Crescent Capital BDC, Inc 8-K, filed Oct 22, 2020
Crescent Capital BDC, Inc. (CCAP)
About this 8-K
Crescent Capital BDC, Inc filed this 8-K on October 22, 2020, reporting on events of October 21, 2020.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 21, 2020
Crescent Capital BDC, Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 814-01132 | 47-3162282 | ||
| (State or Other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| 11100 Santa Monica Blvd., Suite 2000, Los Angeles, CA | 90025 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s Telephone Number, Including Area Code: (310) 235-5900
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to 12(b) of the Act:
| Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
| Common Stock, $0.001 par value per share | CCAP | The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
(Title of class)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 8.01. | Other Events. |
Proposed Strategic Transaction
On October 21, 2020, Crescent Capital Group LP (“Crescent”) entered into a definitive agreement with Sun Life Financial Inc. (together with its subsidiaries and joint ventures, “Sun Life”), whereby (i) Sun Life would acquire a majority interest in Crescent and receive a call option to acquire the remaining interest in Crescent approximately five years from consummation of the transaction, and (ii) if Sun Life does not exercise such call option, Crescent holders will for 90 days thereafter have a put option to sell all (but not less than all) of their remaining interests to Sun Life (the “Transaction”). Consummation of the Transaction will result in Sun Life having at least a majority indirect ownership interest in Crescent Capital Advisors, LLC (the “Advisor”), the investment advisor of Crescent Capital BDC, Inc. (the “Company”). Upon consummation of the Transaction, key senior management of Crescent are expected to continue to operate in the same professional capacity as prior to the Transaction. Additionally, Sun Life has advised Crescent that it intends to purchase up to $10 million of the Company’s common stock over time following the consummation of the Transaction. The timing, manner, price and amount of any share purchases will be determined by Sun Life, in its discretion, based upon the evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. Sun Life is not required to purchase any specific number of shares and we cannot assure you that any shares will be purchased by Sun Life.
If the Transaction is consummated, it will result in a change of control of Crescent, which will result in an assignment of the current investment advisory agreement between the Company and the Advisor under the Investment Company Act of 1940. As a result, the current investment advisory agreement will terminate upon completion of the Transaction, and the Company’s stockholders will be asked to approve a new investment advisory agreement between the Company and the Advisor (the “Stockholder Approval”). All terms are expected to remain unchanged from the current investment advisory agreement, except with respect to the initial term of the agreement. The consummation of the Transaction is expected to occur in late 2020 and is subject to customary closing conditions and the receipt of any required regulatory approvals.
The Advisor and Sun Life issued a joint press release regarding the Transaction, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Additionally, an investor presentation has been posted to the Company’s website, which representatives of the Company intend to use in discussion with certain parties. A copy of this presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information disclosed under this Item 8.01 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.
Forward Looking Statements
The statements in this Current Report on Form 8-K that are not historical facts may be forward-looking statements. These forward-looking statements involve substantial risks and uncertainties. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements the Company makes. Forward-looking statements may include, but are not limited to, statements regarding stockholder liquidity and investment value and returns. The words “anticipates,” “believes,” “expects,” “seeks,” “strives,” “estimates,” “projects,” “plans,” “intends,” “may,” “will,” “would,” “should,” “targets,” “projects,” and variations of these words identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors, some of which are beyond our control and difficult to predict, that might cause such differences include, but are not limited to, the factors included in the Company’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”), particularly in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2019, and the Company’s latest Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC, as such Risk Factors may be updated from time to time in subsequent reports. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Item 9.01. | Financial Statements and Exhibits. |
d) Exhibits.
