fiscal q1 2017 investor presentation may 2017 nasdaq: abdc · nasdaq: abdc . 1 . alcentra capital...

Alcentra Capital Corporation

Fiscal Q1 2017 Investor Presentation May 2017 NASDAQ: ABDC

1


Forward-Looking Statements This presentation has been prepared for informational purposes only from information supplied by Alcentra Capital Corporation (“ABDC” or the “Company”) and from third-party sources indicated herein. Such third-party information has not been independently verified. The Company makes no representation or warranty, expressed or implied, as to the accuracy or completeness of such information. This presentation contains forward-looking statements which are based on current expectations and assumptions about future events. Forward-looking statements describe future financial or business performance, strategies, or expectations, and are generally identified by words or phrases such as “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “plan,” “potential,” “project,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future of conditional verbs such as “will,” “would,” “could,” “should,” “may,” or similar expressions. You are cautioned that such statements are subject to a multitude of risks and uncertainties. Actual results could differ materially from those expressed or implied in the forward-looking statements, and future results could differ materially from historical performance. These forward-looking statements are subject to risks that include, but are not limited to, the following:

― Future operating results, including the performance of our existing loans and warrants; ― Business prospects and the prospects of our portfolio companies; ― The effect of investments that we expect to make; ― Contractual arrangements and relationships with third parties; ― Actual and potential conflicts of interest with our investment adviser, Alcentra NY, LLC (the “Adviser”); ― The dependence of our future success on the general economy and its effect on the industries in which we invest; ― The ability of our portfolio companies to achieve their objectives; ― The use of borrowed money to finance a portion of our investments; ― The adequacy of our financing sources and working capital; ― The timing of cash flows, if any, from the operations of our portfolio companies; ― The ability of the Adviser to locate suitable investments for us and to monitor and administer our investments; ― The ability of the Adviser to attract and retain highly talented professionals; ― The ability to qualify and maintain our qualification as a regulated investment company and a business development company;

and ― Other risks and uncertainties described in our SEC filings.

You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward looking statements speak only as of the date they are made, and we undertake no obligation to update such statements. 2


1st quarter Net Investment Income of $4.6 million, or $0.34 per share Declared regular dividend on March 9, 2017 of $0.34 per share and $0.03

per share special dividend to shareholders of record on March 31, 2017 and paid on April 6, 2017

Declared regular dividend of $0.34 per share on May 4th Net Asset Value (“NAV”) of $13.43 per share as of March 31, 2017 The Company repurchased a total of 14,574 shares during the first quarter.

Alcentra Capital Corporation – 1Q 2017 Snapshot

3


Invested in 2 new portfolio companies ($18.8 mm of capital invested) Champion ONE

Champion ONE (“C1”) resells third party optical transceivers and related fiber optic network components primarily to telephone and CATV network operators in the U.S.

Invested $7.5 million in 11.5% Senior Notes and $1.125 million in equity for 2.77% ownership interest.

Pharmalogics Recruiting Pharmalogics Recruiting (“Pharmalogics”) is a provider of recruiting process

outsourcing and staffing services for life science and pharma companies. Invested $10.0 million in 10.25% 1st lien Notes and $0.20 out of $2.0 million in a

delayed draw term loan.

1Q 2017 Snapshot - Portfolio Activity

4


Incremental investments ($12.2mm of capital invested) Black Diamond

Additional funding of $0.5 million as part of tranche C super senior notes. PharmaLogic

Additional funding of $2.1 million as part of the subordinated note. LRI

Additional funding of $2.8 million as part of the 1st lien note. Superior

Additional funding of $5.8 million as part of the 1st lien note. My Alarm

Additional funding of $1.0 million as part of the 2nd lien note.

Realizations ($22.2mm of capital returned) Wholesome Sweeteners

The remaining equity was sold in a secondary sale on January 3 for $3.7 million. Vectra (Duke Finance)

Company repaid $7.5 million of 2nd lien debt on February 21. MOIC 1.25x Alpine Waste

Company repaid $11.0 million of 2nd lien debt on February 24. MOIC 1.25x

1Q 2017 Snapshot - Portfolio Activity (cont’d)

5


From end of 4th quarter to March 31, 2017, fair value of the portfolio increased from ~$276 million to ~$283 million

