Q2 2025 180 Degree Capital Corp Earnings Call
Operator: Ladies and gentlemen, and thank you for standing by.
Operator: Welcome to 180 Degree Capital Corp's shareholder update. All participants are currently in a listen-only mode. Following our prepared remarks, we will open the line to If you would like to ask a question, please type star followed by one on your telephone keypad or click the ask a question icon if you are participating via your computer.
Good afternoon, ladies and gentlemen, and thank you for standing by.
Welcome to 180° Capital Corps. A shareholder update call.
All participants are currently in a listen-only mode.
Following our prepared remarks, we will open the line to questions.
Operator: We would like to remind participants that this call is being recorded and that we will be referring to a slide deck that we have posted on our Investor Relations website at www.ir.180degreecapital.com under news slash events. As required by securities regulation related to our proposed business, company and product. We will also post a transcript of this call on the SEC's EDGAR system and our website.
If you would like to ask a question, please type star. Followed by 1. On your telephone keypad, or click the ask. A question icon. If you are participating via your computer,
We would like to remind participants that this call is being recorded and that we will be referring to a slide deck that we have posted on our investor relations website at IR 180 degree capital.com under news events.
Operator: Please turn to our Safe Harbour Statement and other disclosures on slide 2-5. This presentation may contain statements of a forward-looking nature relating to future events. Statements contained in this presentation that are forward-looking statements are intended to be made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the company's current beliefs, and a number of important factors could cause actual results to differ materially from those expressed herein.
As required by Securities regulation related to our proposed business company and proxy rules. We will also post a transcript of the school on the sec's Edgar system and our website.
Please turn to our Safe, Harbor statement, and other disclosures on slide 2 to 5.
This presentation may contain statements of a forward-looking nature relating to future events.
Statements contained in this presentation that are forward-looking statements are intended to be made, pursuant to be safe harbor, provisions of the private Securities. Litigation Reform, Act of 1995.
These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions.
Operator: Please see the company's filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the company's business that could affect the company's actual return. Except as otherwise required by federal security laws, 180 Degree Capital Corp. undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.
these statements reflect the company's current beliefs and the number of important factors could cause actual results to differ materially from those expressed hearing,
Please see the company's filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the company's business, that could affect the company's actual results.
Kevin Rendino: I would now like to introduce your host for today's Kevin Rendino, Chief Executive Officer of 180 Degree Cap Mr Rendino, you may begin. Thank you and good afternoon everyone. Daniel Wolfe, our President and Portfolio Manager, and I would like to welcome you to our call this morning.
Except as otherwise required by Federal Security laws 180, degree Capital Court undertakes. No obligation to update or revise, these forward-looking statements to reflect new events or uncertainties. I would now, like to introduce your host for today's conference Mr. Kevin rendino. Chief Executive Officer of 180 degree capital.
Kevin Rendino: Mr. Rendino, you may begin.
Kevin Rendino: We'd also like to note that Ted Goldthorpe, CEO of Mt. Logan, along with other members of the Mt.
Kevin Rendino: Logan team are here today, and you will have an opportunity to hear from them as well shortly. It's been a long road to get to this point, but we could not be more excited for the future ahead for all of 180 Degree Capital shareholders as we finally are filing through the SEC review process and able to seek approval for our proposed business combination with Mount Logan Capital.
Kevin Rendino: Thank you and good afternoon everyone. Daniel wolf our president and portfolio manager and I would like to welcome you to our call this morning. We'd also like to note that Ted goldthorp CEO of Mount Logan along with other members of the Mount Logan team are here today and you will have an opportunity to hear from them as well shortly.
Kevin Rendino: As I said, Ted Goldthorpe is here with us today to talk more about the future of our combined company. I know we've discussed this before, and with voting about to begin, it's a good time to revisit where we started, what we've accomplished, and how we've positioned 180 Degree Capital for growth as part of Mt. Logan Capital.
Kevin Rendino: As I said, Ted gold Thorp is here with us today to talk more about the future of our combined companies.
Kevin Rendino: Ted will speak to the future of our combined companies, and then Daniel and I will address recent public comment. We'll open the line for questions here.
I know we've discussed this before and with voting about to begin, it's a good time to revisit where we started what we've accomplished and how we've positioned 180 degrees capital for growth as part of the Mount Logan capital.
Kevin Rendino: Ted will speak to the future of our combined companies and in Daniel and I will address recent public commentary.