| Exhibit |
Description | |
| 99.1 | Press Release, dated as of October 21, 2020 | |
| 99.2 | Investor Relations Presentation | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| CRESCENT CAPITAL, BDC, INC. | ||||||
| Date: October 21, 2020 | By: | /s/ Gerhard Lombard | ||||
| Name: | Gerhard Lombard | |||||
| Title: | Chief Financial Officer | |||||
Exhibit 99.1
Sun Life to Acquire Majority Stake in Crescent Capital Group LP
A firm with close to 30 years experience in alternative credit investing
to join SLC Management
TORONTO, ON, LOS ANGELES, CA and WELLESLEY, MA – (October 21, 2020) - Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) today announced it intends to acquire a majority stake in Crescent Capital Group LP (“Crescent”), a global alternative credit investment manager. Crescent has approximately US$28 billion in Assets under Management (approximately C$38 billion), as of June 30, 2020. Headquartered in Los Angeles with offices in New York, Boston and London, Crescent has more than 180 partners and employees.
Crescent will form part of SLC Management, Sun Life’s alternatives asset management business. The acquisition will extend SLC Management’s solutions in alternative credit, which will benefit existing and prospective clients.
This transaction provides Crescent the opportunity to bring Sun Life’s investment capital and SLC Management’s relationships together with Crescent’s alternative credit expertise and track record. This will support the expansion of existing and new, adjacent strategies for the benefit of both firms’ constituencies, and further enable Crescent to meet the growing needs of its institutional client base as they allocate more capital to alternative credit in search of yield.
Sun Life will acquire a 51% interest in Crescent for up to US$338 million (approximately C$450 million), consisting of an upfront payment of US$276 million (approximately C$370 million) and a future payment of up to US$62 million (approximately C$80 million) based on the achievement of certain milestones. As part of the transaction, Crescent’s equity holders will retain carried interests in existing funds along with certain assets and their respective economics. The transaction has a put / call option that will allow the transfer of remaining interests approximately five years from closing. Crescent will continue to operate independently under its current leadership and will retain its distinct brand, office locations and clients.
Founded in 1991, Crescent is one of the longest tenured credit managers in the industry and is a leading investor in mezzanine debt, middle market direct lending in the US and Europe, high-yield bonds and broadly syndicated loans.
Sun Life has committed to co-invest up to US$750 million (approximately C$1 billion) in Crescent’s investment strategies, supporting the launch of new products and creating alignment with Crescent’s investors.
“We’re excited that Crescent will be joining SLC Management. Crescent has an excellent track record in alternative credit investing and an exceptional reputation in the industry,” said Steve Peacher, President, SLC Management. “SLC Management and Crescent share a common vision based on delivering outstanding performance for our investors.”
“This partnership represents the next stage of growth for Crescent. In getting to know the team at Sun Life and SLC Management, we feel confident our clients will benefit from the significant seed capital they are providing, their deep understanding of the asset management business, and commitment to Crescent retaining full investment and operational independence of the firm,” said Mark Attanasio, Co-Founder and Managing Partner of Crescent Capital Group LP.
“With our longstanding investment track record, we look forward to further building upon our existing alternative credit investment capabilities, as well as providing clients with new investment strategies as the demand for yield grows globally among our roster of leading institutional investors,” added Jean-Marc Chapus, Co-Founder and Managing Partner of Crescent Capital Group LP.
Attanasio and Chapus added, “We have spent considerable time with Dean Connor and Steve Peacher along with their teams. Together we believe our firms’ complementary cultures will further benefit our employees, clients, investors, and stakeholders.”
“We’ve been looking to expand our alternative credit capabilities for some time now, offering our clients a broader, deeper array of investment solutions across the public and private credit markets, infrastructure, real estate equity and debt,” added Peacher.
SLC Management, Sun Life and Crescent are signatories of the Principles of Responsible Investing (PRI) and committed to sustainable investing practices.
Moelis & Company LLC and Sullivan & Cromwell LLP acted as exclusive financial advisor and legal counsel respectively to Crescent. Skadden, Arps, Slate, Meagher & Flom LLP served as Sun Life’s legal counsel and Berkshire Global Advisors LP served as their financial advisors.
