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STRICTLY CONFIDENTIAL
PRESENTATION TO
FRESNO COUNTY
EMPLOYEES’ RETIREMENT
ASSOCIATION (“FCERA”)
MAY 2018
NOTE: ALL DATA CONTAINED HEREIN IS AS OF
DECEMBER 31, 2017, UNLESS OTHERWISE NOTED.
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Disclaimer and Forward-Looking Statement
This presentation (the “Presentation”) has been prepared by Carlyle Global Credit Investment Management L.L.C. (“CGCIM”) and AlpInvest Partners B.V. (“AlpInvest” and, together with CGCIM, each an “Investment
Adviser”) and may only be used for informational purposes only. 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 each Investment Adviser.
This Presentation provides an overview of information relating to certain funds or accounts managed by CGCIM and AlpInvest 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, any securities that may be issued by a fund or account managed by CGCIM or AlpInvest, or as legal,
accounting or tax advice. An investment in securities of the type described herein presents certain risks. Any offer or solicitation to buy securities or interests in any fund or investment account managed by an
Investment Adviser (“Mandate”) is made only through the Mandate’s governing and/or offering documents (the “Governing Documents”). The information contained in this Presentation is superseded by, and is qualified
in its entirety by the Governing Documents.
Certain information contained in this Presentation may be non-public, proprietary and confidential information. This Presentation may contain confidential and/or material non-public information, which may restrict the
recipient from initiating transactions in certain securities. By accepting this Presentation, the recipient agrees that it and all of its representatives and advisors will maintain such information in strict confidence and that
the recipient will not be free to act upon any such material non-public information contained herein. This Presentation and the information contained herein may not be reproduced, redistributed in any format, or
disclosed to third parties without each Investment Adviser’s express prior written consent.
Neither Investment Adviser makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein. Certain information contained herein has been obtained
from published and non-published sources prepared by third parties. While such information is believed to be reliable, neither Investment Adviser assumes any responsibility for the accuracy or completeness of the
information, which is based on matters as they exist as of the date of this Presentation and not as of any future date.
Certain statements contained in this Presentation are based on current expectations, estimates, projections, opinions, and/or beliefs constitute “forward-looking statements,” which can be identified by the use of
forward-looking terminology such as “may,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “target,” or “believe” or comparable terminology. No representation or warranty is made with respect to such statements
and future events may differ materially from those reflected or contemplated in such statements. As a result, investors should not rely on such forward-looking statements in making their investment decisions.
An investment in a Mandate entails a high degree of risk and no assurance can be given that a Mandate’s investment objective will be achieved or that investors will receive a return on their capital. Each investor should
consult its own legal, accounting and tax advisors as to the legal, business, tax and related matters concerning the information contained in this Presentation in order to make an independent determination and
consequences of a potential investment in a Mandate, including federal, state, local and foreign tax consequences. Past performance is not necessarily indicative of future results, and there can be no assurance that a
Mandate will achieve comparable results, or that a Mandate will be able to implement its investment strategy or achieve its investment objective. Please see the Risk Factors set forth in the applicable Governing
Documents.
Information throughout the Presentation provided by sources other than each Investment Adviser (including information relating to portfolio companies or other investments) has not been independently verified and,
accordingly, neither Investment Adviser makes no representation or warranty in respect of this information.
The following slides contain summaries of certain financial and statistical information about certain funds or accounts managed by CGCIM and AlpInvest . The information contained in this Presentation is summary
information that is intended to be considered in the context of the Governing Documents and reports provided to investors in connection with a Mandate. We undertake no duty or obligation to publicly update or
revise the information contained in this Presentation.
CGCIM is an SEC-registered investment adviser and a wholly owned subsidiary of The Carlyle Group L.P. (together with its affiliates, “Carlyle”). AlpInvest is an SEC-registered investment adviser an affiliate of CGCIM and
Carlyle. An information barrier has been erected between AlpInvest and the rest of Carlyle (including CGCIM) that restricts certain information from being shared, including information regarding AlpInvest portfolio
investment decisions. All investment programs managed by AlpInvest are intended to operate in accordance with the information barrier protocols and supplemental compliance procedures specific to Carlyle’s
Investment Solutions business segment of which AlpInvest is a part.
