APOLLO INVESTMENT CORPORATION Investor Presentation September 2018 Unless otherwise noted, information as of June 30, 2018 It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments shown in this document.
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. Words such as 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 forwardlooking: the return on equity; the yield on investments; the ability to borrow to finance assets; and other risks associated with investing including 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 third-party 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 ) 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. This presentation does not constitute a prospectus and should under no circumstances be understood as an offer to sell or the solicitation of an offer to buy any securities of AINV. 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 and annual financial information for the Corporation refers to fiscal periods. 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. 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 by other investment managers. 2
Agenda Apollo Investment Corporation (AINV) Overview Investment Strategy & Portfolio Repositioning Portfolio Review Conclusion Appendices 3
Overview 4
Overview of Apollo Investment Corporation ( AINV ) Specialty Finance Company Focused on Lending to US Middle Market Companies 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 June 30, 2018, invested $18.5 billion in 443 portfolio companies $2.50 billion investment portfolio across 96 companies and 25 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 ( AGM ), a leading alternative asset manager with approximately $270 billion of AUM 2,4 with expertise in private equity, credit and real estate Apollo Global Management, LLC was founded in 1990 AINV operates as part of AGM s Direct Origination Business Apollo Affiliation Increase in Regulatory Leverage Exemptive Relief to Co-Invest 7 Competitive Advantages Apollo affiliation provides significant benefits Experienced management team Broad product offering Large and diverse direct origination team with joint front engine across AINV and MidCap Financial ( MidCap ) 5 Uniquely positioned to benefit from increase in regulatory leverage 6 Expected to improve AINV s competitive positioning Expected to increase deal flow Current Market Information 8 Market capitalization $1.18 billion Dividend yield at market price 9 11.0% Dividend yield at NAV 10 9.3% 1 On a fair value basis. 2 As of June 30, 2018 3 Apollo Investment Management, L.P. 4 See definition of AUM at beginning of presentation. 5 MidCap Financial refers to MidCap FinCo Designated Activity Company, 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 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by The Small Business Credit Availability Act ( SBCAA ). As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, 2019. 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 As of September 7, 2018. 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 can be no assurances that AINV s dividend will remain at the current level. 5
AINV Benefits from a Strong External Manager Firm Profile 1 Business Segments Founded: 1990 AUM: $270 billion Credit $183 bn AUM Private Equity $72 bn AUM Real Assets $14 bn AUM Employees: 1,052 Inv. Professionals: 382 Global Offices: 13 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 Opportunistic Across Market Toronto Chicago Los Angeles Houston London New York Madrid Bethesda Frankfurt Luxembourg Delhi Mumbai Shanghai Hong Kong Cycles and Capital Structures Bethesda Singapore Focus on 9 Core Industries 1 As of June 30, 2018. See definition of AUM at beginning of presentation Note: AUM components may not sum due to rounding. 6
Apollo s Extensive Credit Platform Apollo Credit $183 billion in AUM & 234 Investment Professionals 1 Corporate Credit Structured Credit Apollo Advised Assets Performing Credit Liquid Opportunistic Credit Illiquid Opportunistic Credit Direct Origination ~$20 billion in AUM incl. sidecars European Principal Finance Structured Credit Athene Asset Management & Other Advised Assets 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 $48 billion in AUM (includes Performing and Hedge Funds, Managed CLOs, and SMAs) Permanent Capital $109 billion in AUM (includes Athene, MidCap, and publicly traded funds) Drawdown Funds $26 billion in AUM (includes Opportunistic, European and Structured Credit Funds, and SMAs) 1 As of June 30, 2018. Please refer to the definition of AUM at the beginning of this presentation. 7