Kevin Rendino: Apologies in advance for the length of our remarks. We haven't been with you in a while. And there's a lot to cover on the quarter, the year, the business combination. If you don't get to your question today, please reach out at any time. We're always happy to follow up. We've remained transparent and responsive since day one.
Speaker Change: We'll open the line for questions after.
Speaker Change: Apologies in advance for the length of our remarks. We haven't been with you with you in a while and there's a lot to cover on the quarter, the year, the business combination and more. If you don't get to your question today, please reach out anytime. We're always happy to follow up.
Kevin Rendino: And while we've held off on calls to respect the SEC process, now that our materials have been declared effective, we're glad to be back in touch with all of you. Our lines are always open.
Kevin Rendino: In 2016, Harrison Harris Group faced a critical turning point in a liquid venture portfolio with limited return visibility and over $6 million of annual expenses. After engaging with the board, I was invited to join as a director with Daniel, then in management, actively involved in the process. It quickly became clear that a strategic overhaul was essential.
Speaker Change: We've remained trans trans transparent and responses since day 1, and while we've held off on calls to respect the SEC process. Now that our materials have been declared effective, we're glad to be back in touch with all of you, our lines are always open.
Kevin Rendino: The board's decision to pivot the business was a strong example of sound government. Daniel and I proposed a plan to restructure the company through two key actions. One, reducing operating costs and two, implementing a strategy focused on controlling investment timing and Drawing on my 24 plus year experience managing value funds at Merrill Lynch and BlackRock, and then another five at Small Cap Act. We shifted to investing in small and micro-cap public companies using a constructive activist approach, bringing transparency and liquidity that the prior model lacked. We cut expenses by more than half overnight, exited our New York office, reduced headcount, and converted to a closed-end fund to lower regulatory costs.
In 2016 Harrison Harris group faced with a critical turning point in the liquid Venture portfolio with limited return visibility and over 6 million dollars of annual expenses. After engaging with the board, I was invited to join as a director with Daniel, then in management actively involved in the process. We quickly became clear that a strategic overhaul was essential, the board's decision to Pivot. The business was a strong example of sound sound governance, Daniel and I proposed a plan to restructure the company through 2 key actions 1 reducing operating cost.
Speaker Change: Plus and 2 implementing a strategy focused on controlling investment timing and exits.
Kevin Rendino: This change, while eliminating stock-based compensation, prioritized shareholder value and our investors over any management benefit. Our goal was to transform the balance sheet from 80% of liquid assets to fully liquid holdings, build a track record of performance, and establish a reputation for value creation. We succeeded both absolutely and relatively. While some may try to discredit the turnaround, we let it, 180 Degree Capital, the facts speak for themselves. Since taking over, we've achieved a meaningful turnaround at 180 Degree Capital, both in absolute terms and relative to where we started. While there have been differing opinions about our strategy and results, it's important to ground the conversation in facts.
Drawing on my 24 plus year experience managing value funds at Maryland and BlackRock and then another 5 of small cap activism. We shifted to investing in small and micro cap. Public companies using constructive activist approach bringing transparency and liquidity. That the prior model lacked, we cut expenses by more than half overnight. Exit is our New York office reduced headcount and converted to a closed end fund to lower regulatory costs. This change while eliminating stock-based compensation prioritize, shareholder value and our investors over any management benefit.
Our goal was to transform the balance sheet from 80% of the liquid assets to fully liquid Holdings, build a track record of performance and Staffing, and establish a reputation for Value creation.
Kevin Rendino: We'll address some of the recent commentary later in the call, but for now, let's focus on the progress we've made and the value we've created for Sheryl. Since assuming leadership in 2017 through June 30, 2025, our investment strategy has generated approximately $38.7 million of gains or $3.87 per return shareholder, representing a gross total return of 253% and an IRR of 16%. This compares favorably to the Russell Micro Cap Index's 66.6% return and a 6% IRR over the same period. At the outset, we inherited a legacy portfolio of illiquid venture investments comprising 80% of the balance sheet, which reduced NAV by $24.1 million, or $2.41 per share.
Speaker Change: We succeeded both. Absolutely and relatively, while some may try to discredit the turnaround, we let it 180 degree Capital. The facts speak for themselves. Since taking over, we've achieved a meaningful turnaround at 180 degree Capital, both in absolute terms and relative to where we started. While there have been differing opinions about our strategy and results. It's important to ground the conversation in facts. We'll just we'll address some of the recent commentary later in the call. But for now, let's focus on the progress we've made and the value we've created for shareholders.
