Cion Investment Corporation · NYSE:CION
Cion Investment — Investor Day (January 2025)
61 slides from Cion Investment's investor day presentation, Jan 28, 2025
Slide 1: CION Investor Day 2025
CION Investment CION Investor Day 2025 JANUARY 28, 2025 Corporation
Slide 2: Disclosures and Forward-Looking Statements
Disclosures and Forward-Looking Statements This presentation has been prepared by CION Investment Corporation (NYSE: CION) (the “Company” or materially from its expectations, include, but are not limited to, the risks, uncertainties and other factors “CION”) and may be used for information and due d
Slide 3: Today's Agenda
Today’s Agenda CION Investments Overview 01 Mark Gatto, Co-CEO CION CION Investment Corporation INVESTOR 02 Michael Reisner, Co-CEO DAY Our Approach to Middle Market Investing 03 Gregg Bresner, President & CIO 2025 A Strong Foundation for Growth & Our Valuation Process 04 Keith Franz, CFO & Nick Tzo
Slide 4: CION Investments Overview
CION Investor Day 2025 CION Investments Overview JANUARY 28, 2025
Slide 5: CION Investments Firm Snapshot
CION Investments CO-FOUNDERS WITH Firm Snapshot 20+ years 80 of average experience in building & Employees based in NYC (HQ), and distributing investment solutions Los Angeles Boston 10 26 36 8 7 Investment Sales/Marketing Operations Legal/Compliance Registered Professionals Professionals Profession
Slide 6: Our Current Business
Our Current Business DISTRIBUTION INVESTMENT MANAGEMENT ADVISOR-FOCUSED PARTNERSHIPS PARTNERSHIPS PARTNERSHIPS BUSINESSES CION CION Advisor I/O CION CION CION Securities Investment Advisor Lab Ares Real Estate Grosvenor Management by CION Management Management Management CION’s robust retail Oversee
Slide 7: Our History
Our History CION Investments was built on a foundation of expertise, transparency, and integrity. We believe we are building differentiated, investor-first structures that offer true access to premier investment management and opportunities with a specific focus on permanent capital vehicles. CION I
Slide 8: Our Current Investment Solutions
Our Current Investment Solutions GLOBALLY DIVERSIFIED CREDIT US DIRECT LENDING INFRASTRUCTURE SPECIALIZED REAL ESTATE CION Ares Diversified CION Investment CION Grosvenor CR Student Housing Credit Fund Corporation Infrastructure Fund Fund A dynamic, institutional-style portfolio Offers access to the
Slide 9: Robust Alternative Investment Retail Capital Raising
CION Robust Alternative INVESTOR DAY Investment Retail 2025 Capital Raising CION INVESTMENTS | 9
Slide 10: Success by the Numbers
Success by #3 Top 4 Top 10 the Numbers Credit interval fund equity raise over Interval fund equity raise across all Privately held or independently owned sponsor and distributor of alternative the last two years categories investment solutions Outreach 30+ 90k+ Years experience in Individual investo
Slide 11: Expansive and Diversified Intermediary Relationships
Expansive and Diversified Intermediary Relationships RIAs IBDs • 440 producing RIAs • 75+ selling agreements • 900+ producing representatives • 1,300+ current producing IARs Wirehouses* Custodians • 30k+ financial advisors • 2,100+ current producing IARs • 26 Custodians • $7+ trillion in client asse
Slide 12: CION Investment Corporation
CION Investment Corporation A Unique Opportunity for Potential Income and Capital Appreciation in the Public BDC Space CION Investor Day 2025 JANUARY 28, 2025
Slide 13: Today's Agenda
Today’s Agenda CION INVESTOR 01 CION – Who We Are DAY 2025 02 Our Track Record and Strategy 03 CION’s Investment Thesis CION INVESTMENTS | 13
Slide 14: CION Investment Group Platform Overview
CION Investment Group CION Investment Group is a vertically integrated alternative investment manager and retail distribution organization Platform Overview founded in 2011 CION Investment CION Ares Diversified CION Grosvenor Corporation Credit Fund Infrastructure Fund CION Investment Corporation (N