Apollo s Dedicated Direct Origination Vehicles Apollo Investment Corporation MidCap CION Investment Corporation 2 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 US middle market companies Publicly-listed on NASDAQ Global Select Market $2.50 billion investment portfolio across 96 companies 1 Full-service finance company focused on directly sourced middle market senior debt Business lines in asset-back loans, leveraged loans, real estate and venture lending Privately-held including by investors affiliated with Apollo Global $8.2 billion in funded assets across 503 distinct positions 1 BDC under the Investment Company Act of 1940 that has elected to be treated as a RIC for tax purposes Focused on providing senior debt solutions to US middle market companies Non-traded $1.8 billion assets across 157 companies 1 Established 2012 Established 2004 Established 2008 Additional capacity in select opportunistic credit accounts 1 As of June 30, 2018. 2 Apollo Investment Management, L.P. (AIM), the investment adviser to Apollo Investment Corporation, is a non-controlling member of CION Investment Management, LLC (CIM), the investment adviser to CION Investment Corporation (CION). AIM performs sourcing services for CIM, which include, among other services, (i) identifying and providing information about potential investment opportunities for approval by CIM s investment committee; (ii) providing (a) trade and settlement support; (b) portfolio and cash reconciliation; (c) market pipeline information regarding syndicated deals, in each case, as reasonably requested by CIM; and (d) monthly valuation reports and support for all broker-quoted investments. AIM has a limited role as a member of CIM and does not provide advice, evaluation, or recommendation with respect to the CION s investments. All of CION s investment decisions are the sole responsibility of, and are made at the sole discretion of, CIM. 8
Apollo s Direct and Specialty Origination Platform Encompasses an array of origination verticals and a comprehensive suite of products Leveraged Lending Financial Sponsors Origination Channels - Unified calling effort across Apollo - Ability to offer full suite of products increase relevancy 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 Non-Sponsor Product Capabilities Revolving Loans Senior First Lien Term Loans Senior Stretch Loans / Unitranche Loans Second Lien Term Loans Delayed Draw Term Loans Asset Based Debt DIP Financing Niche Markets - Life Sciences Lending - Lender Finance - Aircraft Leasing 9
Competitive Advantages Extensive origination team on par with any peer in the market Full-service product suite Significant expertise in niche verticals with flexible product set Significant scale with permanent capital AUM Well positioned to participate in large commitments while maintaining relatively small hold sizes given AINV s receipt of exemptive relief to co-invest in 2016 1 AINV is uniquely positioned to increase leverage 2 with a prudent lower risk portfolio growth strategy given the robust volume of senior floating rate assets already originated by the Apollo Direct Origination platform Note: Reflects the view of Apollo. 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 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by the SBCAA. As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, 2019. 10
Investment Strategy & Portfolio Repositioning 11
AINV Plan for Reduction in Asset Coverage Requirement On April 4, 2018, AINV s Board approved the increase in allowable leverage as permitted under the Small Business Credit Availability Act ( SBCAA ) which will go into effect on April 4, 2019 Key Elements of Our Plan Incremental investment capacity will be used to significantly increase AINV s exposure to senior first lien floating leveraged loans sourced by Apollo s Direct Origination platform with the following characteristics 1 : Leverage range of 4.0x to 5.5x Floating rate spreads ~500 to 700 basis points ~ 1 to 1.5% position sizes Prudently increase leverage over the next 18 to 24 months with a target debt-to-equity range of 1.25x 1.40x Reduce exposure to remaining non-core assets Tangible improvements to the quality of AINV s assets Base management fee decreases to 1% on assets financed with leverage over 1.0 debt-to-equity We believe that the ability to increase our leverage provides a unique opportunity for AINV given the robust volume of senior floating rate assets already originated by the Apollo Direct Origination platform 1 Subject to change at any notice. 12
