Medley Management Inc. (NYSE: MDLY)

Transcription

1 Medley Management Inc. (NYSE: MDLY) Investor Presentation Quarter ended September 30, 2016

2 Important Notice to Investors This presentation contains forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks and uncertainties. Actual outcomes and results could differ materially from those suggested by this presentation due to the impact of many factors beyond the control of Medley Management Inc., including those listed in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and our other filings with the Securities and Exchange Commission ( SEC ). Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and Medley Management Inc. assumes no obligation to update or revise any such forward-looking statements except as required by law. Certain information discussed in this presentation (including information relating to portfolio companies) was derived from third party sources and has not been independently verified and, accordingly, the Company makes no representation or warranty in respect of this information. The following slides contain summaries of certain financial and statistical information about Medley Management Inc. The information contained in this presentation is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of Medley Management Inc., or information about the market, as indicative of Medley Management Inc. s future results. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of Medley Management Inc. This presentation includes certain non-gaap financial measures, including Core Net Income, Core EBITDA, Core Net Income Per Share, Pre-Tax Core Net Income per Share, Pre-Tax Core Net Income Margin, Core Net Income Margin and Pro-Forma Weighted Average Shares Outstanding. These measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with U.S. GAAP. Please refer to the financial performance section of this presentation for a reconciliation of the non-gaap financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with U.S. GAAP. 2

3 Table of Contents 1. Overview 4 2. Market Opportunity Investment Process Overview of funds Financial Performance Appendix 28 3

4 OVERVIEW 4

5 Overview of Medley Management Inc. Medley Management Inc. ( Medley or MDLY ) is a diversified alternative asset management firm with over $5.0 billion of assets under management ( AUM ) Asset manager offering yield-oriented investment products 51% of AUM in permanent capital vehicles Key differentiators supporting growth Broad institutional and retail distribution Diversified product offering Scalable platform 5

6 Medley s Assets Under Management Diversified alternative asset management platform Over $5.0 billion of AUM not subject to traditional outflows MEDLEY (NYSE: MDLY) Public Vehicles Institutional Capital Medley Capital Corporation (NYSE: MCC) Senior Loan Fund Sierra Income Corporation Senior Loan Fund Sierra Total Return Fund Medley Opportunity Fund Long-Dated Funds and Separately Managed Accounts Separately Managed Accounts CLO Opportunity Fund 6

7 Medley s Historical Growth Profile Increasing institutional and retail distribution Significant dry powder to drive growth in fee earning AUM over time Assets Under Management $4.8 $5.0 $3.7 $1.0 $1.3 $1.8 $ Q 2016 MCC SIC Institutional Capital Note: Metrics in billions of USD. 7

8 Portfolio Summary Floating vs. Fixed Rate Investment Type Breakout 3% 3% 15% 19% First Lien Second Lien 85% Floating Fixed 75% Unsecured Equity Industry Breakout Medley Investments by Geography 3% 4% 2% 2% 2% 2% 3% 4% 5% 6% 9% 6% 6% 12% 6% 7% 12% 9% Banking, Finance, Insurance & Real Estate Services: Business Construction & Building Healthcare & Pharmaceuticals High Tech Industries Hotels, Gaming & Leisure Energy: Oil & gas Automotive Aerospace and Defense Beverage & Food Retail Chemicals, Plastics and Rubber Capital Equipment CLO Containers, Packaging and Glass Media: Advertising, Printing & Publishing Telecommunications Other 21% 23% 24% 14% 17% 23.8 % Note: Portfolio summary represents total committed amounts as of 9/30/2016 and represents assets in all investment vehicles including TRS and SLS assets. In addition, non-u.s. investments comprise approximately 1% of Medley s overall investment portfolio. 8

