Apollo Investment Corporation Investor Presentation

Transcription

1 Apollo Investment Corporation Investor Presentation March 2018 Information is as of December 31, 2017 except as otherwise noted. It should not be assumed that investments made in the future will be profitable or will equal the performance of investments in this document.

2 Disclaimers, Definitions, and Important Notes Forward-Looking Statements We make forward-looking statements in this presentation and other filings we make with the Securities and Exchange Commission ( SEC ) within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives, including information about our ability to generate attractive returns while attempting to mitigate risk. When used in this release, the words believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: the return on equity; the yield on investments; the ability to borrow to finance assets; and other risks associated with changes in business conditions and the general economy. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described in the company's filings with the SEC. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation may contain statistics and other data that in some cases has been obtained from or compiled from information made available by thirdparty service providers. Past Performance Past performance is not indicative nor a guarantee of future returns, the realization of which is dependent on many factors, many of which are beyond the control of Apollo Global Management, LLC ( AGM ); Apollo Investment Management, L.P.; and Apollo Investment Corporation (collectively Apollo ). There can be no assurances that future dividends will match or exceed historic ones, or that they will be made at all. Net returns give effect to all fees and expenses. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice. Apollo Investment Corporation (the Corporation or AINV or the Fund ) is subject to certain significant risks relating to our business and investment objective. For more detailed information on risks relating to the Corporation, see the latest Form 10-K and subsequent quarterly reports filed on Form 10-Q. Financial Data Financial data used in this presentation for the periods shown is from the Corporation s Form 10-K and Form 10-Q filings with the SEC during such periods. Unless otherwise indicated, the numbers shown herein are rounded and unaudited. Quarterly financial information about the Company refers to fiscal quarters. The Company s fiscal year 2017 ended March 31, AUM Definition Assets Under Management ( AUM ) refers to the investments AGM manages or with respect to which it has control, including capital it has the right to call from its investors pursuant to their capital commitments to various funds. AGM s AUM equals the sum of: (i) the fair value of its private equity investments plus the capital that it is entitled to call from its investors pursuant to the terms of their capital commitments plus non-recallable capital to the extent a fund is within the commitment period in which management fees are calculated based on total commitments to the fund; (ii) the net asset value of AGM s capital markets funds, other than certain senior credit funds, which are structured as collateralized loan obligations or certain collateralized loan obligation and collateralized debt obligation credit funds that have a fee generating basis other than mark-to-market asset values, plus used or available leverage and/or capital commitments; (iii) the gross asset values or net asset values of AGM s real estate entities and the structured portfolio vehicle investments included within the funds AGM manages, which includes the leverage used by such structured portfolio vehicles; (iv) the incremental value associated with the reinsurance investments of the portfolio company assets that AGM manages; and (v) the fair value of any other investments that AGM manages plus unused credit facilities, including capital commitments for investments that may require pre-qualification before investment plus any other capital commitments available for investment that are not otherwise included in the clauses above. AGM s AUM measure includes AUM for which it charges either no or nominal fees and may include certain assets for which Apollo may earn investment-related services fees rather than management or advisory fees. AGM s definition of AUM is not based on any definition of AUM contained in its operating agreement or in any of its Apollo fund management agreements. AGM considers multiple factors for determining what should be included in its definition of AUM. Such factors include but are not limited to (1) its ability to influence the investment decisions for existing and available assets; (2) its ability to generate income from the underlying assets in its funds; and (3) the AUM measures that it uses internally or believes are used by other investment managers. Given the differences in the investment strategies and structures among other alternative investment managers, AGM s calculation of AUM may differ from the calculations employed by other investment managers and, as a result, this measure may not be directly comparable to similar measures presented byother investment managers. 1

3 Agenda Apollo Investment Corporation (AINV) Overview Investment Strategy & Portfolio Repositioning Portfolio Review Conclusion Appendices 2

4 Overview 3

5 Overview Apollo Investment Corporation ( AINV ) Middle Market Lender Publicly traded (NASDAQ: AINV) business development company ( BDC ) treated as a regulated investment company ( RIC ) for tax purposes Primarily provides debt solutions to U.S. middle market companies with a focus on direct origination Since IPO in April 2004 and through December 31, 2017, invested $17.9 billion in 428 portfolio companies $2.35 billion portfolio across 86 companies (average portfolio company investment $27.4 million) and 24 different industries, spanning a broad range of asset types (1) (2) Externally Managed by Apollo Global Management Externally managed by an affiliate (3) of Apollo Global Management, LLC, a leading alternative asset manager with approximately $249 billion of AUM (2) (4) with expertise in private equity, credit and real estate Apollo Global Management, LLC was founded in 1990 Competitive Advantages Apollo Affiliation Apollo affiliation provides significant benefits Large and diverse direct origination team with joint front engine across AINV & MidCap Financial ( MidCap ) (5) Flexible Mandate Generally able to invest in all levels of the capital structure flexible mandate Broad product offering Experienced management team Exemptive Relief to Co-Invest (6) Expected to improve AINV s competitive positioning Expected to increase deal flow (1) On a fair value basis. (2) As of December 31, (3) Apollo Investment Management, L.P. (4) See definition of AUM at beginning of presentation. (5) MidCap Financial refers to MidCap FinCo Limited, a private limited company domiciled in Ireland, and its subsidiaries, including MidCap Financial Services, LLC. MidCap Financial is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, LLC, pursuant to an investment management agreement between Apollo Capital Management, L.P. and MidCap FinCo Designated Activity Company. (6) On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. 4

6 Apollo Investment Corporation ( AINV ) AINV operates as part of Apollo s Direct Origination Business AINV Ticker (NASDAQ) $1.17 billion Market Capitalization (1) $2.35 billion 86 (2) (3) Investment Portfolio Portfolio Companies (2) 24 Different Industries (2) 11.1% (1) (4) Dividend Yield (1) As of March 5, (2) As of December 31, (3) At fair value (4) Most recent quarterly dividend annualized divided by share price. There can be no assurances that AINV s dividend will remain at the current level. 5

7 Competitive Advantages We Believe Apollo s Direct Origination Platform Enjoys Significant Competitive Advantages Extensive origination team on par with any peer in the market Ability to provide solutions across the capital structure Full-service product suite term loans, revolver and agent capabilities Significant expertise in niche verticals with flexible product set Significant scale with permanent capital AUM (1) Well positioned to take on large commitments to win business Speed and certainty of execution Access to the broader Apollo Global integrated platform (1) Please refer to the definition of Assets Under Management at the beginning of this presentation. 6

