medley management inc. (nyse:...

Medley Management Inc. (NYSE: MDLY)

Investor Presentation

Quarter ended September 30, 2016

2

Important Notice to Investors

This presentation contains “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks

and uncertainties. Actual outcomes and results could differ materially from those suggested by this presentation due to the impact of many factors beyond the control of

Medley Management Inc., including those listed in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and our

other filings with the Securities and Exchange Commission (“SEC”). Any such forward-looking statements are made pursuant to the safe harbor provisions available under

applicable securities laws and Medley Management Inc. assumes no obligation to update or revise any such forward-looking statements except as required by law.

Certain information discussed in this presentation (including information relating to portfolio companies) was derived from third party sources and has not been

independently verified and, accordingly, the Company makes no representation or warranty in respect of this information.

The following slides contain summaries of certain financial and statistical information about Medley Management Inc. The information contained in this presentation is

summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or

otherwise, from time to time. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the

achievement of which cannot be assured. You should not view the past performance of Medley Management Inc., or information about the market, as indicative of Medley

Management Inc.’s future results. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of Medley Management Inc.

This presentation includes certain non-GAAP financial measures, including Core Net Income, Core EBITDA, Core Net Income Per Share, Pre-Tax Core Net Income per

Share, Pre-Tax Core Net Income Margin, Core Net Income Margin and Pro-Forma Weighted Average Shares Outstanding. These measures should be considered only as

supplemental to, and not as superior to, financial measures prepared in accordance with U.S. GAAP.

Please refer to the financial performance section of this presentation for a reconciliation of the non-GAAP financial measures included in this presentation to the most

directly comparable financial measures prepared in accordance with U.S. GAAP.

3

Table of Contents

1. Overview 4

2. Market Opportunity 11

3. Investment Process 16

4. Overview of funds 18

5. Financial Performance 22

6. Appendix 28

OVERVIEW

4

• Medley Management Inc. (“Medley” or “MDLY”) is a diversified alternative asset

management firm with over $5.0 billion of assets under management (“AUM”)

– Asset manager offering yield-oriented investment products

– 51% of AUM in permanent capital vehicles

• Key differentiators supporting growth

– Broad institutional and retail distribution

– Diversified product offering

– Scalable platform

5

Overview of Medley Management Inc.

Medley’s Assets Under Management

6

• Diversified alternative asset management platform

• Over $5.0 billion of AUM not subject to traditional outflows

Sierra Total

Return Fund

MEDLEY (NYSE: MDLY)

Public Vehicles

Medley Capital

Corporation (NYSE: MCC)

Long-Dated Funds and Separately Managed Accounts

Senior Loan Fund

Medley Opportunity

Fund

Separately Managed Accounts

Institutional Capital

CLO Opportunity

Fund

Sierra Income

Corporation

Senior Loan Fund

$1.0 $1.3

$1.8

$2.3

$3.7

$4.8 $5.0

2010 2011 2012 2013 2014 2015 3Q 2016

MCC SIC Institutional Capital

7

Medley’s Historical Growth Profile 41 88 140

153 187 225

137 139 142

120 152 179

Note: Metrics in billions of USD.

• Increasing institutional and retail distribution

• Significant dry powder to drive growth in fee earning AUM over time

Assets Under Management

12%

12%

9%

7%

6% 6%

6%

6%

5%

4%

4%

3%

3%

2%

2% 2%

2%

9%

Banking, Finance, Insurance & Real Estate

Services: Business

Construction & Building

Healthcare & Pharmaceuticals

High Tech Industries

Hotels, Gaming & Leisure

Energy: Oil & gas

Automotive

Aerospace and Defense

Beverage & Food

Retail

Chemicals, Plastics and Rubber

Capital Equipment

CLO

Containers, Packaging and Glass

Media: Advertising, Printing & Publishing

Telecommunications

Other

23.8%

21%

14%

23% 24%

Industry Breakout

Portfolio Summary

8

17%

Investment Type Breakout

Medley Investments by Geography

Note: Portfolio summary represents total committed amounts as of 9/30/2016 and represents assets in all investment vehicles including TRS and SLS assets. In addition, non-U.S. investments comprise approximately 1% of Medley’s overall investment portfolio.