This Presentation contains information about the historical performance of certain Mandates. You should not view information related to the past performance of a Mandate as indicative of the Mandate’s future results,
the achievement of which is dependent on many factors, many of which are beyond the control of the Investment Adviser and cannot be assured. There can be no assurances that future dividends will match or exceed
historic rates or will be made at all. Further, an investment in a Mandate is discrete from, and does not represent an interest in, any other Carlyle entity. Nothing contained herein shall be relied upon as a promise or
representation whether as to the past or future performance of a Mandate or any other Carlyle entity.
2
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Table of Contents
I. Executive Summary
II. Private Credit Overview
i. Why Private Credit
ii. Why Carlyle Direct Lending
III. FCERA Direct Lending Managed Account Program
IV. FCERA AlpInvest Managed Account Program
V. Summary & Considerations
3
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Note: As of December 31, 2017. AUM numbers may not sum to total due to rounding. Past performance is not necessarily indicative of future results.
(1) Amount of unspent commitments to Carlyle investment funds. (2) Includes four Energy & Power and Renewable funds jointly advised with Riverstone Investment Group, L.L.C. and eight funds
advised by NGP Energy Capital Management. (3) Comprised of loans & structured credit, energy credit (Carlyle Energy Mezzanine Opportunities Fund), distressed credit (Carlyle Strategic Partners),
opportunistic credit (Carlyle Credit Opportunities Fund), TCG BDC, and Carlyle Mezzanine Partners invested capital. 4
Established in Washington, D.C. in 1987, Carlyle is one of the world’s largest and most diversified multi-
product global alternative asset management firms:
The Carlyle Group Overview
AUM $195 Billion Total
Active Investment
Vehicles 317 Investment Vehicles
Dry Powder1 $70 Billion
Active Investments275+ Active Portfolio Companies
300+ Active Real Estate Investments
Offices31 Offices
19 Countries
Employees1,600+ Employees Including
650+ Investment Professionals
Investors 1,750+ Active Carry Fund Investors From
83 Countries
Overall Platform Operating Segments
Global Credit3
$33 Billion
AUM58 Funds
Investment
Solutions
$46 Billion
AUM
197 Fund of
Funds Vehicles
Corporate Private
Equity
$73 Billion
AUM33 Funds
Real Assets
$43 Billion
AUM29 Funds2
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Carlyle Global Credit Investment Platform
Note: As of December 31, 2017 unless otherwise stated. Not included in the count are Fundraising, Legal, Finance, Operations and Risk Management professionals.
(1) AUM includes $14.4 billion AUM in U.S. Structured Credit, $6.7 billion in European Structured Credit and $0.5 billion in other structured credit. (2) Not reflective of AUM ($2.9Bn as of December
31, 2017). Reflects total capital accessible to Carlyle Direct Lending in the form of current net asset value of our portfolio, equity contributions in strategic partnerships, joint ventures and managed
accounts, as well as committed financing facilities and structured CLOs. Specifically, the figure includes total Net Asset Value of TCG BDC, Inc. as of December 31, 2017, capital commitments to TCG
BDC II, Inc., Carlyle Mezzanine Partners invested capital, third party capital commitments to the Carlyle Unitranche Program, third-party capital commitments to Middle Market Credit Fund, LLC,
capacity provided under the Middle Market Credit Fund CLO, and third-party capital commitments to separately managed accounts, plus the committed financing facilities to TCG BDC, Inc., TCG
BDC II, Inc., Middle Market Credit Fund, LLC, and separately managed accounts. (3) Represents the amount of committed capital Carlyle Credit Opportunities Fund (“CCOF”) will target to raise.
Carlyle Global Credit100+ Credit-Focused Investment Professionals
Private Credit
Solutions
$2.0Bn3
Opportunistic Credit
$3.4Bn
Distressed &
Special Situations
Distressed-for-Control
Debt and Equity
$4.7Bn
Energy Credit
Debt & Equity of
Energy-Related Assets
$5.2Bn2
Direct Lending
Unitranche Loans
Subordinated Debt
Second Lien Loans
First Lien Loans
5
$21.6Bn1
Loans & Structured
Credit
Carlyle Structured
Credit Fund
U.S. and European
Syndicated Loans
Origination Team
Credit Trading Team
Liability Management Team
Workouts Team
Credit Industry Research Team
Energy &
Commodities
Technology, Media,
& TelecomIndustrials
Defense & Business
ServicesConsumer Healthcare
Special Situations
Market Dislocations
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Carlyle Investment Solutions Platform
6
Private Market Solutions
Capabilities across primary, secondary and co-investment strategies
Investment Solutions $46B AUMResponsible for asset allocation, portfolio construction, and performance
Global Sector and Investment Strategy TeamsResponsible for manager research, due diligence, oversight and analysis
Private Equity Strategies
U.S. & European Leveraged Buyout
U.S. & European Middle Market
Global Emerging Markets
Mezzanine / Private Debt
Venture Capital
Co-Investments / Secondaries
Real Assets (Energy & Real Estate) Strategies
Real Estate Value-Added
Real Estate Opportunistic
Energy
Real Estate Debt
Co-Investments / Secondaries
Broader Carlyle Investment Platform
Source: Carlyle Investment Solutions. Information is as of December 31, 2017.