Plan Focuses on Lower Risk Assets Majority of incremental assets expected to be first lien floating rate loans with leverage of 4.0-5.5x at L+500-700 basis points ` Leverage and Portfolio Size June 30, 2018 Actual Original Target Revised Target AINV Debt-to-Equity Ratio 0.79x 0.65x 0.70x 1.25x 1.40x Portfolio Size (in billions) $2.5 $2.3 - $2.4 $3.3 - $3.4 Asset Mix (%) First Lien Corporate Loans 1 27 50-55 ~ 80-85 ` Second Lien Corporate Loans 28 30-35 < 10 Merx Aviation 20 15 ~10 15 Unsecured Corporate Loans 2 4 0 0 Non-Core and Legacy 20 < 10 < 5 Other Key Metrics Portfolio Asset Yield ~10.7% 10.0-10.5% 9.0-9.5% Weighted Average Spread ~785 bps ~750 to 800 bps ~600 to 650 bps Weighted Average Net Leverage 5.6x 5.25x 4.2x Net Leverage Range of Incremental Assets n/a 4.5x 5.5x 4.0x 5.5x Projected Loss Rate 3 n/a 65-70 bps 35-40 bps % of Investments Per Co-Investment Order 4 24% 50%-60% 70%-80% 1 Excludes Merx Aviation and non-core and legacy assets 2 For 6/30/18, includes preferred and common equity 3 See Appendix for projected loss rate estimate. 4 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. 13
Fee Structure Closely aligns the incentives of the manager with the interests of shareholders The base management fee has been permanently reduced 1 from an annual rate of 2.0% of the Company s gross assets to - 1.5% of gross assets up to 1.0x debt-to-equity - 1.0% of gross assets in excess of 1.0x debt-to-equity 2 The incentive fee on income has been revised to include a total return requirement - Rolling twelve quarter look-back beginning from April 1, 2018 3 The combination of AINV s new fee structure and active stock repurchase program demonstrate our commitment to creating value for our shareholders 1 Effective April 1, 2018. 2 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by the SBCAA. As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, 2019. 3 The calculation of the incentive fee with the total return requirement will begin on January 1, 2019. The incentive fee rate and performance threshold remain 20% and 7% respectively. There is no change to the catch-up provision. For the period between April 1, 2018 through December 31, 2018, the incentive fee rate will be waived to15%, subject to the 7% annualized performance threshold. 14
Significant Progress Repositioning Portfolio Deployed significant capital into core strategies 1 and meaningfully reduced exposure to non-core strategies 2 Portfolio Exposure to Core vs. Non-Core and Legacy Strategies 3 As of June 30, 2016 As of June 30, 2018 20% 41% 59% 80% Core Strategies Non-Core and Legacy Strategies Over the past 8 quarters, invested $1.8 billion in core strategies 4 1 Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. 2 Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities 3. On a fair value basis. 4. From July 1, 2016 through June 30, 2018. 15
Significant Progress Reducing Non-Core Assets 1 Non-Core Assets ($ in millions) 1,000 900 800 700 600 500 400 300 200 100 0 $907 or 35% of portfolio $238 (9%) $133 (5%) $232 (9%) $304 (12%) -53% 6/30/2016 6/30/2018 $430 or 17% of portfolio $25(1%) $154 (6%) $69 (3%) $181 (7%) Oil & Gas Renewables Shipping Structured Credit Over the past 8 quarters, reduced exposure to non-core strategies by $477 million 4 1 Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities. On a fair value basis. 16
Emphasis on First Lien Debt Portfolio Exposure to First Lien Debt 1 As of June 30, 2016 As of June 30, 2018 60% 40% 45% 55% First Lien Secured Debt Second Lien Secured Debt, Unsecured Debt, Structured Products and Other, Preferred Equity, Common Equity / Interests and Warrants Over the past 8 quarters, 59% of total deployment was in first lien debt 2 1. On a fair value basis. 2. From July 1, 2016 through June 30, 2018. 17