Floating vs. Fixed Rate

85%

15%

Floating

Fixed

75%

19%

3% 3%

First Lien

Second Lien

Unsecured

Equity

$3.2 $3.1

$-

$1.5

$3.0

$4.5

$6.0

6/30/2016 9/30/2016

$5.0 $5.0

$-

$1.5

$3.0

$4.5

$6.0

6/30/2016 9/30/2016

$0.14 $0.14

$-

$0.09

$0.18

$0.26

$0.35

6/30/2016 9/30/2016

19.9% 22.3%

–

12.5%

25.0%

37.5%

50.0%

6/30/2016 9/30/2016

$0.24 $0.24

$-

$0.13

$0.25

$0.38

$0.50

6/30/2016 9/30/2016

34.9% 39.1%

–

20.0%

40.0%

60.0%

80.0%

6/30/2016 9/30/2016

Quarterly Financial Results of Operations

9

Fee Earning AUM(1) AUM

Pre-Tax Core Net Income Margin Pre-Tax Core Net Income Per Share

Core Net Income Margin(2) Core Net Income Per Share(2)

420 BPS 0%

0%

-1%

0%

Note: Metrics in billions of USD, except per share data. AUM and Fee Earning AUM are shown rounded for presentation purposes. 1. Fee earning AUM (“FEAUM”) refers to assets under management on which we directly earn base management fees. 2. Assumes that all our pre-tax earnings are subject to federal, state and local income taxes at a combined effective tax rate of 43.0%.

$51.4 $58.8

$63.3 $68.5

$74.6 $76.8 $82.4 $82.0 $83.1 $82.1 $79.7 $77.1

$24.6 $29.3 $31.1 $34.0

$40.1 $42.4 $49.0 $47.8 $46.2 $45.2

$40.0 $37.6

$22.2 $26.4 $28.0 $28.9

$33.3 $33.5 $37.5 $35.9 $33.7 $32.7

$27.9 $25.3

$2,006 $2,177

$2,451

$3,036 $3,058 $3,165

$3,350 $3,401 $3,302

$3,169 $3,158 $3,111

$2,283

$2,602

$3,318

$3,635 $3,682

$3,924 $4,017 $4,002

$4,779 $5,012 $5,025 $5,011

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

$220

$240

FY13 1Q14 2Q14 3Q14 FY14 1Q15 2Q15 3Q15 FY15 1Q16 2Q16 3Q16

10

Results of Operations (Ex Net Performance Fees)(1) 41 88 140

153 187 225

137 139 142

120 152 179

Note: Metrics in millions of USD. Quarterly figures presented above represent LTM performance. 1. Excludes performance fees and related expenses.

33%

17%

Annualized Growth:

17%

Revenue Ex Performance Fees(1) Core Net Income Exp Performance Fees(1) Fee Earning AUM

Core EBITDA Ex Performance Fees(1) AUM

• 33% compound annual growth in AUM

• 17% compound annual growth in Fee Earning AUM and EBITDA(1)

MARKET OPPORTUNITY

11

Private Equity Dry Powder(2)

$16.8

$9.2

$6.7 $4.9

$3.6 $2.7 $2.5 $2.2

United States China US Middle Market Japan Germany France UK Brazil

$531 $638

$685 $674 $604 $593 $561

$622 $686

$744 $839

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q16

Middle Market Opportunity – Large Target Market 41 88 140

153 187 225

137 139 142

120 152 179

1. International Monetary Fund, World Economic Outlook Database, June 2014. Metrics in trillions of USD. 2. Preqin Private Debt Q3 2016 Quarterly Update. Metrics in billions of USD.

Revenue: $500M - $1B

• Standalone US middle market would rank as the 3rd largest global economy

• Private equity dry powder continues to be elevated at all-time highs

12

Top GDPs(1)

• Banks continue to shift toward large borrowers

• Regulatory environment is a headwind for banks in the middle-market

1. Federal Deposit Insurance Corporation, represents number of commercial banking institutions insured by the FDIC as of 6/30/2016. 2. S&P LCD’s Leveraged Lending Review – 2Q16.

