Blackrock Tcp Capital Corp. · NASDAQ:TCPC
Blackrock Tcp Capital — TCP Capital — Raymond James 39th Annual Institutional Investors Conference (March 2018)
28 slides from Blackrock Tcp Capital's conference presentation, Mar 6, 2018
Slide 1: Raymond James 39th Annual Institutional Investor Conference
Raymond James 39th Annual Institutional Investor Conference March 2018 © 2018 Tennenbaum Capital Partners, LLC. All Rights Reserved.
Slide 2: Presenter: Chairman & CEO, TCP Capital Corp.
Chairman & CEO, TCP Capital Corp. Howard Levkowitz Managing Partner & Co-Founder, Tennenbaum Capital Partners, LLC 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 19 industry-focused verticals with ~$9 billion committed capital senior experienced professionals investing under management(1) across asset classes More than 20 ye
Slide 6: Overview of Tennenbaum Platform
Overview of Tennenbaum Platform Tennenbaum ~$9 billion of committed capital under management(1) TCP Capital Corp. Private Institutional (NASDAQ: TCPC) Vehicles and Accounts Publicly-traded BDC (1) As of December 31, 2017 6
Slide 7: Key Highlights – TCP Capital Corp
Key Highlights – TCP Capital Corp As of December 31, 2017 We seek to generate high total returns through current income and capital Investment Objective appreciation, with an emphasis on principal protection Dividend Coverage Dividend covered in all 23 quarters since our IPO $1.5 billion portf
Slide 8: Consistent and Disciplined Portfolio Growth Since IPO
Consistent and Disciplined Portfolio Growth Since IPO Portfolio Growth Since IPO $1,800 $1,600 Total Investments = $1.5 billion $1,400 $1,200 Dollars in millions $1,000 $800 $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 Q
Slide 9: Best-In-Class Advisory Fee Structure
Best-In-Class Advisory Fee Structure TCP Capital Corp. Typical Externally Managed BDCs(1) Base Management Fee 1.5% on gross assets (less cash and 1.5% - 2.0% on gross assets cash equivalents) Incentive Fee Hurdle 8% annualized total return on NAV, 7% annualized NII return on NAV, cumulative
Slide 10: Well Covered and Stable Dividend
Well Covered and Stable Dividend Net investment income(1) of $0.41 per share in Q4 2017 Quarterly dividend of $0.36 per share paid on December 29, 2017 Declared Q1 2018 dividend of $0.36 per share Payable on March 30, 2018 to holders of record as of March 16, 2018 Dividend covered in all 2
Slide 11: Strong Track Record of Positive Performance
Strong Track Record of Positive Performance(1) Book Value per Share and Dividends Paid $24.00 $23.28 $23.04 $22.80 $23.00 $22.32 $21.95 $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 $8.48 $7.76 $8.12 $18.30 $7.40 $7.04 $17.80 $6.68 $18.00 $6.32 $17
Slide 12: TCPC Relative Outperformance
TCPC Relative Outperformance Out-performed the Wells Fargo BDC Index by 47% since our IPO Total Return Performance(1) 200% 190% As of 12/31/17 180% TCPC: 77.5% 170% 160% 150% WFBDC: 52.9% 140% 130% 120% 110% 100% 90% 2012 2013 2014 2015 2016 2017 TCP Capital Corp. Wells Fargo Business Development Co
Slide 13: 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 14: Multi-Channel Deal Sourcing
Multi-Channel Deal Sourcing Extensive and diverse sourcing network designed to generate attractive investments across market cycles Industry / Sector Network Advisory Investor Relationships Reciprocal Credit Firm Board Relationships Middle-Market LBO Liquidators / Restructuring Firms Firms Appraiser
Slide 15: Proven Investment Process
Proven Investment Process Over 20 years(1), Tennenbaum has developed a proven, repeatable investment process Rigorous Due Investment Portfolio Realizations / Diligence & Structuring Committee Management Liquidity Comprehensive analysis of Thorough due diligence, Holistic approach Focus on pr
Slide 16: 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 Banks • Dodd Frank / Volcker Rule • Increased capital ratios a
Slide 17: Case Study – KPC Healthcare, Inc.
Case Study* – KPC Healthcare, Inc. (Regional California Hospital System) Repeat Borrower Initial Transaction 2nd Investment - Refinancing Date of Investment August 2015 February 2017 $55 million (par) (of $140 million $77 million (par) (of $77 million TCP Investment transaction) transaction) Securit
Slide 18: Case Study – NILCO
Case Study* – NILCO Leveraging our deep relationships and industry experience Terms Description Date of Investment July 2016 • Sourcing: Direct sponsor relationship Transaction Size $37.5 million (par) • Structure: Security 1st Lien Term Loan • Collateralized by real estate and equipment value; supp
Slide 19: Portfolio and Financial Review
Portfolio and Financial Review
Slide 20: Conservatively Positioned and Diversified Portfolio
Conservatively Positioned and Diversified Portfolio As of December 31, 2017 $1.5 billion portfolio fair value 93% of portfolio is senior secured debt Investment by Industry 11.0% weighted average effective yield on 89% of debt portfolio is floating rate debt portfolio(1) Portfolio by Asset T
Slide 21: Strategically Positioned Balance Sheet
Strategically Positioned Balance Sheet Asset Portfolio Primarily Floating Rate Liabilities Primarily Fixed Rate Floating Fixed Rate 32% Rate 11% Fixed Floating Rate 68% Rate 89% Positive annual impact on net income of base rate increases in interest rates(1): Net Investment Net Investment Income Bas
Slide 22: Diversified Sources of Funding
Diversified Sources of Funding As of December 31, 2017 Source Capacity Drawn Amount Available Pricing Maturity SVCP Revolver (1) $116.0mm $57.0mm $59.0mm L + 2.50% (5) Jul-18 2019 Convertible Notes $107.0mm (2) $107.0mm - '5.25% Dec-19 (3) 2022 Convertible Notes $137.4mm $137.4mm - 4.625% Mar-22 (4)
Slide 23: 2017 Highlights and Recent Achievements
2017 Highlights and Recent Achievements Dividend Net investment income(1) of $1.59 & dividends of $1.44 per share Coverage Record Deployment of $865 million gross or $210 million net Deployment $175 million unsecured notes offerings at 4.125% Capital Markets $94 million equity offering at a
Slide 24: Conclusion
Conclusion
Slide 25: Appendix
Appendix
Slide 26: Financial Highlights
Financial Highlights Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 ($ per share) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Net investment income, after incentive 0.41 0.38 0.43 0.38 0.36 Net realized & unrealized gains (losses) (0.18) (0.13) (0.08) (0.01) 0.07 Net increase in net assets
Slide 27: Portfolio Highlights
Portfolio Highlights Asset Mix of the Investment Portfolio (in thousands) Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 Senior secured debt $ 1,404,729 $ 1,463,295 $ 1,378,055 $ 1,273,608 $ 1,248,888 Junior debt 41,008 - - - - Equity 68,796 65,455 67,893 64,902 66,082 Total investments 1,514,533 1,528,750
Slide 28: Corporate Information
Corporate Information Securities Listing Transfer Agent NASDAQ: TCPC Equiniti Shareholder Services (800) 468-9716 (from U.S.) Research Coverage (651) 450-4064 (from outside U.S.) www.shareowneronline.com Wells Fargo Bank of America Merrill Lynch Citigroup Global Markets Corporate Headquarters
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