Slide 1: Superior Proposal for TICC Capital Corp. Stockholders
Superior Proposal for TICC Capital Corp. Stockholders (NASDAQ: TICC) October 2015 1 Please refer to Important Disclosures and Disclaimers on Page 55
Slide 2: Agenda
AGENDA Introduction and Executive Summary NexPoint’s Value Proposition for Stockholders Appendix I: Q&A Appendix II: NexPoint’s Capabilities Appendix III: NexPoint’s Board Nominees Important Information Contact Information 2
Slide 3: Executive Summary
Executive Summary ▪ TICC Management, LLC (“TICC Management”), the Company’s current adviser, has agreed to be acquired by Benefit Street Partners, LLC (“BSP”) . ▪ NexPoint’s alternative proposal offers stockholders superior economics and is designed to bolster and support the dividend . ▪ NexPoint b
Slide 4: Executive Summary
Executive Summary ▪ Since the Board’s actions to date indicate that their interests are more aligned with the Company’s incumbent management than with you as a stockholder, we have nominated a highly experienced alternative slate of Board nominees . ▪ If elected at the October 27 meeting, we believe
Slide 5: NexPoint Urges you to vote
NexPoint Urges you to: ▪ Vote AGAINST the TICC Management Advisory Agreement ; ▪ Vote FOR electing NexPoint’s competing slate of director nominees, rejecting the new director nominees proposed by the Board ; and ▪ Vote AGAINST the Company’s proposal to adjourn the Special Meeting in the event that a
Slide 6: Timeline of Events
Timeline of Events 6 TICC announces BSP agreement wherein BSP acquires existing adviser and enters into a new advisory agreement NexPoint announces its proposal to the public Special Meeting of TICC Capital Corp. NexPoint submits its first superior proposal to the Board NexPoint announces to the pub
Slide 7: Agenda
AGENDA Introduction and Executive Summary NexPoint’s Value Proposition for Stockholders Appendix I: Q&A Appendix II: NexPoint’s Capabilities Appendix III: NexPoint’s Board Nominees Important Information Contact Information 7
Slide 8: NexPoint's Proposal for TICC
NexPoint’s Proposal for TICC ▪ P erpetual 1 . 25 % annual base management fee . ▪ This represents an estimated $ 2 . 6 million, or $ 26 million over 10 years, of annual savings to stockholders in perpetuity . * ▪ An additional waiver of the first $ 20 million of management fees . ▪ NexPoint’s propos
Slide 9: NexPoint's Offer is Superior to BSP's
NexPoint’s Offer is Superior to BSP’s TICC Management/ BSP NexPoint Advantage Ability to Vote on Director Slate at Upcoming Meeting Yes Yes Same Preservation of Current Strategy, if Desired by Stockholders No Yes NexPoint $20 million Management Fee Waiver No Yes NexPoint Management Fee (% of Gross A
Slide 10: NexPoint's Offer is Superior to TSLX's
NexPoint’s Offer is Superior to TSLX’s 10 NexPoint’s offer is immediately actionable for stockholders, offers superior economics, saving between $ 55 and $ 64 million in fees over the next 10 years 2 , and is designed to support and bolster TICC’s dividend . TSLX NexPoint Advantage Ability to Vote o
Slide 11: NexPoint Offers Superior Economics
NexPoint Offers Superior Economics ▪ Don’t be misled by either BSP or TSLX . ▪ Applicable fees under both BSP and TSLX proposals are materially higher than those proposed by NexPoint . ▪ NexPoint was the first to commit to open market purchases of the Company’s shares to help reduce TICC’s discount
Slide 12: NexPoint's Superior Experience
NexPoint’s Superior Experience ▪ NexPoint will maintain the Company’s current investment strategy, which is what stockholders have elected ; ▪ Though remaining flexible, and with the expertise, to adjust the strategy should independent Board members or stockholders so choose . ▪ NexPoint has superio
Slide 13: Stockholder Focused Board
Stockholder Focused Board ▪ NexPoint has nominated a highly qualified slate of directors who will be entirely focused on their fiduciary duties and delivering value for stockholders . ▪ Detailed biographies of our nominees are available in Appendix II of this presentation . ▪ If elected we expect to
Slide 14: Agenda
AGENDA Introduction and Executive Summary NexPoint’s Value Proposition for Stockholders Appendix I: Q&A Appendix II: NexPoint’s Capabilities Appendix III: NexPoint’s Board Nominees Important Information Contact Information 14
Slide 15: Why is NexPoint sending me a proxy statement?
Why is NexPoint sending me a proxy statement? ▪ NexPoint believes that the Board has failed to act in your best interests by continuing to support the BSP acquisition and recommending approval of the TICC Management Advisory Agreement while ignoring NexPoint’s repeated requests to meet with the Boar
Slide 16: I agree with NexPoint, what should I do?