8 AINV (1) Benefits From a Strong External Manager Apollo Global Management, LLC is one of the world s largest alternative asset managers Firm Profile (2) Business Segments Founded: 1990 AUM: $249bn Credit $164bn AUM Private Equity $72bn AUM Real Assets $12 AUM Employees: 1,047 Inv. Professionals: 384 Global Offices: 15 Drawdown Liquid / Performing Permanent Capital Vehicles: -Athene -MidCap -BDCs -Closed-End Funds Advisory Opportunistic buyouts Distressed buyouts and debt investments Corporate carve-outs Commercial real estate Global private equity and debt investments Performing fixed income (CMBS, CRE Loans) Investment Approach Global Footprint Value-oriented Contrarian Integrated investment platform Toronto Chicago Toronto Chicago New York Los Angeles Bethesda Houston London Madrid Frankfurt Luxembourg Delhi Shanghai Opportunistic across market cycles and capital structures Bethesda Mumbai Hong Kong Singapore Focus on nine core industries (1) AINV refers to Apollo Investment Corporation. (2) As of December 31, Please refer to the definition of Assets Under Management at the beginning of this presentation. Note: AUM components may not sum due to rounding. 7

9 Apollo Credit Platform: Broad Capabilities & Capital Sources We believe Apollo is one of the largest and most successful managers of alternative credit Apollo Credit $164 billion in AUM & 232 Investment Professionals (1) Corporate Credit Structured Credit Apollo Advised Assets Performing Credit Liquid Opportunistic Credit Illiquid Opportunistic Credit Direct Origination European Principal Finance Structured Credit Athene Asset Management & Other Advised Assets ~$12 billion in AUM Encompasses MidCap, Apollo Investment Corporation (AINV) and CION Additional capacity in certain Opportunistic funds for off-the-run, directly sourced corporate loans Liquid / Performing Alternative Funds $43 billion in AUM (includes Performing and Hedge Funds, Managed CLOs, and SMAs) Permanent Capital $94 billion in AUM (includes Athene, MidCap and publicly traded funds) Drawdown Funds $28 billion in AUM (includes Opportunistic, European and Structured Credit Funds, and SMAs) (1) As of December 31, Please refer to the definition of Assets Under Management at the beginning of this presentation. 8

10 Apollo Has a Range of Solutions Across the Credit Spectrum Apollo manages more than 100 discrete funds or accounts across a broad set of investment strategies Target Return Illustrative Composition of Apollo s Credit Business $164 billion of AUM 15%+ Drawdown Funds ($28bn) Hedge Funds ($7bn) 10-15% EM Debt AINV Managed Accounts 5-10% MidCap ($8bn) Total Return ($4bn) CION CLOs ($12bn) <5% Athene & Athora ($85bn) Yield-Oriented Strategies Opportunistic Strategies $136 billion of AUM including $98 billion in Credit Permanent Capital Vehicles $28 billion of AUM Note: As of December 31, Diagram is illustrative in nature with bubbles banded by approximate return targets and size of bubbles representing magnitude of AUM. Identified pockets of AUM may not sum due to double counting. There is no guarantee that target returns will be achieved. 9

11 Apollo s Dedicated Direct Origination Vehicles We believe Apollo s Direct Origination Platform is a premiere U.S. origination platform that provides best-in-class full service debt solutions to middle market companies Apollo Investment Corporation Business development company (BDC) under the Investment Company Act of 1940 and regulated investment company (RIC) for tax purposes Focused on providing senior and junior debt solutions to U.S. middle market companies Publicly-listed on NASDAQ $2.4 billion in funded assets / 86 distinct positions (1) Established 2004 MidCap Financial Full-service finance company focused on directly originated middle market senior debt Business lines include assetbacked loans, leveraged, real estate, and venture lending Privately-held by investors affiliated with Apollo $7.8 billion in funded assets / 488 distinct positions (1) Established 2008 CĪON Investment Corporation Non-traded Business development company (BDC) under the Investment Company Act of 1940 and regulated investment company (RIC) for tax purposes Focused on providing senior debt solutions to U.S. middle market companies $1.7 billion in funded assets / 161 portfolio companies (2) Commenced operations 2012 Additional capacity in select Opportunistic Credit accounts (1) As of December 31, (2) As of September 30,

12 Comprehensive Approach to Originations We believe that Apollo has one of the largest and most diverse origination teams in the marketplace covering a diverse array of end markets Origination Channels Direct Origination Financial Sponsors AINV has completed transactions with 100+ different sponsors AINV and MidCap unified calling effort into financial sponsors Ability to offer full suite of products increases relevancy Corporate Lending Niche Markets Specialized industry expertise in areas with high barriers to entry AINV and MidCap specialized teams AINV has access to all MidCap specialized teams Life Sciences, ABL, Lender Finance and Aviation Wall Street Leverage Apollo s deep relationship with Wall Street intermediaries Apollo buying power provides good access Potential source of liquidity that may be used to fund core investments Combined with the recent receipt of exemptive relief to co-invest, we believe that the Apollo platform is one that very few alternative asset managers can compete against 11

13 Apollo s Direct and Specialty Origination Platform Direct Origination Encompasses an Array of Origination Verticals Aircraft Leasing Oil & Gas Capital Markets Sponsor Non-sponsor Corporate Asset Based Life Sciences Lender Finance Large and Diverse Team of 125+ Professionals Focused on Direct Origination Creates Stable Source of Proprietary Deal Flow 60+ Originators 65+ Underwriters Direct Origination Team is bolstered by access to the broader Apollo Global Management s integrated platform 12

14 Apollo s Direct Lending Product Suite Apollo s Direct Origination Platform has one of the broadest product offerings in the market which we believe allows us to see a wide array of opportunities Origination Channel Asset Yield (4) AINV MidCap 1 Corporate Lending Senior 4% 6% Stretch Senior 6% 8% Junior 8% 11% Real Estate Lending 4.5% 7.5% Life Sciences Lending 9% 12% Asset Based Lending 5% 11% Lender Finance 5.5% 11.5% Aircraft Leasing (1) 11% 14% Occasional opportunities within certain asset classes will be suitable for both AINV and MidCap (3) Total Investments (in billions) $2.4 (2) $7.8 (2) Primary Mandate Senior and subordinated debt yielding ~ 8% to 12% Senior debt yielding ~ 5% to 7% (1) Investment in aviation made via Merx Aviation Finance, LLC, a wholly owned portfolio company of AINV. (2) As of December 31, (3) Co-investments that are subject to the exemptive order are to be pari-passu. (4) There is no guarantee that these asset yields will be achieved. 13