Emphasis on Floating Rate Debt Portfolio Exposure to Floating Rate Debt 1 2 As of June 30, 2016 As of June 30, 2018 23% 6% 77% 94% Floating Rate Debt Fixed Rate Debt Over the past 8 quarters, 100% of total deployment was in floating rate debt 2 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. From July 1, 2016 through June 30, 2018 18
Investments Made Pursuant to Co-Investment Order 1 We believe our ability to co-invest with other Apollo managed capital makes us one of the largest market participants that is well positioned to make large commitments Co-Investment Deployment Over Past 8 Quarters 2 43% of total deployment has been in investments made pursuant to coinvestment order Co-Investments Outstanding 3 24% of the portfolio is in investments made pursuant to co-investment order 24% 24% 57% 7% 11% 1% 76% Leveraged Loans Asset Based Non Co-investment Life Sciences Lender Finance Order Co-Investments Non-Order Co-Investments 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 June 30, 2018. 3. As of June 30, 2018. On a fair value basis. 19
Portfolio Review 20
Portfolio Snapshot Portfolio Key Statistics 1 Portfolio by Security Type 1,2 Investment Portfolio 2 $2.50 bn # of Portfolio Companies 96 Weighted Average Yield 3 10.7% % Floating Rate 2,4 94% % Sponsored 2,5 81% Average Company Exposure 2 $26.0 mn 30% 8% 4% 3% 1% 55% Median Company Exposure 2 $16.9 mn Median EBITDA 6 Net Leverage Through AINV Position 6 $73 mn 5.6 x First Lien Debt Unsecured Debt Second Lien Debt Structured Products and Other Interest Coverage 6 2.4 x Preferred Equity Common Equity and Warrants Portfolio by Industry 1,2 Portfolio by Strategy 1,2,9 Aviation and Consumer Transport Business Services 3% 9% Healthcare & Pharmaceuticals High Tech Industries Energy Oil & Gas Transportation Cargo, Distribution Energy Electricity Telecommunications 2.5% 2.9% 3.0% 3.4% 6.6% 16.8% 20.1% 16.8% 17% 20% 51% Aerospace & Defense Chemicals, Plastics & Rubber 7.3% 8.4% 12.2% Corporate Lending Aircraft Leasing Non-Core Life Sciences, Asset Based and Lender Finance Legacy Other 8 1 As of June 30, 2018. 2 On a fair basis. 3 On total debt portfolio. At amortized cost, exclusive of investment on non-accrual status. 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. 6 Current. 8 Other includes Existing specialty verticals includes oil & gas, renewables, shipping and structured credit. 9 Non-core strategies include oil 1 & gas, structured credit, renewables, shipping and commodities 21
Merx Aviation is Well-Diversified Represents 20.1% of AINV s investment portfolio 1, 2 Merx Portfolio 1 Aircraft by Type 1,3 Aircraft by Region 1,3 91 aircraft 13 aircraft types 47 lessees in 26 countries 3% 3% 4% 4% 5% 5% 2% 2% 2% 1%1% 38% 23% 3% 3% 10% 2% 32% Weighted average age of aircraft ~8.4 years Weighted average lease maturity ~5.2 years 29% B737-800 A320-200 A321neo A321-200 B787-8 B777-200F B737-700 A319-100 E-195 A330-200 E-190 B737-900ER E-170 28% Asia Europe North America Latin America Africa Australia Middle East Staggered Lease Maturity 1 Aircraft Value by Lessee 1,2 Revenue by Lessee 1,4 14 12 10 8 6 4 2 0 3 2018 4 2019 14 14 2020 2021 7 2022 14 2023 12 2024 8 2025 9 2026 3 3 2027 2028 2029 30 Lessees Each < 2% 36% 9% 4% 2% 2% 3% 2% 3% 3% 2% 2% 2% 7% 6% 4% 5% 4% 4% 0.0% 0.7% 0.6%0.6% 0.8% 0.8% 0.9% 0.8% 1.0% 0.8% 8.0% 1.2% 0.9% 0.9% 0.8% 7.9% 1.2% 1.2% 0.9% 1.3% 1.3% 1.4% 1.5% 5.0% 1.5% 1.6% 1.6% 5.0% 1.7% 1.7% 1.7% 4.9% 1.8% 1.9% 4.1% 1.9% 2.0% 2.3% 4.0% 2.6% 3.6% 2.9% 3.1% 3.2% 3.3% 3.2% # of leases maturing by year 47 Lessees 47 Lessees 1 As of June 30, 2018 2 On a fair value basis. 3 Based on base value. 4 Revenue for next four quarters. For more information about Merx, please visit www.merxaviation.com. 22