9 Quarterly Financial Results of Operations Fee Earning AUM (1) $6.0 AUM $6.0 0% $4.5-1% $4.5 $3.0 $1.5 $3.2 $3.1 $3.0 $1.5 $5.0 $5.0 $- 6/30/2016 9/30/2016 $- 6/30/2016 9/30/2016 Pre-Tax Core Net Income Margin 80.0% Pre-Tax Core Net Income Per Share $ % 40.0% 420 BPS $0.38 0% $ % 34.9% 39.1% $0.13 $0.24 $0.24 6/30/2016 9/30/2016 $- 6/30/2016 9/30/2016 Core Net Income Margin (2) Core Net Income Per Share (2) 50.0% $ % 25.0% $0.26 $0.18 0% 12.5% 19.9% 22.3% $0.09 $0.14 $0.14 6/30/2016 9/30/2016 $- 6/30/2016 9/30/2016 Note: Metrics in billions of USD, except per share data. AUM and Fee Earning AUM are shown rounded for presentation purposes. 1. Fee earning AUM ( FEAUM ) refers to assets under management on which we directly earn base management fees. 2. Assumes that all our pre-tax earnings are subject to federal, state and local income taxes at a combined effective tax rate of 43.0%. 9

10 Results of Operations (Ex Net Performance Fees) (1) 33% compound annual growth in AUM 17% compound annual growth in Fee Earning AUM and EBITDA (1) $240 $220 $200 $4,779 $5,012 $5,025 $5,011 $6,000 Annualized Growth: $5,000 33% $180 $160 $140 $120 $100 $80 $60 $40 $20 $- $3,318 $2,602 $2,451 $2,283 $2,177 $2,006 $63.3 $58.8 $51.4 $29.3 $31.1 $34.0 $24.6 $26.4 $28.0 $28.9 $22.2 $3,924 $4,017 $4,002 $3,635 $3,682 $3,350 $3,401 $3,302 $3,165 $3,169 $3,158 $3,036 $3,058 $3,111 $82.4 $82.0 $83.1 $82.1 $74.6 $76.8 $79.7 $77.1 $68.5 $49.0 $47.8 $40.1 $42.4 $46.2 $45.2 $40.0 $37.6 $37.5 $33.3 $33.5 $35.9 $33.7 $32.7 $27.9 $25.3 FY13 1Q14 2Q14 3Q14 FY14 1Q15 2Q15 3Q15 FY15 1Q16 2Q16 3Q16 $4,000 $3,000 $2,000 $1,000 $- 17% 17% Revenue Ex Performance Fees (1) Core Net Income Exp Performance Fees (1) Fee Earning AUM Core EBITDA Ex Performance Fees (1) AUM Note: Metrics in millions of USD. Quarterly figures presented above represent LTM performance. 1. Excludes performance fees and related expenses. 10

11 MARKET OPPORTUNITY 11

12 Middle Market Opportunity Large Target Market Standalone US middle market would rank as the 3rd largest global economy Private equity dry powder continues to be elevated at all-time highs $16.8 Revenue: $500M - $1B Top GDPs (1) $9.2 $6.7 $4.9 $3.6 $2.7 $2.5 $2.2 United States China US Middle Market Japan Germany France UK Brazil Private Equity Dry Powder (2) $531 $638 $685 $674 $604 $593 $561 $622 $686 $744 $ Q16 1. International Monetary Fund, World Economic Outlook Database, June Metrics in trillions of USD. 2. Preqin Private Debt Q Quarterly Update. Metrics in billions of USD. 12

13 Powerful Secular Trends Banks continue to shift toward large borrowers Regulatory environment is a headwind for banks in the middle-market 11,000 10,000 9,000 U.S. FDIC Insured Commercial Banks(1) Bank Participation in Levered Loan Market (%)(2) 80% 70% 60% 50% 8,000 40% 7,000 6,000 30% 20% 10% 5,000 0% 1. Federal Deposit Insurance Corporation, represents number of commercial banking institutions insured by the FDIC as of 6/30/ S&P LCD s Leveraged Lending Review 2Q16. 13

