First Trust Private Credit Fund (FTPCX) · NASDAQ:FTPCX
First Trust Private Credit Fund (FTPCX) — First Trust Merger Arbitrage Fund — Investor Presentation (October 2026)
29 slides from First Trust Private Credit Fund (FTPCX)'s investor presentation, October 2026
Slide 1: VARBX First Trust Merger Arbitrage Fund
VARBX FIRST TRUST MERGER ARBITRAGE FUND CLASS I SHARES 3 RD Q U A R T E R 2 0 2 6 FOR INSTITUTIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
Slide 2: Why Merger Arbitrage?
WHY MERGER ARBITRAGE? What you can expect from a merger arbitrage strategy: No correlation to stocks and bonds Downside mitigation in negative markets Relatively stable volatility profile Return potential expands as interest rates rise FOR INSTITUTIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
Slide 3: How Does Merger Arbitrage Work?
HOW DOES MERGER ARBITRAGE WORK? Company A acquisition of Company B: 12/20/21 – 6/9/22 Deal Price = $95.00 $95 $90 Entry Price = $90.49 171 Days to Close Deal Closure $85 Arbitrage Analytics Deal Announcement 12/20/21 Price $80 Deal Price $95.00 Entry Price $90.49 $75 Acquisition Announced Arbitrag
Slide 4: How Is Merger Arbitrage Uncorrelated?
HOW IS MERGER ARBITRAGE UNCORRELATED? Company A acquisition of Company B: 12/20/21 – 6/9/22 10% Nasdaq 100 Index Target Company S&P 500 Index 5% 0% Arbitrage Deal -5% was up +4.98% Total Return -10% -15% -20% -25% Market Return -30% S&P 500 Index was down -11.39% Nasdaq 100 Index was down -24.35% -3
Slide 5: Fund Overview
FUND OVERVIEW Investment Objective The First Trust Merger Arbitrage Fund (the “Fund”) seeks returns that are largely uncorrelated with the 25+ Year Track Record returns of the general stock market, and capital appreciation. As of 9/30/2026 Strategy Overview • 8.48% Annualized Total Return The strate
Slide 6: VARBX Metrics & Objectives
VARBX METRICS & OBJECTIVES Attractive Return Potential Low Volatility In “A-Grade” Merger Deal Spreads, Historically only 30% in overall volatility of the the Historic Return Potential = +6-8%^ broad equity market Low Beta Interest Rate Sensitivity Historically <0.2 to Merger spreads expand in U.S.
Slide 7: VARBX Strategy Overview
VARBX STRATEGY OVERVIEW Announced Deals Only High Conviction Announced mergers only; Best-ideas portfolio of no speculative investing 15-25 merger holdings Domestic Focus Shorter Duration Avoid foreign deals with added Average duration of deals is macro/anti-trust risk 3-4 months to close High Quali
Slide 8: Where Might VARBX Fit in a Portfolio?
WHERE MIGHT VARBX FIT IN A PORTFOLIO? As a Fixed Income Replacement and/or Alternatives Solution Low risk ----------------------------------------------------------------------------------------------------------> High risk Illiquid --------------------------------------------------------------> Liq
Slide 9: Strategy Keynotes
STRATEGY KEYNOTES • Announced transaction deal bias. Announced Deals • Seeks to take advantage of the return opportunity presented by the natural deal spread that emerges in the market after the announcement of a merger or acquisition. • The portfolio typically comprises 15-25 positions, diversified
Slide 10: VARBX Deal Grade Criteria
VARBX DEAL GRADE CRITERIA A Grade Deals B Grade Deals • +6-8% annualized returns • +8-15% annualized returns • > 95% closure probability • 85-95% closure probability • Sizing: 4.0-10.0% of NAV • Sizing: 2.5-4.0% of NAV • Exposure: 60-75% of NAV • Exposure: 20-30% of NAV C Grade Deals D Grade Deals •
Slide 11: Research Process
RESEARCH PROCESS We begin our investment process by asking… should we invest in this merger? What is the probability that the merger will be completed? We pursue multiple research sources and contacts to gain market intelligence, substantiate our views including: • Both management teams including Ch
Slide 12: Investment Selection
INVESTMENT SELECTION Conviction: We like to invest in 15-25 mergers that make sense Our criteria includes: • Complementary product lines • High quality companies with respected management teams • Removal of a competitor • Reasonable price paid/comparable transaction multiples • Assured sources of fi
Slide 13: Portfolio Construction
PORTFOLIO CONSTRUCTION Position Size Holding Period Positions are sized based on our judgment of their The average life span of a transaction we invest in and downside risk to the portfolio in the event of a deal break. holding period is 75 to 90 days. Portfolio Analysis Concentration We monitor and
Slide 14: Ongoing Monitoring
ONGOING MONITORING Our daily research calls to monitor investments, seek opportunities and gain intelligence focus on 3 questions: • Should I be invested in this merger? • Is my position the right size? • Is the deal spread still favorable? Ongoing Research of Investment Opportunities: • We source m
