Trilinc Global Impact Fund Llc. · OTC:TRLC
Trilinc Global Impact Fund — Q4 2020 Earnings Presentation
45 slides from Trilinc Global Impact Fund's earnings presentation, Apr 6, 2021
Slide 1: Invest With Impact - Webinar Welcome
TRILINC GL@BAL INVEST WITH IMPACT We will begin at 11:00am PT (2:00pm ET). Thank you for joining us! TRILINC GLSBAL 1
Slide 2: TriLinc Global Impact Fund: Q4 2020 Update
TRILINC GL@BAL INVEST WITH IMPACT TRILINC GLOBAL IMPACT FUND: Q4 2020 UPDATE APRIL 6, 2020
Slide 3: Disclaimer
This Presentation (the “Presentation”) is for informational purposes only, is being furnished on a highly confidential basis, and is intended solely for the persons receiving it; any reproduction or distribution is prohibited and illegal. This document does not constitute an offer of securities and
Slide 4: Portfolio Overview
PORTFOLIO OVERVIEW TRILINC GLSBAL 4
Slide 5: Private Debt Plus: Market Rate Returns + Positive Impact
▪ Private Debt Plus® = Market Rate Returns + Positive Impact ▪ International Private Credit Fund – Private Loans to Private Companies ▪ Designed to: ▪ Generate income ▪ Preserve capital ▪ Offer modest capital appreciation ▪ Create positive, measurable impact ▪ Also intended to be non-correlated with
Slide 6: Typical Investor Allocation
TYPICAL INVESTOR ALLOCATION1 Cash ▪ Liquidity Equity Fixed Income Alternatives Cash Fixed Income ▪ Capital preservation ▪ Income Equity ▪ Growth ▪ Some income Alternatives Debt Equity ▪ Liquidity ▪ Growth ▪ Capital preservation ▪ Non-correlation ▪ Non-correlation ▪ Sometimes Income For illustrative
Slide 7: Private vs. Public Investments Dispersion
The wider array of value levers and risk drivers in private markets can result in greater performance dispersion vs. public markets. Private Sourcing Information Structuring & Use (or misuse) Negotiation of Leverage Valuation Asset Allocation Valuation Asset Allocation Private Investments Public Inv
Slide 8: $1.13 billion invested in 87 SMEs
$1.13 billion Trade finance, term loan, and short-term transactions in 87 Small & Mid-Sized Businesses supporting 40,265 Permanent jobs1 in 38 Developing economies2 0 Default Losses3 1) “Permanent Jobs” is self-reported by borrower companies, and is based on the IRIS Metric of Permanent Employees. 2
Slide 9: Portfolio Key Statistics
Total AUM $342.6 mil Full Cycle Loans $780 mil (68.8% of Total Invested) Weighted Average Portfolio Loan Size $8.1 mil Weighted Average Portfolio Duration < 2.0 years Cumulative Gross Portfolio Yield1 12.54% Leverage $5.0 mil USD Denominated 100%2 The performance information depicted above represent
Slide 10: Portfolio by Sector, Country, Region and Loan Type
Access to Healthcare and Pharmaceuticals Sector Access to Technology Country1 Argentina Botswana Inclusive Finance Brazil Cabo Verde Infrastructure Development Cameroon Chile Recycling Colombia Croatia Responsible Consumer Goods Production Ecuador Ghana Responsible Fuel Storage Guatemala Hong Kong R
Slide 11: Impact Objectives, ESG Screen and Social Impact
Top 10 Impact Objectives1 ESG Screen Summary Productivity and Competitiveness, 26 Equality and Empowerment, 7 100% Adherence to the IFC Exclusion List Capacity Building, 23 Access to Financial Services, 6 100% Compliance with local environmental, labor, health, safety & business laws, standards and
Slide 12: NAV Discussion
NAV DISCUSSION TRILINC GLSBAL
Slide 13: NAV per Unit Price
TGIF Actual NAV vs. NAV w/out Effect of Unrealized Losses & Return of Capital Q4 - 2013 (Q1 2018 - Q4 2020) $8.573 NAVNAV Per Per UnitUnit PricePrice Unrealized Unrealized LossEffect Effect Return ReturnofofCapital CapitalEffect Effect $8.466 $8.421 $8.379 $8.355 $8.227 $8.166 NAV per Unit Price $8.