Snapshot - ABDC Portfolio

June 30, 2016 September 30, 2016 December 31, 2016 March 31, 2017

Portfolio Fair Value $293.6 million $305.9 million

$276.3 million

$283.3 million

Weighted Average Yield 11.7% 11.8%

11.7%

11.7%

Weighted Average Leverage1 3.65x 3.69x

3.93x

3.65x

1 All weighted average leverage figures exclude My Alarm, Black Diamond, and XGS.

6


ABDC Stock Performance

$8.00$9.00

$10.00$11.00$12.00$13.00$14.00$15.00$16.00 Daily Share Price

ABDC Share Price

7

7


27% 31% 37%

43%

32% 31%

29% 23%

24% 27%

26% 27%

17% 11% 9% 8%

As of6/30/16

As of9/30/16

As of12/31/16

As of3/31/17

Equity

SubordinatedDebt2nd Lien Debt

1st Lien Debt

ABDC Portfolio Security Breakout

Met strategic objective of rebalancing portfolio to 90% debt

Continued to increase

1st lien debt as percentage of portfolio

As of 3/31/2017, 52%

of debt was floating rate investments

8


Adjusted Net Investment Income1 & Dividends Paid Per Share2

(1) Adjusted net investment income, which is a non-GAAP measure, represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. (2) Per share data based on shares outstanding at the end of each period. (3) Special dividend of $0.03 declared from spill over income 9

0.34 0.37 0.38

0.35 0.34

0.41 0.44

0.35

0.45

0.34 0.34 0.34 0.34 0.34 0.34 0.34 0.34 0.34 0.34 0.34

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Adjusted Net Investment Income/Share Dividends


Net Asset Value Per Share and Dividends Paid

14.87 14.90 15.03 14.92 14.43 14.41 14.16 13.69 13.72 13.43

0.86 1.20 1.54 1.88 2.22 2.56 2.90 3.24 3.58 3.95 15.73 16.10

16.57 16.80 16.65 16.97 17.06 16.93 17.30 17.38

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Net Asset Value per Share Cumulative Dividend Per Share Total

1

(1) Includes special dividend of $0.03.

10


Portfolio Size:

21

24

28 28 29 29

32 31

33 35

32 31

0

5

10

15

20

25

30

35

40

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Num

ber o

f Por

tfol

io C

ompa

nies

$ M

illio

ns

Cost Fair Market Value # of Portfolio Companies

11


23 portfolio investments realized since IPO – Gross Unlevered Returns

ABDC Realizations Since Inception

Table excludes secondary sale of equity (1) See Disclosures at end of presentation

12

Realized Investments & Expected Realizations

Security Type

Repayment ($000)

Repayment Date

Gross IRR

Gross MOIC

GTT Communications Debt 6,324 8/6/2014 47.50% 1.10x

Wholesome Sweeteners Debt 8,846 9/2/2014 19.78% 1.06x

Acis Offshore Warrants 953 12/23/2014 34.30% 1.20x

American Addiction Centers Debt 8,248 2/25/2015 19.13% 1.14x

Choice Cable Debt 7,575 6/3/2015 12.95% 1.12x

WellBiz Brands Debt 7,830 6/16/2015 15.34% 1.16x

Datascan Debt 3,050 8/5/2015 12.67% 1.15x

NARL Marketing Debt 15,337 8/6/2015 16.87% 1.10x

Net Access Corporation Debt & Equity 14,684 11/19/2015 19.98% 1.23x

HealthFusion Debt & Warrants 8,038 1/4/2016 30.86% 1.51x

Dentistry for Children Debt 14,880 3/28/2016 14.19% 1.26x

ACT Lighting Debt & Warrants 13,804 4/4/2016 31.04% 1.49x

Radiant Logistics Debt 10,300 4/22/2016 17.58% 1.17x

City Carting Preferred Equity 12,504 5/27/2016 8.87% 1.18x

DBI Debt & Warrants 27,340 7/31/2016 39.13% 2.02x

Aphena Pharma Solutions Debt 1,100 10/28/2016 11.65% 1.24x

Bioventus Debt 12,000 11/15/2016 13.73% 1.27x

Triton Technologies, Inc. Debt 1,200 12/12/2016 12.53% 1.24x

Limbach Debt 15,340 12/21/2016 64.53% 1.23x

Vectra (Duke Finance) Debt 7,500 2/21/2017 37.20% 1.25x

Alpine Waste Debt 11,000 2/24/2017 12.74% 1.25x

Weather Realted Investments: DRC Debt & Equity 1,695 1/19/2016 -56.09% 0.55x

Response Team 1 Debt & Equity 10,368 3/21/2016 1.58% 1.03x

(1)


