Trilinc Global Impact Fund Llc. · OTC:TRLC
Trilinc Global Impact Fund — Q2 2021 Earnings Presentation
44 slides from Trilinc Global Impact Fund's earnings presentation, Aug 25, 2021
Slide 1: Trilinc Global: Invest with Impact
TRILINC GL@BAL INVEST WITH IMPACT We will begin at 10:00am PT (1:00pm ET). Thank you for joining us! TRILINC GLSBAL 1
Slide 2: TriLinc Global Impact Fund: Q2 2021 Update
TRILINC GL@BAL INVEST WITH IMPACT TRILINC GLOBAL IMPACT FUND: Qe 2021 UPDATE AUGUST 25, 2021
Slide 3: Disclaimer
This Presentation (the “Presentation”) is for informational purposes only, is being furnished on a highly confidential basis, and is intended solely for the persons receiving it; any reproduction or distribution is prohibited and illegal. This document does not constitute an offer of securities and
Slide 4: Portfolio Overview
PORTFOLIO OVERVIEW TRILINC GLSBAL 4
Slide 5: Private Debt Plus: Market Rate Returns + Positive Impact
▪ Private Debt Plus® = Market Rate Returns + Positive Impact ▪ International Private Credit Fund – Private Loans to Private Companies ▪ Designed to: ▪ Generate income ▪ Preserve capital ▪ Offer modest capital appreciation ▪ Create positive, measurable impact ▪ Also intended to be non-correlated with
Slide 6: Typical Investor Allocation
TYPICAL INVESTOR ALLOCATION1 Cash ▪ Liquidity Equity Fixed Income Alternatives Cash Fixed Income ▪ Capital preservation ▪ Income Equity ▪ Growth ▪ Some income Alternatives Debt Equity ▪ Liquidity ▪ Growth ▪ Capital preservation ▪ Non-correlation ▪ Non-correlation ▪ Sometimes Income For illustrative
Slide 7: Private vs Public Investments Dispersion
The wider array of value levers and risk drivers in private markets can result in greater performance dispersion vs. public markets. Private Sourcing Information Structuring & Use (or misuse) Negotiation of Leverage Valuation Asset Allocation Valuation Asset Allocation Private Investments Public Inv
Slide 8: $1.17 billion invested in small and mid-sized businesses
$1.17 billion Trade finance, term loan, and short-term transactions in 88 Small & Mid-Sized Businesses supporting 40,435 Permanent jobs1 in 38 Developing economies2 0.08% Realized Loss Ratio3 1) “Permanent Jobs” is self-reported by borrower companies, and is based on the IRIS Metric of Permanent Emp
Slide 9: Portfolio Statistics
Total AUM $358.8 mil Full Cycle Loans $783 mil (66.7% of Total Invested) Weighted Average Portfolio Loan Size $8.2 mil Weighted Average Portfolio Duration < 2.0 years Cumulative Gross Portfolio Yield1 12.55% Leverage $5.0 mil USD Denominated 100%2 The performance information depicted above represent
Slide 10: Sector, Region, Country and Loan Type Diversification
Sector Access to Healthcare and Pharmaceuticals Country1 Argentina Botswana Access to Technology Brazil Cabo Verde Inclusive Finance Cameroon Chile Infrastructure Development Colombia Croatia Personal Credit Institutions Recycling Ecuador Ghana Responsible Consumer Goods Production Hong Kong Indones
Slide 11: Impact Objectives and ESG Screen Summary
Top 10 Impact Objectives1 ESG Screen Summary Productivity and Competitiveness, 27 Equality and Empowerment, 7 100% Adherence to the IFC Exclusion List Capacity Building, 23 Access to Financial Services, 6 100% Compliance with local environmental, labor, health, safety & business laws, standards and
Slide 12: NAV Discussion
NAV DISCUSSION TRILINC GLSBAL
Slide 13: NAV per Unit Price
TGIF Actual NAV vs. NAV w/out Effect of Unrealized Losses & Return of Capital (Q1 2018-Q2 2021) Q4 - 2013 NAV Per Unit Price Unrealized Effect Realized Effect Return of Capital Effect $8.466 $8.421 $8.573 $8.379 $8.355 $8.227 $8.166 $8.134 $8.105 $8.024 NAV per Unit Price Elimination of Expense Supp
Slide 14: Distribution Rate as % of NAV
Distribution Rate as % of NAV (Q4 2017 - Q2 2021) Distribution Rate Net Asset Value 8.80% $380 8.57% 8.60% $370 8.40% Net Asset Value (Millions) $360 8.16% 8.20% Distribution Rate (%) 8.09% 8.04% $350 8.00% 7.91% 7.83% 7.80% 7.72% $340 7.67% 7.57% 7.58% 7.57% 7.60% 7.48% 7.49% 7.42% 7.43% $330 7.40%
Slide 15: NAV Effect of Return of Capital and Unrealized Adjustments
NAV Effect of Return of Capital ▪ If NAV declines from unrealized adjustments and distributions stay constant, NAV will decline further ▪ Quarters with high cash levels (therefore less income) and high OPEX also contribute to return of capital NAV Unrealized Adjustments ▪ Down ▪ Typically, non-perfo