Slide 15: CION Investment Corporation (CION) at a Glance
CION Investment Corporation NYSE : CION (CION) at a Glance Size & Scale Investment Focus Strategy • $1.9 billion of Total Assets • Seek to drive cash yields and returns via • Seek floating rate 1st lien investments a highly diversified first lien portfolio of at attractive spreads: • Large enough to
Slide 16: CION – Our Track Record
CION – Our Track Record A Robust Capital Raising Engine à A Strong Record of Disciplined Capital Deployment $1.15B Over $8B 51.5% In Capital Raised via Deployed Since Total Return Since 1 3 Retail Channel Inception Listing 2,500+ 0.022% Transactions Closed Annualized Loss Rate Since Inception2 Note:
Slide 17: A Deep and Experienced Team With Organizational Flexibility
A Deep and Experienced Team With Investment Committee Organizational Flexibility Mark Gatto Michael Reisner Finance, Accounting, Operations Co-Chief Executive Officer Co-Chief Executive Officer Keith Franz (Chief Financial Officer) 20+ Years of Investing Experience 20+ Years of Investing Experience
Slide 18: Investment Strategy Anchored by Quality Earnings
Investment Strategy Anchored by Quality Earnings CION seeks to drive investor returns from direct and Core Opportunistic opportunistic first-lien investments at the top of the capital structure • Direct floating rate first-lien • Selective secondary purchases investments at the top of the of illiqui
Slide 19: Today CION is a mid-sized BDC (by NAV) in a crowded space
Today CION is a mid-sized BDC (by NAV) in a crowded space Large Mid Small Micro $12,000 $1B+ $500M - $1B $250M - <$250M $10,000 Avg P/NAV 0.95x Avg P/NAV 0.94x $500M Avg P/NAV 0.82x Avg P/NAV 0.96x $8,000 NAV ($M) $6,000 CION performs like …but trades this group… like this group $4,000 $2,000 $0 BD
Slide 20: We Believe CION Remains Undervalued Despite Sustained Performance
We Believe CION Remains Undervalued Despite Sustained Performance Price/NAV Ratio vs 3 Year Average ROE CION Average ROE – Last 3 Years1 1.00x 9.00% 7.2% 7.50% Peer2 Median 2.5% 0.90x 6.00% 0.80x 4.50% CION Total Return – Since Listing3 3.00% 0.70x 51.5% 1.50% Peer2 Median 15.3% 0.60x 0.00% -1.50% 0
Slide 21: Our 3 Year Average ROE Compares Favorably to Peers
Our 3 Year Average ROE1 Compares Favorably to Mid-Sized to Micro BDC Peers2 20% 15% 10% 5% Peer Median 0% -5% -10% -15% BDC 1 BDC 2 BDC 3 BDC 4 BDC 5 BDC 6 BDC 7 BDC 8 BDC 9 BDC 10 BDC 11 BDC 12 BDC 13 BDC 14 BDC 15 CION BDC 16 BDC 17 BDC 18 BDC 19 BDC 20 BDC 21 Note: Past performance does not guara
Slide 22: Our Total Return Since Listing Has Outpaced Many BDCs
Our Total Return Since Listing Has Outpaced Many Medium to Micro BDCs1 Total Return (10/05/2021 - 12/31/24)2 120% 100% 80% 60% 40% 20% Peer Median 0% -20% -40% BDC 1 BDC 2 BDC 3 BDC 4 BDC 5 BDC 6 BDC 7 BDC 8 BDC 9 BDC 10 BDC 11 BDC 12 BDC 13 BDC 14 BDC 15 BDC 16 BDC 17 CION BDC 18 BDC 19 BDC 20 BDC
Slide 23: Our Portfolio Remains Conservatively Positioned
Our Portfolio Remains Conservatively Positioned More first lien investments on average1 Lower non-accruals on average2 100.0% 12.0% 80.0% 10.0% 8.0% 60.0% 6.0% 40.0% 4.0% 20.0% 2.0% 0.0% 0.0% CION BDC 1 BDC 2 BDC 3 BDC 4 BDC 5 BDC 6 BDC 7 BDC 8 BDC 9 CION BDC 1 BDC 2 BDC 3 BDC 4 BDC 5 BDC 6 BDC 7 BD
Slide 24: Our Portfolio Generates Attractive Dividend Income
Our Portfolio Generates Attractive Dividend Income We have strong base dividend coverage1… …and an attractive dividend yield2 160% 25.0% 140% 20.0% 120% 100% 15.0% 80% 60% 10.0% 40% 5.0% 20% 0% 0.0% CION CION BDC 10 BDC 11 BDC 12 BDC 13 BDC 14 BDC 15 BDC 16 BDC 17 BDC 18 BDC 19 BDC 20 BDC 21 BDC 22
Slide 25: Supporting Our Stock With Accretive Buybacks and Insider Purchases