14 Strong Demand for Alternatives MDLY s historical AUM growth has outpaced traditional and alternative asset managers Continued strong demand for yield solutions is expected to drive future growth Annualized AUM Growth 12/31/2010 9/30/2016 (1) Growth in Alternatives (2) 40% $14 13% CAGR $13T 32% $12 30% 20% 14% $10 $8 $6 $5T 5% CAGR $7T 10% 6% $4 $2 0% Traditional Managers Alternative Managers MDLY $ Alternative Investments Note: Metrics in trillions of USD. 1. Traditional managers include: BEN, BLK, IVZ, JNS, OMAM, and TROW. Alternative managers include APO, BX, CG, KKR, OAK, and OZM. Medley selected the traditional and alternative manager groups based on subjective factors including our view on the managers in these markets. There may be other managers not mentioned. 2. Based on BCG, Global Asset Management 2015: Sparking Growth with Go-to-Market Excellence, July Preqin, Preqin Investor Outlook: Alternative Assets H PWC Asset Management 2020, A Brave New World, June McKinsey & Company, The $64 Trillion Question: Convergence in Asset Management, February

15 Regulatory Pressure Continues for Banks Level 3 Assets for Financial Firms (1) Total Assets of Publicly Traded BDCs (2) $681 $250 $200 $150 Large Opportunity as Banks Continue to Exit Level 3 Assets $100 $194 $ /30/2016 $ Illustrative Potential for Growth Total Assets of BDCs Potential Opportunity 1. Financial firms include: BAC, C, CS, DB, GS, JPM, MS, WFC, Bear Stearns, Countrywide Financial, Merrill Lynch & Washington Mutual. Metrics in billions of USD. Financial information for C as of 9/30/2016. All other firms as of 6/30/ BDCs include: ACAS, ACSF, AINV, ARCC, BKCC, CMFN, CPTA, FDUS, FSC, FSIC, FSFR, GAIN, GARS, GBDC, GLAD, GSVC, HCAP, HRZN, HTCG, KCAP, KIPO, MAIN, MCC, MCGC, MRCC, MVC, NGPC, NMFC, OFS, PFLT, PNNT, PSEC, SAR, SCM, SLRC, SUNS, TCAP, TCPC, TCRD, TICC, TINY, TPVG, TSLX and WHF. Metrics in billions of USD. Total assets as of 6/30/2016 for GAIN, BKCC, SLRC, and SUNS. All other assets as of 3/31/2016, with the exception of SAR, MCGC, and MVC which are as of 5/31/2016, 6/30/2015, and 1/31/2015, respectively. 15

16 INVESTMENT PROCESS 16

17 Underwriting Process & Asset Management 1 Origination 1 Origination Over 45 investing & credit management professionals Nationwide platform Targeted middle market sectors As much as half of annual origination volume is from repeat or referred borrowers or repeat sponsors 3 Asset Management 2 2 Underwriting Multi-step approval process Documentation process 3rd party resources Approve 2-4% of opportunities Invested in excess of $6 billion to over 350 companies (1) Underwriting 3 Asset Management Infrastructure asset management system Weekly, monthly, quarterly meetings Borrower monitoring and reporting 1. Since inception through 9/30/

18 OVERVIEW OF FUNDS 18

19 Medley Capital Corporation Highlights as of 6/30/2016 AUM Growth NYSE: MCC (Market cap: $367 million as of 6/30/2016) $1,600 $1,400 $1.1 billion in total assets (fee earning AUM equivalent) and $534 million in equity Diversified portfolio across 63 portfolio companies (Top 20 are 53%) $1,200 $1,000 $800 $600 $400 $1,410 $1,296 $1,334 $1, % weighted average portfolio yield as of 6/30/2016 (1) $200 $- 9/30/2015 9/30/2016 6/30/2016 9/30/2016 Gross investment originations of $12 million for the quarter ended 6/30/ % floating rate & 21.8% fixed rate on income bearing investments Total debt/credit facility commitments of $945 million (2) Energy: Oil & Gas 5% Aerospace & Defense 5% Containers, Packaging & Glass 5% Portfolio by Industry (1) Portfolio by Asset Class (1) Hotel, Gaming & Leisure 8% Healthcare & Pharmaceuticals 8% Telecommunications 4% Other 23% Services: Business 14% Equities/Warrants 6% Unsecured Debt 5% Second Lien 28% First Lien 61% Banking, Finance, Insurance & Real Estate 9% Construction & Building 9% Automotive 10% Note: Metrics in millions of USD and data is exclusive of MCC SLS assets, unless stated otherwise. 1. Represents annualized portfolio yield to maturity, excluding fees, while utilizing industry standard forward LIBOR curve assumptions. 2. SBA regulations currently limit the amount that we may borrow to a maximum of $150 million based upon at least $75 million in regulatory capital. As of 6/30/2016, we have at least $75.0 million in regulatory capital which allows us to borrow up to $150 million from SBA. 3. MCC information detailed above as of 6/30/

