Msc Income Fund, Inc. · NYSE:MSIF
Msc Income Fund — Q2 2024 Earnings Presentation
31 slides from Msc Income Fund's earnings presentation, Aug 14, 2024
Slide 1: MSC Income Fund Investor Presentation Second Quarter 2024
MSC INCOME FUND Investor Presentation Second Quarter – 2024 MSC MSCIncome Fund, Income Fund, Inc. Inc. mscincomefund.com mscincomefund.com Page 1
Slide 2: Disclaimers
Disclaimers MSC Income Fund, Inc. (MSIF or the Company) cautions that statements in You should read the documents MSIF has filed with the SEC for more this presentation that are forward-looking, and provide other than historical complete information about MSIF. You may access these documents for fre
Slide 3: Corporate Overview and Investment Strategy
MSC Income Fund, Inc. Corporate Overview and Investment Strategy 2nd Quarter – 2024 MSC Income Fund, Inc. mscincomefund.com Page 3
Slide 4: MSIF is a Principal Investor in Private Debt and Equity
MSIF is a Principal Investor in Private Debt and Equity Business Development Company (BDC) with diversified Diversified investment investment strategy strategy and resulting • $1.3 billion of capital(1) investment portfolio and – Managed by a wholly-owned subsidiary(2) of Main Street Capital Corpora
Slide 5: Private Loan Investment Strategy
Private Loan Investment Strategy Private Loan portfolio Investment objectives investments are primarily • Access proprietary investments with attractive risk-adjusted return debt investments in characteristics privately held companies • Generate cash yield to support MSIF’s quarterly dividend which
Slide 6: LMM Investment Strategy
LMM Investment Strategy LMM investment Investment objectives strategy differentiates • High cash yield from secured debt investments (12.8% weighted- MSIF from its average cash coupon as of June 30, 2024); plus competitors and • Dividend income, fair value appreciation and periodic capital gains pro
Slide 7: LMM Investment Opportunity
LMM Investment Opportunity MSIF targets LMM Large and critical portion of U.S. economy investments in • 195,000+ domestic LMM businesses(1) established, profitable companies LMM is under-served from a capital perspective and less competitive Characteristics of LMM provide beneficial risk- Inefficien
Slide 8: Middle Market Debt Investment Strategy
Middle Market Debt Investment Strategy MSIF has historically Investment objective invested in debt • Generate cash yield to support MSIF’s quarterly dividend investments in Middle Market companies and Investments in secured and/or rated debt investments continues to maintain a • First lien, senior s
Slide 9: MSIF Executive Management Team
MSIF Executive Management Team • Co-founded MAIN; Joined Main Street group in 2002; affiliated with Main Street group Dwayne Hyzak(1)(2) since 1999 CEO and Chairman of the Board • Director of Acquisitions & Integration with Quanta Services (NYSE: PWR) • Manager with a Big 5 Accounting Firm’s audit a
Slide 10: Investment Portfolio
MSC Income Fund, Inc. Investment Portfolio 2nd Quarter – 2024 MSC Income Fund, Inc. mscincomefund.com Page 10
Slide 11: Total Investment Portfolio
Total Investment Portfolio Diversity provides Includes complementary Private Loan debt investments, LMM debt and structural protection to equity investments and Middle Market debt investments investment portfolio, revenue sources, income, Total investment portfolio at fair value consists of approxim
Slide 12: Total Portfolio by Industry (as a Percentage of Cost)
Total Portfolio by Industry (as a Percentage of Cost)(1) (1) Excluding MSIF’s Other Portfolio investments, as described in MSIF’s SEC filings, which in aggregate represent approximately 2% of the total portfolio MSC Income Fund, Inc. mscincomefund.com Page 12
Slide 13: Diversified Total Portfolio (as a Percentage of Cost)
Diversified Total Portfolio (as a Percentage of Cost)(1) Invested Capital by Transaction Type Invested Capital by Geography(3) (2) 35% 18% 20% 23% 39% 19% 20% 21% 5% (1) Excluding MSIF’s Other Portfolio investments, as described in MSIF’s SEC filings, which in aggregate represent approximately 2% of
Slide 14: Private Loan Investment Portfolio
Private Loan Investment Portfolio Private Loan investment 84 investments / $665.9 million in fair value portfolio provides a • 58% of total investment portfolio at fair value diversified mix of investments and Average investment size of $7.8 million(1) (less than 1% of total sources of income to por
Slide 15: Middle Market Investment Portfolio
Middle Market Investment Portfolio Middle Market 13 investments / $49.9 million in fair value investment portfolio • Less than 5% of total investment portfolio at fair value provides a diversified mix of investments and Average investment size of $5.7 million(1) (less than 1% of total diverse source
Slide 16: Private Loan & Middle Market Portfolios by Industry