Supporting Our Stock With Total Repurchases as a % of Market Cap2 Accretive Buybacks1 and Insider Purchases 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% CION Peer Average Note: All results and financial data are as of September 30, 2024. CION’s BDC peers represent those externally managed mid-sized, smal
Slide 26: In Focus – PIK and Equity Portfolio
In Focus – PIK and Equity Portfolio Payment in Kind Equity Portfolio • Will selectively use PIK features to enhance yields in a first • Often is acquired via a restructuring with takeback debt lien position and equity • Often prefer these structures to potentially reaching lower • Recent growth in e
Slide 27: In Focus - Not all PIK is Created Equal
In Focus - Not all PIK is Created Equal 95.8% 34% 2/3 of CION’s PIK income is Only ~4% of CION’s PIK is risk 66% “structured” vs “amended” rated 4 or 51 4.2% 4% FV marks remain 96% First Lien Senior 78% of PIK Loans Marked 90+ Secured Debt supportive 96% 8% 20% 20.2% 2025 22.9% 33% 2026 CION’s PIK i
Slide 28: In Focus – Our Equity Portfolio
In Focus – Our Equity Portfolio Top 3 Positions - ~45% of Equity Portfolio at FV David’s Bridal Carestream Health Longview Power • National leader in bridal, wedding • Worldwide provider of medical imaging • 700 megawatt coal-fired power plant – planning, and special occasion industry systems, x-ray
Slide 29: Our Approach Has Led to Outperformance of Estimates
Our Approach Has Led to Outperformance of Estimates Quarterly CION Earnings Per Share vs. Consensus Analyst Estimates $0.70 Average BEAT vs analyst consensus: $0.60 $0.50 25.8% $0.40 $0.30 Average MISS vs analyst consensus: $0.20 $0.10 -4.4% $0.00 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q
Slide 30: In Summary
In Summary Price/NAV Ratio1 vs 3 Year Average ROE2 We believe our market price is 1.00x 9.00% fundamentally disconnected from our 7.50% performance 0.90x 6.00% 0.80x 4.50% We believe our portfolio remains 3.00% conservatively positioned and is 0.70x 1.50% performing well 0.60x 0.00% -1.50% 0.50x We
Slide 31: Our Approach to Middle Market Investing
CION Investor Day 2025 CION Investment Corporation JANUARY 28, 2025 Our Approach to Middle Market Investing
Slide 32: Today's Agenda
Today’s Agenda CION INVESTOR DAY 2025 01 The US Middle Market Opportunity 02 Our Deal Sourcing and Strategy 03 Managing our Portfolio 04 Case Studies CION INVESTMENTS | 32
Slide 33: The US Middle Market – A Massive Investable Sector
The US Middle Market – A Massive Investable Sector Our addressable market is massive… …and growing confidently… …while investing in key areas 300,000 Businesses 4 out of 5 are growing revenue Technology $13T in Annual Revenue Double digit employment growth Talent One Third of Private Sector 20% borr
Slide 34: The US Middle Market – Resilient From Recent Competitive Pressures
The US Middle Market – Resilient From Recent Competitive Pressures Lower and Middle Market1 Large Cap Market1 Spread Compression Moderate High Covenant Package Maintenance & Comprehensive Lite to No Covenant Lender Protections Protective Relaxed 1. Source: Pitchbook / LCD Q4 2024 Global Private Cred
Slide 35: 2024 Cohort: Investment Returns vs. Funds Flow Management
2024 Cohort: Investment Returns • For 2024, CION was able to remain selective and sustain 1L loan spreads in excess of 600 bps due to proportional investment activity and having achieved its targeted vs. Funds Flow Management leverage of 1.25x early in the year • Average monthly net cash inflows of
Slide 36: Differentiated Investment Platform
Differentiated CION’s unique platform drives selectivity, efficiency and focus Investment Platform Sourcing Powered Organizational Flexibility Size & Scale CION is Exclusive Focus by Strong Network Generates Efficiency Provides Competitive of Investment Team Advantage • Direct first lien and club •
Slide 37: Sourcing Strategy Drives Selectivity
Sourcing Strategy Drives CION’s open architecture origination approach capitalizes on a deep and diverse network of highly Selectivity experienced and like-minded partners: • Private and Public Lenders § Relationships are deep, long-term and personal; often date back for decades • Select middle mark