Slide 16: Independent Fair Value Review Process
Duff & Phelps Independent fair value review for all loans with a maturing of > 1 year QVT & Quarterly Fair Value Valuation Valuation Memo Determination Models Report ▪ Investment Partner ▪ Valuation Committee ▪ Audit Committee1 “valuation” inputs ▪ CFO Prepares ▪Fund Board for TGIF ▪ Investment Team
Slide 17: Realized Losses versus Unrealized Valuation Adjustments
REALIZED LOSSES VERSUS UNREALIZED VALUATION ADJUSTMENTS TRILINC GLSBAL
Slide 18: Performing Loans and Troubled Loans
Performing Loans Troubled Loans 1. Loans Performing as Expected 3. Actual Performance Weakness ▪ May require loan restructuring 2. Potential Loan Weakness ▪ Change to key terms (weaker) ▪ Short Term (Forbearance – short term disruptions like COVID) 4. Non-Performing Loans (NPLs) ▪ Long Term – reprof
Slide 19: Type of Adjustment and Direction
Type of Adjustment Adjustment Direction Unrealized Losses or Gains - /+ Return of Capital - Distributions Exceeding Fund Net Income as a result of: ▪ Opex going up or down - /+ ▪ Higher yielding positions + ▪ Positions on non-accrual - New Equity Capital Into The Fund + Realized Losses In Excess of
Slide 20: Non-Performing Loans Since Inception
Number of Transactions Dollar Amount Total Invested Since Inception ~ $1.2 billion Total NPLs Since Inception2 17 ~$90.6 million NPLs “Rehabilitated” or Fully Paid3 4 ~$19.2 million Current NPLs4 13 ~$75.4 million ▪ IIG-Related 6 ~$40.9 million ▪ Non-IIG Related 7 ~$34.5 million 1) June 2013 2) Tota
Slide 21: NPLs at Q2 2021
NPLs at Q2 2021 Amortized Cost % of Portfolio Q2 Fair Value % of Portfolio Beef Exporter $ 9,000,000 2.84% $ 6,161,679 1.94% Agriculture Distributor $ 12,500,000 3.94% $ 6,055,061 1.91% IIG TOF $ 6,000,000 1.89% $ 3,758,063 1.18% Chia Seed Exporter $ 1,326,687 0.42% $ 1,375,794 0.43% Oilseed Distrib
Slide 22: IIG Loans Realized Losses
IIG Loans Fish Processor and Exporter $(881,800) Sesame Seed Exporter $(27,784) Total $(909,584) Realized losses were recognized in Q2 2021. 22
Slide 23: Realized Losses and Unrealized Adjustments Since Inception
Number of As a Percent of Dollar Amount Transactions Total Invested Total Invested Since Inception ~ $1.2 billion Total Realized Losses Since Inception2 2 $(909,584) 0.08% Total Unrealized Adjustments Since Inception3 72 $(36,533,659) 3.11% 1) June 2013 2) Losses were recognized in Q2 2021. 3) Total
Slide 24: Non-IIG and IIG Loan Status
Non-IIG Loans ▪ LED Lighting Service Provider – technical EOD only ~$1.4mil ▪ Property Developer – began legal process ~$17.9mil ▪ Fruit & Nut Distributor – in full workout now ~$786k ▪ Pharmaceuticals Distributor – insurance claim ~$648k ▪ Mobile Phone Distributor – in liquidation ~$9.5mi ▪ Scrap M
Slide 25: Loan Recovery Timeline
Total Amount Loaned $9,317,523 Principal Repayments before NPL $1,967,898 Interest Payments before NPL $197,159 Date of Default 10/19/2017 Principal Outstanding at DofD $7,349,626 Research and Legal Preparation Oct. 2017 – Mar. 2018 (6 mos) English Court Process Mar. 2018 filing, Jan. 2020 trial sta
Slide 26: TGIF Performance
TGIF PERFORMANCE TRILINC GLSBAL
Slide 27: TGIF Gross Yields
TGIF Gross Yields 16.00% 14.00% ▪ GPY fell 36 bps in Q2 from Q1 due to Gross Yield (%) 12.00% changes in the portfolio composition, as 10.00% well as less extra income compared to Q1 8.00% 6.00% ▪ GPY declined to 12.54% in Q2 from 12.90% 4.00% in Q1; AAY increased to 11.71% in Q2 from 2.00% 0.00% 11
Slide 28: Total Distributions Since Inception
Since inception through 6/30/21, total distributions for TGIF have been: $149,933,737 Average net assets since inception through 6/30/21: $233,352,095 Total assets as of 6/30/2021: $358,802,784 Distributions reflect actual paid distributions for the period indicated. This metric is not a measure of
Slide 29: Net Yield from Leverage and Starting NAV
Offering Price $10.00 Less Sales Commissions & O&O "load" ($1.43) – Blended Rate of all Share Classes "Starting" NAV $8.57 Net Yield from Leverage is designed to grow NAV to help make up the front end “load” The use of leverage can make investment performance more volatile. 29
Slide 30: Inception to Date Distributions by Unit Class