Weighted average yield of 11.7% on BDC debt portfolio as of March 31, 2017

Asset Quality – Risk Adjusted Return, First Dollar of Attachment on ABDC Portfolio

$91,646 $100,967 $127,733

$146,374

$128,036 $133,277 $82,560

$74,844

$52,383 $28,815

$24,626 $21,523 $13,504

$14,587 $39,571

$38,104 $27,084

June 30, 2016 September 30, 2016 December 31, 2016 March 31,2017

Cum

ulat

ive

Inve

stm

ent

($ in

thou

sand

s)

0.0x - 1.0x 1.0x - 3.0x 3.0z - 4.0x 4.0x - 4.5x 4.5x+

13% 0% 10% 44% 33%

14% 1% 9% 30% 46%

5% 1% 18% 44% 32%

10% 5%

8%

26% 52%

13


ABDC Portfolio – Equity Composition Smaller & More Diverse

14

• Total equity at IPO based on FMV was $45.8 million • Average equity investment was $3.5 million • 28.9% of the total FMV of the portfolio was equity • 13 companies

• Total equity at March 31, 2017 based on FMV was $21.7 million • Average equity piece was $1.4 million • 7.6% of the total FMV of the portfolio was equity • 15 companies

25%

20%

17%

10%

6%

5%

5%

5%

2% 2% 2% 1%

0%

Equity Investments at IPO

25%

23%

11%

8%

6%

6%

6%

5%

3% 3%

2% 2% 0% 0%

0%

Equity Investments at Q1 2017

Net Access Corporation

$8.9

American Addiction Centers $8.0

Wholesome Sweeteners

$4.7

Southern Technical

$5.4

Battery Solutions

$4.9

Tunnel Hill $2.3

Tunnel Hill $11.5

In millions


As of March 31, 2017, portfolio consisted of 31 companies representing 20 industry sectors

ABDC Portfolio – Industry Concentration

18%

16%

9%

7% 7%

5%

5%

4%

4%

4%

4%

3%

3% 3%

2% 2% 1% 1% 1% 1%

Technology & TelecomHealthcare ServicesHigh Tech IndustriesSecurityAutomotiveEnergy ServicesEducationRetailMedia: Advertising, Printing & PublishingBusiness ServicesOil & Gas ServicesIndustrial ServicesIndustrial ManufacturingEnvironmental ServicesWholesaleTransportation and LogisticsAerospaceTechnology & ITMedia & EntertainmentWaste Services

15


As of March 31, 2017, portfolio consisted of 31 companies located in all regions of the country

ABDC Portfolio – Investments Diversified Geographically

Midwest 18%

Northeast 23% South

42%

West 17%

16


As of March 31, 2017, exposure to the oil & gas industry was 3.5% (of portfolio FMV) through investment in Black Diamond $ 10.0 million in combined FMV as of

March 31, 2017 Owned by a family office and institutional

investor with deep resources and extensive experience in the industry.

At the end of March 2017 the total rig count in North America was almost 95% higher than at the end of May 2016

Texas and Oklahoma saw rig increases over the same period, two states where Black Diamond has significant operations

ABDC Portfolio – Oil & Gas Exposure

0

100

200

300

400

500

600

700

800

900

Oklahoma Texas Total

17

Alcentra Capital Corporation $(3,500)

$(3,000)

$(2,500)

$(2,000)

$(1,500)

$(1,000)

$(500)

$-

$500

$1,000

$1,500

Change ($ in thousands)

$(3,500)

ABDC Portfolio – Write-ups & Write-downs

18

Number of write-ups: 10 Number of write-downs: 5 No change: 16


Appendix

19


Notes: (1) Information on this page summarizes the financial statements of Alcentra Capital Corporation contained in the Quarterly Reports (10-Q) and the Annual Report (10-K). All quarterly and annual reports are filed with the SEC and can be accessed on the SEC website, www.sec.gov.