I agree with NexPoint, what should I do? ▪ To protect your interest and preserve the value of your investment in the Company, NexPoint urges you to vote on the BLUE proxy card : ▪ Vote AGAINST the TICC Management Advisory Agreement ; ▪ Vote FOR electing NexPoint’s competing slate of director nominee
Slide 17: Can you tell me more about the Board's conduct?
Can you tell me more about the Board’s conduct ? ▪ On August 11 , 2015 , NexPoint submitted a proposal to the Board that offered the Company and its stockholders significant economic savings compared to the BSP proposal . ▪ Despite NexPoint’s stated desire to discuss the terms of its proposal with t
Slide 18: What is NexPoint's proposal?
What is NexPoint’s proposal? ▪ Perpetual 1 . 25 % annual base management fee . ▪ An additional waiver of the first $ 20 million of management fees . ▪ An investment of at least $ 20 million in the Company’s common stock in open market transactions in the first 12 months following appointment . ▪ Sup
Slide 19: Why is NexPoint's proposal Superior?
Why is NexPoint’s proposal Superior? 19 Q: A : 1 Based on the Company’s AUM as of June 30, 2015. Assumes 14% annual return. NexPoint’s Proposal Saves Stockholders Between $45 to $50 Million in Fees Over the BSP Proposal* TICC Management/ BSP NexPoint Advantage Ability to Vote on Director Slate at Up
Slide 20: Why does NexPoint believe the BSP transaction is designed to enrich management?
Why does NexPoint believe the BSP transaction is designed to enrich management? ▪ According to at least one industry analyst, this arrangement could generate estimated payments of $ 60 million to the Company’s current adviser, TICC Management (an amount we believe was initially as high as $ 132 mill
Slide 21: Can you tell me more about NexPoint and its qualifications?
Can you tell me more about NexPoint and its qualifications? ▪ NexPoint, together with its affiliates, currently manages approximately $ 20 billion in net assets and believes that its core competencies are squarely within the Company's investment strategy . ▪ NexPoint is affiliated with Highland Capi
Slide 22: Are there any alternative proposals on which I can vote?
Are there any alternative proposals on which I can vote? ▪ No, as discussed in the next Q&A . 22 Q: A :
Slide 23: What about the proposal from TPG Specialty Lending?
What about the proposal from TPG Specialty Lending, Inc. (“TSLX ”)? ▪ TSLX submitted only a preliminary, highly conditional non - binding all - stock offer, which “ does not constitute or create any commitment, undertaking or other binding obligation” and is “based solely on publicly available infor
Slide 24: Why is NexPoint's proposal superior to the TSLX proposal?
Why is NexPoint’s proposal superior to the TSLX proposal? 24 Q: A : NexPoint’s Proposal Saves Stockholders Between $55 to $64 Million in Fees Over the TSLX Proposal Over the Next 10 Years 2 TSLX NexPoint Advantage Ability to Vote on Director Slate at Upcoming Meeting No Yes NexPoint Preservation of
Slide 25: Should I hold out for a better offer from TSLX?
Should I hold out for a better offer from TSLX? 25 Q: A : ▪ No . The Board has provided no indication they are willing to pursue TSLX’s non - binding proposal and, even assuming the TSLX proposal was an available alternative, NexPoint strongly believes its proposal is superior for the following reas
Slide 26: NexPoint's industry-leading loyalty program
Can you tell me more about Nexpoint’s industry - leading loyalty program? ▪ Under this program, NexPoint plans to provide an effective 2 % gross - up of the contributions of stockholders that invest through the plan administrator and hold the related shares for at least one year . ▪ NexPoint believe
Slide 27: Why shouldn't TICC delay the meeting and seek alternatives?
Why shouldn’t TICC to delay the meeting and seek alternatives such as engaging an investment banker to analyze strategic alternatives? ▪ The Board has already shown, in our view, that they put TICC Management’s interests ahead of stockholders . ▪ Delaying the vote leaves the current management and b
Slide 28: If elected, how will your nominees implement your proposal?
