BCP Investment Corporation (BCIC) Small-Cap Growth Virtual Investor Conference summary

Company overview and strategy

• Focuses on direct origination of senior secured debt to U.S.-based private companies with less than $50 million EBITDA, emphasizing income generation and capital preservation.

• Managed by Sierra Crest Investment Management, affiliated with BC Partners, leveraging a $40 billion global platform and $7.5 billion in private credit assets.

• Maintains a diversified portfolio of 103 companies, with an average position size of about 1%, and over 90% of debt securities are floating rate.

• Operates primarily in non-cyclical, high free cash flow industries such as software, business services, and healthcare.

• Has a history of successful M&A, acquiring and integrating three public BDCs to achieve scale and enhance shareholder value.

Market trends and industry analysis

• Private credit has gained market share as banks have shifted focus to larger companies, leaving a gap filled by alternative asset managers.

• Private equity deal volumes have surpassed public equity since 2015, driving growth in private credit.

• Value of private equity-owned assets nearly doubled from $1.5 trillion in 2019 to $3 trillion in 2023, with median hold periods increasing.

• Private credit offers stable, durable returns, with floating-rate loans providing resilience against market volatility.

• Structural protections and extensive diligence in private credit differentiate it from public high-yield markets.

Competitive advantages and differentiation

• Focuses on the less competitive sub-$50 million EBITDA segment, where risk-reward is attractive and competition is limited.

• Leverages BC Partners’ sector expertise, operational resources, and cross-platform capabilities for value-added lending.

• Offers tailored financing solutions and value-added services, such as board participation and operational support, to portfolio companies.

• Maintains a consistent share buyback program, prioritizing capital allocation between new investments and repurchases based on accretion analysis.

• Avoids traditional retail/consumer credit, preferring B2B and non-cyclical sectors for stability and predictability.