20

As of

March 31, 2015 As of

June 30, 2015 As of

September 30, 2015 As of

December 31, 2015 As of

March 31, 2016 As of

June 30, 2016 As of

September 30, 2016 As of

December 31, 2016 As of

March 31, 2017 Portfolio investments, at fair value

Non-controlled / non-affiliated investments

173,433,992

189,074,441

194,281,248

221,349,073

205,364,448

228,320,326

269,067,466

239,722,117

246,605,747

Non-controlled / affiliated investments

63,435,406

66,136,367

67,237,740

59,243,999

62,734,755

50,927,904

23,066,462

22,094,203

21,952,856

Controlled / affiliated investments

30,158,773

30,078,391

27,417,562

15,748,539

14,291,727

14,390,754

13,814,627

14,456,630

14,770,075

Total Portfolio Investments

267,028,171

285,289,199

288,936,550

296,341,611

282,390,930

293,638,984

305,948,555

276,272,950

283,328,678

Cash

3,962,318

3,806,606

11,472,602

4,866,972

3,831,847

5,038,752

6,708,245

3,891,606

4,719,733

Other Assets

2,866,260

4,045,943

5,593,200

6,287,224

6,031,457

5,860,596

10,608,526

8,033,491

5,843,705

Total Assets

273,856,749

293,141,748

306,002,352

307,495,807

292,254,234

304,538,332

323,265,326

288,198,047

293,892,116

Credit facility payable

56,954,490

38,054,738

52,654,738

63,504,738

42,709,057

51,685,846

70,872,238

39,133,273

46,933,273 Notes payable (net of deferred offering costs)

-

40,000,000

40,000,000

40,000,000

44,120,163

50,130,063

53,451,176

53,504,938

53,600,991

Other Liabilities

15,547,928

11,955,953

11,613,942

8,958,858

10,856,828

11,634,887

14,283,719

11,035,245

12,939,409

Total Liabilities

72,502,418

90,010,691

104,268,680

112,463,596

97,686,048

113,450,796

138,607,133

103,673,456

113,473,673

Net Assets

201,354,331

203,131,057

201,733,672

195,032,211

194,568,186

191,087,536

184,658,193

184,524,591

180,418,443

Shares Outstanding

13,516,766

13,516,766

13,516,766

13,516,766

13,506,257

13,490,636

13,490,636

13,451,633

13,437,059

NAV per Share

14.90

15.03

14.92

14.43

14.41

14.16

13.69

13.72

13.43

http://www.sec.gov/


Notes: (1) Information on this page summarizes the financial statements of Alcentra Capital Corporation contained in the Quarterly Reports (10-Q) and the Annual Report (10-K). All quarterly and annual reports are filed with the SEC and can be accessed on the SEC website, www.sec.gov. (2) On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses.

21

Quarter ended March 31, 2015

Quarter ended June 30, 2015

Quarter ended September 30, 2015

Quarter ended December 31, 2015


Quarter ended June 30, 2016

Quarter ended September 30, 2016

Quarter ended December 31, 2016


Total Investment Income 8,224,653

8,507,540

8,507,142

8,676,914

9,946,391

10,639,969

9,116,468

10,899,771

9,201,448

Management Fee 1,148,005

1,219,963

1,273,705

1,302,213

1,289,036

1,283,763

1,335,294

1,301,591

1,249,569

Incentive Fee - Ordinary Income 806,100

397,028

546,027

521,295

790,727

926,158

607,739

930,543

653,911

Incentive Fee - Capital Gains 1,001,467

434,217 (434,217)

- - - -

-

-

Incentive Fee 1,807,567

831,245

111,810

521,295

790,727

926,158

607,739

989,864

653,911

Other Expenses 1,293,374

1,806,983

1,979,583

2,323,804

2,261,736

2,531,702

2,386,642

2,489,161

2,705,352

Total Expenses 4,248,946

3,858,191

3,365,098

4,147,312

4,341,499

4,741,623

4,329,675

4,780,616

4,608,832

Management Fee Waiver - - - - - - -

-

-

Incentive Fee Waiver (1,001,467) - -

- - - -

-

-

Waiver of management and incentive fees

(1,001,467) - -

- - - -

-

-

Net Expenses 3,247,479

3,858,191

3,365,098

4,147,312

4,341,499

4,741,623

4,329,675

4,780,616

4,608,832

Net Investment Income 4,977,174

4,649,349

5,142,044

4,529,602

5,604,892

5,898,346

4,786,793

6,119,155

4,592,616

NII per share 0.37

0.34

0.38

0.34

0.41

0.44

0.35

0.45

0.34

Capital Gains Incentive Fee (Reversal) Expense - 434,217

(434,217)

- - - -

-

-

Adjusted Net Investment Income2

4,977,174

5,083,566

4,707,827

4,529,602

5,604,892

5,898,346

4,786,793

6,119,155

4,592,616

Adjusted NII per share2 0.37

0.38

0.35

0.34

0.41

0.44

0.35

0.45

0.34

http://www.sec.gov/


Portfolio Investments as of March 31, 2017

($ in thousands) Notes: Total Unrealized Investments in Alcentra Capital Corporation (ABDC) as of March 31, 2017.