Note: Provided for informational purposes only and should not be considered a recommendation of any particular security or investment.
A leading global alternatives investor with $46 billion of AUM focused on private market strategies
Integrated set of multi-alternative capabilities can help support robust deal flow and sourcing capabilities across the entire
platform to be able to provide what we believe are the most attractive opportunities for our managed account clients
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Note: For illustrative purposes only. (1) There can be no guarantee that any fund’s portfolio will include all of the target assets. (2) Senior secured dollar one unitranche loans combine typical senior and
junior financing into one tranche. (3) Includes first lien last out unitranche loans, second lien term loans
Overview of FCERA Private Credit Managed Account
7
Direct Lending ProgramCarlyle Global Credit – Carlyle Direct Lending (“CDL”)
Value-Added Features of Managed Account Program
Third Party Private Credit ProgramCarlyle Investment Solutions – AlpInvest
Leading Investment Capabilities
Capital Call Efficiency
Aggregated and Enhanced
Reporting of Investments
Portfolio Management
of New Investments
Cost Effective Program Structure Reduce Administration Burden
(i.e. tax, audit, valuation)
TCG BDC II, Inc.
Commingled Fund
Target Assets1:
• First Lien Senior Secured
• Dollar-One Unitranche2
• First Lien Last Out (Unitranche)
• Second Lien Senior Secured
• Subordinated Debt / Other
Commitment: $150MM
Leverage: ~1.0x Debt-to-Equity
FCERA Managed Account Program
CPC V, L.P.
SMA
Target Assets1:
• First Lien Senior Secured & Dollar-
One Unitranche2 (95%)
• Other3 (5%)
Commitment: $150MM
Leverage: ~0.5x Debt-to-Equity
Highly diversified private credit portfolio universe with a focus on first lien senior secured assets
Broad origination platform with enhanced credit underwriting expertise and track record of very limited defaults
SMA with Carlyle Direct Lending creates fee efficiency across the entire managed account program
Diversification through AlpInvest’s ability to access high quality global mezzanine funds that have historically outperformed the market
Primary Fund Investments
SMA
Target Assets1:
• Managers focused on Mezzanine and Subordinated Debt Investments
• Securities can also include:
• HoldCo Notes
• Uni-tranche securities
Commitment: $100MM
Leverage: None
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Key Program Milestones
FCERA Private Credit Managed Account Timeline
The FCERA Managed Account is currently being invested, with the CDL portion of the account ~14%
called and the AlpInvest portion of the account 50% allocated and ~7% called as of March 31, 2018
8
August 2016
RFP Submitted
February 2017
FCERA Mandate Awarded
October 2017
AlpInvest Commitment Signed
Began investing in TCG BDC II, Inc.
The FCERA Private Credit Managed Account is collectively ~12% called through March 31, 2018
CDL has collectively called $42MM of $300MM commitment as of March 31, 2018, which represents 25 individual loans
To date, AlpInvest has committed to two managers on FCERA’s behalf representing ~50% of their $100MM account
AlpInvest has called ~7% of commitments to date
December 2016
Board PresentationSeptember 2017
TCG BDC II, Inc. Commitment Signed
CPC V, L.P. Commitment Signed
November 2017
Commitment to
Mezzanine Fund III
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q1 2018Q4 2017
January 2018
Commitment to
Mezzanine Fund I
December 2017
Began investing in CPC V, L.P.