15 Key Investment Professionals Providing Services to AINV Jim Zelter Howard Widra Co-President & Managing Partner and Chief Investment Officer, Apollo Credit Chief Executive Officer of Apollo Investment Corporation Global Head of Direct Origination, Apollo President of Apollo Investment Corporation Total Years of Work Experience Years at Apollo Tanner Powell Chief Investment Officer, Apollo Investment Management, L.P Pat Ryan Chief Credit Officer, Apollo Credit Chief Credit Officer, Apollo Investment Management, L.P Average Total Years of Work Experience Average Total Years at Apollo 3 Managing Directors Principals Junior Staff Direct Origination Investment Committee Underwriting Team Origination / Sourcing Team 35+ people focused on direct origination / sourcing 14

16 Co-Investment Opportunities AINV received exemptive relief from the SEC permitting it to enter into previously prohibited negotiated joint transactions with other funds / entities managed by AGM, including MidCap (1) We believe exemptive relief to co-invest should improve AINV s competitive positioning Allows AINV to compete more on the basis of size / scale and certainty of execution, rather than simply on price Enhances ability to originate larger transactions with the ability to hold and / or syndicate loans Expected to increase deal flow number and variety of deals Ability to partner with MidCap which provides AINV with access to MidCap s expertise in niche markets with high barriers to entry Already seeing a strong pipeline of co-investment opportunities with MidCap AINV does not lend to portfolio companies owned by AGM s private equity funds Since receiving the order, AINV has invested $511 million across 22 companies, pursuant to the coinvestment exemptive order (2) We believe that the scale of AINV, MidCap and other Apollo managed capital, on a combined basis, makes us one of the largest market participants well positioned to make large commitments (1) On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. (2) Through December 31,

17 Investment Strategy & Portfolio Repositioning 16

18 AINV Investment Strategy Our investment strategy is based on the following key principles: Continue to increase exposure to core strategies consisting of: Senior secured traditional corporate loans sourced by Apollo s direct origination platform with emphasis on true first lien and floating rate loans First lien loans in life sciences, asset-based lending and lender finance, areas with significant barriers to entry and areas in which MidCap has expertise Continue to transition away from non-core strategies (1) Reduce outsized single name or industry concentration With the continued successful execution our plan, we believe that AINV should generate consistent and sustainable ROEs The AINV investment strategy reflects the views of Apollo Investment Corporation s management team. Subject to change at any time. There is no guarantee that the strategy will be achieved. (1) Non-core strategies are oil & gas, renewables, shipping and structured credit. 17

19 Significant Progress Repositioning Portfolio Deployed Significant Capital in Core Strategies (1) and Meaningfully Reduced Exposure to Non-Core (2) Strategies and Legacy Assets As of June 30, 2016 (3) Non-Core Strategies & Legacy 41% Core Strategies 59% Reduced exposure to non-core strategies (2) and legacy assets by $565 million (4) 5) Invested approximately $1.1 billion into core strategies (1) (5) As of December 31, 2017 (3)(4) Non-Core Strategies & Legacy 22% Core Strategies 78% Improved Risk Profile / Portfolio Composition Increased exposure to first lien and floating rate debt, reduced average company exposure and benefitted from As of June 30, 2017 co-investment (3) exemptive relief (7) As of June 30, 2016 (3) As of December 31, 2017 (3) First Lien Debt, as % of Total Portfolio 40% 50% Floating Rate Debt, as % of Total Portfolio (8) 77% 92% Average Company Exposure $ 32.3 million $26.1 million (4) Co-Investments, as % of Total Portfolio (7) 0% 19% (1) Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. (2) Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities. (3) At fair value. (4) Pro forma for the $106.4 million repayment received from Solarplicity Group, subsequent to the quarter ended December 31, (5) From July 1, 2016 through December 31, (6) Excludes aviation. (7) On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. (8) The Company s interest rate type information is based on its corporate debt portfolio, exclusive of investments on non-accrual status. 18

20 Significant Progress Reducing Exposure to Non-Core Assets (1) We have significantly reduced AINV s exposure to non-core assets which are generally higher on the risk spectrum and have more volatile returns Portfolio Composition by Strategy (2) $2.62 bn $2.35 bn 5% 19% 17% 41% 52% 41% 26% Non-Core Assets % of Total Portfolio (2) 6/30/16 12/31/17 Oil & Gas 11.6% 7.3% Renewables 8.9% 7.8% Shipping 5.1% 4.9% Structured Credit 9.1% 2.2% Legacy 6.0% 3.6% Non-Core and Legacy Investments 40.7% 25.8% 6/30/ /31/2017 Life Sciences, Asset Based and Lender Finance Aircraft Leasing Corporate Lending Non-Core & Legacy (1) (1) Non-core assets are oil & gas, renewables, shipping and structured credit. (2) At fair value. 19

21 Emphasis on First Lien Debt We have significantly increased AINV s exposure to first lien debt investments which we believe have less risk, given higher recovery prospects in the event of default Investment Portfolio Exposure to First Lien Debt (1) $2.62 billion $2.35 billion Over the past 6 quarters, 47% of total deployment was in first lien debt First Lien 40% First Lien 50% 6/30/ /31/2017 (1) At fair value. 20

22 Emphasis on Floating Rate Debt We have significantly increased our exposure to floating rate debt which we believe better positions AINV for rising interest rates Investment Portfolio Exposure to Floating Rate Debt (1) Floating Rate 77% Floating Rate 92% Over the past 6 quarters, 100% of deployment within our corporate debt portfolio was in floating rate debt 6/30/ /31/2017 (1) At fair value. The Company s interest rate type information is based on its corporate debt portfolio, exclusive of investments on non-accrual status. 21

23 Emphasis on Floating Rate Debt We have significantly increased our exposure to floating rate debt which we believe better positions AINV for rising interest rates Investment Portfolio Exposure to Floating Rate Debt (1) Floating Rate 77% Floating Rate 92% Over the past 6 quarters, 100% of deployment within our corporate debt portfolio was in floating rate debt 6/30/ /31/2017 (1) At fair value. The Company s interest rate type information is based on its corporate debt portfolio, exclusive of investments on non-accrual status. 22

24 Investments Made Pursuant to Co-Investment (1) We believe our ability to co-invest along with other Apollo managed capital makes us one of the largest market participants well positioned to make large commitments Co-Investment Deployment as % Total Deployment (2) Corporate Lending 29% Life Sciences 4% Asset Based 6% Lender Finance 1% Over the past 6 quarters, AINV has invested $511 million or 40% of total deployment across 22 companies, pursuant to the co-investment exemptive order (1) On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. (2) From July 1, 2016 through December 31,