Slide 14: Distribution Rate as % of NAV
Distribution Rate as % of NAV (Q4 2017 – Q4 2020) Distribution Rate Net Asset Value 8.80% $380 8.57% 8.60% Net Asset Value (Millions) $370 8.40% $360 8.20% 8.16% 8.09% Distribution Rate (%) $350 8.00% 7.91% 7.83% 7.80% 7.72% $340 7.67% 7.57% 7.58% 7.60% 7.49% 7.48% $330 7.42% 7.43% 7.40% $320 7.20%
Slide 15: NAV Effect of Return of Capital and Unrealized Adjustments
NAV Effect of Return of Capital ▪ If NAV declines from unrealized adjustments and distributions stay constant, NAV will decline further ▪ Quarters with high cash levels (therefore less income) and high OPEX also contribute to return of capital NAV Unrealized Adjustments ▪ Down ▪ Typically, non-perfo
Slide 16: Independent Fair Value Review Process
Duff & Phelps Independent fair value review for all loans with a maturing of > 1 year Quarterly Quarterly Fair Value Valuation Valuation Memo Determination ▪Investment Partner Report ▪Valuation “valuation” inputs Committee ▪Audit Committee ▪Investment Team ▪CFO Prepares ▪Fund Board Assessment & Loan
Slide 17: A Deeper Dive on Unrealized Valuation Adjustments
A DEEPER DIVE ON UNREALIZED VALUATION ADJUSTMENTS TRILINC GLSBAL
Slide 18: Performing Loans and Troubled Loans
Performing Loans Troubled Loans 1. Loans Performing as Expected 3. Actual Performance Weakness ▪ May require loan restructuring 2. Potential Loan Weakness ▪ Change to key terms (weaker) ▪ Short Term (Forbearance – short term disruptions like COVID) 4. Non-Performing Loans (NPLs) ▪ Long Term – reprof
Slide 19: Total Invested and NPLs Since Inception
Number of Transactions Dollar Amount Invested Total Invested Since Inception > $1.1 billion Total NPLs Since Inception 17 ~$90.6 million NPLs “Rehabilitated” or Fully Paid2 4 ~$19.2 million Current NPLs3 15 ~$75.7 million ▪ IIG-Related 8 ~$41.7 million ▪ Non-IIG Related 7 ~$34 million 1) June 2013 2
Slide 20: NPLs at Q4 2020
NPLs at Q4 2020 Principal % of Portfolio Q4 Fair Value % of Portfolio Sesame Seed Exporter $ 881,800 0.31% $ 10,504 0.00% Beef Exporter $ 9,000,000 3.13% $ 6,361,679 2.21% Agriculture Distributor $ 12,500,000 4.35% $ 9,679,636 3.37% IIG TOF $ 6,000,000 2.09% $ 3,758,063 1.31% Chia Seed Exporter $ 1,
Slide 21: Non-IIG and IIG Loan Updates
Non-IIG Loans ▪ LED Lighting Service Provider – technical EOD only ~$1.4mil ▪ Property Developer – began legal process ~$17.1mil ▪ Fruit & Nut Distributor – in full workout now ~$786k ▪ Pharmaceuticals Distributor – insurance claim ~$648k ▪ Mobile Phone Distributor – in liquidation $9.5mi ▪ Scrap Me
Slide 22: NPL Recovery Timeline Example
Total Amount Loaned $9,317,523 Principal Repayments before NPL $1,967,898 Interest Payments before NPL $197,159 Date of Default 10/19/2017 Principal Outstanding at DofD $7,349,626 Research and Legal Preparation Oct. 2017 – Mar. 2018 (6 mos) English Court Process Mar. 2018 filing, Jan. 2020 trial sta
Slide 23: Distributions
DISTRIBUTIONS TRILINC GLSBAL
Slide 24: Distribution Rate as % of NAV
Distribution Rate as % of NAV (Q4 2017 – Q4 2020) 9.00% 8.57% 8.50% 8.09% 8.16% Distribution rate as a % of NAV 8.00% 7.91% 7.83% 7.67% 7.72% 7.57% 7.58% 7.42% 7.48% 7.49% 7.43% 7.50% 7.00% 6.50% 6.00% 5.50% 5.00% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 202