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Table of Contents
I. Executive Summary
II. Private Credit Overview
i. Why Private Credit
ii. Why Carlyle Direct Lending
III. FCERA Direct Lending Managed Account Program
IV. FCERA AlpInvest Managed Account Program
V. Summary & Considerations
9
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Carlyle Global Credit Edge
10
Performance Solutions Scale Growth
• Capture excess risk-
adjusted returns by
investing across the
universe of credit products,
throughout the capital
structure and through
credit cycles
• Deliver consistent
outperformance, at scale,
while prudently managing
downside risk
• Capitalize on periodic
dislocations to generate
outstanding total returns
• Deliver complete
financing solutions to
corporations and
financial sponsors across
sectors and geographies
• Develop differentiated
proprietary deal flow
through consistent, direct
dialogue with borrowers
and integration with
Carlyle’s global
investment network
• Deploy capital at
significant scale across
investment strategies,
leveraging resources
across the credit platform
• Meet the demands of
limited partners who
seek a wide breadth of
investment opportunities
while deploying capital
through a limited
number of asset
managers
• Organically grow existing
strategies by increasing
limited partner
relationships, leveraging
the knowledge base of
the credit team, and
capturing market share
• Pursue new investment
strategies that can
achieve scale and will
benefit from the Carlyle
platform, lead by
experienced investors
A leading global alternative credit platform that captures excess risk-adjusted returns and capitalizes
on market dislocations across credit markets on behalf of our limited partners
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Multiple Flavors of Direct Lending
11Note: For illustrative purposes only. Not intended as an exhaustive list of factors to consider in determining a private credit strategy.
There are several varieties of direct lending and risk profiles can vary
significantly depending on the investment strategy:
Carlyle Investment Strategy
CDL believes its strategy to be lower risk than the vast
majority of other managers
VS. Concentrated PortfoliosHighly Diversified
VS. Cyclical CreditsNon-Cyclical Credits
VS. High LTV LoansLow LTV Loans
VS. Non-Sponsored LoansSponsored Loans
VS. “Storied” Credits“Healthy” Credits
VS. Unsecured LoansSenior Secured Loans
VS.Originated Loans Participation Loans
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
$4 $6$29
$50
$81
$132$151
$113
$0
$50
$100
$150
$200
2010 2011 2012 2013 2014 2015 2016 YTD1Q17
Uninvested U.S. PE Capital by Vintage
2010-1Q17 PE Capital to Deploy: $566Bn
2017-2023 MM Loan
Maturities: $595Bn
($ in Bn)
Middle Market Loan Maturities
($ in Bn)
Significant Demand for Middle Market Loans from Non-Bank Lenders
(1) No assurance is given that such demand will continue. Sources: Uninvested U.S. PE Capital by Vintage from Pitchbook 2017 PE & VC Fundraising & Capital Overhang Report; Total Middle Market
Maturities for U.S. (Sponsored and Non-Sponsored) from Thompson Reuters LPC, as of December 31, 2017; Primary Market for Leveraged Loans by Type from LCD Leveraged Lending Review – 4Q
2017.
Demand for middle market financing continues to experience growth driven by significant PE dry powder
and upcoming loan maturities1, while global and regional banks have progressively exited the middle
market leveraged loan space, thereby presenting a significant opportunity for alternative lenders
Primary Market for Highly Leveraged Loans by
Broad Type
12
$96.2
$114.6 $117.3 $122.8$115.3
$28.2
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
2018E 2019E 2020E 2021E 2022E 2023E
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1994 1999 2004 2009 2012 2015 2016 2017
US Banks Finance Co. Non-US Banks Institutional Investor Securities Firm
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Favorable Default and Recovery Rates
Middle market loan cumulative default rate of 7.6% with
recovery rate of 87%, compared to 10.8% and 82%,
respectively, for broadly syndicated loans3
Well Positioned to Capitalize on Middle Market Opportunity
Note: As of December 31, 2017, unless otherwise noted. No assurance is given that the referenced opportunities, trends, or environment will continue. (1) Refers to all operating companies in the
U.S. by revenue generating $20-1,000 million in revenue. Industry criteria includes Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Healthcare, Banks, Diversified Financials,
Insurance and Utilities. Source: S&P CapIQ. (2) Includes all transactions $50 million or greater announced by U.S. private equity sponsors between January 1, 2006 and December 31, 2017. Source:
S&P CapIQ. (3) Standard & Poor’s LCD; 1995-2015.
Middle Market Opportunity How CDL Addresses the Opportunity
Flexible product offerings
Solution provider across the
capital structure
Broad sponsor coverage &
direct origination platform
Disciplined underwriting
Experienced investment team
Largest Target Market
95% of U.S. companies are in the middle market1
72% of transaction volume occurs in the middle market2
Technical Benefits
Illiquidity Premium vs. Public Credit
Floating Rate
Lower Volatility
Greater Downside Protection
Covenanted Deals
Significant Access to Diligence
More conservative capital structures
13
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Note: No assurance is given that the Company will invest in any or all of the illustrative structures referenced above. Provided for informational purposes only; not intended as an exhaustive list of
illustrative structures.