25 Reduced Borrower Concentration We have significantly reduced our single name concentration exposure by reducing outsized positions as well as adding new positions consistent with our target hold size Average Borrower Exposure (1) $35.0 $33.0 $31.0 $32.3 million 2.70% $29.0 $27.0 $25.0 $ % $27.4 million 1.90% 2.20% 1.70% $21.0 $ % 1.16% 1.20% $17.0 $15.0 6/30/16 12/31/17 Avg. Borrower Exposure Avg. Borrower Exposure % Portfolio Avg. Borrower Exposure % Net Assets 0.70% (1) Average borrower exposure defined as investment portfolio at fair value divided by number of portfolio companies. 24

26 Conclusion Apollo has one of the largest direct origination teams in the marketplace with significant expertise in many verticals. Looking ahead, AINV will continue to focus on investing in core assets and decreasing exposure to non-core assets (1) Investment Portfolio by Strategy (1) 19% 41% 5% 17% 52% ~ 20% 25% ~15% ~50% 60% 41% 26% 7% 6/30/ /31/2017 Target Portfolio (3) Non-Core & Legacy Aircraft Leasing (2) Corporate Lending Life Sciences, Asset Based and Lender Finance Strategy designed to deliver consistent shareholder returns and a stable NAV (1) At fair value. (2) Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities. (3) The target portfolio reflects the views and opinion of the management team of Apollo Investment Corporation. Subject to change at any time. There is no guarantee that the target portfolio will be achieved. 25

27 Portfolio Review 26

28 Portfolio Snapshot Portfolio Key Statistics (1) Investment Portfolio (2) $2.35 bn Debt Outstanding $0.88 bn Net Assets $1.44 bn Net Leverage Ratio (3) 0.62x Net Asset Value Per Share $6.60 Unsecured 5% Structured Products and Other 4% Portfolio by Security Type Preferred Equity 1% (1) (2) Common Equity and Warrants 9% Most Recent Quarterly Dividend (4) $0.15 per share # of Portfolio Companies 86 Weighted Average Yield (5) 10.5% % Floating Rate (2) (6) 92% 2nd Lien 32% 1st Lien 50% Average Company Exposure (2) Median Company Exposure (2) Median EBITDA (7) Net Leverage Through AINV Position (7) Interest Coverage (7) Market Information (8) $27.4 mn $17.8 mn $80 mn 5.47 x 2.68 x Life Sciences & Asset Based 5% Portfolio by Strategy Other 4% (1) (2) Market Capitalization $1.15 bn Share Price $5.30 Price-to-Book 0.80x Dividend Yield at Share Price (9) 11.3% Dividend Yield at NAV (10) 9.1% Existing Specialty Verticals 22% (11) Aircraft Leasing 17% Corporate Lending 52% (1) As of December 31, (2) On a fair value basis. (3) Net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies at fair value, divided by net assets. (4) On February 9, 2018, the Board of Directors declared a dividend of $0.15 per common share to shareholders of record as of March 27, 2018 payable on April 12, (5) On total debt portfolio. At amortized cost, exclusive of investment on nonaccrual status. (6) The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. (7) Current. (8) As of February 1, (9) Most recent quarterly dividend annualized divided by share price. There can be no assurances that AINV s dividend will remain at the current level. (10) Most recent quarterly dividend annualized divided by net asset value per share. There 27 can be no assurances that AINV s dividend will remain at the current level. (11) Existing specialty verticals includes oil & gas, renewables, shipping and structured credit.

29 Portfolio Snapshot (continued) Portfolio by Industry (1) (2) Fixed Rate vs. Floating Rate (1) (2) (4) Sponsored vs. Non-Sponsored (1) (2) (5) Telecommunications 2.9% Aerospace & Defense 2.9% Other(3) 17.4% Business Services 18.8% Fixed Rate Assets 8% Sponsored 82% Diversified Investment Vehicles, Banking, Finance, Real Estate 3.9% Transportation Cargo, Distribution 6.0% Aviation and Consumer Transport 17.3% Energy Electricity 8.9% Floating Rate Assets 92% Non-Sponsored 18% High Tech Industries 7.2% Healthcare & Pharmaceuticals Energy Oil & Gas 7.4% 7.3% (1) On a fair value basis. (2) As of December 31, (3 Other consists of: Chemicals, Plastics & Rubber; Manufacturing, Capital Equipment; Food & Grocery; Consumer Goods Durable; Advertising, Printing & Publishing; Utilities Electric; Automotive; Consumer Goods Non-durable; Consumer Services; Hotel, Gaming, Leisure, Restaurants; Insurance; Containers, Packaging & Glass; Media Diversified & Production and Metals & Mining. (4) The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. (5) The sponsored / non-sponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 28

30 Portfolio Concentration Top Ten Portfolio Companies (1) Top Ten Industries (1) Rank Portfolio Company Fair Value Portfolio 1 Merx Aviation Finance, LLC $ 407, % 2 Solarplicity Group Limited (f/k/a AMP Solar UK) 133, % 3 Spotted Hawk 96, % 4 U.S. Security Associates Holdings, Inc. 80, % 5 MSEA Tankers LLC 71, % 6 Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc 64, % 7 Skyline Data, News and Analytics LLC (Dodge) 52, % 8 Access Information 50, % 9 Maxus Capital Carbon SPE I, LLC (Skyonic) 49, % 10 UniTek Global Services Inc. 44, % Top Ten Total $ 1,050, % Other 1,301, % Total Portfolio 2,352, % Rank Industry Fair Value % of Portfolio 1 Business Services $ 443, % 2 Aviation and Consumer Transport 407, % 3 Energy Electricity 208, % 4 Healthcare & Pharmaceuticals 174, % 5 Energy Oil & Gas 172, % 6 High Tech Industries 168, % 7 Transportation Cargo, Distribution 141, % 8 Diversified Investment Vehicles, Banking, Finance, Real Estate 91, % 9 Aerospace & Defense 68, % 10 Telecommunications 67, % Top Ten Total $ 1,943, % Other 408, % Total Portfolio 2,352, % Average Position Size, at fair value ($ in millions) $29.7 $26.9 $28.8 $27.1 $27.4 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 (1) Top ten portfolio companies and top ten industries based on market value as of December $ in thousands. 29