Inception to Date A Units C Units I Units Average Annual Distribution (% of Offering Price) 6.47% 6.69% 7.16% Years since Inception x 8.00 8.00 8.00 Total Distributions 51.79% 53.52% 57.26% Offering Price x $10.00 $9.576 $9.186 $ of Distributions on Offering Price $5.18 $5.13 $5.26 Starting NAV afte
Slide 31: Since Inception Net IRR
Since Inception Net IRR (Q4 2017 – Q2 2021) 8.00% 7.82% IIG 7.48% 7.50% 7.16% 7.18% Net Internal Rate of Return 7.00% 6.86% 6.79% 6.75% COVID-19 6.71% 6.55% 6.50% 6.28% 6.19% 6.13% 6.06% 6.02% 6.00% 5.79% 5.50% 5.00% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2
Slide 32: Volatility and Correlation
Volatility (Since Inception 9/30/13 – 6/30/21) Asset US Bonds1 Hedge Funds2 Global Stocks3 S&P 5004 TGIF5 Average Quarterly Returns (%) 0.60% 1.11% 2.84% 3.69% 1.89% Std. Deviation of Returns (%) 1.59% 3.05% 7.31% 7.15% 0.28% Sharpe Ratio6 -0.06 0.12 0.29 0.41 1.22 Average Annualized Returns (%) 2.4
Slide 33: Standard Deviation vs. Annual Returns
Standard Deviation vs. Annual Returns Period: Since Inception 9/30/13 – 6/30/2021 16% S&P 500 (4) 14% Average Annualized Returns (%) 12% Global Stocks (3) 10% 8% TriLinc Global Impact Fund (5) 6% Hedge Funds (2) 4% 2% US Bonds (1) 0% 0% 2% 4% 6% 8% 10% 12% 14% 16% Annualized Returns STD (%) The risk
Slide 34: Methodology and Footnotes
Methodology: The volatility and correlation analysis was conducted using quarterly returns (%) including TriLinc Global Impact Fund Since Inception Net IRR from each quarter. Average annualized returns (%) are displayed for reference and were calculated using average quarterly return (%) results. Th
Slide 35: Leverage Update
LEVERAGE UPDATE TRILINC GLSBAL
Slide 36: Levered AAY and the Leverage Effect
Levered AAY and the Leverage Effect Levered AAY Leverage Effect 13.55% 12.47% 14.00% 12.32% 12.65% 0.12% 11.99% 11.80% 11.69% 0.10% 11.63% 13.00% 0.44% 11.32% 11.31% 0.45% 0.03% 12.00% 0.08% 0.09% 0.08% 0.09% Gross Yield (%) 0.09% 11.00% 10.00% 9.00% 8.00% 7.00% 6.00% Quarter ▪ Continuing to closely
Slide 37: Current Leverage Options Being Pursued
Current Options Being Pursued ▪ IFC A/B Loan ▪ Up to $175 million facility ▪ In late stages of re-approval ▪ Specialty Finance Company ▪ Sourced through Placement Agent ▪ Considered pre-IFC, now pursuing in parallel ▪ Insurance wrapped “bond” sold through a bank ▪ U.S. Pension Plan ▪ Sourced through
Slide 38: Distribution Reinvestment Program Reopened
▪ Effective 5/29/20, the TGIF DRP program was reopened and available for investors1 ▪ DRP units are purchased at current NAV ▪ Opportunity to dollar cost average investment 1) Includes Unitholders who own Class A, Class C, Class I, Class W or Class Y Units. 38
Slide 39: TGIF Continues to Be an Attractive Investment
▪ We believe that TGIF continues to be an attractive investment for clients, offering: ▪ Relative stable value ▪ High income ▪ Non-correlated ▪ Impact ▪ The TriLinc team continues to focus on maximizing value for investors, including increasing total returns and obtaining leverage for TGIF ▪ The Boa
Slide 40: Management Team
Gloria Nelund: Chairman & CEO Brent L. VanNorman, Esq.: President ▪ Former CEO of $50 billion Deutsche Bank Private Wealth ▪ Experienced executive manager with over 25 years Management North America & former CEO of $35 billion Bank professional experience in law, accounting and business of America’s
Slide 41: Thank you!
If you have any additional questions, please feel free to reach out to TriLinc directly. Angie Miller [email protected] (602) 908-3417 TGIF Website: www.TrilincGlobalImpactFund.com Thank you! 41
Slide 42: Disclaimer
This Presentation (the “Presentation”) is for informational purposes only, is being furnished on a highly confidential basis, and is intended solely for the persons receiving it; any reproduction or distribution is prohibited and illegal. This document does not constitute an offer of securities and
Slide 43: TGIF Liquidation Strategy Discussion
TGIF LIQUIDATION STRATEGY DISCUSSION TRILINC GLSBAL
Slide 44: Board Review of Strategic Alternatives
• In late 2020, the TGIF Board hired a nationally recognized investment banking firm with an expertise in alternative investments and direct participation programs • Stanger was engaged to review and evaluate potential strategic alternatives for TGIF, including: o Listing o Merger o Liquidation o Ex
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