Speaker Change: since assuming the leadership in 2017, through June 3rd of June 30th of 2025, our investment strategy has generated approximately 38.7 million of gains or 3.87 per turn shareholder,
Representing a gross total return of 253% and an irr of 16% this compares favorably, to the Russell microcap index of 66.6%, return, and a 6%. Irr over the same period.
Kevin Rendino: Had the prior board not shifted the company's strategic direction, this decline, combined with over $600 million in legacy expenses, the outcome for shareholders could have been far worse. It's important to recognize that this loss of the private portfolio stemmed from legacy assets and not from 180 Degree Capital's current investment strategy. Since then, I've personally invested in over 800,000 shares, primarily with after-tax dollars, demonstrating our alignment with shareholders. In Q4 of 2023, we successfully completed the transformation of our balance sheet from 80% of liquid venture investments to 99% of liquid assets in cash. With this transition behind us, two key developments followed.
At the outset, We inherited a legacy portfolio of a liquid Venture Investments comprising, 80% of the balance sheet, which reduced nav by 24.1 million or $2.41 cents per share.
Speaker Change: At the prior board, not shifted, the company's strategic Direction, This decline combined with over 600 million dollars in Legacy expenses. The outcome for shareholders could have been far worse
It's important to recognize that this loss of the private portfolio stem from Legacy assets. And not from 180 degree capitals current investment strategy. Since then I personally invested in over 800,000 shares primarily with after tax dollars demonstrating our alignment with shareholders.
In Q4 2023, we successfully completed the transformation of our balance sheet, from 80%, a liquid Venture Investments to 99% of liquid assets and cash.
Kevin Rendino: First, certain investors focused on short-term gains through liquidation or tender offers began to take interest in 180 Degree Capital. These strategies, often aimed at collapsing discounts and closed-end funds, contrast with our long-term approach.
Kevin Rendino: We believe our shareholders share our vision for value creation through the proposed business combination with Mount Logan, rather than pursuing short-term spreads at the expense of NAV and shareholder capital.
Speaker Change: With this transition behind us 2 key developments followed first. Certain investors focused on short-term gains through liquidation or Tender offers began to take interest in 180 degree Capital these strategies often aimed at collapsing discounts and closed end funds contrast with our long-term approach.
Kevin Rendino: Daniel will speak more to this later. Secondly, and more importantly, the completion of our transformation positioned us to scale. With a proven strategy, a viable business model, we recognized the need for greater scale to enhance our ability to serve portfolio companies and absorb public company costs.
Daniel will speak more to this later.
Kevin Rendino: That's where BC Partners and Mount Logan came in.
Kevin Rendino: We began interacting with BC Partners and Mount Logan teams in July of 2024. And today, for reasons we'll discuss, we feel even better about and more excited for the combination than we did when we first announced it.
Speaker Change: Secondly and more importantly the completion of our transformation positioned us to scale with a proven strategy, a viable business model we recognize the need for greater scale to enhance. Our ability to serve portfolio companies and absorb public company costs. That's where BC Partners in Mount. Logan came in.
Kevin Rendino: For 35 years, I've been a value investor attempting to uncover great companies that I believe are trading below their intrinsic value. As we spent more time with Ted and his world-class team over the past six months, it became abundantly clear to us that we believe Mount Logan is one of those great undiscovered, undervalued companies, and two, the combination of our two companies has the potential to unlock substantial value for 180 Degree shareholders by doing the following. One, shifting the valuation of our business from one based on net asset value to a valuation based on operating metrics, with a foundation of what we believe will be more predictable fee-related revenues attributable to earnings from the management of permanent and semi-permanent capital VMs. Other similar businesses currently trade on multiples of operating metrics, like fee-related earnings and spread-related earnings, and or multiples of book value rather than discounts to net asset value.
We began interacting with BC Partners in Mount Logan teams in July of 20 2024, and today for reasons, we'll discuss. We feel even better about and more excited for the combination than we did. When we first announced it,
Speaker Change: For 35 years, I've been a value investor, attempting to uncover, great companies that I believe are trading below their intrinsic value as we spent more time with Ted, and His World Class team. Over the past 6 months, it became abundantly clear to us that we believe Mount. Logan is 1 of those great undiscovered. Undervalued companies and 2. The combination of our 2 companies has the potential to unlock substantial value for 180 degree shareholders by doing the following 1 Shifting, the valuation of our business, from 1 based on net, asset value to evaluation based on operating metrics for the foundation of what we believe will be more predictable fee, related revenues attributable to earnings from the management, a permanent and semi-permanent, Capital Vehicles, other similar businesses currently trade on multiple of operating metrics like fee related, earnings and spread related earnings and or multiples of Book value.