120 152 179

Powerful Secular Trends

13

0%

10%

20%

30%

40%

50%

60%

70%

80%

5,000

6,000

7,000

8,000

9,000

10,000

11,000

U.S. FDIC Insured Commercial Banks(1)

Bank Participation in Levered Loan Market (%)(2)

6%

14%

32%

0%

10%

20%

30%

40%

TraditionalManagers

AlternativeManagers

MDLY

$-

$2

$4

$6

$8

$10

$12

$14

2007 2014 2020

Alternative Investments

14

Strong Demand for Alternatives

• MDLY’s historical AUM growth has outpaced traditional and alternative asset managers

• Continued strong demand for yield solutions is expected to drive future growth

Annualized AUM Growth 12/31/2010 – 9/30/2016(1) Growth in Alternatives(2)

$5T

$7T

$13T

5% CAGR

13% CAGR

Note: Metrics in trillions of USD. 1. Traditional managers include: BEN, BLK, IVZ, JNS, OMAM, and TROW. Alternative managers include APO, BX, CG, KKR, OAK, and OZM. Medley selected the traditional and

alternative manager groups based on subjective factors including our view on the managers in these markets. There may be other managers not mentioned. 2. Based on BCG, Global Asset Management 2015: Sparking Growth with Go-to-Market Excellence, July 2015. Preqin, Preqin Investor Outlook: Alternative Assets H1 2015. PWC

Asset Management 2020, A Brave New World, June 2015. McKinsey & Company, The $64 Trillion Question: Convergence in Asset Management, February 2015.

$681

$194

2007 9/30/2016

$0

$50

$100

$150

$200

$250

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illustrative

Potential forGrowth

Total Assets of BDCs Potential Opportunity

41 88 140

153 187 225

137 139 142

120 152 179

Regulatory Pressure Continues for Banks

1. Financial firms include: BAC, C, CS, DB, GS, JPM, MS, WFC, Bear Stearns, Countrywide Financial, Merrill Lynch & Washington Mutual. Metrics in billions of USD. Financial information for C as of 9/30/2016. All other firms as of 6/30/2016.

2. BDCs include: ACAS, ACSF, AINV, ARCC, BKCC, CMFN, CPTA, FDUS, FSC, FSIC, FSFR, GAIN, GARS, GBDC, GLAD, GSVC, HCAP, HRZN, HTCG, KCAP, KIPO, MAIN, MCC, MCGC, MRCC, MVC, NGPC, NMFC, OFS, PFLT, PNNT, PSEC, SAR, SCM, SLRC, SUNS, TCAP, TCPC, TCRD, TICC, TINY, TPVG, TSLX and WHF. Metrics in billions of USD. Total assets as of 6/30/2016 for GAIN, BKCC, SLRC, and SUNS. All other assets as of 3/31/2016, with the exception of SAR, MCGC, and MVC which are as of 5/31/2016, 6/30/2015, and 1/31/2015, respectively.

Total Assets of Publicly Traded BDCs(2) Level 3 Assets for Financial Firms(1)

Large Opportunity as Banks Continue to Exit Level 3 Assets

15

INVESTMENT PROCESS

16

Origination

Underwriting Process & Asset Management

Underwriting

Asset Management

1

2

3

41 88 140

153 187 225

137 139 142

120 152 179

• Multi-step approval process

• Documentation process

• 3rd party resources

• Approve 2-4% of opportunities

• Invested in excess of $6 billion

to over 350 companies(1)

Underwriting 2

• Infrastructure – asset

management system

• Weekly, monthly, quarterly

meetings

• Borrower monitoring and

reporting

Asset Management 3

• Over 45 investing & credit

management professionals

• Nationwide platform

• Targeted middle market sectors

• As much as half of annual

origination volume is from

repeat or referred borrowers or

repeat sponsors

1 Origination

17

1. Since inception through 9/30/2016.

OVERVIEW OF FUNDS

18

First Lien 61%

Second Lien 28%

Unsecured Debt 5%

Equities/Warrants 6%

Services: Business

14%

Automotive 10%

Construction & Building 9%

Banking, Finance, Insurance & Real Estate

9%


8%

Hotel,

Gaming & Leisure 8%

Containers, Packaging & Glass

5%

Aerospace & Defense

5%

Energy: Oil & Gas 5%

Telecommunications 4%

Other 23%

$1,410 $1,296 $1,334 $1,296

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

9/30/2015 9/30/2016 6/30/2016 9/30/2016

Medley Capital Corporation

Highlights as of 6/30/2016

Portfolio by Industry(1) Portfolio by Asset Class(1)