31 Portfolio Company Credit Quality Median LTM EBITDA Net Leverage through AINV Position (weighted average by cost) Total Cash Interest Coverage (weighted average by cost) $86 $74 $68 $65 $66 $66 $66 $70 $76 $82 $71 $80 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 At Close Current Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 At Close Current Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 At Close Current Source: Company data. Includes all portfolio company investments except structured products, common equities, warrants and investments on non-accrual status. Also excludes select investments where debt-to-ebitda is not a relevant or appropriate metric, or data is not available. 30

32 Merx Aviation is Well-Diversified Merx Portfolio (1) Aircraft by Type (1) (2) Aircraft by Region (1) (2) 85 aircraft 11 aircraft types 46 lessees in 25 countries Weighted average age of aircraft ~9.1 years Weighted average lease maturity ~4.9 years B % E-195 3% A % A % A % B F 6% E-190 2% B ER 2% A % E-170 1% B % LATAM 12% Africa 4% Australia 3% North America 21% Middle East 3% Europe 25% Asia 32% Staggered Lease Maturity (1) Aircraft Value by Lessee (1) (2) Revenue by Lessee # of leases maturing by year Lessees Each < 2% 2% 2% 2% 2% 2% 2% 46 Lessees 29% 2% 3% 3% 3% 8% 6% 3% 3% 3% 6% 3% 4% 4% 4% 4% 46 Lessees 8.4% (1) (3) 5.7% 5.2% (1) As of December 31, 2017 Based on calendar year. (2) Based on base value. (3) Revenue for next four quarters. For more information about Merx, please visit 31

33 Conclusion 32

34 Reasons to Own AINV Apollo affiliation provides significant benefits Origination platform is highly differentiated versus other market participants Receipt of exemptive relief to co-invest enhances competitive positioning Positioned to benefit from rising interest rates Strategy designed to deliver consistent shareholder returns and a stable NAV Strong balance sheet and diverse funding sources Active share repurchase program 33

35 Appendices 34

36 Net Leverage Ratio (1) AINV has operated near the low end of its target range over the last several quarters 1.00 x 0.90 x 0.80 x 0.70 x 0.60 x Upper Target ~ 0.70x 0.66 x Lower Target ~ 0.60x 0.55 x 0.62 x 0.59 x 0.62 x 0.50 x 0.40 x 0.30 x 0.20 x 0.10 x 0.00 x Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Net Leverage Ratio Target Range Previous Upper Target (1) Net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies at fair value, divided by net assets. 35

37 AINV Investment Process Deal Sourcing Underwriting & Due Diligence Structuring, Pricing & Approval Portfolio Monitoring Multi-Channel Sourcing Engine Focus on Risk-Adjusted Returns Protect Downside Risk Comprehensive and Regular Review and Dialogue Experienced investment team Ability to execute direct / non-sponsor transactions with a focus on specialty verticals Financial sponsors Long-term relationships Transactions with > 100 sponsors 82% of corporate portfolio is sponsorbacked (1) (2) (3) Limited origination restrictions Apollo affiliation Coverage and experience Market insights Proprietary research Apollo s credit segment AUM ~$164 billion (2) (4) Risk-adjusted investment philosophy Preservation of capital Strong asset coverage Extensive due diligence Knowledge sharing across Apollo platform Access to management teams of private equity portfolio companies Draft term sheet Investment Committee review Iterative process Negotiate transaction Structuring and terms Typical forms include: strong covenants, collateral package, prepayment protection, Board seat or observation rights Seek Investment Committee approval Weekly meetings to discuss and vote on new deals Comprised of senior personnel from across Apollo Extensive quarterly portfolio reviews Internal risk rating system Covenant compliance Board observation rights Independent third party valuation for non-quoted investments Offer to provide managerial assistance Increased monitoring of problem investments Dedicated professionals for managing problem investments Watch list committee Weekly review of watch list Investment process is subject to change. (1) On a fair value basis. (2) As of December 31, (3) The sponsored / non-sponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. (4) See definition of AUM at beginning of presentation. 36

38 AINV / MidCap Product Overlap Asset Based Secured loans to manufacturing, distribution, retail and services companies Core product consists of revolvers advancing against accounts receivable and inventory; will selectively include term loans against fixed assets or as supported by cash flow High-touch asset class requiring liquidity for daily revolver fundings, collateral evaluation and diligence expertise, borrowing base monitoring capabilities and complex cash dominion structures Leverages MidCap s in-place portfolio and collateral monitoring infrastructure Life Sciences Low loan-to-value loans, covered by material asset values and cash on hand, made to borrowers in product development (e.g., biotech companies) or early commercialization Enterprise value loans Niche market with what we believe to be disproportionate risk reward almost no historical losses across market Typically have multiple sources of exit including strong equity support, well funded balance sheets, and liquidation value No underwriting of science only of cash support and development timeline Lender Finance Senior secured facilities made to lenders in various industries (consumer and commercial) secured by their underlying collateral Typically benefit from multiple levels of credit support and protection in addition to support of underlying borrowers Defined eligibility criteria or loan-by-loan approval, borrowing base structure with ability to remove specific assets, and corporate and/or personal recourse with various restrictive covenants Highly structured transactions skewing towards larger commitments ($25+ million) to provide diversification of underlying collateral Significant opportunities exist to fill the capital void left by large banks exiting and descaling in this asset class 37