Illustrative Capital Structure of Borrower
Substantial downside protection with LTV typically 30-50%
Total Enterprise Value: 10.00x EBITDA
Mu
ltip
le o
f EB
ITD
A
14
0.00x
1.00x
2.00x
3.00x
4.00x
5.00x
6.00x
7.00x
8.00x
9.00x
10.00x
Cash Equity Invested by PE Firm
5.00x
First Lien Senior Secured Loan
3.50x
Second Lien Senior Secured Loan / Mezzanine Debt
1.50x
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Table of Contents
I. Executive Summary
II. Private Credit Overview
i. Why Private Credit
ii. Why Carlyle Direct Lending
III. FCERA Direct Lending Managed Account Program
IV. FCERA AlpInvest Managed Account Program
V. Summary & Considerations
15
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Key Investment Highlights
As of December 31, 2017. Communications between investment professionals of the Investment Adviser, Direct Lending, and the CGC platform, on the one hand, and other Carlyle private equity,
investment solutions, and real estate investment professionals, on the other hand, are subject to certain restrictions as set forth in the applicable information barrier policies and procedures. (1)
References to Operating Executives refers collectively to Carlyle Operating Executives, Senior Advisors, Operating Advisors and other consultants who are involved in portfolio company value
creation. Operating Executives are consultants who are not considered Carlyle personnel. 16
Strategic Relationships
Expands origination platform & product
offerings
Provides significant scale & full solution offering
Access to more deal flow
Alignment of Interests
Significant Carlyle commitment to TCG BDC II,
Inc. (lesser of $45 million or 3% of commitments)
Attractive fee structure (fees on drawn equity
only; fees not charged on uncalled capital or
leverage)
One Carlyle Advantages
Access to broader Carlyle platform & expertise
Proprietary economic research and sector data
43 in-house Operating Executives1
Scaled Investment Platform
Scale facilitates enhanced economics & terms
Allows investments across the entire capital
structure and large hold sizes
Experienced Investment Team
Investment Committee with average 22 years of
industry experience
29 dedicated investment professionals with
support from 13 U.S. industry research analysts
Market Leading Direct Origination Platform
Broad national coverage with offices in New
York, Chicago, and Los Angeles
Direct coverage of 200+ private equity firms &
150+ lenders
1
2
3
4
5
6
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Portfolio Summary – TCG BDC II, Inc. & CPC V, L.P.
(1) Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of period end. Actual yields earned over the life of each
investment could differ materially from the yields presented above. Combined yield is calculated using portfolio yields prorated by portfolio fair value. (2) Investments and commitments for TCG
BDC II, Inc. are prorated to reflect FCERA’s ownership percentage as of March, 31, 2018. Charts shown are based on FCERA’s prorated ownership in the combined portfolio of TCG BDC II, Inc. and
CPC V, L.P. 17
As of March 31, 2018 (Unaudited, subject to change)
0.4%
22.9%
76.7%
Portfolio Characteristics Diversification by Borrower2
Asset Mix2 Industry2
Top 10 Investments Next 10 Investments Remaining Investments
First Lien Debt Second Lien Debt Equity
(Dollar amounts in millions)TCG BDC II2 CPC V Combined
Total Equity Called $24.3 $18.0 $42.3
Total Investments and Commitments $43.1 $33.9 $77.0
Unfunded Commitments $8.9 $13.4 $22.3
Investments at Fair Value $34.2 $20.5 $54.7
Yield at Fair Value of Investments1 9.25% 8.33% 8.91%
Number of Investments 19 9 25
Number of Portfolio Companies 17 9 23
Floating / Fixed 100% / 0% 100% / 0% 100% / 0%
72%
27%
2%
16%
4%
12%12%
11%
11%
3%
25%
Capital Equipment
Forest Products & PaperHotel, Gaming & Leisure
Financial Services
Non-durable GoodsHigh Tech Business Services
Consumer ServicesSoftwareHealthcare & Pharma
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
($ in MM) TCG BDC
Total Investments & Commitments $2,086
Unfunded Commitments $118
Investments at Fair Value $1,968
WA Yield at Cost of Investments2 8.86%
WA Yield at Fair Value of Investments2 8.90%
Number of Active Investments 107
Fair Value of Non-Accruals $19
Note: As of December 31, 2017, unless otherwise noted. (1) Reflects TCG BDC only. The Company commenced operations in September 2017 and, as of December 31, 2017, has not yet reached a
scale we believe to be representative of the strategy. The Company’s portfolio characteristics may differ materially from those shown here. (2) Weighted average yields include the effect of accretion
of discounts and amortization of premiums and are based on interest rates as of December 31, 2017. Actual yields earned over the life of each investment could differ materially from the yields
presented above. Weighted average yields for TCG BDC do not include TCG BDC’s investment in MMCF. Includes impact of the NF acquisition. (3) Inception is May 2, 2013, the date of TCG BDC’s
initial closing of its private offering. Includes capital deployed by TCG BDC, and excludes duplicative capital deployed by TCG BDC as part of its acquisition of NF (June 9, 2017).