19

AUM Growth

• NYSE: MCC (Market cap: $367 million as of

6/30/2016)

• $1.1 billion in total assets (fee earning AUM

equivalent) and $534 million in equity

• Diversified portfolio across 63 portfolio companies

(Top 20 are 53%)

• 12.0% weighted average portfolio yield as of

6/30/2016(1)

• Gross investment originations of $12 million for

the quarter ended 6/30/2016

• 78.2% floating rate & 21.8% fixed rate on income

bearing investments

• Total debt/credit facility commitments of $945

million(2)

Note: Metrics in millions of USD and data is exclusive of MCC SLS assets, unless stated otherwise. 1. Represents annualized portfolio yield to maturity, excluding fees, while utilizing industry standard forward LIBOR curve assumptions. 2. SBA regulations currently limit the amount that we may borrow to a maximum of $150 million based upon at least $75 million in regulatory capital. As of 6/30/2016, we have at

least $75.0 million in regulatory capital which allows us to borrow up to $150 million from SBA. 3. MCC information detailed above as of 6/30/2016.

$1,152 $1,249 $1,217 $1,249

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

9/30/2015 9/30/2016 6/30/2016 9/30/2016

First Lien 58%

Second Lien 28%

Subordinated Debt 6%

Equities/Warrants

8%

Sierra Income Corporation

• Sierra Income Corporation is a senior debt

focused non-traded public BDC launched in 2012

• Capital is being raised through 187 broker dealers

and over 17,900 RIAs

• $1.2 billion in fee earning AUM and $888 million

in gross equity raised, as of 9/30/2016

• 10.5% weighted average yield for total

investments for the quarter ended 9/30/2016

• Diversified portfolio across 95 portfolio

companies(1)

• 89.7% floating rate & 10.3% fixed rate loans

Portfolio by Industry Portfolio by Asset Class

Highlights

20

AUM Growth

Services: Business

16%

Multi-Sector

Holdings 12%

Hotel, Gaming & Leisure 8%

Aerospace & Defense 7%

Banking, Finance,

Insurance & Real Estate 7%

Retail 6%

Construction &

Building 6%


4%

Automotive 4%

Wholesale 3%

Other 27%

Note: Metrics in millions of USD, unless stated otherwise. 1. Excludes TRS and SIC SLS investments.

First Lien 81%

Second Lien 13%

Unsecured 2%

Equity 4%

Banking, Finance, Insurance & Real

Estate 20%

Construction & Building 15%


12%

Automotive 7%

Services: Business

7%

Energy: Oil & gas 6%

Beverage & Food 6%

Hotels, Gaming & Leisure 5%

Chemicals, Plastics and Rubber

4% High Tech Industries 4%

Other 14%

$1,440

$2,466 $2,474 $2,466

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

9/30/2015 9/30/2016 6/30/2016 9/30/2016

Portfolio by Industry Portfolio by Asset Class

Institutional Capital

Note: Metrics in millions of USD, unless stated otherwise.

21

• Institutional AUM remained at $2.5B during the

quarter ended 9/30/2016

• Private Funds and SMAs generally operate without

leverage

• Allocations from major public pensions and insurance

companies

• Focus on senior secured loans

• Diversified portfolio across 68 portfolio companies

Highlights AUM Growth

0%

FINANCIAL PERFORMANCE

22

(Dollars in thousands except per share amounts)

Revenues

Management fees $ 15,262 $ 18,135 $ 50,220 $ 56,578

Performance fees 1,446 (14,595) 1,706 (10,627)

Other income and fees 2,172 1,891 5,851 5,496

Total revenues 18,880 5,431 57,777 51,447

Expenses

Compensation and benefits 6,964 5,914 21,396 19,532

Performance fee compensation (212) (3,660) (238) (4,578)

General, administrative and other expenses 8,801 1,626 25,679 10,756

Total expenses 15,553 3,880 46,837 25,710

Other income (expense)

Dividend income 312 222 755 665

Interest expense (2,403) (2,141) (6,593) (6,335)

Other income (expenses), net 55 (838) (1,559) (1,087)

Total other expense, net (2,036) (2,757) (7,397) (6,757)