If elected, how will your nominees implement your management proposal? ▪ Both the Board and the Company’s stockholders are required to approve an investment advisory agreement between the Company and NexPoint . ▪ Stockholders are not being asked at the Special Meeting to approve an investment adviso
Slide 29: Agenda
AGENDA Introduction and Executive Summary NexPoint’s Value Proposition for Stockholders Appendix I: Q&A Appendix II: NexPoint’s Capabilities Appendix III: NexPoint’s Board Nominees Important Information Contact Information 29
Slide 30: We Are A Leading Alternative Asset Manager
We Are A Leading Alternative Asset Manager CLOs $10.4 billion Liquid Alternatives $4.6 billion NexPoint , Highland and Affiliates $19.8 billion Hedge Funds, Private Equity and Other $3.4 billion Separate Accounts $1.4 billion Year Award Presenter 2015 Best CLO Fund CreditFlux 2015 Best New CLO Final
Slide 31: Our Competitive Edge
Our Competitive Edge 31 ▪ Led migration of the bank loan (senior secured loan) asset class to institutional products ▪ Structured the first non - bank CLO in 1996 ▪ Led migration of alternative strategies to liquid alternative funds ▪ One of the largest CLO managers in the world (1) ▪ Approximately
Slide 32: Our Investment Philosophy
Our Investment Philosophy 32 We seek to exploit these opportunities through : ▪ Proprietary fundamental credit and financial modelling across the spectrum of loans and bonds (par loans, CLOs, high yield, stressed/distressed loans), leading to a differentiated access and interpretation of information
Slide 33: Rigorous and Disciplined Investment Process
Rigorous and Discipline Investment Process Tested Through Multiple Cycles 33 Sourcing Due Diligence Approval Portfolio Construction Monitoring Sell Discipline Utilize relationships with Highland’s Trading Desk and external counterparties to identify opportunities Large, Broad, and Liquid Investment
Slide 34: Our Sourcing Process Creates a Unique and Differentiated Portfolio
Our Sourcing Process Creates a Unique and Differentiated Portfolio 34 Credit Suisse Leveraged Loan Index Approximately 1,600 loans (1) Credit Suisse High Yield Index Approximately 1,600 bonds (1 ) Investable Universe Tranche of $300 million+ Covered Universe Team of 15 credit research analysts condu
Slide 35: Consistent and Robust Process with Senior Level Investment Committee Approval
Comprehensive Committee packet includes five main categories of research with a full understanding of historical financials, including any adjustments to EBITDA and real cash flow Detailed hands on financial review and analysis Market and Competitive Analysis Valuation Key Risks and Mitigants Struct
Slide 36: Alpha is Generated Through Differentiated Portfolio Construction
Alpha is Generated Through Differentiated Portfolio Construction 36 Sourcing Due Diligence Approval Portfolio Construction Monitoring Sell Discipline THEMATIC. Theme based investing across industries and sectors Comprehensive Risk Management Incorporates: Fundamental Portfolio Economics Fundamental
Slide 37: Active Monitoring and Sell Discipline is Essential to Risk Management
Active Monitoring and Sell Discipline is Essential to Risk Management 37 Sourcing Due Diligence Approval Portfolio Construction Monitoring Sell Discipline Portfolio Level: ▪ Daily Return Attribution and Movers ▪ Portfolio Management Dashboard - measures and monitors the following risk metrics: – Dur
Slide 38: Comprehensive Approach to Risk Management
Comprehensive Approach to Risk Management 38 ▪ Identify key risks through regularly scheduled daily, weekly and monthly meetings ▪ Classify – Market risk – Fundamental/ e conomic risk – Sector and name - specific technical risk ▪ In monthly risk management meetings, the investment team reviews and q
Slide 39: Comprehensive Approach to Risk Management: Identification
Comprehensive Approach to Risk Management: Identification 39 Market Risk Mitigants : ▪ Monthly risk management meeting focuses on market risks we believe are non - consensus ▪ Views are constantly re - evaluated in scheduled daily and weekly meetings ▪ Quantitative portfolio risk overlay takes into
Slide 40: ▪ Investment Committee meetings at initial purchase and ongoing monitoring of investment thesis ▪
▪ Investment Committee meetings at initial purchase and ongoing monitoring of investment thesis ▪ Development in corporate fundamentals ▪ Capital structure and credit agreement review ▪ Competitive environment, etc . ▪ Review of models (projections, base case and downside scenarios) ▪ Credit earning
Slide 41: Our Firm's Approach to Investing is Founded on Common Beliefs
Our Firm’s Approach to Investing is Founded on Common Beliefs ▪ Experienced. ▪ Disciplined. ▪ Bold. Key Principles of our Philosophy 1 Wells Fargo Securities, “CLO Desktop Primer”, 3/11/2014. How We Invest ▪ Co - Founders, Jim Dondero and Mark Okada, each have over 30 years of experience in credit a
Slide 42: Agenda
AGENDA Introduction and Executive Summary NexPoint’s Value Proposition for Stockholders Appendix I: Q&A Appendix II: NexPoint’s Capabilities Appendix III: NexPoint’s Board Nominees Important Information Contact Information 42