39 Summary of Quarterly Results Third Quarter of Fiscal Year 2018 (Three Months Ended December 31, 2017) and Other Recent Highlights Net investment income for the quarter ended December 31, 2017 was $34.0 million, or $0.16 per share, compared to $34.2 million, or $0.16 per share for the quarter ended September 30, 2017 Net realized and change in unrealized losses for the quarter ended December 31, 2017 were ($28.1) million, or ($0.13) per share, compared to ($2.4) million, or ($0.01) per share for the quarter ended September 30, 2017 Net asset value per share as of December 31, 2017 was $6.60 compared to $6.72 as of September 30, 2017, a 1.8% decline During the quarter, three separate events occurred which advanced the Company's strategic repositioning, long-term earnings power, and book value stability, but had a combined $(0.09) loss per share. Excluding the three events below, NAV per share declined 0.5% Redeemed higher cost debt (1) which reduced funding costs by approximately 42 basis points and should contribute approximately $0.02 per share per year to net investment income. The extinguishment of the debt resulted in a $(0.03) loss per share during the quarter Subsequent to quarter end, a significant portion of the Company s first lien secured debt investment in Solarplicity Group Limited was repaid. (2) The repayment reduces non-core assets (3) by approximately $106.4 million to approximately $416 million or 19% of the portfolio (4), reduces PIK income, and reduces average borrower exposure. The Company recorded a $(0.04) loss per share on its investment in Solarplicity Group during the December quarter The Company recorded a $(0.06) loss per share on its oil hedge and a $0.03 unrealized gain per share on oil and gas investment marks. The oil hedge is designed to protect against a significant decline in the price the price of oil. The net impact of these two items was a $(0.03) loss per share during the quarter Net leverage (5) as of the end of the quarter was 0.62x compared to 0.59x as of September 30, 2017, providing us with substantial investment capacity to execute our portfolio repositioning strategy Invested $198 million across 8 new and 12 existing portfolio companies including 47% in investments made pursuant made pursuant to co-investment order (6) Investments sold totaled $48 million and investments repaid totaled $157 million Net investment activity before repaid investments was $150 million, and net investment activity after repayments was ($6) million for the quarter During the three months ended December 31, 2017, the Company repurchased 778,400 shares of common stock at a weighted average price per share of $5.97, inclusive of commissions, for an aggregate cost of $4.6 million. During the period from January 1, 2018 through February 6, 2018, the Company repurchased 1,732,158 shares at a weighted average price per share of $5.77, inclusive of commissions, for a total cost of $10.0 million. Since the inception of the share repurchase program and through February 6, 2018, the Company repurchased 20,217,555 shares of common stock at a weighted average price per share of $5.88, inclusive of commissions, for an aggregate cost of $119.0 million Continued to successfully execute the portfolio repositioning strategy. Reduced exposure to non-core assets to 22% of the portfolio as of December 31, 2017, down from 35% as of June 30, Pro forma for the exit of a majority of our investment in Solarplicity Group, non-core assets decreased to approximately 18% of the portfolio. (3) (4) (7) Decreased exposure to legacy and other assets to 4% of the portfolio as of December 31, 2017, down from 6% as of June 30, 2016 (4) (7) Increased exposure to core assets to 74% of the portfolio as of December 31, 2017, up from 59% as of June 30, 2016 (4) (7) (8) Invested approximately $1.1 billion in core strategies since July 1, 2016 through December 31, 2017 (8) (9) Improved the risk profile of the portfolio Increased first lien debt to 50% of the portfolio as of December 31, 2017, up from 40% as of June 30, 2016 (4) (7) Increased floating rate debt to 92% of the corporate debt portfolio as of December 31, 2017, up from 77% as of June 30, 2016 (4) (7) (10) On February 6, 2018, the Board of Directors declared a distribution of $0.15 per share payable on April 12, 2018 to shareholders of record as of March 27, 2018 (1) On October 16, 2017, the Company redeemed $150 million of 6.625% senior unsecured notes due The Company recognized a realized loss on the extinguishment of debt of approximately $(5.8) million or $(0.03) per share. (2) Subsequent to quarter end, a significant portion of the Company s first lien secured debt investment in Solarplicity Group Limited was repaid at a price, slightly below the fair value as of December 31, The repayment reduced the Company s exposure to Solarplicity Group Limited by approximately $106.4 million, assuming the same currency exchange rate as of December 31, Based on the fair value mark as of December 31, 2017 and including estimated escrowed amounts, the retained portion of the Company s investment in Solarplicity Group Limited is approximately $16.4 million. In addition, the Company still holds its investments in Solarplicity UK Holdings Limited, which had a fair value of approximately $7.9 million as of December 31, (3) Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities. (4) On a fair value basis. (5) The Company s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. (6) On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. (7) June 30, 2016 represents the approximate starting point of senior management appointments. (8) Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. (9) Excluding aviation. (10) The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. 38

40 Financial Highlights ($ in thousands, except per share data) 3Q'18 2Q'18 1Q'18 4Q'17 3Q'17 Operating Results (1) Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Net investment income $ 33,966 $ 34,157 $ 33,320 $ 37,290 $ 36,352 Net realized and change in unrealized gains (losses) from investments and foreign currencies (22,342) (2,370) (4,539) (29,238) (25,062) Net realized loss on extinguishment of debt (5,790) Net increase in net assets resulting from operations $ 5,834 $ 31,787 $ 28,781 $ 8,052 $ 11,290 Net investment income per share $ 0.16 $ 0.16 $ 0.15 $ 0.17 $ 0.17 Net realized and change in unrealized gains (losses) from investments and foreign currencies per share (0.10) (0.01) (0.02) (0.13) (0.12) Net realized loss on extinguishment of debt per share (0.03) Earnings per share $ 0.03 $ 0.14 $ 0.13 $ 0.04 $ 0.05 Distribution recorded per common share $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15 Select Balance Sheet and Other Data Investment portfolio (at fair value) $ 2,352,562 $ 2,360,290 $ 2,416,579 $ 2,316,708 $ 2,526,333 Debt outstanding $ 875,165 $ 864,906 $ 920,674 $ 848,449 $ 1,033,958 Net assets $ 1,441,050 $ 1,472,600 $ 1,477,624 $ 1,481,797 $ 1,506,699 Net asset value per share $ 6.60 $ 6.72 $ 6.73 $ 6.74 $ 6.86 Debt-to-equity ratio 0.61 x 0.59 x 0.62 x 0.57 x 0.69 x Net leverage ratio (2) 0.62 x 0.59 x 0.62 x 0.55 x 0.66 x Weighted average shares outstanding 218,550, ,519, ,694, ,694, ,168,710 Shares outstanding 218,255, ,034, ,694, ,694, ,694,654 Number of portfolio companies, at period end Weighted Average Yields, at period end Secured debt (3) 10.5% 10.3% 10.2% 10.2% 10.9% Unsecured debt (3) 11.2% 11.2% 11.1% 11.1% 10.7% Total debt portfolio (3) 10.5% 10.3% 10.3% 10.3% 10.9% Total portfolio (4) 9.6% 9.7% 9.7% 8.7% 9.2% (1) Numbers may not sum due to rounding. (2) The Company s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. (3) On a cost basis. Exclusive of investments on non-accrual status. (4) On a cost basis. Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status. 39

