Blackrock Tcp Capital Corp. · NASDAQ:TCPC
Blackrock Tcp Capital — TCP Capital — Wells Fargo Middle Market Opportunities Forum 2016
28 slides from Blackrock Tcp Capital's conference presentation, December 2016
Slide 1: Wells Fargo Middle Market Opportunities Forum
Wells Fargo Middle Market Opportunities Forum December 2016 © 2016 Tennenbaum Capital Partners, LLC. All Rights Reserved.
Slide 2: Presenter
Presenter Chairman & CEO, TCP Capital Corp. Howard Levkowitz Managing Partner & Co-Founder, Tennenbaum Capital Partners 2
Slide 3: Forward Looking Statements
Forward Looking Statements Prospective investors considering an investment in TCP Capital Corp. should consider the investment objectives, risks and expenses of the Company carefully before investing. This information and other information about the Company are available in the Company's filings wit
Slide 4: Overview
Overview
Slide 5: Established Platform – Tennenbaum Capital Partners
Established Platform – Tennenbaum Capital Partners (“Tennenbaum”) Externally Managed by Tennenbaum Experienced Team with Diverse Skills Over $7 billion in committed capital 19 industry-focused verticals with under management by a leading alternative senior experienced professionals investing investm
Slide 6: Overview of TCPC Investment Manager
Overview of TCPC Investment Manager Tennenbaum Over $7 billion of committed capital under management(1) TCP Capital Corp. Private Institutional Registered Fund (NASDAQ: TCPC) Vehicles Publicly-traded BDC (1) As of September 30, 2016. 6
Slide 7: Portfolio Growth Since IPO
Portfolio Growth Since IPO Portfolio Growth Since IPO $1,400 $1.3 billion $1,200 $1,000 $800 Dollars in millions $600 $400 $200 $ Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Equity Fixed rate debt Floating rate debt 7
Slide 8: Best-In-Class Advisory Fee Structure
Best-In-Class Advisory Fee Structure Typical Externally Managed BDCs(1) TCP Capital Corp. Base Management Fee 1.5% - 2.0% on gross assets 1.5% on gross assets (less cash and cash equivalents) Incentive Fee Hurdle 2.0% quarterly return on NAV 2.0% quarterly return on NAV Capital Gains: 20%
Slide 9: Dividend Stability
Dividend Stability Net investment income(1) of $0.39 per share, out-earning dividend by $0.03 Quarterly dividend of $0.36 per share paid on September 30, 2016 Declared Q4 2016 dividend of $0.36 per share Payable on December 30, 2016 to holders of record as of December 16, 2016 2012(2) 2013 2
Slide 10: Strong Track Record of Positive Performance
Strong Track Record of Positive Performance Book Value per Share and Dividends Paid $22.00 $21.52 $21.06 $21.00 $20.62 $20.34 $20.38 $19.98 $20.00 $19.55 $19.18 $19.17 $19.00 $18.70 $18.30 $17.80 $6.68 $18.00 $6.32 $17.27 $5.24 $5.96 $4.88 $5.60 $3.75 $4.52 $16.79 $4.16 $17.00 $3.39 $2.98 $16.40 $2.