Income (loss) before income taxes 1,291 (1,206) 3,543 18,980

Provision for (benefit from) income taxes 77 (113) 291 1,953

Net income (loss) 1,214 (1,093) 3,252 17,027

438 (2,150) 1,106 (1,134)

$ 776 $ 1,057 $ 2,146 $ 18,161

Core Net Income (1) $ 6,552 $ 701 $ 19,080 $ 22,877

Core EBITDA 9,818 2,790 28,638 32,110

Core Net Income per share (2) $ 0.14 $ 0.01 $ 0.40 $ 0.48

Core Net Income Margin (3) 22.3% 5.7% 21.3% 28.2%

Pro Forma Weighted Average Shares Outstanding (4)

For the Three Months Ended

September 30,

(Unaudited)

2016 2015

(Unaudited)

2016 2015

30,779,206 30,455,796

For the Nine Months Ended

September 30,

30,652,109 30,456,326

Less: Net income (loss) attributable to redeemable non-controlling

interests and non-controlling interests in consolidated subsidiaries

Net income (loss) attributable to Medley Management Inc. and non-

controlling interests in Medley LLC

Income Statements

23


$ 776 $ 1,057 $ 2,146 $ 18,161

Reimbursable fund startup expenses 5,647 (1,066) 16,391 3,103

IPO date award stock-based compensation 672 662 2,018 2,080

Other non-core items (1) 211 - 732 137

Income tax benefit (expense) on adjustments (754) 48 (2,207) (604)

Core Net Income $ 6,552 $ 701 $ 19,080 $ 22,877

Interest expense 2,192 2,141 6,382 6,335

Income taxes 831 (161) 2,498 2,557

Depreciation and amortization 243 109 678 341

Core EBITDA $ 9,818 $ 2,790 $ 28,638 $ 32,110

The calculation of Net Income Per Share is as follows:

$ 6,552 $ 701 $ 19,080 $ 22,877

Add: Income taxes 831 (161) 2,498 2,557

Pre-tax Core Net Income 7,383 540 21,578 25,434

Denominator

Class A common stock 5,778,409 6,000,211 5,802,334 6,000,071

Conversion of LLC Units to Class A common stock 23,333,333 23,333,333 23,333,333 23,333,333

Restricted stock units 1,667,464 1,122,252 1,516,442 1,122,922

Pro-Forma Weighted Average Shares Outstanding 30,779,206 30,455,796 30,652,109 30,456,326

Pre-tax Core Net Income Per Share $ 0.24 $ 0.02 $ 0.70 $ 0.84

Less corporate income taxes per share (2) (0.10) (0.01) (0.30) (0.36)

Core Net Income Per Share $ 0.14 $ 0.01 $ 0.40 $ 0.48


September 30,


September 30,

2015

The reconciliation of Net income attributable to Medley

Management Inc. and non-controlling interests in Medley LLC to

Core Net Income and Core EBITDA is as follows:


September 30,

(Unaudited)

2016 2015


September 30,

(Unaudited)

2016

Net income attributable to Medley Management Inc. and non-

controlling interests in Medley LLC

2016 20152016 2015

(Unaudited)(Unaudited)

Numerator

Core Net income

Income Statements (Cont.)

24

1. For the three months ended 9/30/2016, other non-core items consist of a $0.2 million acceleration of amortization of deferred financing costs and discount relating to prepayments made on our Term Loan Facility as a result of the refinancing of our indebtedness from the issuance of Senior Unsecured Debt. For the nine months ended 9/30/2016, other non-core items also include a $0.5 million impairment loss on our investment in CK Pearl Fund. For the nine months ended 9/30/2015, other non-core items consist of a one-time $0.1 million severance cost to former employees.

2. Represents a per share adjustment for income taxes assuming that all our pre-tax earnings were subject to federal, state, and local income taxes. We assumed an effective corporate tax rate of 43.0% for all periods presented.


