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