Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Investor Presentation (October 2017)
24 slides from Oaktree Specialty Lending's investor presentation, Oct 17, 2017
Slide 1: Oaktree Specialty Lending Corporation Investor Presentation
OAKTREE OCSL Specialty Lending Corporation Investor Presentation
Slide 2: Forward Looking Statements
OAKTREE OCSL Specialty Lending Corporation Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended
Slide 3: Oaktree Capital Management
OAKTREE OCSL Specialty Lending Corporation Oaktree Capital Management • Founded in 1995, Oaktree is a leading global investment management firm focused on credit investing – Applies a contrarian, value-oriented and risk-controlled investment strategy across a variety of asset classes – Assets under
Slide 4: The Oaktree Advantage
OAKTREE OCSL Specialty Lending Corporation The Oaktree Advantage Scale • Premier credit manager and leader among alternative investment managers for more than 20 years • $99.3 billion in assets under management; 70% in credit strategies • A team of more than 250 highly experienced investment profess
Slide 5: Corporate Highlights
OAKTREE OCSL Specialty Lending Corporation Corporate Highlights • Provide customized, one-stop credit solutions to companies with limited access to public or syndicated capital markets • Leverage the extensive firm-wide resources and expertise of Oaktree for originations, due diligence, and credit s
Slide 6: Management Team
OAKTREE OCSL Specialty Lending Corporation Management Team Edgar Lee, Chief Executive Officer & Chief Investment Officer • Managing Director and Portfolio Manager of Oaktree’s Strategic Credit Strategy • 10 year career with Oaktree; Founder of the Strategic Credit Strategy which has grown from $250
Slide 7: Oaktree's Investment Philosophy
OAKTREE OCSL Specialty Lending Corporation Oaktree’s Investment Philosophy Oaktree’s Underwriting Criteria and Investment Process Have Been Demonstrated Across Market Cycles Primacy of Risk Control Avoid Losers & Winners Take Care of Themselves Market Inefficiency Benefits Of Specialization Emphasis
Slide 8: Oaktree's Approach to Direct Lending
OAKTREE OCSL Specialty Lending Corporation Oaktree’s Approach to Direct Lending Emphasis on Proprietary Deals Focus on High-quality Companies and Extensive Diligence Disciplined Portfolio Management Employ Innovative Loan Structures to Manage Risk • Focus on proprietary investment opportunities as w
Slide 9: Oaktree's Extensive Origination Capabilities
OAKTREE OCSL Specialty Lending Corporation Oaktree’s Extensive Origination Capabilities Extensive, Global Credit Platform to Source Deal Flow • Strong market presence and established relationships with financial sponsors, management teams and capital raising advisers • Emphasis on proprietary deals:
Slide 10: Oaktree's Rigorous Diligence Process
OAKTREE OCSL Specialty Lending Corporation Oaktree’s Rigorous Diligence Process Company Analysis • Actively engage and assess company management teams • Identify and understand key business and demand drivers • Evaluate core risks within businesses and industries • “Think like an owner” regarding ca
Slide 11: Oaktree's Credit Investment Process
OAKTREE OCSL Specialty Lending Corporation Oaktree’s Credit Investment Process Source • Leverage Oaktree’s global platform: – Team of 250+ highly- experienced investment professionals – Strong market presence and established relationships with financial sponsors, management teams and capital raising
Slide 12: Middle-Market Represents Significant Opportunity for Direct Lending
OAKTREE OCSL Specialty Lending Corporation Middle-Market Represents Significant Opportunity for Direct Lending • Nearly 200,000 middle-market businesses in the U.S. – Companies with annual revenues of $50 million to $1 billion or EBITDA of $10 million to $50 million – Represent one-third of private
Slide 13: Portfolio Summary
OAKTREE OCSL Specialty Lending Corporation Portfolio Summary As of June 30, 2017 $1.8B Portfolio invested in 133 companies 10.3% Weighted average yield on debt investments 79.5% Of the debt portfolio consists of floating-rate loans Portfolio Composition (As % of total portfolio, at fair value) First
Slide 14: Portfolio Repositioning Strategy
OAKTREE OCSL Specialty Lending Corporation Portfolio Repositioning Strategy Near-term Priorities – Reposition The Portfolio • Protect principal and minimize credit losses • Manage the portfolio down to smaller number of high conviction investments • Restructure certain loans and exit positions when
Slide 15: Sources of Funding
OAKTREE OCSL Specialty Lending Corporation Sources of Funding As ofJune30, 2017 Funding SourceCapacityInterest RateMaturity Syndicated Credit Facility led by ING$710 million(1)LIBOR+225bpsAugust 2018 Sumitomo Mitsui Bank Credit Facility$125 millionLIBOR+200bpsAugust 2018 SBA debentures$148 million(2
Slide 16: Aligned with Investment Strategy and Shareholder Interests
OAKTREE OCSL Specialty Lending Corporation Aligned with Investment Strategy and Shareholder Interests Fee Structure • 1.5% base management fee on total gross assets (excluding cash and cash equivalents) • Incentive fee: – 6% hurdle rate – 17.5% of ordinary income – 17.5% on capital gains – No accumu
Slide 17: Board of Directors
OAKTREE OCSL Specialty Lending Corporation Board of Directors John Frank Chairman of the Board • Vice Chairman of Oaktree Capital Group • Joined Oaktree in 2001 as General Counsel • Managing Principal at Oaktree from 2006 -2014 Craig Jacobson Independent Director • Founding partner of Los Angeles ba
Slide 18: Investment Highlights
OAKTREE OCSL Specialty Lending Corporation Investment Highlights Specialty finance company dedicated to customized, one-stop credit solutions for companies with limited access to public or syndicated capital markets Managed by Oaktree Capital, a premier credit manager and leading global alternative
Slide 19: Appendix
OAKTREE OCSL Specialty Lending Corporation Appendix
Slide 20: Historical Financial Highlights
OAKTREE OCSL Specialty Lending Corporation Historical Financial Highlights ($ in thousands, except per share data) Q3’17 Q2’17 Q1’17 Q4’16 Q3’16 Operating Results Jun-17 Mar-17 Dec-16 Sep-16 Jun-16 Net investment income $19,390 $18,504 $23,294 $25,695 $29,106 Net realized appreciation (depreciation)
Slide 21: Historical Portfolio Metrics
OAKTREE OCSL Specialty Lending Corporation Historical Portfolio Metrics ($ in thousands) As of and for Three Months Ended June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 Investments at Fair Value $1,790,540 $1,788,690 $1,951,740 $2,165,490 $2,247,460 Number of Portfol
Slide 22: Credit Quality
OAKTREE OCSL Specialty Lending Corporation Credit Quality ($ in thousands) Non-Accrual – Debt Investments Q2 2017 Q1 2017 Q4 2016 Q3, 2016 Non-Accrual Investments at Amortized Cost $190,482 $190,141 $358,003 $214,816 Non-Accrual Investments/Total Investments at Amortized Cost 11.3% 11.3% 18.2 % 10.2
Slide 23: Investment Objectives – OCSL vs. OCSI
OAKTREE OCSL Specialty Lending Corporation Investment Objectives – OCSL vs. OCSI OAKTREE Specialty Lending Corporation (Nasdaq: OCSL) A vehicle with more flexibility to invest across the capital structure, may seek to take advantage of credit-specific and market dislocations • Lender to companies wi
Slide 24: Contact: Investor Relations
OAKTREE OCSL Specialty Lending Corporation Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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