Portfolio Company Industry Security Type Maturity Fixed/ Floating Coupon Structure Cost Basis Market Value A2Z Wireless Technology & Telecom Term Note 1/15/2021 Floating L + 9% (100bps floor) Cash 10,505 10,817 A2Z Wireless Technology & Telecom Delayed Draw Term Note 1/15/2021 Floating L + 9% (100bps floor) Cash 3,611 3,718 Battery Solutions Environmental Services Senior Subordinated Notes 11/6/2021 Fixed 6% Cash / 8% PIK 2,263 2,263 Battery Solutions Environmental Services Class E units 11/6/2021 - - 3,894 3,894 Battery Solutions Environmental Services Preferred Equity 11/6/2021 Fixed 8% PIK 1,058 1,031 Black Diamond Oil & Gas Services Senior Secured 7/8/2018 Fixed - 5,938 5,197 Black Diamond Oil & Gas Services Senior Subordinated Notes 7/9/2018 Fixed - 8,009 3,500 Black Diamond Oil & Gas Services Senior Secured Tranche C 7/9/2018 Fixed 4.0% Cash / 10% PIK 1,299 1,308 Champion ONE Technology & Telecom Common Equity 3/17/2022 - - 1,125 1,125 Champion ONE Technology & Telecom Senior Secured 3/17/2022 Floating L + 10.5% (100bps floor) Cash 7,425 7,500 Conisus Media: Advertising, Printing & Publishing 2nd Lien Debt 6/23/2021 Floating L + 8.75% (100bps floor) Cash 11,750 10,609 FST Technical Services Technology & Telecom Senior Secured 11/18/2018 Fixed 12% Cash / 5% PIK 13,482 13,482 FST Technical Services Technology & Telecom Equity 11/18/2018 Fixed 9% PIK 1,807 1,288 Graco Supply Aerospace 2nd Lien Debt 3/17/2021 Fixed 12% Cash 4,000 4,000 GST AutoLeather Automotive Senior Subordinated Notes 1/11/2021 Fixed 11% Cash / 2% PIK 8,454 8,454 HCAT Healthcare Services 2nd Lien Debt 4/30/2022 Fixed 12.25% Cash 8,500 8,500 IGT Industrial Services Unitranche Debt 12/10/2019 Fixed 9.75% Cash / 1.% PIK 8,010 8,064 IGT Industrial Services Class AA preferred - Fixed 15% Preferred Dividend 303 303 IGT Industrial Services Preferred Equity 12/10/2019 Fixed 11% Preferred Dividend 1,111 1,111 IGT Industrial Services Common Equity - - - 44 271 LRI Energy Services 1st Lien Debt 9/28/2021 Floating L + 9.75% (50bps floor) Cash 12,657 12,778 LRI Energy Services Equity 9/28/2021 - - 1,000 1,392 Lugano Retail Equity 10/24/2021 - - 667 679 Lugano Retail Senior Secured Term Note 10/24/2021 Floating L + 10.0% (75bps floor) Cash 5,260 5,388 Media Storm Media & Entertainment Senior Subordinated Notes 8/28/2019 Fixed 10% Cash 2,455 2,455 Medsurant Healthcare Services 2nd Lien Debt 6/18/2021 Fixed 12.25% Cash 6,138 6,200 Metal Powder Products Industrial Manufacturing Senior Subordinated Notes 11/5/2021 Floating L + 11.25% (75bps floor) Cash /

1.0% PIK 8,271 8,271

Metal Powder Products Industrial Manufacturing Common Equity - - - 500 696

22


Portfolio Investments as of March 31, 2017

($ in thousands) Notes: Total Unrealized Investments in Alcentra Capital Corporation (ABDC) as of March 31, 2017.