Kevin Rendino: Two, changing to an asset-light operating company that leverages an association with BC partners enables economies of scale that are not possible at 180 degrees current size. And three, substantially increasing the available capital to us to be able to leverage our relationships with smaller microcapitalization public companies to develop capital structure solutions that seem to unlock as a diversified credit.
Speaker Change: Rather than discounts to net asset value.
Kevin Rendino: Here are the reasons for doing the deal. Unfortunately, we've gotten considerable support from the shareholders that examined.
2 changing to an asset Light operating company that leverages an association with BC Partners, enables economies of scale that are not possible at 180 degrees, current size and 3 substantially. Increasing the available Capital to us, to be able to leverage our relationships with small and micro capitalization public companies to develop capital structure solutions that seem to unlock value and generate favorable risk, adjusted returns and further differentiate the platform as a diversified credit manager.
Kevin Rendino: Now Logan has what we believe to be an outstanding management team comprised of its CEO, Ted Goldthorpe. Ted came from Apollo in 2017, and has built several large scale private credit businesses from zero. He's one of the most impressive business leaders I've ever come across.
Speaker Change: Here are the reasons for doing the deal and fortunately, we've gotten considerable support from the shareholders that examined the deal.
Kevin Rendino: And the team he has assembled is talented and shareholder value oriented. The combined company will operate as Mt. Logan Capital, Inc., with $2.4 billion of assets under management, focused on the high-growth private credit market, with the benefit of a wholly-owned regulated insurance solution business with $1.1 billion in total assets. These assets under management generally generate predictable fee revenue that can be used to benefit the growth of the combined company and its shareholders. Strong pro forma balance sheet post-transaction that will support investment in what the parties believe is highly actionable pipeline of organic and inorganic growth opportunities.
Speaker Change: Mount Logan has what we believe to be an outstanding management team comprised of its CEO. Ted Goldberg Ted came from Apollo in 2017 and has built several large-scale private credit businesses from zero. He's 1 of the most impressive Business Leaders I've ever come across and the team he has assembled is talented and shareholder value oriented
Speaker Change: The combined company will operate operate as Mount. Logan, Capital Inc, with 2.4 billion dollars of assets under management focused on the high growth private credit Market with a benefit of a wholly owned regulated Insurance solution, business, with 1.1 billion in total assets.
Speaker Change: These assets under management General generate predictable, fee Revenue that they can, that can be used to benefit the growth of the combined company and its shareholders.
Kevin Rendino: across both asset management and insurance solution business. The combined business is expected to pay quarterly dividends subject to board director's approval.
Strong performer balance sheet, post-transaction that will support investment in what the parties believe, is high, highly actionable pipeline of organic and inorganic growth opportunities across both asset management and insurance solution businesses.
Kevin Rendino: This is a major benefit to the shareholders of Tern, who have not received a cash dividend since 2001. So having the ability to access the return of capitals is also a benefit for this deal. Mount Logan has operational leverage and unique investment access through its association with BC Partners, a leading global private equity and credit firm. Mount Logan is focused on what we believe is the fastest growing market of private credit. We believe that Mount Logan remains undiscovered by the majority of investors due to its listing on the CBOE exchange rather than the U.S. National Exchange.
The combined business is expected to pay. Quarterly, dividends subject to board, directors approval. This is a major benefit to the shareholders of turn who have not received a cash dividend since 2001. So, having the ability to access and return of capitals is also a benefit for this deal.
Kevin Rendino: We believe Mount Logan is significantly undervalued by public market investors. And importantly, 180 Degree shareholders are receiving ownership of the combined company based on our full net asset value at our closing and Mount Logan being valued at $67.4 million, subject to certain adjustments as defined in the merger agreement. Let me repeat that. Our shareholders are getting full value in the combined company at net asset value, not a discount, full.
Mount Logan has operational leverage and unique investment access through its association with BC Partners. A leading Global private equity and credit. Firm Mount Logan is focused on what we believe is the fastest growing Market of private credit. We believe that Mount Logan remains undiscovered by the majority of investors due to its listing on the CBOE exchange. Rather than the US National Exchange, We Believe Mount Logan is significantly undervalued by public market investors. And importantly, 1 80° shareholders are receiving ownership with the combined company based on our full net asset value. At our closing and Mount Logan being valued at 67.4 million subject to certain adjustments as defined in the merger of green.