Portfolio Concentration Top Ten Portfolio Companies 1 ($ in millions) Rank Portfolio Company Fair Value % of Portfolio 1 Merx Aviation Finance, LLC $503 20.1% 2 Spotted Hawk 111 4.4% 3 Dynamic Product Tankers (Prime), LLC 82 3.3% 4 U.S. Security Associates Holdings, Inc. 80 3.2% 5 MSEA Tankers LLC 72 2.9% Glacier Oil & Gas Corp. (f/k/a Miller Energy 6 62 Resources, Inc.) 2.5% 7 Skyline Data, News and Analytics LLC (Dodge) 53 2.1% 8 Capital Carbon SPE I LLC) 46 1.9% 9 Genesis Healthcare, Inc. 44 1.8% 10 TriTech $43 1.7% Top Ten Total $1,096 43.9% Other $1,400 56.1% Total Portfolio $2,495 100.0% Top Ten Industries 1 ($ in millions) Rank Industry Fair Value % of Portfolio 1 Aviation and Consumer Transport $503 20.1% 2 Business Services 418 16.8% 3 Healthcare & Pharmaceuticals 305 12.2% 4 High Tech Industries 210 8.4% 5 Energy Oil & Gas 181 7.3% 6 Transportation Cargo, Distribution 164 6.6% 7 Energy Electricity 85 3.4% 8 Telecommunications 75 3.0% 9 Aerospace & Defense 73 2.9% 10 Chemicals, Plastics & Rubber $62 2.5% Top Ten Total $2,076 83.2% Other $420 16.8% Total Portfolio $2,495 100.0% Average Position Size, at fair value ($ in millions) 35.0 28.0 $28.8 $27.1 $27.4 $25.0 $26.0 21.0 14.0 7.0 0.0 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 1 Top ten portfolio companies and top ten industries based on market value as of June 30 2018. 23
Portfolio Company Credit Quality Median LTM EBITDA Net Leverage through AINV Position (weighted average by cost) Total Cash Interest Coverage (weighted average by cost) $100 8.00x 4.00x $90 $80 7.00x 3.50x 3.00x $70 $60 6.00x 2.50x $50 5.00x 2.00x $40 $30 4.00x 1.50x 1.00x $20 $10 3.00x 0.50x $0 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 2.00x Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 0.00x Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 At Close Current At Close Current 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. 24
Conclusion 25
Reasons to Own AINV 1 Origination platform is highly differentiated versus other market participants 2 Uniquely positioned to benefit from increase in regulatory leverage 1 3 Receipt of exemptive relief to co-invest enhances competitive positioning 2 4 Plan for reduction in asset coverage requirement expected to deliver consistent shareholder returns and a stable NAV 5 Well-positioned to benefit from rising interest rates 6 Strong balance sheet and diverse funding sources 7 Fee structure closely aligns the incentives of the manager with the interests of shareholders 8 Active share repurchase program Notes: Reflects the views of Apollo. For detailed information on risks relating to AINV, see the latest 10-K and subsequent quarterly reports on Form 10-Q, filed with the SEC. 1 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by the SBCAA. As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, 2019. 2 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. 26
Appendices 27
Specialty Niches Asset Based Life Sciences Lender Finance 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 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 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 ($25+ million) to provide diversification of underlying collateral Significant opportunities exist to fill the capital void left by large banks exiting and descaling in this asset class 28
Financial Highlights ($ in thousands, except per share data) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Operating Results 1 Net investment income $31,547 $31,943 $33,966 $34,157 $33,320 Net realized and change in unrealized gains (losses) from investments and foreign currencies (18,297) (11,316) (22,342) (2,370) (4,539) Net realized loss on extinguishment of debt (5,790) Net increase in net assets resulting from operations $13,251 $20,627 $5,834 $31,787 $28,781 Net investment income per share $0.15 $0.15 $0.16 $0.16 $0.15 Net realized and change in unrealized gains (losses) from investments and foreign currencies p/s ($0.08) ($0.05) ($0.10) ($0.01) ($0.02) Net realized loss on extinguishment of debt per share ($0.03) Earnings per share $0.06 $0.10 $0.03 $0.14 $0.13 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) $2,495,459 $2,248,047 $2,352,562 $2,360,290 $2,416,579 Debt outstanding $1,102,679 $789,846 $875,165 $864,906 $920,674 Net assets $1,391,166 $1,418,086 $1,441,050 $1,472,600 $1,477,624 Net asset value per share $6.47 $6.56 $6.60 $6.72 $6.73 Debt-to-equity ratio 0.79 x 0.56 x 0.61 x 0.59 x 0.62 x Net leverage ratio 2 0.78 x 0.57 x 0.62 x 0.59 x 0.62 x Weighted average shares outstanding 215,914,717 216,700,552 218,550,180 219,519,803 219,694,654 Shares outstanding 214,925,294 216,312,096 218,255,954 219,034,354 219,694,654 Number of portfolio companies, at period end 96 90 86 87 84 Weighted Average Yields, at period end Secured debt 3 10.7% 10.7% 10.5% 10.3% 10.2% Unsecured debt 3 11.4% 11.3% 11.2% 11.2% 11.1% Total debt portfolio 3 10.7% 10.7% 10.5% 10.3% 10.3% Total portfolio 4 9.7% 9.6% 9.6% 9.7% 9.7% 1 Numbers may not sum due to rounding. 2 The Company s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. 3 On a cost basis. Exclusive of investments on non-accrual status. 4 On a cost basis. Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status. 29