The transaction is expected to close in late 2020, subject to receipt of regulatory approvals and satisfaction of customary closing conditions. Crescent currently serves as the investment adviser of Crescent Capital BDC, Inc. (“Crescent BDC,” NASDAQ: CCAP), a business development company. Upon completion of the transaction, Crescent is expected to become a majority-owned subsidiary of SLC Management and, subject to the approval of Crescent BDC’s shareholders, remain the investment adviser of Crescent BDC.
Slides related to this announcement are available at www.sunlife.com.
Connect with Sun Life
About Sun Life
Sun Life is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate Clients. Sun Life has operations in a number of markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of June 30, 2020, Sun Life had total assets under management of $1,122 billion. For more information, please visit www.sunlife.com.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.
About SLC Management
SLC Management is a global institutional asset manager that offers institutional investors traditional, alternative, and yield-orientated investment solutions across public and private fixed income markets, as well as global real estate equity and debt.
SLC Management is the brand name for the institutional asset management business of Sun Life Financial Inc. (“Sun Life”) under which Sun Life Capital Management (U.S.) LLC in the United States, and Sun Life Capital Management (Canada) Inc. in Canada operate.
BentallGreenOak and InfraRed Capital Partners (InfraRed) are also part of SLC Management. BentallGreenOak and is a leading, global real estate investment management advisor and a globally-recognized provider of real estate services. InfraRed is an international investment manager focused on infrastructure, managing equity capital in multiple private and listed funds, primarily for institutional investors across the globe.
As of June 30, 2020, SLC Management has assets under management of C$262 billion (US$193 billion).
About Crescent Capital Group LP
Crescent is a global credit investment manager with approximately US$28 billion of assets under management. For nearly 30 years, the firm has focused on below investment grade credit through strategies that invest in marketable and privately-originated debt securities including senior bank loans, high yield bonds, as well as private senior, unitranche, and junior debt securities. Crescent is headquartered in Los Angeles with offices in New York, Boston, and London and more than 180 employees globally. For more information about Crescent, visit www.crescentcap.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.
About Crescent Capital BDC, Inc.
Crescent BDC is a business development company that seeks to maximize the total return of its stockholders in the form of current income and capital appreciation by providing capital solutions to middle market companies with sound business fundamentals and strong growth prospects. Crescent BDC utilizes the extensive experience, origination capabilities and disciplined investment process of Crescent. Crescent BDC is externally managed by Crescent Cap Advisors, LLC, a subsidiary of Crescent. Crescent BDC has elected to be regulated as a business development company under the Investment Company Act of 1940. For more information about Crescent BDC, visit www.crescentbdc.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.
Forward-looking information
In this news release, “we”, “our” and “us” refer to Sun Life and its subsidiaries and joint ventures. Certain statements in this news release are forward-looking, including, but not limited to, statements (i) relating to our growth strategies and strategic objectives, (ii) relating to our anticipated acquisition of a majority stake in Crescent Capital, (iii) that are not historical or that are predictive in nature or that depend upon or refer to future events or conditions, and (iv) that include words such as “intends to”, “will”, and similar expressions. All such forward-looking statements are made pursuant to the “safe harbour provisions” of applicable Canadian securities laws and of the United States Private Securities Litigation Reform Act of 1995.
The forward-looking statements in this news release represent our current expectations, estimates and projections regarding future events as of the time of this news release and are not historical facts. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties and are based on key factors and assumptions that are difficult to predict, particularly in light of the ongoing and developing COVID-19 pandemic and its impact on the global economy and its uncertain impact on our business, including the assumption that the transaction will be completed. The forward-looking statements in this news release do not reflect the potential impact of any non-recurring or other special items or of any dispositions, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after the date of this news release. If any non-recurring or other special item or any transaction should occur, the financial impact could be complex and the effect on our operations or results would depend on the facts particular to such item and we cannot describe the expected impact in a meaningful way or in the same way we could present known risks affecting our business. Except as may be required by Canadian securities laws, we do not undertake any obligation to update or revise any forward-looking statements contained in this news release.