As of

(Unaudited)

Assets

Cash and cash equivalents $ 57,331 $ 71,688

Investments, at fair value 24,273 16,360

Management fees receivable 12,613 16,172

Performance fees receivable 4,245 2,518

Other assets 18,185 13,015

Total assets $ 116,647 $ 119,753

Liabilities and Equity

Loans payable $ 78,197 $ 100,871

Senior unsecured debt 23,394 -

Accounts payable, accrued expenses and other liabilities 37,403 34,746

Performance fee compensation payable 1,066 1,823

Total liabilities 140,060 137,440

Redeemable Non-controlling Interests 24,668 -

Equity

Class A common stock 58 60

Class B common stock - -

Additional paid-in-capital (capital deficit) 2,170 631

Accumulated other comprehensive income (loss) 47 -

Retained earnings (accumulated deficit) (4,473) (730)

(2,198) (39)

Non-controlling interests in consolidated subsidiaries (1,863) (459)

Non-controlling interests in Medley LLC (44,020) (17,189)

Total equity (deficit) (48,081) (17,687)

$ 116,647 $ 119,753

September 30, 2016 December 31, 2015

Total liabilities, redeemable non-controlling interests

and equity

Total stockholders' equity (deficit), Medley

Management Inc.

Balance Sheets

25

($ in millions) MCC SIC

Institutional

Capital Total ($ in millions) MCC SIC

Institutional

Capital Total

Q2 2016 $1,334 $1,217 $2,474 $5,025 Q3 2015 $1,410 $1,152 $1,440 $4,002

Commitments(1)(21) 31 47 57 Commitments(1)

(9) 131 1,261 1,383

Capital reduction(2)(2) - - (2) Capital reduction(2)

(13) - - (13)

Distributions(3)(12) (19) (69) (100) Distributions(3)

(61) (70) (251) (382)

Change in fund value(4)(3) 20 14 31 Change in fund value(4)

(31) 36 16 21

Q3 2016 $1,296 $1,249 $2,466 $5,011 Q3 2016 $1,296 $1,249 $2,466 $5,011

QoQ Increase (Decrease) -3% 3% 0% 0% LTM Increase (Decrease) -8% 8% 71% 25%

26

Assets Under Management

Note: Percentage change calculations shown are based on actual numbers and may differ from rounded calculations. 1. With respect to permanent capital vehicles, represents increases during the period through equity and debt offerings, subject to restrictions, as well as any increases in available

undrawn borrowings or capital commitments. With respect to institutional capital, represents new commitments or gross inflows, as well as any increases in available undrawn borrowings.

2. Represents the permanent reduction in equity or leverage during the period. 3. With respect to permanent capital vehicles, represents distributions of income. With respect to long-dated private funds and SMAs, represents return of capital, given our funds’

stage in their respective life cycle and prioritization of capital distributions. 4. Includes interest income, realized and unrealized gains (losses), fees and/or expenses.

MCC

SIC

Inst. Capital

• AUM decreased by 3% to $1.3 billion vs. Q2 2016

• AUM decreased by 8% vs. Q3 2015, a decrease of $114 million

• AUM increased by 3% to $1.2 billion vs. Q2 2016

• AUM increased by 8% vs. Q3 2015, an increase of $97 million

• AUM remained at $2.5 billion in Q3 2016

• AUM increased by 71% vs. Q3 2015, an increase of $1.0 billion Q3

20

16

HIG

HLIG

HT

S

Q3 2016 AUM Rollforward LTM AUM Rollforward

($ in millions) MCC SIC

Institutional

Capital Total ($ in millions) MCC SIC

Institutional

Capital Total

Q2 2016 $1,067 $1,132 $959 $3,158 Q3 2015 $1,258 $1,048 $1,095 $3,401

Commitments(1)(19) 19 44 44 Commitments(1)

(122) 138 90 106

Capital reduction(2)(2) - - (2) Capital reduction(2)

(13) - - (13)

Distributions(3)(12) (19) (79) (110) Distributions(3)

(62) (70) (215) (347)

Change in fund value(4)(3) 20 4 21 Change in fund value(4)

(30) 36 (42) (36)

Q3 2016 $1,031 $1,152 $928 $3,111 Q3 2016 $1,031 $1,152 $928 $3,111

QoQ Increase (Decrease) -3% 2% -3% -1% LTM Increase (Decrease) -18% 10% -15% -9%

27

Fee Earning Assets Under Management

Note: Percentage change calculations shown are based on actual numbers and may differ from rounded calculations. 1. With respect to permanent capital vehicles, represents increases or temporary reductions during the period through equity and debt offerings, as well as any increases in capital

commitments. With respect to institutional capital, represents new commitments or gross inflows. 2. Represents the permanent reduction in equity or leverage during the period. 3. Represents distributions of income, return of capital and return of portfolio investment capital to the fund. 4. Includes interest income, realized and unrealized gains (losses), fees and/or expenses.