20 Sierra Income Corporation Highlights AUM Growth Sierra Income Corporation is a senior debt focused non-traded public BDC launched in 2012 $1,600 $1,400 Capital is being raised through 187 broker dealers and over 17,900 RIAs $1,200 $1,000 $800 $1.2 billion in fee earning AUM and $888 million in gross equity raised, as of 9/30/2016 $600 $400 $1,152 $1,249 $1,217 $1, % weighted average yield for total investments for the quarter ended 9/30/2016 $200 $- 9/30/2015 9/30/2016 6/30/2016 9/30/2016 Diversified portfolio across 95 portfolio companies (1) Portfolio by Industry Portfolio by Asset Class 89.7% floating rate & 10.3% fixed rate loans Automotive 4% Healthcare & Pharmaceuticals 4% Construction & Building 6% Wholesale 3% Other 27% Subordinated Debt 6% Equities/Warrants 8% Banking, Finance, Insurance & Real Estate 7% Retail 6% Aerospace & Defense 7% Hotel, Gaming & Leisure 8% Multi- Sector Holdings 12% Services: Business 16% Second Lien 28% First Lien 58% Note: Metrics in millions of USD, unless stated otherwise. 1. Excludes TRS and SIC SLS investments. 20

21 Institutional Capital Highlights Institutional AUM remained at $2.5B during the quarter ended 9/30/2016 Private Funds and SMAs generally operate without leverage Allocations from major public pensions and insurance companies Focus on senior secured loans Diversified portfolio across 68 portfolio companies AUM Growth $3,000 0% $2,500 $2,000 $1,500 $2,466 $2,474 $2,466 $1,000 $1,440 $500 $- 9/30/2015 9/30/2016 6/30/2016 9/30/2016 Portfolio by Industry Portfolio by Asset Class Hotels, Gaming & Leisure 5% Beverage & Food 6% Energy: Oil & gas 6% Services: Business 7% Automotive 7% Healthcare & Pharmaceuticals 12% Chemicals, Plastics and Rubber 4% High Tech Industries 4% Other 14% Banking, Finance, Insurance & Real Estate 20% Construction & Building 15% Unsecured 2% Second Lien 13% Equity 4% First Lien 81% Note: Metrics in millions of USD, unless stated otherwise. 21