Top 10
Investments
21%
Remaining 82
Investments
46%
Next 11 – 25
Investments
23%
MMCF
10%
Diversification by Borrower Asset Mix Industry
As of December 31, 20171
$4.1BnCapital Deployed Since Inception3
0.4%Annualized Default Rate
78%First Lien Assets
~30Portfolio Industries
18
First Lien Debt
65.7%
First Lien Last Out
12.1%
Second Lien Debt
12.5%
Investment Fund
8.8%
Equity
0.9%
Healthcare &
Pharmaceuticals
12%
High Tech Industries
9%
Business Services
9%
Banking, Finance,
Insurance & Real Estate
9%
Investment Fund
(MMCF)
9%
Consumer Services
6%
Transportation: Cargo
4%
Telecommunications
4%
Aerospace & Defense
3%
Durable Consumer
Goods
3%
Other (18 Industries)
31%
Portfolio Summary – TCG BDC I, Inc.
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Liabilities Management
Brokerage Committee
Valuation Committee
Risk Management
Prudent Risk Management Process
Note: For illustrative purposes only; may be subject to change.
Formal quarterly portfolio reviews consisting of individual credit analysis,
and detailed portfolio construction and risk monitoring
Proprietary credit surveillance report to monitor investment
performance
Broad participation includes Investment Committee, Origination,
Underwriting and Portfolio Management
Monthly watchlist reviews focus on all credits downgraded on our internal
risk ratings scale
Quarterly risk review focused on technical analysis of migration of financial
performance and portfolio diversification
Weekly portfolio dashboard focused on exposure by issuer, industry, ratings
and other risk factors
Weekly portfolio leverage and compliance dashboard focused on
projected asset coverage and non-qualifying asset tests
Dedicated workout function to maximize recovery
Robust internal compliance controls and dedicated officer
Multiple layers of checks and balances throughout underwriting
process
Ad Hoc Analysis and Projects led by Chief Risk Officer
Multiple layers of risk review and
oversight
Business continuity plan designed
to allow all critical business
functions to continue in efficiently
in the event of an emergency
Risk Governance
Investment
Committee
Active Risk Management
19
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Regular Independent Valuation
Sound valuation framework exercises rigorous oversight including both internal and external
independent review
Valuation Process
Third-Party Valuation Advisor
Reviews the Audit Committee
valuation recommendation
Determines the fair value of the
investment in the portfolio based
on the input of both the investment
team and the third-party valuation
advisor
Board of Directors1
Reviews the assessments of the
Investment Adviser and the third-
party valuation firm
Provides Board of Directors with
recommendation
Audit Committee1
Initially reviewed by both
investment professionals and
finance team
Valuation conclusions documented
and reviewed by a valuation
committee comprised of members
of our senior management
Valuation Committee
In accordance with the valuation policy, portions of middle market loan and equity portfolio are reviewed by a third party
specialist quarterly
• Each loan and equity investment is reviewed at least once on a rolling 12 month basis
Lincoln Partners has been engaged by the Board of Directors to perform third-party review
• Meets with the Audit Committee to discuss valuation methodology and analysis, and provide industry observations
• Conclusion communicated via a formal report to the Audit Committee
Note: For illustrative purposes only; may be subject to change. (1) Applies to TCG BDC II, Inc. only; however, the proposed program will benefit from these committees being in place. 20
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
As of March 31, 2018, the weighted average Internal Risk Rating of our debt investment portfolios for TCG BDC II, Inc. and CPC V, L.P. was 2.0 and 1.9,
respectively. As of March 31, 2018, none of our investments were assigned an Internal Risk Rating of 4-6 and no investments in the portfolio were on
non-accrual status. All of our first and second lien debt investments were performing and current on their interest payments as of March 31, 2018.