Private Loan & Middle Market Portfolios by Industry (as a Percentage of Cost) MSC Income Fund, Inc. mscincomefund.com Page 16
Slide 17: Diversified Private Loan & Middle Market Investments
Diversified Private Loan & Middle Market Investments (as a Percentage of Cost) Invested Capital by Transaction Type Invested Capital by Geography(2) Recapitalization/ Refinancing LBO/MBO(1) 36% 20% 13% 30% 32% 22% 15% 4% 28% Acquisition Growth Capital (1) Leveraged Buyout / Management Buyout (2) Bas
Slide 18: LMM Investment Portfolio
LMM Investment Portfolio LMM investment 54 portfolio companies / $406.3 million in fair value portfolio consists of a • 35% of total investment portfolio at fair value diversified mix of secured debt and lower Average investment size of $6.2 million at cost (less than 1% of cost basis equity total p
Slide 19: LMM Portfolio by Industry (as a Percentage of Cost)
LMM Portfolio by Industry (as a Percentage of Cost) MSC Income Fund, Inc. mscincomefund.com Page 19
Slide 20: Diversified LMM Portfolio (as a Percentage of Cost)
Diversified LMM Portfolio (as a Percentage of Cost) Invested Capital by Transaction Type Invested Capital by Geography(2) Recapitalization/ Refinancing LBO/MBO(1) 35% 14% 34% 9% 54% 27% 16% 7% 4% Acquisition Growth Capital (1) Leveraged Buyout / Management Buyout (2) Based upon portfolio company hea
Slide 21: Shareholder Liquidity Event Activity
MSC Income Fund, Inc. Shareholder Liquidity Event Activity 2nd Quarter – 2024 MSC Income Fund, Inc. mscincomefund.com Page 21
Slide 22: Shareholder Liquidity Event Activity
Shareholder Liquidity Event Activity Since becoming MSIF’s MSIF regularly explores potential liquidity events for its shareholders sole investment adviser in • MSIF’s management has frequent discussions with industry experts regarding the market conditions for a favorable outcome through various liq
Slide 23: Financial Overview
MSC Income Fund, Inc. Financial Overview 2nd Quarter – 2024 MSC Income Fund, Inc. mscincomefund.com Page 23
Slide 24: MSIF Financial Performance
MSIF Financial Performance Total Investment Income ($ in millions) Net Investment Income ($ in millions) Year over Year Change Year over Year Change (1) (1) (22)% 4% 15% 27% 6% (16)% 14% (1)% 9% 1% $120.0 $70.0 $131.4 $105.0 $111.8 $60.0 $103.8 $57.7 $90.0 $55.9 $90.1 $50.0 $53.4 $52.9 $86.7 $75.0 $
Slide 25: MSIF Income Statement Summary
MSIF Income Statement Summary Q2 24 vs. Q2 23 ($ in 000s, except per share amounts) Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 % Change(1) Total Investment Income $ 33,228 $ 32,351 $ 34,761 $ 33,950 $ 33,946 2% Expenses: Interest Expense (8,862) (9,403) (9,859) (9,549) (9,546) (8)% G&A Expense(2) (6,369) (6,254)
Slide 26: MSIF Per Share Change in Net Asset Value (NAV)
MSIF Per Share Change in Net Asset Value (NAV) ($ per share) Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Beginning NAV $ 7.59 $ 7.67 $ 7.67 $ 7.77 $ 7.72 Net Investment Income 0.18 0.18 0.19 0.18 0.18 Net Realized Gain/(Loss) (0.36) 0.01 (0.11) (0.02) — Net Unrealized Appreciation/(Depreciation) 0.45 (0.02) 0.19
Slide 27: MSIF Balance Sheet Summary
MSIF Balance Sheet Summary ($ in 000s) Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Private Loan Portfolio Investments $ 587,603 $ 608,952 $ 595,326 $ 631,447 $ 665,860 LMM Portfolio Investments 363,812 367,565 386,956 391,575 406,252 Middle Market Portfolio Investments 107,945 101,105 85,990 68,352 49,898 Other P
Slide 28: MSIF Capitalization
MSIF Capitalization ($ in 000s) Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Corporate Facility(1) $ 85,000 $ 92,000 $ 132,000 $ 79,000 $ 151,000 SPV Facility(2) 252,688 264,688 203,688 275,688 250,688 Series A Notes(3) 150,000 150,000 150,000 150,000 150,000 Total Debt at Par Value $ 487,688 $ 506,688 $ 485,688 $
Slide 29: Interest Rate Impact and Sensitivity
Interest Rate Impact and Sensitivity MSIF’s financial results are The following table illustrates the approximate annual changes in the components of MSIF’s net investment income due to hypothetical increases (decreases) in interest rates(1)(2) (dollars in thousands, subject to impact from changes e
Slide 30: Non-GAAP Information
Non-GAAP Information Net Debt to NAV Ratio is calculated as the Debt to NAV Ratio as determined in accordance with U.S. GAAP, except that total debt is reduced by cash and cash equivalents. MSIF believes presenting the Net Debt to NAV Ratio is useful and appropriate supplemental disclosure for analy
Slide 31: MSC Income Fund, Inc. Corporate Data
MSC Income Fund, Inc. Corporate Data Please visit MSIF’s website at www.mscincomefund.com for additional information Board of Directors Corporate Headquarters Investor Relation Contacts Dwayne L. Hyzak 1300 Post Oak Blvd, 8th Floor Dwayne L. Hyzak CEO and Chairman of the Board Houston, TX 77056 Chie