Slide 43: Meet the Nominees
Meet the Nominees ▪ Dr . Bob Froehlich ▪ John Honis ▪ Timothy K . Hui ▪ William M . Swenson ▪ Ethan Powell ▪ Bryan A . Ward Additionally, If elected we expect to recommend engaging separate, premier legal counsel to advise the Board and TICC . 43
Slide 44: Dr. Bob Froehlich
Dr . Bob Froehlich Dr . Froehlich currently serves on a portfolio of boards spanning private, public, not - for - profit and mutual fund companies, which includes serving on the Advisory Board of Directors for Internet Connectivity Group, Inc . , Chairman of the Board, CEO, President & Owner of the
Slide 45: John Honis
John Honis Mr . John Honis has more than 25 years of business experience as CEO, CRO and board - level advisor to both high - growth and distressed companies in a wide range of manufacturing and service industries . Since August 2013 , Mr . Honis has served as President of Rand Advisors, LLC . Prior
Slide 46: Timothy K. Hui
Timothy K . Hui Mr . Timothy K . Hui has served as Dean of Educational Resources at at Cairn University (formerly, Philadelphia Biblical University) since July 2012 and also from July 2006 to January 2008 . Mr . Hui served as Vice President at Cairn University from February 2008 to June 2012 . He se
Slide 47: William M. Swenson
William M . Swenson Mr . Swenson has extensive experience raising debt and equity capital globally for middle market companies in various industries . Mr . Swenson’s experience spans Direct Lending, Debt Capital Markets (Loans, Bonds, Mezzanine and Private Debt), Origination, Portfolio and Credit Ri
Slide 48: Ethan Powell
Ethan Powell Mr . Powell is Chief Product Strategist at NexPoint and Highland Capital Management Fund Advisors, L . P . In this role he is responsible for evaluating and optimizing the registered product lineup offered by Highland . Additionally, Mr . Powell works with portfolio managers and wholesa
Slide 49: Bryan A. Ward
Bryan A . Ward Mr . Ward currently focuses on private investments in the oil and gas, real estate and power generation sector . Prior to this from 2001 - 2014 he held various senior roles including Special Projects Advisor, Senior Manager and Information Technology consultant at Accenture primarily
Slide 50: Agenda
AGENDA Introduction and Executive Summary NexPoint’s Value Proposition for Stockholders Appendix I: Q&A Appendix II: NexPoint’s Capabilities Appendix III: NexPoint’s Board Nominees Important Information Contact Information 50
Slide 51: Important Information
Important Information 51 ▪ The Special Meeting of the Company will be held on : ▪ October 27 , 2015 , at 10 : 00 a . m . , Eastern time ▪ Location : Sutherland Asbill & Brennan LLP ▪ 1114 Avenue of the Americas, 40 th Floor, New York, New York 10036 ▪ Your proxy is due on October 26 , 2015 if not vo
Slide 52: Agenda
AGENDA Introduction and Executive Summary NexPoint’s Value Proposition for Stockholders Appendix I: Q&A Appendix II: NexPoint’s Capabilities Appendix III: NexPoint’s Board Nominees Important Information Contact Information 52
Slide 53: Contact Information
Contact Information ▪ If you have any questions or need assistance voting your Shares, please call : D.F . King & Co., Inc. 48 Wall Street New York, NY 10005 ▪ Stockholders Call Toll−Free at: 866 - 416 - 0556 ▪ Banks and Brokers Call Collect at: 212 - 269 - 5550 ▪ Email: TICC@DFKing.com ▪ NexPoint e
Slide 54: Thank you for your support
Thank you for your support NexPoint Advisors, L . P . 54
Slide 55: Disclosures and Disclaimers
Disclosures and Disclaimers TSLX’s Incentive and Administrative Fee Structure . In addition to higher management fees, under TSLX’s incentive fee and administrative fee structure, stockholders would bear an additional approximately $ 10 - 14 million of incentive and administrative fees over the next
Slide 56: Disclaimer About NexPoint Advisors, L.P.
Disclaimer About NexPoint Advisors, L.P. NexPoint , together with its affiliates, currently manages approximately $ 22 billion in net assets and believes that its core competences are squarely within the Company's investment strategy . NexPoint is indirectly wholly owned by a trust that is beneficia
Slide 57: Disclaimer (cont'd)
Disclaimer (cont’d) Participants in the Solicitation NexPoint and the Nominees are deemed to be participants in NexPoint’s solicitation of proxies from the Company’s stockholders in connection with the matters to be considered at the Company’s Special Meeting of Stockholders to be held on October 27
Slide 58: Disclaimer (cont'd)
Disclaimer (cont’d) NexPoint and its respective affiliates do not assume responsibility for investment decisions . This presentation does not recommend the purchase or sale of any security . Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of
Slide 59: Disclaimer (cont'd)
Disclaimer (cont’d) NexPoint may have relied upon certain quantitative and qualitative assumptions when preparing the analysis which may not be articulated as part of the analysis . The realization of the assumptions on which the analysis was based are subject to significant uncertainties, variables