Credit Quality of Investments
21
Rating Definition
1 Performing – Low Risk: Borrower is operating more than 10% ahead of the Base Case
2 Performing – Stable Risk: Borrower is operating within 10% of the Base Case (above or below). This is the initial rating assigned to all new borrowers
3Performing – Management Notice: Borrower is operating more than 10% below the Base Case. A financial covenant default may have occurred, but
there is a low risk of payment default
4Watch List: Borrower is operating more than 20% below the Base Case and there is a high risk of covenant default, or it may have already occurred.
Payments are current although subject to greater uncertainty, and there is moderate to high risk of payment default
5Watch List – Possible Loss: Borrower is operating more than 30% below the Base Case. At the current level of operations and financial condition, the
borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may
have occurred. Loss of principal is possible
6
Watch List – Probable Loss: Borrower is operating more than 40% below the Base Case, and at the current level of operations and financial condition,
the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or
may have already occurred. Additionally, the prospects for improvement in the borrower’s situation are sufficiently negative that impairment of some or all
principal is probable
Portfolio Risk Ratings – TCG BDC II, Inc.
(Dollar amounts in millions) March 31, 2018
Internal Risk Rating Fair Value % of Fair Value
1 - 0.00%
2 34.2 100.00%
3 - 0.00%
4 - 0.00%
5 - 0.00%
6 - 0.00%
Total 34.2 100.00%
Portfolio Risk Ratings – CPC V, L.P.
(Dollar amounts in millions) March 31, 2018
Internal Risk Rating Fair Value % of Fair Value
1 2.4 11.54%
2 18.1 88.46%
3 - 0.00%
4 - 0.00%
5 - 0.00%
6 - 0.00%
Total 20.5 100.00%
(1) Investments and commitments for TCG BDC II, Inc. are prorated to reflect FCERA’s ownership percentage as of March, 31, 2018. Charts shown are based on FCERA’s prorated ownership in the
combined portfolio of TCG BDC II, Inc. and CPC V, L.P.
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Table of Contents
I. Executive Summary
II. Private Credit Overview
i. Why Private Credit
ii. Why Carlyle Direct Lending
III. FCERA Direct Lending Managed Account Program
IV. FCERA AlpInvest Managed Account Program
V. Summary & Considerations
22
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
AlpInvest Private Credit Fund Program
Note: As of April 2018. For illustrative purposes only. There can be no assurance that AlpInvest will be able to achieve any portfolio construction objectives. AlpInvest may adjust its target allocations
at different times based on market conditions as it deems appropriate. Diversification does not eliminate the risk of loss. 23
$100 million commitment
Target funds primarily focused on mezzanine and other subordinated debt
investments globally
Target 4-5 funds; equally sized commitments of 20-25%
Without prior approval, will not commit to any Carlyle Fund or invest over 30-35% in
any one investment
Portfolio
Components
Selection
Sponsor Composition: Focus on high-quality managers that invest in mezzanine or
subordinated debt like securities with some form of additional equity participation, or
opportunistic credit strategies
Geography: Primary focus on North America and Europe focused funds
Industry: Generalist focus with limited exposure to sector specific funds
Current Program
Three-year investment period starting October 26, 2017
~50% committed and ~7% invested as of March 31, 2018 through two
commitments
Mezzanine Fund III (2017 vintage), and Mezzanine Fund I (2018 vintage)
Currently evaluating a number of additional managers in North America and Europe
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Systematic Primary Fund Sourcing Strategy to Ensure Full Visibility for FCERA
24Note: Information as of April 2018. For illustrative purposes only and subject to change. There is no assurance that AlpInvest will be able to make any investment in its pipeline or that any such
investment will be successful. (1) Source Preqin (accessed 04/23/18). Please note amount raised in USD, sample size includes all US and EU funds raised from 2013 through March 31, 2018.
