Phenixfin Corporation · NASDAQ:PFX
Phenixfin — Medley Capital — Wells Fargo Securities 2012 Specialty Finance Symposium
21 slides from Phenixfin's conference presentation, 2012
Slide 1: Medley Capital Corporation – 2012 Specialty Finance Symposium
Medley Capital Corporation We s Fargo Wells a go Securities Sec es 2012 Specialty Finance Symposium
Slide 2: Disclaimer for Medley Capital Corporation Presentation
Disclaimer for Medley y Capital p Corporation p Presentation These materials and any presentation of which they form a part are neither an offer to sell, nor a solicitation of an offer to purchase securities offered by Medley Capital Corporation. These materials are being provided for discussion pur
Slide 3: Forward Looking Statements
Forward Looking g Statements This presentation contains forward-looking statements. These statements include, without limitation, information with respect to future events or our future financial performance and results of operations. These forward looking statements are not guarantees of our future
Slide 4: Medley Overview
Medley y Overview Medley y is a p private asset management g firm focused on direct lending g to middle market businesses in the United States Medley y manages g over $ $1.6 billion in assets through g pprivate funds and Medley Capital Corporation (NYSE:MCC) Seasoned 42 person team with office
Slide 5: Why MCC?
Why y MCC? Growing dividend Attractive Return Secure portfolio with no assets on non non-accrual accrual Attractive yields in the lower middle market M k t Opportunity Market O t it Reduced competition with exit of banks and favorable outlook going forward Benefits from Medley Medley’ss br
Slide 6: MCC Performance Since IPO
MCC Performance Since IPO Consistent quarterly dividend growth ($0.31 for quarter ending 3/31/12) Visibility for future dividend increases based upon available investment capacity and existing pipeline 14.5% portfolio yield as of 3/31/12 with no assets on non-accrual $125M revolving credit f
Slide 7: Performance Since IPO
Performance Since IPO Dividend Growth Portfolio Growth $0.35 $350.0 $0.30 $0 30 $300 0 $300.0 $0.25 $250.0 ($ millionss) $0.20 $200.0 $0.31 $150.0 306.3 $0.15 $0.28 1 $ $0.25 248 7 248.7 $0.10 $0.21 $100.0 199.2 $0.16 144.7 $50.0 105.4 $0.05 84.8 $0.00 $0.0 3/31/11 6/30/11 9/30/11 12/31/11 3/31/12 I
Slide 8: Attractive Market Opportunity in Private Debt
Attractive Market Opportunity pp y in Private Debt Exit of banks and other lenders has created historically tight Reduced Competition p liquidity conditions Lower Risk Asset values and LTV ratios have declined Medley’s team and investment process have performed through Disciplined Approach the chall
Slide 9: Attractive Market Opportunity in Private Debt (cont.)
Attractive Market Opportunity pp y in Private Debt (cont.) 15+ years of banks reducing exposure to middle market lending (1,2) ~3,900 fewer banks from 1994-2011 Banks now have less than 20% market share 1. Source: S&P LCD, as of 12/31/11. Includes issuers with $50M or less of EBITDA. 2. Source: Fe
Slide 10: Medley Investment Process
Medley y Investment Process Consistent and diligent approach to all investment and portfolio management 25 investment professionals Significant repeat and referral deal flow Sourcing g Avoid A id bbroadly dl marketed k d and d syndicated di d transactions i Over 100 investments closed in l
Slide 11: Filtering – Highly Selective Underwriting Process
Filtering g – Highly g y Selective Underwriting g Process Historically, Medley has invested in 3%-5% of opportunities screened annually Annual Deal Volume Originate / Screen Deal 800 Reviewed by Portfolio Manager 200 Term Sheet Negotiation 100 Invest 25 – 35 Page 10
Slide 12: Portfolio Summary as of March 31, 2012
Portfolio Summary y as of March 31,, 2012 Portfolio Diversification1 $306.3M total fair value of investments as of March 31, 2012 6% 1% 5% 2% 2% 3% 3% 14.5% portfolio yield as of 3/31/12 6% 5% 2% 5% 3% 1% 3% 6% 30 portfolio companies as of 3/31/12 2% Diversified portfolio with no assets on n
Slide 13: High Quality Investment Portfolio
High g QQuality y Investment Portfolio Portfolio Composition Average Yield Medley Capital Corporation 99.4 % 0.6% 14.5% Solar Capital Ltd. 38.1% 52.2% 9.7% 14.3% THL Credit, Inc. 51.7% 43.0% 5.4% 14.0% PennantPark Investment 13.2% Corporation 49.8% 40.8% 9.4% Prospect Capital Corporation 77.5% 4.2%
Slide 14: Risk Management
Risk Management g Portfolio Construction Asset Servicing Broad Diversification Rigorous Oversight – Sector / industry – Weekly borrower calls – Collateral C ll l – Monthly M hl financials, fi i l cash h reconciliation ili i – Position size – Quarterly onsite visits – Active covenant monitoring Caref
Slide 15: Concluding Summary
Concluding g Summary y Compelling Market Opportunity – Secured positions against high-quality assets and enterprises – Less competition due to exit of traditional lending sources – Contractual payments that are not dependent upon M&A or public equity market Attractive A i RiRisk/Return k/R P Pro
Slide 16: Appendix – Select Financial Data
A Appendix di Select Financial Data
Slide 17: Financial & Portfolio Highlights
Financial & Portfolio Highlights g g Financial Highlights Q2-12 Q1-12 Q4-11 Q3-11 Q2-11 Net investment income per share $ 0.31 $ 0.28 $ 0.26 $ 0.21 $ 0.10 Net realized gains (losses) - - - - - Net unrealized gains (losses) 0.03 (0.03) (0.03) 0.02 - Net income per share 0.34 0.25 0.23 0.23 0.10 Net a
Slide 18: Select Financial & Portfolio Information
Select Financial & Portfolio Information As of and for the Three Months Ended 3/31/2012 12/31/2011 9/30/2011 6/30/2011 3/31/2011 Net investment income per share - basic & diluted $ 0.31 $ 0.28 $ 0.26 $ 0.21 $ 0.10 Net realized and unrealized gains per share - basic & diluted 0.03 (0.03) (0.03) 0.02
Slide 19: Balance Sheet
Balance Sheet As of 3/31/2012 12/31/2011 9/30/2011 6/30/2011 3/31/2011 ASSETS (Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) Investments at fair value Non-control/non-affiliate investments $ 260,364,140 $ 198,238,921 $ 153,385,565 $ 98,541,136 $ 59,273,023 Affili t iinvestments Affiliate
Slide 20: Transaction & Backlog Summary
Transaction & Backlog g Summary y Pricing 1 Deal Sector Security $Amount Fixed/Floating Tenor Yield Closed in Q2 FY11 Applied Natural Gas Fuels, Inc. Oil and Gas Senior - 1st lien $5.0 Fixed 3.0 years 13.9% Aurora Flight Sciences Corporation Aerospace & Defense Senior - 2nd lien 15.0 Fixed 3.0 years
Slide 21: Corporate Information
Corporate p Information Board of Directors Corporate Officers Research Coverage Corporate Counsel BROOK TAUBE BROOK TAUBE BB&T CAPITAL MARKETS MORRISON & FOERSTER, LLP Chairman & Chief Executive Officer Chairman & Chief Executive Officer Vernon Plack - (804)-780-3257 New York, NY ANDREW FENTRESS RIC
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