Portfolio Company Industry Security Type Maturity Fixed/ Floating Coupon Structure Cost Basis Market Value My Alarm Center Security Equity 7/9/2019 - - - - My Alarm Center Security 2nd Lien Debt 7/9/2019 Floating L + 11% (100bps floor) Cash 13,635 10,420 Nation Safe Drivers Automotive 2nd Lien Debt 9/29/2020 Floating L + 8% (200bps floor) Cash 11,721 11,838 NextCare Healthcare Services Senior Subordinated Notes 12/31/2018 Fixed 10% Cash/4% PIK 15,177 15,356 NTI Technology & Telecom Unitranche Debt 3/30/2021 Floating L + 8% (100bps floor) Cash 11,574 11,574 NTI Technology & Telecom Common Equity - - - 403 803 NTI Technology & Telecom Warrant 1/0/1900 - - 225 430 NWN Technology & IT 1st Lien Debt 10/16/2020 Floating L + 10.0% Cash (100bps floor) 3,810 3,888 Palmetto Moon Retail Common Equity 10/31/2021 - - 434 434 Palmetto Moon Retail 1st Lien Debt 10/31/2021 Fixed 11.5% Cash 5,456 5,480 Pharmalogic Healthcare Services Subordinated Debt 9/1/2021 Fixed 12% Cash 16,090 16,122 PharmaLogic Recruiting Business Services Delayed Draw 1/31/2022 Fixed 10.25% Cash 200 200 PharmaLogic Recruiting Business Services Senior Secured Notes 1/31/2022 Fixed 10.25% Cash 9,900 10,000 QRC High Tech Industries Subordinated Debt 11/20/2021 Fixed 12.25% Cash 10,000 10,000 Safe Security Security Subordinated Debt 6/19/2020 Floating L + 13% (100bps floor) Cash 9,812 10,004 Show Media Media & Entertainment Senior Secured 8/10/2017 Fixed 5.5% Cash / 5.5% PIK 4,088 1,063 Show Media Media & Entertainment Series A Preferred 1/31/2019 Fixed 10.0% PIK 3,747 - Show Media Media & Entertainment Penny Warrant - - - - - Southern Technical Education 2nd Lien Debt 12/2/2020 Floating L + 8.00% (100bps floor) Cash /

4% PIK 8,322 8,322

Southern Technical Education Class SP-1 Units - Fixed 15.75% Preferred Dividend 4,651 4,762 Southern Technical Education Equity 10/15/2022 - - 2,167 464 Southern Technical Education Warrant - - - 110 - Southern Technical Education Penny Warrants - - - 111 154 Stancor Wholesale Unitranche Debt 8/19/2019 Floating L + 9% (75bps floor) Cash 4,747 4,747 Superior Controls High Tech Industries Senior Secured Notes 3/22/2021 Floating L + 8.75% (100bps floor) Cash 15,767 15,825 Superior Controls High Tech Industries Preferred Equity 1/0/1900 - - 400 516 Tunnel Hill Waste Services Common Equity - - - 2,454 2,317 XGS Transportation and Logistics 2nd Lien Debt 4/10/2020 Fixed 10% PIK 5,226 2,352 XGS Transportation and Logistics Warrant 4/10/2020 - - 489 - XGS Transportation and Logistics 2nd Lien Debt 4/10/2020 Floating L + 11% (100bps floor) Cash 1,927 1,965 Total Investments $302,179 $283,329

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Paul Hatfield, Chairman of the Board of Directors of ABDC Paul joined Alcentra in 2003 and was the senior portfolio manager for the European CLOs at Alcentra Ltd., until moving to head Alcentra NY’s U.S. business in July 2008. In February 2010, Paul became Global Chief Investment Officer of Alcentra, Ltd. From April 2002 to March 2003, Paul was a senior analyst for the CDO operations of Intermediate Capital Group, where he covered building products and construction, aerospace and consumer credits. Between 1995 and 2001, Paul worked at Deutsche Bank in London for the Leveraged Finance Group. In 1998, while at Deutsche Bank, Paul worked in New York where he supervised Leveraged Finance and the telecom division. Before joining Deutsche Bank, Paul originated a portfolio of mezzanine and development capital loans at FennoScandia Bank. He originally trained as a chartered accountant in the audit division of Arthur Andersen. Paul received a B.A. (Honors) in Economics from Cambridge University.

Paul Echausse, Chief Executive Officer & President of ABDC Paul is responsible for the overall management and direction of fund investing, including transaction sourcing, deal execution and the monitoring of portfolio companies. Paul is a member of the investment committee, serves as the Chairman of the board of directors of Grindmaster Cecilware Corporation and is a member of the board of directors of Emerald Waste Services, EB Brands, Battery Solutions, DRC and FST Technical Services. Paul brings more than 20 years of leveraged finance experience to the origination and management of the Partnership’s investment portfolios. Prior to joining Alcentra, Paul was President of Kisco Capital Corporation, the growth capital Small Business Investment Company affiliate of the Kohlberg family office. Previously he was Chief Operating Officer of IBJS Capital Corporation, the junior capital investment affiliate of IBJ Schroder Bank. Prior to IBJS, Paul was the Assistant Division Head of Southeast Banking for the Bank of New York. Paul has served as President of the Northeast Regional Association of Small Business Investment Companies and on the national board of the National Association of Small Business Investment Companies. Paul received a B.S. from Fordham University, magna cum laude, Phi Beta Kappa, an M.B.A. from New York University and a J.D. from Fordham Law School, and is a member of the New York State Bar.