Summary Investment Activity ($ in thousands) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Portfolio Activity 1 Investments made $358,950 $243,329 $198,355 $265,439 $342,036 Investments sold (14,832) (119,302) (48,084) (11,703) (9,949) Net investment activity before repayments $344,117 $124,027 $150,271 $253,737 $332,087 Investments repaid (93,786) (238,131) (156,716) (328,096) (241,998) Net investment activity $250,331 ($114,104) ($6,445) ($74,359) $90,089 Number of portfolio companies, at beginning of period 90 86 87 84 86 Number of new portfolio companies 7 8 8 12 11 Number of exited portfolio companies (1) (4) (9) (9) (13) Number of portfolio companies, at period end 96 90 86 87 84 Number of investments in existing portfolio companies 20 19 12 11 11 Yield on Activity 2 Yield on investments made 9.4% 9.7% 9.9% 10.0% 10.3% Yield on debt sales and repayments 9.4% 9.6% 10.2% 10.3% 11.3% 1 Numbers may not sum due to rounding. 2 Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 30
Quarterly Investment Activity Investment Activity ($ in millions) Total Debt Portfolio Yield 1,2 $342 $265 $198 $243 $359 10.3% 10.3% 10.5% 10.7% 10.7% ($10) ($12) ($48) ($242) ($157) ($328) ($119) ($238) ($15) ($94) Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 New Investments Sales Repayments Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Net Investment Activity ($ in millions) Yield on Investment Activity 2,3 11.4% 10.8% $250 10.3% 10.2% 11.2% $90 ($6) 10.3% 9.4% 10.0% 9.9% 9.3% 10.2% 9.7% 9.4% 7.6% 9.1% ($74) ($114) Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 New Investments Sales Repayments 1 Weighted average yield on total debt portfolio on a cost basis at period end, exclusive of investments on non-accrual status. 2 Change in terms on investments may impact the weighted average yield of the total debt portfolio but are not reflected in new, sold or repaid investments. 3 Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 31
Detailed Quarterly Investment Activity ($ in thousands) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Purchases 1 First lien 2 $319,224 $186,265 $108,008 $111,229 $236,735 Second lien 39,323 49,426 89,544 152,972 103,819 Total secured debt 358,547 235,691 197,552 264,201 340,554 Unsecured debt 0 0 Structured products and other 43 47 Preferred equity 0 333 Common equity/interests and warrants 360 7,258 803 1,238 1,481 Total Purchases $358,950 $243,329 $198,355 $265,439 $342,036 Yield at Cost on Debt Purchases 3 First lien 9.3% 9.5% 9.3% 9.3% 10.3% Second lien 10.4% 10.3% 10.7% 10.4% 10.3% Total secured debt 9.4% 9.7% 9.9% 10.0% 10.3% Unsecured debt N/A N/A N/A N/A N/A Preferred equity N/A N/A N/A N/A N/A Yield at Cost on Debt Purchases 9.4% 9.7% 9.9% 10.0% 10.3% Sales and Repayments 1 First lien 2 $93,006 $228,989 $79,659 $128,848 $136,063 Second lien 8,728 91,255 90,981 140,034 53,838 Total secured debt 101,735 320,243 170,639 268,882 189,901 Unsecured debt 2,453 2,060 55 55,000 0 Structured products and other 92 27,349 27,292 8,961 33,166 Preferred equity (30) 0 0 0 0 Common equity/interests and warrants 4,369 7,780 6,814 6,956 28,879 Total Sales and Repayments $108,618 $357,433 $204,800 $339,799 $251,947 Yield at Cost on Debt Sales and Repayments 3 First lien 9.3% 9.0% 10.0% 10.4% 12.0% Second lien 10.0% 11.2% 10.5% 9.9% 9.7% Total secured debt 9.3% 9.6% 10.2% 10.1% 11.3% Unsecured debt 10.8% 10.2% 13.0% 11.0% N/A Preferred equity N/A N/A N/A N/A N/A Yield at Cost on Debt Sales and Repayments 9.4% 9.6% 10.2% 10.3% 11.3% Yield at Cost on Sales 11.2% 7.6% 10.2% 9.3% 9.4% Yield at Cost on Debt Repayments 9.1% 10.8% 10.2% 10.3% 11.4% 1 Numbers may not sum due to rounding. 2 First lien purchases include revolver drawdowns; first lien sales and repayments includes revolver repayments. 3 Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 32