Forward-looking statements are presented for the purpose of assisting investors and others in understanding our expected financial position and results of operations as at the date of this news release, as well as our objectives for the transaction, strategic priorities and business outlook following the transaction, and in obtaining a better understanding of our anticipated operating environment following the transaction. Readers are cautioned that such forward-looking statements may not be appropriate for other purposes and undue reliance should not be placed on these forward-looking statements.
The following are transactional risk factors that could have an adverse effect on the forward-looking statements in this news release: (1) the ability of the parties to complete the transaction; (2) failure of the parties to obtain necessary consents and approvals or to otherwise satisfy the conditions to the completion of the transaction in a timely manner, or at all; (3) our ability to realize the financial and strategic benefits of the transaction; and (4) the impact of the announcement of the transaction on Sun Life and Crescent Capital. These risks all could have an impact on Sun Life’s business relationships (including with future and prospective employees, Clients, distributors and partners) and could have an adverse effect on our current and future operations, financial conditions and prospects. Other important risk factors that could cause our actual results to differ materially from those expressed in or implied by the forward-looking statements in this news release are listed in the annual information form of Sun Life Financial Inc. for the year ended December 31, 2019 under the heading “Risk Factors” and other regulatory filings of ours filed or furnished to Canadian and U.S. securities regulators available at www.sedar.com and www.sec.gov.
| Sun Life Media Relations Contact: |
Sun Life Investor Relations Contact: | |
| Rajani Kamath |
Leigh Chalmers | |
| Associate Vice-President |
Senior Vice-President | |
| Corporate Communications |
Head of Investor Relations & Capital Markets | |
| t. 416-979-6070 |
t. 647-256-8201 | |
| Rajani.kamath@sunlife.com |
Investor.relations@sunlife.com |
| Crescent Capital Media Relations Contact: |
Crescent BDC Investor Relations: | |
| Bill Mendel |
Daniel McMahon | |
| Owner |
Vice-President | |
| Mendel Communications |
Head of Public Investor Relations | |
| t. 212-397-1030 |
t. 212-364-0149 | |
| bill@mendelcommunications.com |
Daniel.mcmahon@crescentcap.com |
Investor Presentation October 2020 Exhibit 99.2
Disclaimer and Forward-Looking Statement This presentation (the “Presentation”) has been prepared by Crescent Capital BDC, Inc. (together with its consolidated subsidiaries, “CCAP,” “Crescent BDC” or the “Company”) and may be used for informational purposes only. This Presentation contains summaries of certain financial and statistical information about the Company and should be viewed in conjunction with the Company’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K. The information contained herein may not be used, reproduced, referenced, quoted, linked by website, or distributed to others, in whole or in part, except as agreed in writing by the Company. This Presentation does not constitute a proxy solicitation or prospectus and should under no circumstances be understood as an offer to sell or the solicitation of a proxy or an offer to buy the Company’s common stock or any other securities nor will there be any sale of the common stock or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction. This Presentation provides limited information regarding the Company and is not intended to be taken by, and should not be taken by, any individual recipient as investment advice, a recommendation to buy, hold or sell, or an offer to sell or a solicitation of offers to purchase, the Company’s common stock or any other securities that may be issued by the Company, or as legal, accounting or tax advice. An investment in securities of the type described herein presents certain risks. Footnotes contain important information about the definition of terms used herein, the composition of the investment portfolio and related performance information as well as unrealized investment valuations and should be carefully reviewed. Market data and information included herein (including information relating to portfolio companies) is based on various published and unpublished sources considered to be reliable, but has not been independently verified and there is no guarantee of its accuracy or completeness. Performance information contained herein is based in significant part on unrealized investment valuations which may not be achieved. We undertake no duty or obligation to publicly update or revise the information contained in this Presentation. Legal, tax and regulatory changes, as well as judicial decisions, both within and outside of the United States, could have an adverse impact on the Company and its investments. Instability in the securities markets may increase the risk inherent in CCAP’s investments in that the ability of issuers to refinance or redeem portfolio securities held may depend on their ability to sell new securities in the market. Future periods of uncertainty in the U.S. economy and the economies of other countries of issuers of securities and loans