Ellida McMillan, Chief Financial Officer & Chief Operating Officer of ABDC Ellida joined Alcentra in 2013 and is the Chief Accounting Officer. Prior to joining Alcentra in 2013, Ellida consulted with Tatum Partners, the largest executive services firm in the US offering CFO services. Previously, she was a corporate controller at KBC Financial Holdings, a subsidiary of KBC Financial Products UK Ltd, which engaged in the sales, structuring and risk management of equity linked and equity derivatives instruments. Prior to KBC, Ellida was an associated director of Fixed Income Derivatives at Bear Stearns. Ellida began her career as an auditor at Arthur Andersen in the financial service sector. Ellida holds a B.S. from Fairfield University and is a licensed C.P.A.

Team Overview

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David Scopelliti, Managing Director & Chief Investment Officer of the U.S. Direct Lending at the Advisor

David joined Alcentra in 2014. Most recently, David was a Principal at GarMark Partners where he focused on investing debt and equity in middle market companies. Prior to that, David was a Managing Director with Pacific Corporate Group, an alternative asset investment firm, responsible for discretionary and non-discretionary private investment programs for corporate and governmental entities. Prior to that, David served as Head of Private Equity for the State of Connecticut, where he restructured and rebuilt its $4.0 billion private equity program and was elected as Vice Chairman of the Institutional Limited Partners Association. David’s prior experience also includes having been a Managing Director with CIBC World Markets and ING Capital investing debt and equity in middle market businesses. He started his career at Heller Financial. David received his B.B.A. in Finance/Accounting from Pace University, and serves as an independent director for the Student Transportation, Inc. (NASDAQ “STB”) and is a mentor of the National Association of Corporate Directors.

Branko Krmpotic, Executive Vice President of ABDC Branko rejoined Alcentra in 2013. Prior to Alcentra, Branko was a senior analyst at Raven Asset Management, a credit hedge fund focused on a wide variety of credit investments. Prior to Raven, he structured private investments and loans at GSO Capital Partners (now owned by Blackstone) and before that at Technology Investment Capital Corp. (NASDAQ:TICC). Branko worked with Paul Echausse at the Bank of New York in the formation of the Mezzanine Group at its inception. Branko received his M.B.A. from Baruch College – CUNY where he received the Vincent De Lorenzo award for scholastic excellence. He received undergraduate degrees from New York University and University of Belgrade, Serbia.

Karin Kovacic, Senior Vice President, Business Development & Marketing of the Adviser Karin joined Alcentra in 2013. Prior to Alcentra, Karin developed and implemented CBIZ MHM LLC’s growth, marketing and business development strategies in the New York Metropolitan area. Prior to CBIZ, Karin spent four years as Vice President at Fifth Street Capital, where she was responsible for North East deal origination, as well as coordinating their business development and marketing efforts. She also spent four years with UBS Financial as a Registered Associate where she was actively involved in institutional sales of equity related products and relationship management. Karin began her career at Smith Barney as a Registered Sales Associate. Karin graduated magna cum laude from SUNY Purchase with a B.A. in Liberal Arts. She is on the board and is an executive committee member of ACG Global (Association for Corporate Growth).

Team Overview

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Dante DeRogatis, Associate, Finance Professional of the Advisor

Dante is responsible for transaction execution, due diligence, and the monitoring of portfolio companies. Prior to joining Alcentra, Dante was a senior analyst in the Corporate and Project Workouts Group at Prudential Capital Group and interned at Imperial Capital and UBS previously. While at Prudential Capital, Dante worked on various distressed investments and restructurings. Dante graduated from University of Maryland, College Park, with a BA in Economics.

Alfred Minahan, Associate, Finance Professional of the Advisor Al is responsible for transaction execution, due diligence, and the monitoring of portfolio companies. Prior to joining Alcentra, Al was an analyst in the Leveraged Finance group at Jefferies in New York, and before that worked at Ernst & Young in Boston. While at Jefferies, Al worked on a variety of leveraged finance transactions including acquisitions, mergers, recapitalizations, and restructurings across multiple industries. Al graduated from Boston College, Carroll School of Management with a B.S. in Finance and Accounting.