Kevin Rendino: And almost more importantly, it does not require monetization of investments in a forced manner that would likely result in a decrease of net asset value or not enable us to capture potential value creation between now and the close. Thus far in 2025, our public investment performance and NEV growth are significantly outperforming the Russell microcap index by over 1500 basis points and 450 basis points through June 30 of 2025. And that has been expanded even further as a date of this call. Additionally, 180 Degrees Stock, through the end of Q2 2025, has outperformed the Russell Micro Cap Index and our Lipper Peer Group by over 900 basis points and 1,100 basis points respectively.
Speaker Change: Well, let me repeat that our shareholders are getting full value in the combined company. At net asset value, not a discount full
And almost more importantly, it does not require monetization of investments in a force manner that would likely result in a decrease of net asset value, or not enable us to capture potential value creation between now, and the close.
Speaker Change: And that has been expanded even further as of the date of this call.
Speaker Change: Additionally 180 degrees.
Kevin Rendino: All of this will accrue to the benefit of 180 Degree shareholders because we're not forced to liquidate any position. We don't shy away from periods of underperformance, and we're equally proud of our recent outperformance. Given many of our investors think in terms of net asset book value, we have found it helpful to walk shareholders through what that means for them in these circumstances. If you use our net asset value as of June 30, 2025, of approximately $48 million, plus the equity value of Mount Logan on its most recently available U.S. GAAP financial statements of approximately $103 million as of March 31, 2025, then the combined book value of our companies would be about $150 million.
through the end of Q2 2025 is outperformed, the Russell microcap index and our liver peer Group by over 900 basis, points, and 1100, basis points respectively,
Speaker Change: all of this will accrue to the benefit of 180° shareholders, because we're not forced to liquidate any positions.
Kevin Rendino: If you just take 180 Degree Capital's shareholder portion of the combined book value, then our stake in the new company would be approximately $60 million, or 125% of our current NAV, or approximately $6 per share. In our supplemental slides posted on our website, we also run through calculations to show what 180 Degree Capital shareholder's portion of the combined company could be valued as compared to our current NAV and stock price based on various multiples of fee-related earnings and spread-related earnings that are similar to those of our publicly traded asset. The message is math is math.
We don't shy away from periods of underperformance and we're equally proud of our recent outperformance. Given many of our investors think in terms of net asset Book value, we found it helpful to walk shareholders through what we means what that means for them in these circumstances, if you use our net asset value, as of June 30th, 2025 of approximately 48 million, plus the equity value of Mount Logan on its most recently, available us gaap financial statements of approximately 103 million as of March, 31st, 2025, and the combined Book value of our companies would be about 150 million.
If you just take 180 degree, Capital shareholder portion of the combined Book value, then our stake in the new company would be approximately 60 million or 125% of our current nav or approximately $6 per share.
And our supplemental slides posted on our website. We also run through calculations to show what 180 degree, Capital shareholders, portion of the combined company could be valued as compared to our current nav and stock price based on various multiples, a fee related earnings and spread relating earnings that are similar to those of our publicly traded asset managers.
Kevin Rendino: This is one of the many reasons why I believe the Special Committee of our Board of Directors independently determined the very preliminary offer of one hundred and one percent of NAV in a company in vehicles trading at discounts already. We're not unlikely to meet the requirement of being a superior offer versus our proposed business combination with Mount Logan. In our opinion, it doesn't. I encourage you to view our slides as they show a clear picture of why we think this deal is accretive to our NAV and shareholders today, let alone the accretion leads a long way towards future shareholder value creation, giving our multiple trades a significant discount to the competition.
Kevin Rendino: With that, I am pleased to now turn the call over to Ted Goldberg, CEO of Mount Logan, and then I'll return with some closing remarks after Daniel's. Thank you, Kevin.
The message is math is math. This is 1 of the many reasons why I believe the special Committee of our board of directors independently, determines the very preliminary offer of 101% of nav in a company in vehicles trading. At discounts already, we're not unlikely to meet the requirement of being a superior, offer versus our proposed business combination with Mount Logan in our opinion, it doesn't. I incur, I encourage you to view our slides as they show. A clear picture of why we think this deal is a creative to our nav and shareholders. Today, let alone the accretion leaves a long way towards future shareholder value creation, giving our multiple trades, a significant discount to the competition with that. I am pleased to now turn the call over to Ted goldar CEO of Mount Logan and then I'll return with some closing remarks. After Daniel speaks,
Ted Goldthorpe: We could not be more excited about the future of our combined It's been a while since I had the opportunity to speak with you all, perhaps it makes sense for me to go through a quick refresher on Mount Logan, and then reinforce why we were so excited about this business combination, and what we think it means for value creation for all shareholders of the business. Matt Logan is an alternative asset management and insurance solutions platform, managing in excess of $2.4 billion of AUM in what we believe to be one of the most attractive alternative asset classes, private credit.