Q3 2016 Fee Earning AUM Rollforward LTM Fee Earning AUM Rollforward

MCC

SIC

Inst. Capital

• Fee Earning AUM decreased 3% to $1.0 billion vs. Q2 2016

• Fee Earning AUM decreased by 18% vs. Q3 2015, a decrease of $227 million

• Fee Earning AUM increased 2% to $1.2 billion vs. Q2 2016

• Fee Earning AUM increased by 10% vs. Q3 2015, an increase of $104 million

• Fee Earning AUM decreased 3% to $0.9 billion vs. Q2 2016

• Fee Earning AUM decreased by 15% vs. Q3 2015, a decrease of $167 million Q3

20

16

HIG

HLIG

HT

S

APPENDIX

28

29

Endnotes & Definitions

Definitions:

“Assets Under Management” or “AUM” refers to the assets of our funds, which represents the sum of the NAV of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods).

“Core Earnings Before Interest, Income Taxes, Depreciation and Amortization (Core EBITDA)” is calculated as Core Net Income before interest expense, income taxes, depreciation and amortization.

“Core Net Income” is calculated by adjusting net income attributable to Medley Management Inc. and net income attributable to non-controlling interests in Medley LLC to exclude reimbursable expenses associated with the launch of funds, amortization of stock-based compensation expense associated with grants of restricted stock units at the time of our IPO, other non-core items and the income tax impact of these adjustments.

“Core Net Income Margin” equals Core Net Income Per Share divided by total revenue per share.

“Core Net Income Per Share” is Core Net Income adjusted for corporate income taxes assuming that all of our pre-tax earnings are subject to federal, state and local corporate income taxes, divided by Pro-Forma Weighted Average Shares Outstanding (as defined above). In determining corporate income taxes we used an annual effective corporate tax rate of 43.0%.

“Fee Earning Assets Under Management” refers to the assets under management on which we directly earn base management fees.

“Pre-Tax Core Net Income” is calculated as Core Net Income excluding the impact of income taxes.

“Pre-Tax Core Net Income Margin” equals Pre-Tax Core Net Income Per Share divided by total revenue per share.

“Pre-Tax Core Net Income Per Share” is calculated as Pre-Tax Core Net Income divided by Pro-Forma Weighted Average Shares Outstanding.

“Pro-Forma Weighted Average Shares Outstanding” assumes the conversion by the pre-IPO holders of 23,333,333 LLC Units for 23,333,333 shares of Class A common stock at the beginning of each period presented, as well as the vesting of the weighted average number of restricted stock units during each of the periods presented.

30

Corporate Information

Board of Directors

BROOK TAUBE Co-Chairman SETH TAUBE Co-Chairman JEFF TONKEL Director JEFFREY T. LEEDS Independent Director GUY ROUNSAVILLE, JR. Independent Director PHILIP K. RYAN Independent Director

Corporate Officers

BROOK TAUBE Co-Chief Executive Officer SETH TAUBE Co-Chief Executive Officer JEFF TONKEL President RICHARD T. ALLORTO, JR. Chief Financial Officer JOHN FREDERICKS General Counsel & Secretary

Research Coverage

COMPASS POINT Casey Alexander – (646) 452-7083 CREDIT SUISSE Craig Siegenthaler - (212) 325-3104 DEUTSCHE BANK Stephen Laws - (901) 322-8212 KEEFE, BRUYETTE & WOODS Ann Dai - (212) 887-3688 LADENBURG THALMANN & CO. Mickey Schleien - (305) 572-4131 FBR & CO. Christopher Nolan - (646) 412-7690

Corporate Headquarters

280 Park Avenue, 6th Floor East New York, NY 10017 (212) 759-0777 Investor Relations

SAM ANDERSON Head of Capital Markets & Risk Management (212) 759-0777 Corporate Counsel

SIMPSON THACHER & BARTLETT LLP New York, NY Independent Registered Public Accounting Firm

RSM US, LLP New York, NY Securities Listing

NYSE: MDLY (Common Stock) Transfer Agent

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC (888) 777-0324 Media Contact

FITZROY COMMUNICATIONS (212) 498-9197

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