in which the Company may invest, and the possibility of increased volatility, default rates and deterioration in financial markets, may adversely affect the Company’s investment portfolio. This Presentation may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. You should read statements that contain these words carefully because they discuss plans, strategies, prospects and expectations concerning CCAP’s business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. There may be events in the future, however, that we are not able to predict accurately or control. You should not place undue reliance on these forward-looking statements, which speak only as of the date on which we make them. Factors or events that could cause our actual results to differ, possibly materially from our expectations, include, but are not limited to, the risks, uncertainties and other factors we identify in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in filings we make with the Securities and Exchange Commission (the “SEC”), and it is not possible for us to predict or identify all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. CCAP is managed by Crescent Cap Advisors, LLC (the “Investment Adviser”), an SEC-registered investment adviser and a subsidiary of Crescent Capital Group LP (together with its affiliates, “Crescent”). This Presentation contains information about the Company and certain of its affiliates and includes the Company’s historical performance. You should not view information related to the past performance of the Company as indicative of the Company’s future results, the achievement of which is dependent on many factors, many of which are beyond the control of the Company and the Investment Adviser and cannot be assured. There can be no assurances that future dividends will match or exceed historic rates or will be paid at all. Further, an investment in the Company is discrete from, and does not represent an interest in, any other Crescent entity. Nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance of the Company or any other Crescent entity.
Sun Life to Acquire Crescent Capital Group Management of Crescent Capital BDC, Inc. to Continue with Same Team, Greater Resources On October 21, 2020, Crescent Capital Group LP (“Crescent”), parent of the Advisor1 to Crescent Capital BDC, Inc. (“CCAP”), and Sun Life Financial Inc. (together with its subsidiaries and joint ventures, “Sun Life”) announced that they entered into a definitive agreement under which Sun Life will acquire a majority economic interest in Crescent (the “Acquisition”) Crescent will form part of SLC Management, Sun Life’s alternative investment management platform The same Crescent team that has been responsible for the investment operations of CCAP prior to the Acquisition will continue to focus on executing the same investment strategies and process In addition to continuing to benefit from Crescent’s significant experience in private credit origination and underwriting, CCAP stockholders will benefit from Sun Life’s global scale and platform CCAP is managed by Crescent Cap Advisors, LLC (the “Advisor” and formerly, CBDC Advisors, LLC), an investment adviser that is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended. Crescent is the majority member of the Advisor.
Transaction Summary Key Transaction Terms Sun Life to acquire a majority interest in Crescent Sun Life will own a 51% economic interest in Crescent upon closing of the transaction Sun Life committing co-investment/seed capital of $750 million to Crescent Transaction includes put/call options to acquire the remaining 49% interest in Crescent approximately 5 years from closing Both Crescent and SLC Management will continue to operate their respective businesses independently Management Crescent executives and senior management to continue in current roles CCAP executives and independent directors to continue in current roles Timing Closing subject to regulatory approvals and certain other customary conditions Expected to close in Q4 2020 Other Important Highlights Sun Life has advised Crescent that it intends to purchase up to $10 million of CCAP’s common stock upon consummation of the transaction1 In connection with the transaction, CCAP will seek stockholder approval for a new investment advisory agreement between CCAP and its Advisor2 The timing, manner, price and amount of any share purchases will be determined by Sun Life, in its discretion, based upon the evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. Sun Life is not required to purchase any specific number of shares and we cannot assure you that any shares will be purchased by Sun Life. Due to the change of control of Crescent, if the Acquisition is consummated, it will result in an assignment of the current investment advisory agreement between CCAP and the Advisor under the Investment Company Act of 1940, as amended (the “1940 Act”) and, as a result, the immediate termination of such investment advisory agreement. Since the current investment advisory agreement will terminate upon completion of the Acquisition, the stockholders of CCAP will be asked to approve a new investment advisory agreement between CCAP and the Advisor. The new investment advisory agreement will have an initial term of two years. All other terms will remain unchanged from the current investment advisory agreement.