22 FINANCIAL PERFORMANCE 22

23 Income Statements (Dollars in thousands except per share amounts) For the Three Months Ended September 30, (Unaudited) For the Nine Months Ended September 30, (Unaudited) Revenues Management fees $ 15,262 $ 18,135 $ 50,220 $ 56,578 Performance fees 1,446 (14,595) 1,706 (10,627) Other income and fees 2,172 1,891 5,851 5,496 Total revenues 18,880 5,431 57,777 51,447 Expenses Compensation and benefits 6,964 5,914 21,396 19,532 Performance fee compensation (212) (3,660) (238) (4,578) General, administrative and other expenses 8,801 1,626 25,679 10,756 Total expenses 15,553 3,880 46,837 25,710 Other income (expense) Dividend income Interest expense (2,403) (2,141) (6,593) (6,335) Other income (expenses), net 55 (838) (1,559) (1,087) Total other expense, net (2,036) (2,757) (7,397) (6,757) Income (loss) before income taxes 1,291 (1,206) 3,543 18,980 Provision for (benefit from) income taxes 77 (113) 291 1,953 Net income (loss) 1,214 (1,093) 3,252 17,027 Less: Net income (loss) attributable to redeemable non-controlling interests and non-controlling interests in consolidated subsidiaries Net income (loss) attributable to Medley Management Inc. and noncontrolling interests in Medley LLC 438 (2,150) 1,106 (1,134) $ 776 $ 1,057 $ 2,146 $ 18,161 Core Net Income (1) $ 6,552 $ 701 $ 19,080 $ 22,877 Core EBITDA 9,818 2,790 28,638 32,110 Core Net Income per share (2) $ 0.14 $ 0.01 $ 0.40 $ 0.48 Core Net Income Margin (3) 22.3% 5.7% 21.3% 28.2% Pro Forma Weighted Average Shares Outstanding (4) 30,779,206 30,455,796 30,652,109 30,456,326 23

24 Income Statements (Cont.) (Dollars in thousands except per share amounts) The reconciliation of Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC to Core Net Income and Core EBITDA is as follows: Net income attributable to Medley Management Inc. and noncontrolling interests in Medley LLC For the Three Months Ended September 30, (Unaudited) $ 776 $ 1,057 $ 2,146 $ 18,161 Reimbursable fund startup expenses 5,647 (1,066) 16,391 3,103 IPO date award stock-based compensation ,018 2,080 Other non-core items (1 ) Income tax benefit (expense) on adjustments (754) 48 (2,207) (604) Core Net Income $ 6,552 $ 701 $ 19,080 $ 22,877 Interest expense 2,192 2,141 6,382 6,335 Income taxes 831 (161) 2,498 2,557 Depreciation and amortization Core EBITDA $ 9,818 $ 2,790 $ 28,638 $ 32, For the Nine Months Ended September 30, (Unaudited) The calculation of Net Income Per Share is as follows: Numerator Core Net income $ 6,552 $ 701 $ 19,080 $ 22,877 Add: Income taxes 831 (161) 2,498 2,557 Pre-tax Core Net Income 7, ,578 25,434 Denominator For the Three Months Ended September 30, (Unaudited) For the Nine Months Ended September 30, (Unaudited) Class A common stock 5,778,409 6,000,211 5,802,334 6,000,071 Conversion of LLC Units to Class A common stock 23,333,333 23,333,333 23,333,333 23,333,333 Restricted stock units 1,667,464 1,122,252 1,516,442 1,122,922 Pro-Forma Weighted Average Shares Outstanding 30,779,206 30,455,796 30,652,109 30,456,326 Pre-tax Core Net Income Per Share $ 0.24 $ 0.02 $ 0.70 $ 0.84 Less corporate income taxes per share (2 ) (0.10) (0.01) (0.30) (0.36) Core Net Income Per Share $ 0.14 $ 0.01 $ 0.40 $ For the three months ended 9/30/2016, other non-core items consist of a $0.2 million acceleration of amortization of deferred financing costs and discount relating to prepayments made on our Term Loan Facility as a result of the refinancing of our indebtedness from the issuance of Senior Unsecured Debt. For the nine months ended 9/30/2016, other non-core items also include a $0.5 million impairment loss on our investment in CK Pearl Fund. For the nine months ended 9/30/2015, other non-core items consist of a one-time $0.1 million severance cost to former employees. 2. Represents a per share adjustment for income taxes assuming that all our pre-tax earnings were subject to federal, state, and local income taxes. We assumed an effective corporate tax rate of 43.0% for all periods presented. 24