Slide 25: Distributions, Return of Capital, and NAV
Distributions, Return of Capital, and NAV (Q4 2017 – Q4 2020) Distributions Return of Capital Net Asset Value 9.00% 8.57% $380 7.91% 8.09% 8.16% 7.67% 7.72% 7.83% 8.00% 1.98% 7.42% 7.48% 7.57% 7.58% $370 7.49% 7.43% 1.95% 0.80% 1.70% 0.68% 1.57% 1.54% 1.31% 0.93% Net Asset Value (Millions) 7.00% 1.0
Slide 26: NAV per Unit Price
TGIF Actual NAV vs. NAV w/out Effect of Unrealized Losses & Return of Capital Q4 - 2013 (Q1 2018 - Q4 2020) $8.573 NAVNAV Per Per UnitUnit PricePrice Unrealized Unrealized LossEffect Effect Return ReturnofofCapital CapitalEffect Effect $8.466 $8.421 $8.379 $8.355 $8.227 $8.166 NAV per Unit Price $8.
Slide 27: Distribution Rate Policy Changes
▪ Effective May 1, 2021, the daily distribution rate will be more closely tied to the most recently determined NAV per unit ▪ The board of managers expects to maintain the declaration and payment of distributions at an annualized rate equal to approximately 7.0% of the most recently determined NAV p
Slide 28: TGIF Liquidity Discussion
TGIF LIQUIDITY DISCUSSION TRILINC GLSBAL
Slide 29: TGIF Performance
TGIF PERFORMANCE TRILINC GLSBAL
Slide 30: TGIF Gross Yields and Cash as % of AUM
TGIF Gross Yields 16.00% 14.00% ▪ GPY declined to 12.95% in Q4 from 13.85% Gross Yield (%) 12.00% 10.00% in Q3; AAY fell to 11.53% in Q4 from 8.00% 13.43% in Q3 6.00% 4.00% 2.00% 0.00% Quarter Gross Portfolio Yield Cumulative Gross Portfolio Yield AAY - Levered Cumulative AAY - Levered Cash as % of
Slide 31: Total Distributions Since Inception
Since inception through 12/31/2020, total distributions for TGIF have been: $136,265,373 Average net assets since inception through 12/31/2020: $225,802,841 Total assets as of 12/31/2020: $368,701,523 Distributions reflect actual paid distributions for the period indicated. This metric is not a meas
Slide 32: Net Yield from Leverage and Offering Load
Offering Price $10.00 Less Sales Commissions & O&O "load" ($1.43) – Blended Rate of all Share Classes "Starting" NAV $8.57 Net Yield from Leverage is designed to grow NAV to help make up the front end “load” The use of leverage can make investment performance more volatile. 32
Slide 33: Inception to Date Returns by Unit Class
Inception to Date A Units C Units I Units Average Annual Distribution (% of Offering Price) 7.29% 7.53% 8.06% Years since Inception x 7.50 7.50 7.50 Total Distributions 54.68% 56.48% 60.45% Offering Price x $10.00 $9.576 $9.186 $ of Distributions on Offering Price $5.47 $5.41 $5.55 Starting NAV afte
Slide 34: Since Inception Net IRR
Since Inception Net IRR (Q4 2017 – Q4 2020) 8.00% 7.82% IIG 7.48% 7.50% 7.16% 7.18% Net Internal Rate of Return 7.00% 6.86% 6.79% 6.75% COVID-19 6.71% 6.55% 6.50% 6.28% 6.19% 6.13% 6.06% 6.00% 5.50% 5.00% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Slide 35: Volatility and Correlation
Volatility (Since Inception 9/30/13 – 12/31/20) Asset US Bonds1 Hedge Funds2 Global Stocks3 S&P 5004 TGIF5 Average Quarterly Returns (%) 0.71% 0.98% 2.66% 3.46% 1.91% Std. Deviation of Returns (%) 1.47% 3.10% 7.52% 7.33% 0.27% Sharpe Ratio6 -0.02 0.07 0.25 0.36 1.17 Average Annualized Returns (%) 2.