41 Summary Investment Activity ($ in thousands) 3Q'18 2Q'18 1Q'18 4Q'17 3Q'17 Portfolio Activity (1) Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Investments made $ 198,355 $ 265,439 $ 342,036 $ 149,408 $ 201,309 Investments sold (48,084) (11,703) (9,949) (38,393) (17,114) Net investment activity before repayments $ 150,271 $ 253,737 $ 332,087 $ 111,015 $ 184,195 Investments repaid (156,716) (328,096) (241,998) (306,449) (178,208) Net investment activity $ (6,444) $ (74,359) $ 90,089 $ (195,434) $ 5,987 Number of portfolio companies, at beginning of period Number of new portfolio companies Number of exited portfolio companies (9) (9) (13) (12) (10) Number of portfolio companies, at period end Number of investments in existing portfolio companies Yield on Activity (2) Yield on investments made 9.9% 10.0% 10.3% 9.8% 10.1% Yield on debt sales and repayments 10.2% 10.3% 11.3% 9.9% 10.5% (1) Numbers may not sum due to rounding. (2) Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 40

42 Quarterly Investment Activity Investment Activity ($ in millions) Total Debt Portfolio Yield (1) (2) $201 $149 $342 $265 $ % 10.3% 10.3% 10.3% 10.5% ($17) ($38) ($10) ($12) ($48) ($178) ($242) ($157) ($306) ($328) Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 New Investments Sales Repayments Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Net Investment Activity ($ in millions) Yield on Investment Activity (2) (3) $90 $6 ($195) ($74) ($6) 10.7% 10.2% 9.9% 10.1% 9.8% 8.8% 11.4% 10.2% 10.3% 10.3% 10.2% 10.0% 9.9% 9.4% 9.3% Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 New Investments Sales Repayments (1) Weighted average yield on total debt portfolio on a cost basis at period end, exclusive of investments on non-accrual status. (2) Change in terms on investments may impact the weighted average yield of the total debt portfolio but are not reflected in new, sold or repaid investments. (3) Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 41

43 Detailed Quarterly Investment Activity ($ in thousands) 3Q'18 2Q'18 1Q'18 4Q'17 3Q'17 Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Purchases (1) First lien (2) $ 108,008 $ 111,229 $ 236,735 $ 52,018 $ 34,174 Second lien 89, , ,819 92, ,657 Total secured debt 197, , , , ,831 Unsecured debt ,499 12,713 Structured products and other Preferred equity Common equity/interests and warrants 803 1,238 1,481 2, Total Purchases $ 198,355 $ 265,439 $ 342,036 $ 149,408 $ 201,309 Yield at Cost on Debt Purchases (3) First lien 9.3% 9.3% 10.3% 9.2% 10.0% Second lien 10.7% 10.4% 10.3% 10.2% 10.3% Total secured debt 9.9% 10.0% 10.3% 9.8% 10.2% Unsecured debt N/A N/A N/A 8.0% 8.5% Preferred equity N/A N/A N/A N/A N/A Yield at Cost on Debt Purchases 9.9% 10.0% 10.3% 9.8% 10.1% Sales and Repayments (1) First lien (2) $ 79,659 $ 128,848 $ 136,063 $ 52,662 $ 22,904 Second lien 90, ,034 53,838 96,892 35,888 Total secured debt 170, , , ,554 58,792 Unsecured debt 55 55,000-92,836 - Structured products and other 27,292 8,961 33,166 55,102 96,647 Preferred equity ,868 Common equity/interests and warrants 6,814 6,956 28,879 47,350 3,016 Total Sales and Repayments $ 204,800 $ 339,799 $ 251,947 $ 344,842 $ 195,322 Yield at Cost on Debt Sales and Repayments (3) First lien 10.0% 10.4% 12.0% 9.3% 10.5% Second lien 10.5% 9.9% 9.7% 10.1% 9.6% Total secured debt 10.2% 10.1% 11.3% 9.8% 9.9% Unsecured debt 13.0% 11.0% N/A 10.0% N/A Preferred equity N/A N/A N/A N/A 11.5% Yield at Cost on Debt Sales and Repayments 10.2% 10.3% 11.3% 9.9% 10.5% Yield at Cost on Sales 10.2% 9.3% 9.4% 10.2% 8.8% Yield at Cost on Debt Repayments 10.2% 10.3% 11.4% 9.9% 10.7% (1) Numbers may not sum due to rounding. (2) First lien purchases include revolver drawdowns; first lien sales and repayments includes revolver repayments. (3) Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 42

44 Net Asset Value ($ in thousands, except per share data) 3Q'18 2Q'18 1Q'18 4Q'17 3Q'17 Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Per Share NAV, beginning of period $ 6.72 $ 6.73 $ 6.74 $ 6.86 $ 6.95 Net investment income Net realized and change in unrealized gain (loss) (0.10) (0.01) (0.02) (0.13) (0.12) Net realized loss on extinguishment of debt (0.03) Net increase (decrease) in net assets resulting from operations Repurchase of common stock Distribution recorded (0.15) (0.15) (0.15) (0.15) (0.15) NAV, end of period $ 6.60 $ 6.72 $ 6.73 $ 6.74 $ 6.86 Total NAV, beginning of period $ 1,472,600 $ 1,477,624 $ 1,481,797 $ 1,506,699 $ 1,541,938 Net investment income 33,966 34,157 33,320 37,290 36,352 Net realized and change in unrealized gains (losses) (22,342) (2,370) (4,539) (29,238) (25,062) Net realized loss on extinguishment of debt (5,790) Net increase (decrease) in net assets resulting from operations 5,834 31,787 28,781 8,052 11,290 Repurchase of common stock (4,645) (3,956) - - (13,575) Distributions recorded (32,738) (32,855) (32,954) (32,954) (32,954) NAV, end of period $ 1,441,050 $ 1,472,600 $ 1,477,624 $ 1,481,797 $ 1,506,699 Net Asset Value Per Share $6.86 $6.74 $6.73 $6.72 $6.60 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Numbers may not sum due to rounding. 43

45 Portfolio as of December 31, 2017 By Asset Class (1) Fixed Rate vs. Floating Rate (1) (2) Preferrred equity, common equity/interests and w arrants 10% Structured products and other 4% Unsecured debt 5% Fixed Rate Assets 8% Floating Rate Assets 92% Secured debt 81% By Industry (1) (3) Sponsored vs. Non-sponsored (1) (4) Telecommunications 2.9% Aerospace & Def ense 2.9% Div ersif ied Investment Vehicles, Banking, Finance, Real Estate 3.9% Transportation Cargo, Distribution 6.0% Other 17.4% Business Serv ices 18.8% Av iation and Consumer Transport 17.3% Nonsponsored 18% Sponsored 82% High Tech Industries 7.2% Energy Oil & Gas 7.3% Healthcare & Pharmaceuticals 7.4% Energy Electricity 8.9% (1) On a fair value basis. (2) The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on nonaccrual status. (3) Other consists of: Chemicals, Plastics & Rubber; Manufacturing, Capital Equipment; Food & Grocery; Consumer Goods Durable; Advertising, Printing & Publishing; Utilities Electric; Automotive; Consumer Goods Non-durable; Consumer Services; Hotel, Gaming, Leisure, Restaurants; Insurance; Containers, Packaging & Glass; Media Diversified & Production and Metals & Mining. (4) The sponsored / non-sponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 44