25 Balance Sheets (Dollars in thousands except per share amounts) As of September 30, 2016 December 31, 2015 (Unaudited) Assets Cash and cash equivalents $ 57,331 $ 71,688 Investments, at fair value 24,273 16,360 Management fees receivable 12,613 16,172 Performance fees receivable 4,245 2,518 Other assets 18,185 13,015 Total assets $ 116,647 $ 119,753 Liabilities and Equity Loans payable $ 78,197 $ 100,871 Senior unsecured debt 23,394 - Accounts payable, accrued expenses and other liabilities 37,403 34,746 Performance fee compensation payable 1,066 1,823 Total liabilities 140, ,440 Redeemable Non-controlling Interests 24,668 - Equity Class A common stock Class B common stock - - Additional paid-in-capital (capital deficit) 2, Accumulated other comprehensive income (loss) 47 - Retained earnings (accumulated deficit) (4,473) (730) Total stockholders' equity (deficit), Medley (2,198) (39) Management Inc. Non-controlling interests in consolidated subsidiaries (1,863) (459) Non-controlling interests in Medley LLC (44,020) (17,189) Total equity (deficit) (48,081) (17,687) Total liabilities, redeemable non-controlling interests and equity $ 116,647 $ 119,753 25

26 Q HIGHLIGHTS Assets Under Management Q AUM Rollforward LTM AUM Rollforward ($ in millions) MCC SIC Institutional Capital Total ($ in millions) MCC SIC Institutional Capital Q $1,334 $1,217 $2,474 $5,025 Q $1,410 $1,152 $1,440 $4,002 Commitments (1 ) (21) Commitments (1 ) (9) 131 1,261 1,383 Capital reduction (2 ) (2) - - (2) Capital reduction (2 ) (13) - - (13) Distributions (3 ) (12) (19) (69) (100) Distributions (3 ) (61) (70) (251) (382) Change in fund value (4 ) (3) Change in fund value (4 ) (31) Q $1,296 $1,249 $2,466 $5,011 Q $1,296 $1,249 $2,466 $5,011 QoQ Increase (Decrease) -3% 3% 0% 0% LTM Increase (Decrease) -8% 8% 71% 25% Total MCC AUM decreased by 3% to $1.3 billion vs. Q AUM decreased by 8% vs. Q3 2015, a decrease of $114 million SIC AUM increased by 3% to $1.2 billion vs. Q AUM increased by 8% vs. Q3 2015, an increase of $97 million Inst. Capital AUM remained at $2.5 billion in Q AUM increased by 71% vs. Q3 2015, an increase of $1.0 billion Note: Percentage change calculations shown are based on actual numbers and may differ from rounded calculations. 1. With respect to permanent capital vehicles, represents increases during the period through equity and debt offerings, subject to restrictions, as well as any increases in available undrawn borrowings or capital commitments. With respect to institutional capital, represents new commitments or gross inflows, as well as any increases in available undrawn borrowings. 2. Represents the permanent reduction in equity or leverage during the period. 3. With respect to permanent capital vehicles, represents distributions of income. With respect to long-dated private funds and SMAs, represents return of capital, given our funds stage in their respective life cycle and prioritization of capital distributions. 4. Includes interest income, realized and unrealized gains (losses), fees and/or expenses. 26

27 Q HIGHLIGHTS Fee Earning Assets Under Management Q Fee Earning AUM Rollforward LTM Fee Earning AUM Rollforward ($ in millions) MCC SIC Institutional Capital Total ($ in millions) MCC SIC Institutional Capital Q $1,067 $1,132 $959 $3,158 Q $1,258 $1,048 $1,095 $3,401 Commitments (1 ) (19) Commitments (1 ) (122) Capital reduction (2 ) (2) - - (2) Capital reduction (2 ) (13) - - (13) Distributions (3 ) (12) (19) (79) (110) Distributions (3 ) (62) (70) (215) (347) Change in fund value (4 ) (3) Change in fund value (4 ) (30) 36 (42) (36) Q $1,031 $1,152 $928 $3,111 Q $1,031 $1,152 $928 $3,111 QoQ Increase (Decrease) -3% 2% -3% -1% LTM Increase (Decrease) -18% 10% -15% -9% Total MCC Fee Earning AUM decreased 3% to $1.0 billion vs. Q Fee Earning AUM decreased by 18% vs. Q3 2015, a decrease of $227 million SIC Fee Earning AUM increased 2% to $1.2 billion vs. Q Fee Earning AUM increased by 10% vs. Q3 2015, an increase of $104 million Inst. Capital Fee Earning AUM decreased 3% to $0.9 billion vs. Q Fee Earning AUM decreased by 15% vs. Q3 2015, a decrease of $167 million Note: Percentage change calculations shown are based on actual numbers and may differ from rounded calculations. 1. With respect to permanent capital vehicles, represents increases or temporary reductions during the period through equity and debt offerings, as well as any increases in capital commitments. With respect to institutional capital, represents new commitments or gross inflows. 2. Represents the permanent reduction in equity or leverage during the period. 3. Represents distributions of income, return of capital and return of portfolio investment capital to the fund. 4. Includes interest income, realized and unrealized gains (losses), fees and/or expenses. 27