Slide 11: Strong Track Record of Positive Performance
Strong Track Record of Positive Performance TCPC vs WFBDC Since IPO Indexed Performance 180 170 160 150 140 130 120 110 100 90 80 WFBDC TCPC Source: FactSet 11
Slide 12: Investment Strategy & Focus
Investment Strategy & Focus Primarily current cash income with additional return from origination and structuring fees Return Focus Potential capital appreciation Potential upside through equity participation Directly originated and newly originated leveraged loans and, to a lesser extent, s
Slide 13: Multi-Channel Deal Sourcing
Multi-Channel Deal Sourcing Tennenbaum utilizes an extensive and diverse sourcing network designed to generate attractive investments regardless of market conditions Industry / Sector Network Advisory Investor Relationships Reciprocal Credit Firm Board Relationships Middle-Market LBO Liquidators /
Slide 14: Investment Process
Investment Process Over its 20 year history(1), Tennenbaum has developed and implemented a proven, repeatable investment process Rigorous Due Diligence & Investment Portfolio Realizations / Structuring Committee Management Liquidity Experienced credit investors Thorough review of due Holisti
Slide 15: Middle-Market Credit Overview
Middle-Market Credit Overview Middle-market lending is increasingly dominated by non-traditional lenders as banks continue a secular shift away from the market Why have banks retreated from the market? Regulatory Changes Consequences for the Banks • Dodd Frank / Volcker Rule • Increased regulatory
Slide 16: Case Studies: Aircraft Financings
Case Studies* Aircraft Financings * Case studies provide examples of investments made by TCPC and its investment process and approach. Not all investments following this process and approach have been profitable and there can be no guarantee that the investments profiled will be profitable. Addition
Slide 17: Case Studies: Diversity of Portfolio
Case Studies* Diversity of Portfolio * Case studies provide examples of investments made by TCPC and its investment process and approach. Not all investments following this process and approach have been profitable and there can be no guarantee that the investments profiled will be profitable. Addit
Slide 18: Portfolio and Financial Review
Portfolio and Financial Review
Slide 19: Diversified Portfolio as of September 30, 2016
Diversified Portfolio as of September 30, 2016 $1.3 billion portfolio fair value 88 companies 11.2% weighted average effective yield on debt portfolio(1) Investment by Industry Largest position: 3.67% Top 10 investments: 26.7% (1) Weighted average annual effective yield includes amortizati
Slide 20: Conservatively Positioned Primarily Floating Rate Portfolio
Conservatively Positioned Primarily Floating Rate Portfolio As of September 30, 2016 Portfolio by Asset Type Debt Portfolio by Interest Type Leverage by Interest Type Mezzanine / Equity 4% Junior Debt <1% Floating rate 52% Fixed Rate 19% Floating Rate 81% Fixed rate 48% Senior Secured Debt 96% Posit
Slide 21: Diversified Sources of Funding
Diversified Sources of Funding As of September 30, 2016 Source Capacity Drawn Amount Available Pricing Maturity SVCP Revolver $116.0mm - $116.0mm L + 2.50% Jul-18 Term Loan $100.5mm $100.5mm - L + 2.50% Jul-18 2019 Convertible Senior Unsecured Notes $106.4mm (1) $106.4mm - '5.25% Dec-19 2022 Convert
Slide 22: 2016 Highlights
2016 Highlights Out-earned our dividends by $0.14 per share over the last four quarters Raised $30 million in equity through issuance and conversion of a privately placed convertible note Raised $35.3 million in equity through a registered direct offering of common stock Closed private place
Slide 23: Conclusion
Conclusion
Slide 24: Key Highlights
Key Highlights Founded in 1996, inclusive of predecessor entity; Registered Investment Advisor Established Direct since 2001 Origination Platform More than $16.5 billion invested in over 450 companies Approximately $1.3 billion portfolio with a 11.2% effective yield on the debt(1) Portfolio
Slide 25: Appendix
Appendix
Slide 26: Financial Highlights
Financial Highlights ($ per share) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Net investment income before taxes (1) $ 0.49 $ 0.47 $ 0.47 $ 0.55 $ 0.50 Excise taxes - - - (0.02) - Incentive compensation on NII (0.10) (0.09) (0.09) (0.11) (0.10) Net investment income, after incentive(1) 0.39 0.38 0.38 0
Slide 27: Portfolio Highlights
Portfolio Highlights Asset Mix of the Investment Portfolio (in thousands) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Senior secured debt $ 1,221,182 $ 1,176,581 $ 1,173,244 $ 1,129,571 $ 1,227,621 Mezzanine/subordinated debt - - 65 965 57 Equity 55,248 54,920 53,836 52,384 41,483 Total investments 1,27
Slide 28: Corporate Information
Corporate Information Securities Listing Transfer Agent NASDAQ: TCPC Wells Fargo Shareholder Services (800) 468-9716 (from U.S.) Research Coverage (651) 450-4064 (from outside U.S.) www.shareowneronline.com Bank of America Merrill Lynch Citigroup Global Markets D.A. David Corporate Headquarter
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