Slide 15: First Trust SPAC Arbitrage
FIRST TRUST SPAC ARBITRAGE The Fund’s SPAC strategy provides exposure to SPAC arbitrage and seeks to provide capital appreciation, potential returns due to spread compression and a low correlation to traditional market indices. SPAC Arbitrage is an investment strategy that seeks to acquire shares or
Slide 16: Uncorrelated Return Stream
UNCORRELATED RETURN STREAM Risk Analysis VARBX performance has remained non-correlated to stocks and bonds. BLOOMBERG BLOOMBERG S&P 500 S&P 500 Correlation VARBX U.S. AGGREGATE INDEX Beta VARBX U.S. AGGREGATE INDEX BOND INDEX BOND INDEX VARBX 1.00 0.10 0.04 VARBX 1.00 0.11 0.01 BLOOMBERG BLOOMBERG U
Slide 17: Risk & Return Statistics
RISK & RETURN STATISTICS 4/1/2000 – 9/30/2026 VARBX S&P 500 Index Bloomberg U.S. Aggregate Bond Index Annualized Return 8.48 8.31 3.78 Standard Deviation 4.54 15.13 4.20 Sharpe Ratio 1.43 0.42 0.48 Max Drawdown -6.81 -50.95 -17.18 Months to Recover from Max Drawdown 4 37 N/A (Current Drawdown) Jan F
Slide 18: Performance of VARBX During Down Months for Stocks and Bonds
PERFORMANCE OF VARBX DURING DOWN MONTHS FOR STOCKS AND BONDS Since November 2021, stocks, represented by the S&P 500 Index, had a negative return in 23 months. During 17 of those 23 months, bonds, represented by the Bloomberg U.S. Aggregate Bond Index (AGG), also posted a loss. In contrast, VARBX wa
Slide 19: Growth of $500,000
GROWTH OF $500,000 Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth m
Slide 20: Calendar Year Performance
CALENDAR YEAR PERFORMANCE Bloomberg U.S. Aggregate S&P 500 VARBX Bond Index Index Annualized 8.5% 3.8% 8.3% Merger arbitrage is an alternative investment strategy that strives to 2026 YTD 3.1% -2.91% 12.8% 2025 6.1% 7.3% 17.9% take advantage of price discrepancies that exist for companies involved 2
Slide 21: Low Volatility Profile
LOW VOLATILITY PROFILE The exhibit below displays rolling standard deviation of the VARBX and market indices. VARBX has generated a materially lower volatility than the S&P 500 Index and a similarly low volatility relative to the Bloomberg U.S. Aggregate Bond Index, without adding commensurate fixed
Slide 22: Distribution of Monthly Returns
DISTRIBUTION OF MONTHLY RETURNS Months with Positive Return The First Trust Merger Arbitrage Fund has delivered positive monthly returns 88% of the time, compared to 64% for the S&P 500 Index (TR). Monthly Returns (4/1/2000 – 9/30/2026) VARBX S&P 500 Index (TR) 100 280 240 80 Number of Periods Numbe
Slide 23: Market Volatility
MARKET VOLATILITY Performance of merger arbitrage is dependent on the outcome of specific, shorter-duration events as opposed to overall market directionality. Accordingly, the strategy may profit from elevated volatility. Market volatility can produce opportunities for relative attractive entry poi
Slide 24: VARBX During S&P 500 Index Drawdowns
VARBX DURING S&P 500 INDEX DRAWDOWNS Downside Capture The First Trust Merger Arbitrage Fund has managed to deliver positive average monthly returns during most periods in which the S&P 500 declined in value. Average Returns During S&P 500 Index Drawdowns (4/1/2000 – 9/30/2026) 2% 0.64% 0.61% 0.31% 0
Slide 25: VARBX During Rising Rates
VARBX DURING RISING RATES The “arbitrage spread” in M&A transactions has shown a tendency to increase as interest rates increase. This is because the risk-free rate of interest is a primary input into any M&A spread. The table below shows the historical return metrics for VARBX and the Bloomberg U.S
Slide 26: Historic Merger and Acquisition Deal Flow
HISTORIC MERGER AND ACQUISITION DEAL FLOW Regardless of market performance or macroeconomic activity, M&A transactions have been a consistent part of the business cycle. Source: Bloomberg. Sorted data as Public Target with deal size >400mm in North America in cash, stock and cash/stock deals. Quarte
Slide 27: VARBX Performance as of 9/30/2026
VARBX PERFORMANCE 1 (%) AS OF 9/30/2026 Since Fund Total Expense Net Expense Net Asset Value (NAV)* QTD YTD 1 Year 3 Year 5 Year 10 Year Inception Ratio Ratio^ VARBX – Class I Shares 1.12 3.13 4.61 5.35 4.21 4.14 8.48 1.75 1.75 Index Performance** Bloomberg U.S. -3.51 -2.91 -1.84 4.06 -0.64 1.14 3.7
Slide 28: VARBX Risk Considerations
VARBX RISK CONSIDERATIONS You should consider a fund’s investment objectives, risks, and charges and expenses carefully before investing. Contact First Trust Capital Management at 1-800-988-5196 or visit www.firsttrustcapital.com to obtain a prospectus or summary prospectus which contains this and o
Slide 29: Contact Us
Contact Us 1-800-988-5196 | www.firsttrustcapital.com FOR INSTITUTIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
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