Slide 36: Standard Deviation vs. Annual Returns
Standard Deviation vs. Annual Returns Period: Since Inception 9/30/13 – 12/31/2020 16.00% 14.00% S&P 500 (4) Average Annualized Returns (%) 12.00% Global Stocks (3) 10.00% 8.00% TriLinc Global Impact Fund (5) 6.00% 4.00% Hedge Funds (2) US Bonds (1) 2.00% 0.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 1
Slide 37: Methodology and Footnotes
Methodology: The volatility and correlation analysis was conducted using quarterly returns (%) including TriLinc Global Impact Fund Since Inception Net IRR from each quarter. Average annualized returns (%) are displayed for reference and were calculated using average quarterly return (%) results. Th
Slide 38: Leverage Update
LEVERAGE UPDATE TRILINC GLSBAL
Slide 39: Levered AAY and the Leverage Effect
Levered AAY and the Leverage Effect (Q1 2016 – Q4 2020) Levered AAY Leverage Effect 12.60% 12.47%12.32% 11.99% 11.69% 11.32% 12.65% 13.55% 11.63% 14.00% 0.12% 13.00% 0.45% 0.10% 0.44% 0.45% 0.03% 12.00% 0.08% 0.09% Gross Yield (%) 0.09% 11.00% 10.00% 9.00% 8.00% 7.00% 6.00% Quarter ▪ Continuing to c
Slide 40: Current Leverage Options Being Pursued
Current Options Being Pursued ▪ IFC A/B Loan ▪ Up to $175 million facility ▪ In late stages of re-approval ▪ Specialty Finance Company ▪ Up to $300 million facility ▪ In negotiation on terms ▪ U.S. Placement Agent ▪ Considered pre-IFC ▪ Leverage terms negotiated based on indicative rating ▪ In paral
Slide 41: Distribution Reinvestment Program Reopened
▪ Effective 5/29/20, the TGIF DRP program was reopened and available for investors1 ▪ DRP units are purchased at current NAV ▪ Opportunity to dollar cost average investment 1) Includes Unitholders who own Class A, Class C, Class I, Class W or Class Y Units. 41
Slide 42: Why TGIF Remains Attractive
▪ We believe that TGIF continues to be an attractive investment for clients, offering: ▪ Relative stable value ▪ High income ▪ Non-correlated ▪ Impact ▪ The TriLinc team continues to focus on maximizing value for investors, including increasing total returns and obtaining leverage for TGIF ▪ The Boa
Slide 43: Management Team
Gloria Nelund: Chairman & CEO Brent L. VanNorman, Esq.: President ▪ Former CEO of $50 billion Deutsche Bank Private Wealth ▪ Experienced executive manager with over 25 years Management North America & former CEO of $35 billion Bank professional experience in law, accounting and business of America’s
Slide 44: Thank you!
If you have any additional questions, please feel free to reach out to TriLinc directly. Angie Miller AMiller@TriLincGlobal.com (602) 908-3417 TGIF Website: www.TrilincGlobalImpactFund.com Thank you! 44
Slide 45: Disclaimer
This Presentation (the “Presentation”) is for informational purposes only, is being furnished on a highly confidential basis, and is intended solely for the persons receiving it; any reproduction or distribution is prohibited and illegal. This document does not constitute an offer of securities and
TriLinc Global Impact Fund — Q4 2020 Earnings Presentation on 6ix