Thank you. Kevin.
Ted Goldar: We could not be more excited about the future of a combined companies. It has been a while since I had the opportunity to speak with you all, as perhaps it makes sense for me to go through a quick refresher on Mount Logan and then reinforce why we were so excited about this business combination and what we think it means for Value creation for all shareholders of the business.
Ted Goldthorpe: We formed Mt. Logan in 2018, and since then, we believe we've built a platform with diverse credit capabilities focused on providing partnership to middle market businesses across key segments of the market and a variety of products, including senior and unit tranche lending, opportunistic credit, specialty finance, and private and public investment grade, and through our runway minority stake acquisition that closed at the end of January 2025, venture lending. On the capital formation side, by organic growth M&A, Mount Logan has strategically positioned itself in the key areas of focus of asset management, insurance, permanent capital and retail.
Mount Logan is an alternative asset management and Insurance Solutions platform managing an excess of 2.4 billion dollars of AUM and what we believe to be 1 of the most attractive, alternative, asset classes, private credit,
Ted Goldar: Before Mount Logan in 2018 and since then, we believe we built a platform with diverse credit capabilities focused on providing partnership to Middle Market businesses across key segments of the market and a variety of products, including senior and unitron, lending, opportunistic, credit, especially finance and private and public investment grade. And through our Runway, minority stake acquisition that closed at the end of January 2025, Venture Lending.
Ted Goldthorpe: We believe our platform is different from many as we have built a strong franchise in the core middle market, an area that has been increasingly ignored by the large asset management firms in our space as they continue to scale and are unable or unwilling to invest in the smaller part of the market. We're also unique in that we have a presence across both sponsored and non sponsored deals, sponsored, referencing private equity ownership, which we believe enables us to generate alpha for both the return perspective, as we can allocate capital across a broader array.
Ted Goldar: On the capital formation Side by organic growth m&a. Mount Logan has strategically positioned itself in the key areas of focus of asset management Insurance permanent capital and Retail.
We believe our platform is different from many, as we've built a strong franchise in the karele market an area that has been increasingly ignored by the large Asset Management firms in our space. As I continue to scale and on will are unable or unwilling to invest in the smaller part of the market.
Ted Goldthorpe: We believe that the combination with 180 Degree Capital to allow us to build out our capabilities and offering private solutions to public companies, which is a large and overlooked space, particularly in areas where our respective management teams focus. Our ability to provide one-stop solutions to borrow and issuer clients across sponsor and non-sponsor public companies makes us a very attractive and key counterpart to many stakeholders in the credit For more information visit www.fema.gov Since we announced the combination with 180 Degree Capital in January, one major achievement for our team has been the 2025, June 2025 announcement that our two BDCs, Logan Ridge and Portman Ridge, received shareholder approval to complete a merger of the two companies into a single company that will be named BCE Investment Corporation and trade under the symbol BCIC and close this month.
We're also unique in that. We have a presence across both sponsored and non-sponsored. Deals sponsored referencing private Equity ownership, which we believe enables us to generate Alpha for both the return perspective. As we can allocate Capital across a broader array of deals,
Ted Goldar: We believe that the combination with 180 degree Capital to allow us to build out our capabilities and offering private solutions to public companies which is a large and overlooked space particularly in the areas for our respective management teams focused.
Ted Goldar: Our ability to provide 1-stop solutions to borrow and issue our clients across sponsor and non-sponsored and public companies makes us a very attractive and key counterpart to many stakeholders in the credit ecosystem.
Ted Goldar: Species. Logan Bridge Department Ridge where she sold her approval to complete. A merger of the 2 companies into a single company, that would be named at BC e Investment corporation, and trade under the under the symbol bcic enclosed this month.
Ted Goldthorpe: We believe that the merger of Logan Ridge and Portman Ridge are positive events for those shareholders, but also Mount Logan Capital and ultimately 180 Degree Capital shareholders as well. In particular, Mount Logan currently receives its proportionate share of the management and incentive fees generated on Portman based on its minority stake ownership in Portman's advisor, Sierra Crest, and 100% of the management fees and incentive fees to the extent it earns, generated on LRS. On an asset-based blended basis, the economics to Mt. Logan equates to approximately 25% of the management and incentive fees for the first quarter of 2025, and this percentage will be adjusted on a post-Portman-Logan basis to provide Mt.
