Phenixfin Corporation · NASDAQ:PFX
Phenixfin — Medley Capital — Credit Suisse Small & Mid Cap Conference 2012
21 slides from Phenixfin's conference presentation, September 2012
Slide 1: Medley Capital Corporation
Medley Capital Corporation Credit Suisse Small & Mid Cap Conference September 2012
Slide 2: Disclaimer for Medley Capital Corporation Presentation
Disclaimer for Medley Capital Corporation 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 purposes
Slide 3: Forward Looking Statements
Forward Looking 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 p
Slide 4: Medley Overview
Medley Overview Medley is a private asset management firm focused on direct lending to middle market businesses in the United States Medley manages over $1.6 billion in assets through private funds and Medley Capital Corporation (NYSE:MCC) Seasoned 46 person team with offices in New York and S
Slide 5: Why MCC?
Why MCC? Growing dividend Attractive Return Secure portfolio with no assets on non-accrual Attractive yields in the lower middle market Market Opportunity Reduced competition with exit of banks and favorable outlook going forward Benefits from Medley’s broad platform and organizational dep
Slide 6: MCC Performance Since IPO
MCC Performance Since IPO Consistent quarterly dividend growth ($0.36 for quarter ending 6/30/12) 14.3% portfolio yield as of 6/30/12 with no assets on non-accrual FY Q3 2012 investment originations of $67.5M Issued 5.75M shares in August 2012 for net proceeds of $71.7M $227.5M of committe
Slide 7: Performance Since IPO ($ millions)
Performance Since IPO Dividend Growth Portfolio Growth $0.40 $400.0 $0.35 $350.0 $0.30 $300.0 $0.25 $250.0 ($ millions) $0.20 $200.0 $0.36 363.1 $0.15 $0.31 $150.0 306.3 $0.28 1 $0.25 248.7 $0.10 $0.21 $100.0 199.2 $0.16 144.7 $0.05 $50.0 105.4 84.8 $0.00 $0.0 3/31/11 6/30/11 9/30/11 12/31/11 3/31/1
Slide 8: Attractive Market Opportunity in Private Debt
Attractive Market Opportunity in Private Debt Exit of banks and other lenders has created historically tight Reduced Competition liquidity conditions Lower Risk Asset values and LTV ratios have declined Medley’s team and investment process have performed through Disciplined Approach the challenging
Slide 9: Attractive Market Opportunity in Private Debt (cont.)
Attractive Market Opportunity 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: Federal
Slide 10: Medley Investment Process
Medley Investment Process Consistent and diligent approach to all investment and portfolio management 26 investment professionals Significant repeat and referral deal flow Sourcing Avoid broadly marketed and syndicated transactions Over 120 investments closed in last 10 years Rigorous in
Slide 11: Filtering – Highly Selective Underwriting Process
Filtering – Highly Selective Underwriting 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 June 30, 2012
Portfolio Summary as of June 30, 20121 Portfolio by Issuer 6% 1% 5% 2% 2% Applied Natural Gas Fuels, Inc. Geneva Wood Fuels LLC 3% 3% Bennu Glass, Inc. Aurora Flight Sciences Corporation 5% Velum Global Credit Management LLC Allied Cash Holdings LLC 6% Water Capital USA, Inc. BayDelta Maritime LLC S
Slide 13: High Quality Investment Portfolio
High Quality Investment Portfolio Portfolio Composition Average Yield 0 .4 % Medley Capital Corporation 5 5 .6% 4 4 .1% 14.3% 7 .7 % THL Credit, Inc. 2 4 .1% 6 8 .2% 14.2% Solar Capital Ltd. 4 1 .1% 4 0 .4% 1 8 .6% 13.9% 6 .7 % PennantPark Investment 13.2% 3 0 .7% 6 2 .6% Corporation Prospect Capita
Slide 14: Risk Management
Risk Management Portfolio Construction Asset Servicing Broad Diversification Rigorous Oversight – Sector / industry – Weekly borrower calls – Collateral – Monthly financials, cash reconciliation – Position size – Quarterly onsite visits – Active covenant monitoring Careful Structuring – UCC (lien) f
Slide 15: Concluding Summary
Concluding Summary 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 Risk/Return Profile – Lower ass
Slide 16: Appendix: Select Financial Data
Appendix Select Financial Data
Slide 17: Financial & Portfolio Highlights
Financial & Portfolio Highlights Financial Highlights Q3-12 Q2-12 Q1-12 Q4-11 Q3-11 Q2-11 Net investment income per share $ 0.36 $ 0.31 $ 0.28 $ 0.26 $ 0.21 $ 0.10 Net realized gains (losses) - - - - - - Net unrealized gains (losses) (0.08) 0.03 (0.03) (0.03) 0.02 - Net income per share 0.28 0.34 0.
Slide 18: Select Financial & Portfolio Information
Select Financial & Portfolio Information As of and for the Three Months Ended 6/30/2012 3/31/2012 12/31/2011 9/30/2011 6/30/2011 3/31/2011 Net investment income per share - basic & diluted $ 0.36 $ 0.31 $ 0.28 $ 0.26 $ 0.21 $ 0.10 Net realized and unrealized gains per share - basic & diluted (0.08)
Slide 19: Balance Sheet
Balance Sheet As of 6/30/2012 3/31/2012 12/31/2011 9/30/2011 6/30/2011 3/31/2011 ASSETS (Unaudited) (Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) Investments at fair value Non-control/non-affiliate investments $ 355,035,060 $ 260,364,140 $ 198,238,921 $ 153,385,565 $ 98,541,136 $ 59,273,
Slide 20: Transaction & Backlog Summary
Transaction & Backlog Summary Pricing 1 2 Deal Sector Security $Amount Fixed/Floating Tenor Yield Closed in Q1 FY12 Renaissance Learning, LLC Healthcare, Education and Childcare Senior - 1st/2nd lien $4.8 Floating 6.4 years 10.9% Hoffmaster Group, Inc. Personal & Nondurable Consumer Products Senior
Slide 21: Corporate Information
Corporate Information Board of Directors Corporate Officers Research Coverage Corporate Counsel BROOK TAUBE BROOK TAUBE CITIGROUP GLOBAL MARKETS MORRISON & FOERSTER, LLP Chairman & Chief Executive Officer Chairman & Chief Executive Officer Donald Fandetti - (212)-816-2971 New York, NY ANDREW FENTRES
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