28 APPENDIX 28

29 Endnotes & Definitions Definitions: Assets Under Management or AUM refers to the assets of our funds, which represents the sum of the NAV of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). Core Earnings Before Interest, Income Taxes, Depreciation and Amortization (Core EBITDA) is calculated as Core Net Income before interest expense, income taxes, depreciation and amortization. Core Net Income is calculated by adjusting net income attributable to Medley Management Inc. and net income attributable to non-controlling interests in Medley LLC to exclude reimbursable expenses associated with the launch of funds, amortization of stock-based compensation expense associated with grants of restricted stock units at the time of our IPO, other non-core items and the income tax impact of these adjustments. Core Net Income Margin equals Core Net Income Per Share divided by total revenue per share. Core Net Income Per Share is Core Net Income adjusted for corporate income taxes assuming that all of our pre-tax earnings are subject to federal, state and local corporate income taxes, divided by Pro-Forma Weighted Average Shares Outstanding (as defined above). In determining corporate income taxes we used an annual effective corporate tax rate of 43.0%. Fee Earning Assets Under Management refers to the assets under management on which we directly earn base management fees. Pre-Tax Core Net Income is calculated as Core Net Income excluding the impact of income taxes. Pre-Tax Core Net Income Margin equals Pre-Tax Core Net Income Per Share divided by total revenue per share. Pre-Tax Core Net Income Per Share is calculated as Pre-Tax Core Net Income divided by Pro-Forma Weighted Average Shares Outstanding. Pro-Forma Weighted Average Shares Outstanding assumes the conversion by the pre-ipo holders of 23,333,333 LLC Units for 23,333,333 shares of Class A common stock at the beginning of each period presented, as well as the vesting of the weighted average number of restricted stock units during each of the periods presented. 29

30 Corporate Information Board of Directors Corporate Officers Research Coverage Corporate Headquarters BROOK TAUBE Co-Chairman SETH TAUBE Co-Chairman BROOK TAUBE Co-Chief Executive Officer SETH TAUBE Co-Chief Executive Officer COMPASS POINT Casey Alexander (646) CREDIT SUISSE Craig Siegenthaler - (212) Park Avenue, 6th Floor East New York, NY (212) Investor Relations JEFF TONKEL Director JEFFREY T. LEEDS Independent Director GUY ROUNSAVILLE, JR. Independent Director JEFF TONKEL President RICHARD T. ALLORTO, JR. Chief Financial Officer JOHN FREDERICKS General Counsel & Secretary DEUTSCHE BANK Stephen Laws - (901) KEEFE, BRUYETTE & WOODS Ann Dai - (212) LADENBURG THALMANN & CO. Mickey Schleien - (305) SAM ANDERSON Head of Capital Markets & Risk Management (212) Corporate Counsel SIMPSON THACHER & BARTLETT LLP New York, NY PHILIP K. RYAN Independent Director FBR & CO. Christopher Nolan - (646) Independent Registered Public Accounting Firm RSM US, LLP New York, NY Securities Listing NYSE: MDLY (Common Stock) Transfer Agent AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC (888) Media Contact FITZROY COMMUNICATIONS (212)