Ted Goldar: We believe that the merger of Logan Ridge in Portland, Bridge are positive events for those shareholders but also Mount Logan capital and ultimately 180 degree, uh, Capital shareholders as well.
Ted Goldar: And particular Mount Logan currently received its proportionate share of the management and incentive fees generated on Portman based on its minority stake ownership in Portland's advisor Sierra Crest at 100% of the management fees and incentive fees to the extent earned generated on lrfc.
Ted Goldar: on an asset-based flooded basis, the economics, to Mount Logan equates to approximately 25% of the management and incentive fees for the first quarter of 2025,
Ted Goldthorpe: Logan with a greater share of the combined management and incentive fees. In addition, the combination of these two entities will enable economics of scale, savings of duplicative expenses, which will reduce the expense drag on the total assets of the merged entity versus separate entities from which the management fee is based. That savings accrues directly to the benefit of Mount Logan and its shareholders. Mount Logan is historically being very inquisitive in growing asset center management for its BDCs. We expect that trend will continue to occur post the closing of Mount Logan and 180 Degree Capital combination, particularly since new Mount Logan will have additional capital to invest in its asset management business through the acquisition of 180 Degree Capital.
Ted Goldar: And this 100 percentage will be adjusted on a post appointment, Logan basis to provide male Logan with a greater share of the combined management and incentives.
Ted Goldar: In addition, the combination of these 2 entities will enable economics of scale Savings of duplicative expenses, which will reduce the expense drag on the total assets of the merge entity versus separate entities from which the management fee is based.
that savings across directly to the benefit of Mount Logan and the shareholders
Ted Goldthorpe: Additionally, we believe the shareholder-friendly terms that were just announced to the BDC shareholders could provide additional credibility and support for other BDCs looking to grow and increase scale and that want to become part of the Mount Logan platform, which would lead to greater asset center management and fee income, and the benefits of synergies and scale will roll through the combined entity. Clearly, all those opportunities will accrue to the benefit of our combined company post-merger and positive portfolio performance and action expense savings should support improvement in the trading of the combined entity and potentially allow us to evaluate growing the equity base as the stock trades closer to net assets.
now Logan is historically being very inquisitive and growing assets under management for its bdcs. Expect that Trend will continue to occur close to closing Mount. Logan and 183, Capital combination, particularly since new Mount Logan will have additional Capital to invest in this Asset Management business through the acquisition of 180 degree capital.
Ted Goldar: Additionally, we believe the shareholder friendly terms that were just announced to the BDC shareholders, could provide additional credibility to support for other BC's, looking to grow and increase scale. And that want to become part of the Mount Logan platform which would lead to Greater assets under management and fee income. And the benefits of synergies will can scale roll through the combined entities,
Ted Goldthorpe: This continues our track record of creating value through organic and inorganic growth, while creating cost energies through scale, and demonstrating that we are very comfortable rolling up our sleeves to unlock value for sure.
Clearly all those opportunities will crew to the benefit of our combined company, post merger and positive, portfolio performance and action expenses. Savings should support Improvement in the trading of the combined entity. And potentially allow us to evaluate growing the equity based as a stock Trace closer to net asset value.
Ted Goldthorpe: Lastly, I wanted to close out why I believe on those. Why I believe our proposed business combination is a significant milestone for 180 Degree Capital Sherald. First, it marks the next step in the company's evolution, enabled by the tremendous turnaround executed by Kevin and Daniel. With the business transitioning into an asset light operating company structure, which are most frequently valued on a multiple of specified operating metrics, rather than discounts or premiums to net assets.
Ted Goldar: This continues our track record of creating value through organic and inorganic growth while trading cost energies through scale and demonstrating that, we are very comfortable rolling up our sleeves to unlock value for shareholders.
Speaker Change: Lastly, I wanted to close out why I believe on our proposed.
Why I believe our proposed combination our proposed business combination is a significant milestone for 180 degree Capital shareholders.
First, it marks the next step in the company's Evolution enabled by the tremendous turnaround executed by Kevin, and Danielle.
Ted Goldthorpe: The Transformation, Kevin, Daniel, and team started in 2017 and is seemingly complete. Secondly, 180 Degree Capital shareholders will be pleased to own a business that has maintained a quarterly dividend to its shareholders since 2019 and a business where we think we will continue to plan to do so subject to approval by our Board of Directors. And third, listing on the NASDAQ and gaining increased scale, we hope will enable the combined entities to trade closer to publicly traded peers, which will result in a valuation uplift.