Transaction Overview – Crescent Platform Enhanced by Sun Life’s Scale, Resources and Global Footprint Reflects deployment across Crescent’s Mezzanine, Direct Lending and European Specialty Lending strategies. Crescent Over 25-year track record of prioritizing capital preservation and high current income across multiple market cycles driven by an industry-leading team with a strong culture of credit ~$28 billion in assets under management as of 6/30/2020 and over $22 billion invested in private credit since inception1 Long-standing relationships with financial sponsors and portfolio companies Primarily focused on below investment grade corporate credit SLC Management Unparalleled scale and global footprint providing yield-oriented, liability-matching investment solutions for institutional investors Investment capabilities spanning fixed income, real estate equity and debt, and infrastructure equity and debt. Crescent is complementary to the SLC Management alternatives platform Broad and deep financial institution relationships Leading Global Credit Platform
As of June 30, 2020. Based on net asset value per share of $18.12 as of June 30, 2020. Past performance is not a guarantee of future results. CCAP Key Highlights CCAP is core to the Crescent franchise Leverages size and scale of broader Crescent platform SEC co-investment exemptive relief with Crescent Significant market reach with financial sponsors and corporate borrowers Scaled BDC with $926 million of assets1 Focused primarily on U.S. middle market companies Ample liquidity and modest leverage profile allows for further measured portfolio growth Middle market lending opportunity Historically recurring income generation Dividend yield of 9.1% of NAV2 Diversified portfolio of 124 borrowers1 76% of portfolio in first lien investments1
Sun Life is a leading global financial services organization providing insurance, wealth and asset management solutions to individuals and corporate clients The Sun Life Platform Company Profile Founded: 1865 Employees: 40,000+ Principal Office: Toronto, Canada Operations in 27 markets globally $1.1 trillion in assets under management1 as of 6/30/2020 SLC Management Crescent will form part of SLC Management, Sun Life’s alternative investment management platform $222 billion in assets under management (pro forma for Crescent) as of 6/30/2020 Sun Life Insurance and Wealth Asset Management US Canada Asia MFS Partnership Approach SLC Management’s partnership approach allows for: Preservation of independence and entrepreneurial culture Access to growth capital and broader strategic support Complementary distribution platform with benefits of scale and global reach SLC Management Canadian dollars.
Benefits for Crescent Crescent has been an industry leader in the below-investment grade market for over 25 years. Coupling Crescent’s longstanding experience in private credit origination and underwriting with Sun Life’s global scale and platform creates a compelling combination. Providing access to greater scale and resources needed to further augment global financial sponsor and corporate borrower reach Further improving access to capital markets Enhancing institutional relevance and market coverage This transaction with Sun Life enables us to continue to strengthen our competitive position by:
Continuity for CCAP Stockholders Team The team that manages CCAP will remain in place Crescent to maintain complete autonomy on investing and operational processes Strategy Strategy remains unchanged – will continue to seek to maintain a high-quality, highly diversified investment portfolio, with emphasis on senior secured, first-lien debt investments Fee Structure Maintain best-in-class advisory fee structure: Base management fees of 1.25% on gross assets minus cash 17.5% incentive fee over a 7% cumulative hurdle rate on combined ordinary income and capital gains Fee waivers introduced in connection with CCAP’s public listing remain unchanged Dividend Policy Dedicated to maintaining a consistent dividend policy alongside measured net asset value growth Name and Ticker CCAP will retain its current name and its common shares will continue to be listed and traded on the Nasdaq under the ticker symbol “CCAP”