Caitlin Parrella, Financial Analyst of ABDC Joined Alcentra in February 2017. Prior to joining Alcentra, Caitlin was a senior consultant in the Securitization group at Deloitte. While at Deloitte she worked on a variety of commercial mortgage backed security transactions including conduits, single assets, agency, and seasoned loans. Caitlin graduated from the University of Florida, Heavener School of Business with a Bachelor of Science in Business Administration with a Major in Finance.

Steven Levinson, Chief Compliance Officer of ABDC and the Advisor Steven joined Alcentra in October 2011. Prior to joining Alcentra, Steven spent four years at Stone Tower Capital where he served as Director of Compliance. From March 2003 to December 2006, Steven was the Chief Audit Executive at IDT Corporation. He began his career at Price Waterhouse and spent fourteen years in the Internal Audit departments of major financial institutions. Steven received a B.A. in Accounting and Economics from Queens College of the City University of New York and an M.B.A. with a concentration in Financial Management from Pace University.

Prumiys Dulger, Deputy Chief Compliance Officer of the Advisor Prumiys joined Alcentra in July 2014. Prior to joining Alcentra, Prumiys spent two years as the Chief Compliance Officer for Daiwa Asset Management America, a Latin American security focused registered investment advisor. Previously, Prumiys spent 8 years working at Keefe, Bruyette & Woods, Inc. where she was a Vice President in the Compliance Department. Prior to joining Keefe, Bruyette & Woods, Inc., Prumiys was an Assistant Vice President in the Asset Management Compliance Department at Citigroup covering the North American Fixed Income Group at Citigroup Asset Management. Prior to Citigroup, Prumiys spent two years at Nomura Holdings America, Inc. where she was responsible for two fixed income registered investment advisors with focuses in distressed debt, emerging market and mortgage backed securities. Prumiys holds a B.A. in Economics from Barnard College, Columbia University and a J.D. from New York Law School.

Team Overview

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BNY Mellon holds 100% of the parent holding company of BNY Alcentra Group Holdings Inc., which is comprised of the following affiliated companies: Alcentra Ltd. and Alcentra NY, LLC. Assets under management include assets managed by both companies. Alcentra NY, LLC and Alcentra Ltd. are registered with the U.S. Securities & Exchange Commission under the Investment Advisers Act of 1940. BNY Mellon Asset Management is one of the world’s leading asset management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. BNY Mellon is the corporate brand for The Bank of New York Mellon Corporation. An investor should consider the portfolio strategy’s investment objectives, risks, charges and expenses carefully before investing. Portfolios are subject to investment risks, including possible loss of the principal amount invested. Material in this publication is for general information only and is not intended to provide specific investment advice or recommendations for any purchase or sale of any specific security or commodity. Certain information contained herein is based on outside sources believed to be reliable, but its accuracy is not guaranteed. Investments in sub-investment grade debt are speculative and involve special risks, and there can be no assurance that an account’s investment objectives will be realized or that suitable investments may be identified. Many factors affect performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. An investor could lose all or a substantial portion of his or her investment. No investment process is free of risk and there is no guarantee that the investment process described herein will be profitable. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. The enclosed material is confidential and not to be reproduced or redistributed in whole or in part without the prior written consent of Alcentra. Any statements of opinion constitute only current opinions of Alcentra, which are subject to change and which Alcentra does not undertake to update. Nothing herein constitutes an offer to sell, or solicitation of an offer to purchase, any securities, nor does it constitute an endorsement with respect to any investment strategy or vehicle. The information is not intended and should not be construed as legal, accounting or tax advice. Parties should independently investigate any investment strategy or manager, and should consult with qualified investment, legal, accounting and tax professionals before making any investment. All opinions and estimates in this report constitute the best judgment of Alcentra as of the date hereof, but are subject to change without notice, and do not necessarily represent the views of Alcentra. Gross IRR represents an effective annualized rate of return calculated using realized and unrealized results as of March 31, 2017. The Gross IRR is calculated using the contributions made by the partners of the respective funds, cash proceeds received from their underlying investments, and the Unrealized Value of each fund as of March 31, 2017. The Gross IRR does not take account of any incentive distributions to the respective general partners

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fiscal q1 2017 investor presentation may 2017 nasdaq: abdc · nasdaq: abdc . 1 . alcentra capital...

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