46 Portfolio Composition ($ in thousands) 3Q'18 2Q'18 1Q'18 4Q'17 3Q'17 Portfolio Composition, measured at fair value ($) Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 First lien $ 1,169,317 $ 1,142,148 $ 1,140,215 $ 1,049,232 $ 1,052,890 Second lien 743, , , , ,858 Total secured debt $ 1,912,616 $ 1,892,857 $ 1,875,161 $ 1,734,500 $ 1,736,748 Unsecured debt 107, , , , ,121 Structured products and other 97, , , , ,748 Preferred equity 25,690 25,780 25,754 25,637 30,785 Common equity/interests and warrants 208, , , , ,930 Total investment portfolio $ 2,352,562 $ 2,360,290 $ 2,416,579 $ 2,316,708 $ 2,526,333 Portfolio Composition, measured at fair value (%) First lien 50% 48% 47% 45% 42% Second lien 32% 32% 30% 30% 27% Total secured debt 81% 80% 78% 75% 69% Unsecured debt 5% 5% 7% 7% 10% Structured products and other 4% 5% 6% 7% 9% Preferred equity 1% 1% 1% 1% 1% Common equity/interests and warrants 9% 9% 9% 10% 11% Portfolio Composition by Strategy, measured at fair value (%) Core strategies (1) 74% 73% 74% 71% 66% Non-core strategies (2) 22% 23% 23% 24% 29% Legacy & Other 4% 4% 4% 5% 5% Interest Rate Type, measured at fair value (3) Fixed rate % 8% 9% 14% 16% 16% Floating rate % 92% 91% 86% 84% 84% Sponsored / Non-sponsored, measured at fair value (4) Sponsored % 82% 81% 83% 86% 86% Non-sponsored % 18% 19% 17% 14% 14% (1) Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. (2) Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities. (3) The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. (4) The sponsored / nonsponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 45

47 Credit Quality As of December 31, 2017, 2.4% of total investments at amortized cost, or 1.5% of total investments at fair value, were on non-accrual status. ($ in thousands) 3Q'18 2Q'18 1Q'18 4Q'17 3Q'17 Dec-17 Sep-17 Jun-17 Mar-17 Dec-16 Investments on Non-Accrual Status Non-accrual investments at amortized cost $ 57,928 $ 46,199 $ 46,430 $ 183,141 $ 236,453 Non-accrual investments / total portfolio, at amortized cost 2.4% 1.9% 1.9% 7.0% 8.2% Non-accrual investments at fair value $ 35,175 $ 30,204 $ 27,458 $ 68,571 $ 65,587 Non-accrual investments / total portfolio, at fair value 1.5% 1.3% 1.1% 3.0% 2.6% Portfolio Company Credit Metrics (1) Net Leverage (Close) 5.4 x 5.5 x 5.4 x 5.5 x 5.6 x Net Leverage (Current) 5.5 x 5.5 x 5.5 x 5.5 x 5.7 x Interest Coverage (Close) 2.7 x 2.7 x 2.7 x 2.5 x 2.4 x Interest Coverage (Current) 2.7 x 2.7 x 2.7 x 2.5 x 2.5 x ($ in thousands) Industry Cost Fair Value Investments on Non-Accrual Status as of December 31, 2017 Elements Behavioral Health, Inc. Healthcare & Pharmaceuticals $ 11,911 $ 865 Magnetation, LLC Metals & Mining 1, Spotted Hawk Energy Oil & Gas 44,380 33,738 Total $ 57,928 $ 35,175 (1) Source: Company data. Includes all portfolio company investments except structured products, common equities, warrants and investments on non-accrual status. Also excludes select investments where debt-to-ebitda is not a relevant or appropriate metric, or data is not available. Weighted average by cost. 46

48 Diversified Funding Sources as of December 31, 2017 Debt Facilities Debt Issued / Amended Final Maturity Date Interest Rate Principal Amount Outstanding (in thousands) Senior Secured Facility ($1.19 billion) 12/22/ /22/2021 L bps $ 370,831 Senior Secured Notes (Series B) 9/29/2011 9/29/ % 16, Notes (redeemable on or after 7/15/18) 6/17/2013 7/15/ % 150, Notes 3/3/2015 3/3/ % 350,000 Weighted Average Annualized Interest Cost (1) & Total Debt Obligations 5.067% 886,831 Deferred Financing Cost and Debt Discount (11,666) Total Debt Obligations,Net of Deferred Financing Cost and Debt Discount $ 875,165 (1) Includes the stated interest expense and commitment fees on the unused portion of the Senior Secured Facility. Excludes amortized debt issuance costs. For the three months ended December 31, Based on average debt obligations outstanding. 47

49 Interest Rate Exposure as of December 31, 2017 Investment Portfolio (1) (2) Funding Sources (3) Fixed Rate Assets 8% Floating Rate Assets 92% Common Equity 62% Fixed Rate Debt 22% Floating Rate Debt 16% Floating Rate Asset Floor Net Investment Income Interest Rate Sensitivity (4) ($ in millions) Par or Cost % of Floating Rate Portfolio Interest Rate Floors No Floor $ % < 1.00% 18 1% 1.00% to 1.24% % 1.25% to 1.49% 69 5% 1.50% to 1.74% 13 1% > =1.75% 50 4% Total $ 1, % Annual Net Investment Income (in millions) Annual Net Investment Income Per Share Basis Point Change Up 400 basis points $ 28.1 $ Up 300 basis points $ 21.1 $ Up 200 basis points $ 14.1 $ Up 100 basis points $ 7.0 $ Down 100 basis points $ (3.6) $ (0.017) (1) On a fair value basis. (2) The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. (3) Based on total debt obligations before deferred financing cost and debt discount. (4) The table shows the estimated annual impact on net investment income of base rate changes in interest rates (considering interest rate floors for floating rate instruments) to our loan portfolio and outstanding debt as of December 31, 2017, assuming no changes in our investment and borrowing structure. 48

50 Contact Information For more information, please contact: Elizabeth Besen Investor Relations Manager Phone: (212) Gregory W. Hunt Chief Financial Officer and Treasurer Phone: (212)

51 50