Slide 38: Sample Transaction Partners
Sample Transaction Partners Many More… Note: As of September 30, 2024. CION INVESTMENTS | 38
Slide 39: Investment Strategy
Investment Strategy CION drives investor returns primarily through a first lien focus supplemented with select, opportunistic investments CORE OPPORTUNISTIC (90% of investments) (10% of investments) • Direct investments at the top of the capital structure • Selectively target higher return / special
Slide 40: A robust bottom-up investment process
Dynamic Investment Committee with Clear Investment Criteria Private Equity Funds Investment Banks Commercial Banks Club Lending Peers Financial & Legal Intermediaries Owners / Operators Pre-screen potential investment Begin drafting initial due diligence list and Key Investment Criteria: A robust “b
Slide 41: We Believe Our Opportunistic Strategy Complements our Core Business
We Believe Our Opportunistic Strategy Complements our Core Business Lightly syndicated and illiquid first lien loans to quality borrowers purchased at a discount due to credit rating / technical / allocation dislocations and acquired through secondary purchase First Lien Focus Technical Dislocations
Slide 42: A Thorough Underwriting and Monitoring Process
A Thorough Underwriting and CION implements a fully-integrated underwriting approach that we believe produces superior credit outcomes. Monitoring Process • One integrated team for entire process: sourcing, underwriting, monitoring, and management of refinancing/restructuring. • May produce superior
Slide 43: Experienced Senior Investment Team With a Singular Focus
Experienced Senior Investment We Believe Our Team Structure Has Unique Advantages Team With a Singular Focus Gregg Bresner – 30+ years Exclusively focused on CION BDC – not competing Geoff Manna – Senior MD – 30+ years with other in-house funds or strategies Joe Elsabee – MD - 15+ years Aditi Budhia
Slide 44: In Focus – Our Structural PIK
In Focus – Our Structural PIK Minimal/Moderate Material PIK Philosophy PIK Modification PIK is structurally PIK is utilized to PIK is utilized to used as we seek to replace a portion of provide incremental attain higher yields at cash interest or liquidity to borrowers closing incrementally add in c
Slide 45: Structural PIK Example – Two Litigation Finance Investments
Structural PIK Example – Two Litigation Finance Investments – Case Study Summary SOFR + 5% - 8% Targeted IRR Loan Originated Regular Cash Interest Payments Loan Matures High Yielding Structural PIK Uncertain Timing of Case Settlements and 20+% Targeted IRR Loan Originated Cash Payments Loan Matures
Slide 46: In Focus – Our Equity Portfolio
In Focus – Our Equity Portfolio Top 3 Positions - ~45% of Equity Portfolio at FV David’s Bridal Carestream Health Longview Power • Restructured and acquired through • Co-led subset of 2L lenders to backstop • Co-lead subset of 1L lenders to 2023 bankruptcy court process via DIP and equity rights off
Slide 47: In Summary
In Summary Massive Opportunity Set in Differentiated Investment Middle Market Platform • $13T in Revenue • Strong Sourcing Network • 300,000 US Businesses • Core Direct Lending • Resilient from Competitive • Opportunistic & Special Pressures Situations Case Studies Deep and Experienced Defensive Por
Slide 48: Dayton Superior
CASE STUDY 1 Dayton Superior Company Profile CION Involvement Key Highlights: Founded in 1924 and headquartered in Ohio, Dayton Superior Corporation CION worked with a like-minded lender group to • CION team had deep history with is a global company serving the non-residential concrete construction
Slide 49: Future Pak