Detailed Quarterly Investment Activity (Continued) ($ in thousands) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Investment Activity, excluding Merx Aviation and Revolver Activity Deployment $199,714 $157,985 $165,066 $234,414 $189,917 Sales ($14,832) ($119,302) ($48,084) ($11,703) ($9,949) Repayments ($13,464) ($157,061) ($119,070) ($276,601) ($153,579) Net Investment Activity $171,418 ($118,378) ($2,087) ($53,890) $26,389 Merx Aviation Deployment $91,000 $18,500 $5,800 $10,000 $105,400 Repayments - ($25,000) ($26,000) ($37,334) ($65,650) Net funding into Merx $91,000 ($6,500) ($20,200) ($27,334) $39,750 Revolvers, excluding Merx Aviation Deployment $68,236 $66,844 $27,489 $21,025 $46,718 Repayments ($80,322) ($56,070) ($11,646) ($14,161) ($22,769) Net funding on revolvers ($12,086) $10,774 $15,843 $6,864 $23,950 Total Deployment $358,950 $243,329 $198,355 $265,439 $342,035 Sales ($14,832) ($119,302) ($48,084) ($11,703) ($9,949) Repayments ($93,786) ($238,131) ($156,716) ($328,096) ($241,998) Net Investment Activity $250,331 ($114,104) ($6,445) ($74,359) $90,089 Note: Numbers may not sum due to rounding. 33
Net Asset Value ($ in thousands, except per share data) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Per Share NAV, beginning of period $6.56 $6.60 $6.72 $6.73 $6.74 Net investment income 0.15 0.15 0.16 0.16 0.15 Net realized and change in unrealized gain (loss) (0.08) (0.05) (0.10) (0.01) (0.02) Net realized loss on extinguishment of debt (0.03) Net increase (decrease) in net assets resulting from operations 0.06 0.10 0.03 0.14 0.13 Repurchase of common stock 0.01 0.01 0.00 0.00 Distribution recorded (0.15) (0.15) (0.15) (0.15) (0.15) NAV, end of period $6.47 $6.56 $6.60 $6.72 $6.73 Total NAV, beginning of period $1,418,086 $1,441,050 $1,472,600 $1,477,624 $1,481,797 Net investment income 31,547 31,943 33,966 34,157 33,320 Net realized and change in unrealized gains (losses) (18,297) (11,316) (22,342) (2,370) (4,539) Net realized loss on extinguishment of debt (5,790) Net increase (decrease) in net assets resulting from operations 13,251 20,627 5,834 31,787 28,781 Repurchase of common stock (7,877) (11,145) (4,645) (3,956) 0 Distributions recorded (32,293) (32,447) (32,738) (32,855) (32,954) NAV, end of period $1,391,166 $1,418,086 $1,441,050 $1,472,600 $1,477,624 Net Asset Value Per Share $6.73 $6.72 $6.60 $6.56 $6.47 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Note: Numbers may not sum due to rounding. 34
Portfolio as of June 30, 2018 By Asset Class 1 Fixed Rate vs. Floating Rate 1,2 8% 3% 4% First lien debt Second lien debt 6% Unsecured debt 30% 55% Structured products and other Preferrred equity, common equity/interests and warrants 94% Fixed Rate Assets Floating Rate Assets By Industry 1,3 Sponsored vs. Non-sponsored 1,4 2.5% 2.9% 3.0% 16.8% 20.1% 19% 3.4% 16.8% 6.6% 7.3% 8.4% 12.2% 81% Aviation and Consumer Transport Business Services Healthcare & Pharmaceuticals High Tech Industries Energy Oil & Gas Transportation Cargo, Distribution Energy Electricity Telecommunications Aerospace & Defense Chemicals, Plastics & Rubber Other Sponsored Non-sponsored 1 On a fair value basis. 2 The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. 3 Other consists of: Diversified Investment Vehicles, Banking, Finance, Real Estate; Manufacturing, Capital Equipment; Food & Grocery; Advertising, Printing & Publishing; Automotive; Consumer Goods Durable; Utilities Electric; Consumer Goods Non-durable; Beverage, Food & Tobacco; Consumer Services; Insurance; Containers, Packaging & Glass; Media Diversified & Production; Hotel, Gaming, Leisure, Restaurants; and Metals & Mining. 4 The sponsored/non-sponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 35
Portfolio Composition ($ in thousands) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Portfolio Composition, measured at fair value ($) First lien $1,363,867 $1,131,942 $1,169,317 $1,142,148 $1,140,215 Second lien 737,124 706,011 743,299 750,710 734,946 Total secured debt $2,100,991 $1,837,953 $1,912,616 $1,892,857 $1,875,161 Unsecured debt 90,599 103,166 107,678 107,558 162,028 Structured products and other 67,373 67,968 97,884 124,269 135,863 Preferred equity 31,401 31,053 25,690 25,780 25,754 Common equity/interests and warrants 205,095 207,908 208,694 209,826 217,772 Total investment portfolio $2,495,459 $2,248,047 $2,352,562 $2,360,290 $2,416,579 Portfolio