BCP Investment Corporation (BCIC) 17th Annual LD Micro Main Event Conference summary

Business model and market positioning

• Operates as a yield-focused BDC, distributing at least 90% of earnings annually, with a consistent $0.69 quarterly dividend since 2019 takeover.

• Focuses on originating senior secured loans to U.S. middle market companies with $10–$50 million EBITDA.

• Portfolio consists of nearly $500 million in assets, 88% floating-rate, diversified across 75 companies, mainly in non-cyclical sectors.

• Benefits from being part of BC Partners, a $40 billion global asset manager, leveraging private equity insights and operational resources.

• Maintains a mix of sponsor-backed and management-owned company transactions, emphasizing operational value-add.

Industry trends and competitive advantages

• Private credit has grown as banks tightened lending post-1990s, with fund managers now outpacing banks in debt capital provision.

• Private equity AUM has quadrupled since 2002, driving demand for private credit as hold periods lengthen and M&A activity is expected to rise.

• Emphasizes downside protection through covenants, asset liens, and cash flow sweeps, aiming for capital preservation.

• Private debt has outperformed public benchmarks, benefiting from both rising and falling rate environments due to fee structures and portfolio rotation.

• Differentiates by focusing on smaller companies, reducing competition and enabling better terms.

Management, sourcing, and investment process

• Managed by an experienced team with backgrounds at Apollo and PennantPark, supported by 30 credit professionals.

• Leverages BC Partners’ private equity network for deal flow, industry expertise, and operational support.

• Focuses on four core sectors: TMT, healthcare, business services, and industrial, with a preference for software and financials.

• Maintains a diversified portfolio, with average position size under 1% of assets, and targets non-cyclical, high free cash flow industries.

• Has a track record of successful M&A, integrating three BDCs since 2019 and realizing value above acquisition cost.