CASE STUDY 2 Future Pak Company Profile CION Involvement Key Highlights: Future Pak, Ltd (“Future Pak” or the “Company”) is an integrated sales and CION participated alongside Colbeck and was • High risk reward contract manufacturing organization for pharmaceuticals. Company comfortable given the wa
Slide 50: Yak Mat
CASE STUDY 3 Yak Mat Company Profile CION Involvement Key Highlights: Yak Access (now a part of NYSE: URI) is a leading CION bought into the 1L Term Loan at a significant discount and • Contrarian specialty equipment leasing and logistics company contacted incumbent lenders to lock arms and fund the
Slide 51: Balance Sheet & Debt Capital Structure
CION Investor Day 2025 JANUARY 28, 2025 CION Investment Corporation Balance Sheet & Debt Capital Structure
Slide 52: Conservative Balance Sheet Philosophy
Conservative Balance We believe our strong balance sheet supports our operational flexibility and ability Sheet Philosophy to be active in different market conditions, as we seek to: Maintain a Well Focus on Diversified Debt Unsecured Maintain a Maintain Structure with an Financing for Strong Liquid
Slide 53: Debt Summary – Diversified Debt Structure
Debt Summary – Diversified Debt Structure DEBT SCHEDULE* ($ in millions) Total Principal Commitment Amount Interest Rate Maturity Date Amount Outstanding JPM Credit Facility $562 $450 S + 2.55% 6/15/2027 • $1.07B Total Debt Outstanding Unsecured Notes, 2029 173 173 7.50% 12/30/2029 UBS Facility 150
Slide 54: Debt Summary – Debt Mix
Debt Summary – Debt Mix1,2 DEBT MATURITIES1 ($ in millions) • 60% - Unsecured Debt $280 • 40% - Senior Secured Debt • 88% - Floating Rate • 8.2% - WA Cost of Debt $450 Capital $240 $173 • WA Maturity Wall recently $100 extended by 3 years through 2025 2026 2027 2028 2029 2027 and 2029 Senior Secured
Slide 55: Strong Liquidity Position
Strong Liquidity Position $83 million $162 million In cash and cash equivalents In available revolver capacity within existing senior secured facilities 30% Turnover Rate $853 million Portfolio turnover creates additional source of In total unencumbered assets liquidity* As of September 30, 2024. Pa
Slide 56: Recent Transactions- Diversified Sources of Debt Financing
Recent Transactions- Diversified Sources of Debt Financing • On July 15, 2024, amended and extended our $675 million Senior Secured Credit Facility with JPMorgan Chase Bank through Demonstrated Track Record 2027. of Accessing the Debt Capital • On September 18, 2024, completed a private offering pur
Slide 57: Valuation Team & Process
CION Investor Day 2025 JANUARY 28, 2025 CION Investment Corporation Valuation Team & Process
Slide 58: Valuation Team
Valuation Team Recommend and Present the Quarterly 01 02 Fair Value Marks to CIM: Lead and Coordinate Manage internal and the Quarterly Valuation external resources Process 03 04 Structure of the Independent Resources Valuation Team to Mitigate Internal Conflicts CION INVESTMENTS | 58 CION INVESTMEN
Slide 59: Third Party Valuation Firms
Third Party Continuous Portfolio Monitoring Valuation Firms • Receive and analyze monthly, quarterly and annual financial packages • Discuss portfolio company financial information at daily investment team meetings • Assess covenant compliance and variance to projected financials and business plan •
Slide 60: Valuation Process - Overview
Valuation Process CION maintains a rigorous valuation process overseen by CION’s Board of Directors with a well-documented and strict - Overview process for all assets 01 02 03 04 05 Determine Fair Perform Valuation Review Valuation Determine Final Recommend Fair Value Treatment Analysis Results Fai
Slide 61: Navigating Complexity in the Middle Market
Panel: Navigating Complexity in the Middle Market Moderator Geoff Manna Senior Managing Director, CION Investment Corporation Michael Aingorn Keith Carter Managing Director, Crestline Investors Senior Managing Director, Man Varagon Panelist Panelist Anup Bagaria Joe Elsabee Co-Managing Partner, Eagl