AlpInvest seeks to have full visibility on the institutional quality mezzanine fund universe and fundraising
calendar
Mezzanine Landscape Map Mezzanine Fundraising (Last 5 years)1
Timing Key
2018
2019
2020+
Systematic, pro-active sourcing strategy led by senior team members
Seek full visibility on universe of institutional quality mezzanine and private debt investment opportunities
Proprietary database of sponsors by segment and geography, tracking full set of opportunities
Secure desired access through pro-active relationship building
Pro-actively and systematically target “must have sponsors”
Private Credit landscape maps are updated semi-annually by the team
79%
21%
% of Capital Raised, by Geography
US Europe
80%
10%
10%
# of Funds, by Fund Size
<$500mm $500mm-1Bn >$1Bn
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Mezzanine Fund Commitment Case Studies
Note: Case studies are intended to provide examples of the types of transactions AlpInvest pursues and do not represent all investments made AlpInvest or the outcomes achieved. Investment
rationales and other considerations are based on AlpInvest’s internal analysis and views as of the date of the investment commitment and will not be updated. References to a particular investment
should not be considered a recommendation of any security or investment. There can be no assurance that AlpInvest will be able to invest in similar opportunities in the future. 25
Highlights
Attractive history with limited losses and consistent equity
performance
Favorable LP terms similar to other captive mezzanine funds
Immediate capital deployment and interest payments
AlpInvest had an existing relationship with the GP
AlpInvest conducted an on-site due diligence session and completed
extensive analysis of the firm’s representative mezzanine track record
During diligence we focused on the interaction with the GP’s equity
funds and potential conflicts given the fund’s captive strategy
Geography: U.S.
Strategy
Captive mezzanine fund investing
alongside the GP’s equity funds, targeting
middle-market companies in North
America
Target SecuritiesGP primarily seeks debt securities with
minority equity exposure
Investment professionals 25 professionals (at the equity sponsor)
Mezzanine Fund III (Q4 2017 Close)
Investment Rationale
Highlights
Consistent and attractive investment strategy through market cycles
Strong absolute and relative track record with limited losses
Stable and experienced senior team with no turnover
The opportunity was sourced through ongoing market outreach
AlpInvest conducted multiple on-site due diligence sessions,
completed unrealized portfolio analysis, and made numerous
reference calls
During diligence we focused on the historic and unrealized track
record and the GP’s sponsor network and sourcing approach
Geography: U.S.
Strategy
Mezzanine investor targeting sponsor-
backed lower middle-market companies in
North America
Target SecuritiesGP primarily seeks debt securities with
minority equity exposure
Investment professionals 12 professionals
Mezzanine Fund I (Q1 2018 Close)
Investment Rationale
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
2019 FCERA Forward-Looking Pipeline
Note: For illustrative purposes only and subject to change. No assurance can be given that any pending transaction or other identified investment opportunity will be consummated within the
expected time frame, or at all. References to a particular investment should not be considered a recommendation of any security or investment. There can be no assurance that AlpInvest will be able
to invest in similar opportunities in the future. (1) Estimated fund size in local currency. (2) Refers to AlpInvest’s relationship with the GP across primary, secondary, and co-investment deal teams. 26
2019 FCERA Pipeline
Fund NameAnticipated Fund
Size (mm)1 Geography Transaction Type Security Types AIP Relationship2
Fund A 7,500 Global Mixed Debt Oriented
Fund B 5,000 Global Sponsored Debt Oriented
Fund C 2,000 US Mixed Debt Oriented
Fund D 1,500 Europe Sponsored Debt Oriented
Fund E 1,400 US Sponsored Debt Oriented
Fund F 1,200 US Non-Sponsored Equity Oriented
Fund G 1,200 US Mixed Opportunistic
Fund H 900 US Sponsored Equity Oriented
Fund I 700 US Mixed Opportunistic
Fund J 650 US Sponsored Debt Oriented
Fund K 500 Europe Non-Sponsored Mixed
Fund L 500 US Mixed Mixed
Fund M 400 US Mixed Mixed
Fund N 400 US Non-Sponsored Mixed
Fund O 300 Europe Sponsored Debt Oriented
Key: AIP Relationship with Sponsor
Reviewed transaction
Reviewed / Closed transaction
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Table of Contents
I. Executive Summary
II. Private Credit Overview
i. Why Private Credit
ii. Why Carlyle Direct Lending
III. FCERA Direct Lending Managed Account Program
IV. FCERA AlpInvest Managed Account Program
V. Summary & Considerations
27
T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L
Summary & Considerations
28
The FCERA Private Credit Managed Account is in the early days of its
investment period
Carlyle and FCERA are working together on FCERA’s Legacy Private Credit
Portfolio to roll-up performance and cash-flow monitoring
AlpInvest is currently handling all new in-bound third party non-Carlyle private
credit managers as directed by FCERA staff
FCERA may consider (over following 6-12 months) how it will work with its
legacy private credit managers going forward, and continue to allocate to the
private credit space in order to achieve and maintain its asset allocation target