Composition, measured at fair value (%) First lien 55% 50% 50% 48% 47% Second lien 30% 31% 32% 32% 30% Total secured debt 84% 82% 81% 80% 78% Unsecured debt 4% 5% 5% 5% 7% Structured products and other 3% 3% 4% 5% 6% Preferred equity 1% 1% 1% 1% 1% Common equity/interests and warrants 8% 9% 9% 9% 9% Portfolio Composition by Strategy, measured at fair value (%) Core strategies 1 80% 77% 74% 73% 74% Non-core strategies 2 17% 19% 22% 23% 23% Legacy & Other 3% 4% 4% 4% 4% Interest Rate Type, measured at fair value 3 Fixed rate % 6% 8% 8% 9% 14% Floating rate % 94% 92% 92% 91% 86% Sponsored / Non-sponsored, measured at fair value 4 Sponsored % 81% 81% 82% 81% 83% Non-sponsored % 19% 19% 18% 19% 17% Note: Numbers may not sum due to rounding. 1 Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. 2 Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities. 3 The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. 4 The sponsored/non-sponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 36
Credit Quality As of June 30, 2018, 3.0% of total investments at amortized cost, or 2.3% of total investments at fair value, were on non-accrual status. ($ in thousands) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Investments on Non-Accrual Status Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Non-accrual investments at amortized cost $75,671 $75,671 $57,928 $46,199 $46,430 Non-accrual investments/total portfolio, at amortized cost 3.0% 3.3% 2.4% 1.9% 1.9% Non-accrual investments at fair value $57,646 $51,426 $35,175 $30,204 $27,458 Non-accrual investments/total portfolio, at fair value 2.3% 2.3% 1.5% 1.3% 1.1% Portfolio Company Credit Metrics 1 Net Leverage (Close) 5.5 x 5.5 x 5.4 x 5.5 x 5.4 x Net Leverage (Current) 5.6 x 5.5 x 5.5 x 5.5 x 5.5 x Interest Coverage (Close) 2.4 x 2.5 x 2.7 x 2.7 x 2.7 x Interest Coverage (Current) 2.3 x 2.5 x 2.7 x 2.7 x 2.7 x Industry Cost Fair Value Investments on Non-Accrual Status as of June 30, 2018 Elements Behavioral Health, Inc. Healthcare & Pharmaceuticals $11,911 $0 Magnetation, LLC Metals & Mining 1,273 405 Spotted Hawk Energy Oil & Gas 44,380 45,470 Sprint Industrial Holdings, LLC. Containers, Packaging & Glass 18,107 11,770 Total $75,671 $57,646 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. 37
Diversified Funding Sources as of June 30, 2018 Debt Facilities Debt Issued/ Amended Final Maturity Date Interest Rate Principal Amount Outstanding (in thousands) Senior Secured Facility ($1.19 billion) 12/22/2016 12/22/2021 L + 200 bps $597,751 Senior Secured Notes (Series B) 9/29/2011 9/29/2018 6.250% 16,000 2043 Notes (redeemable on or after 7/15/18) 6/17/2013 7/15/2043 6.875% 150,000 2025 Notes 3/3/2015 3/3/2025 5.250% 350,000 Weighted Average Annualized Interest Cost 1 & Total Debt Obligations 5.246% 1,113,751 Deferred Financing Cost and Debt Discount (11,072) Total Debt Obligations,Net of Deferred Financing Cost and Debt Discount $1,102,679 1 Includes the stated interest expense and commitment fees on the unused portion of the Senior Secured Facility. Excludes amortized debt issuance costs. For the three months ended June 30, 2018. Based on average debt obligations outstanding. 38
Interest Rate Exposure as of June 30, 2018 Investment Portfolio 1,2 Funding Sources 3 6% 21% 55% 24% Fixed Rate Assets 94% Floating Rate Assets Fixed Rate Debt Floating Rate Debt Common Equity Floating Rate Asset Floor Net Investment Income Interest Rate Sensitivity 4 ($ in millions) Par or Cost Interest Rate Floors % of Floating Rate Portfolio No Floor $306 20% < 1.00% 90 6% 1.00% to 1.24% 1,095 70% 1.25% to 1.49% 30 2% 1.50% to 1.74% 13 1% > =1.75% 23 1% Basis Point Change Annual Net Investment Income (in millions) Annual Net Investment Income Per Share Up 400 basis points $28.7 $0.134 Up 300 basis points $21.5 $0.100 Up 200 basis points $14.4 $0.067 Up 100 basis points $7.2 $0.033 Down 100 basis points ($7.0) ($0.032) Total $1,557 100% 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 June 30, 2018, assuming no changes in our investment and borrowing structure. 39
Contact Information For more information, please contact: Elizabeth Besen Investor Relations Manager Phone: (212) 822-0625 Email: ebesen@apollo.com Gregory W. Hunt Chief Financial Officer and Treasurer Phone: (212) 822-0655 Email: ghunt@apollo.com 40