Speaker Change: With the business transitioning into an asset Light operating company structure, which are most frequently valued on a multiple specified operating metrics rather than discounts or premiums in an asset value. It's the transformation Kevin. Daniel team started in 2017 and is seemingly complete.
Speaker Change: Secondly 1 is a great Capital shareholders. We'll close please to own a business that has been playing a quarterly dividend to its shareholders since 2019 and a business where we think we will continue to plan to do so subject to approval by our board of directors.
Ted Goldthorpe: Thank you to everyone. We're very excited to have the definitive proxy out there and take the next step in our proposed business combinations process.
And third listing on the NASDAQ and gaining increased scale. We hope will enable to combine entities to trade closer to publicly traded peers which will result in an evaluation uplift of our stock.
Daniel Wolfe: With that, I will now turn the call over to my partner, Daniel. Thanks, Ted. As you mentioned in our release announcement call, we've been waiting for the right time to address a number of inaccuracies and distortions included in press releases by an activist investor, starting prior to the announcement of our proposed business combination. We made a deliberate decision not to engage in a public back and forth with this investor while we were focused on completing the proxy and registration statement. Now that this process is behind us and the vote is underway, we believe it is important to be clear.
Thank you to everyone. We are very excited to have the definitive proxy out there and take the next step in our proposed business combinations progress.
Speaker Change: with that, I will now turn the call over to my partner, Daniel,
Thanks Ted. As you mentioned in our release, in our release announces call, we've been waiting for the right time to address a number of inaccuracies and distortions. Included in press releases by an activist investor starting prior to the announcement of our proposed business combination. We made a deliberate decision not to engage in a public back and forth with this investor while we were focused on completing the proxy and registration statement.
Daniel Wolfe: This is not a game to us. We take our fiduciary and corporate governance responsibilities seriously and remain focused on creating long term value for shareholders. You might ask, why are we even spending time on this topic? It is because while certain active investors coordinate and pursue short term tactics that divert resources. We believe such efforts are a distraction and a misuse of shareholder capital. Capital that should be directed towards sustaining the strong performance of our investment portfolio and maximizing the ownership of 180 Degree Capital shareholders in the merged entity. It is worth noting that NAV growth would have been even stronger without the added legal costs resulting from these activist actions.
Speaker Change: Now that this process is behind us and the vote is underway. We believe in is important to to be clear. This is not a game to us.
Speaker Change: We take our fiduciary and corporate governance responsibility, seriously and remain focused on creating long-term value for shareholders.
Speaker Change: You might ask. Why are we even spending time on this topic?
It is because while certain active investors coordinate and pursue short-term tactics that divert resources
We Believe such efforts are a distraction and a misuse of shareholder capital capital. They should be directed towards sustaining, the strong performance of our Investment, Portfolio and maximizing, the ownership of the pondering degree Capital shareholders in the merged entity.
Daniel Wolfe: We're doing everything we can to try to minimize the impact and have caused by these activist shareholders. For example, it took multiple requests to finally reach the point where we reached agreement to move the demand and director election meeting date without needing lawyers involved. And our reason for asking for it to be moved was to save shareholder expense of running a contested election. We also have one investor who was identified in our proxy as 180 Degree Shareholder A, proposing via email that this shareholder would tell us how to get the requisite vote with minimal solicitation expenses in exchange for compensation when the merger is approved by shareholders.
Speaker Change: Navy growth would have been even stronger without these added legal costs. Resulting from these activists actions,
We are doing everything we can to try to minimize the impact and nav caused by these access shareholders, for example.
I took multiple requests to finally resupply where we reached agreement to move the demand and director election meeting date without needing lawyers involved.
Speaker Change: At our reason for asking for it to be moved, was to Safe shareholder expense of running, a contested election. We also have 1 investor whose identified in our proxy.
Daniel Wolfe: As a matter of principle and as a matter of good corporate governance. Our special committee and our board declined to engage in this brazen attempt to vote lying by bribing the company. So in short, no side deals, no public deals, no non-public deals, nothing. We do not make monetary or other side deals for votes. The claims made by one activist investor is such non-public deals are not supported by facts. We've also been driving hard to reach this point where we could announce the meeting date and begin collecting votes. We're happy to dive into the SEC review steps and timeline in detail, if any shareholder would like us to do so at any time or as part of the Q&A.
Speaker Change: Is 180 degree shareholder a proposing via email that this shareholder would tell us how to get the requisite vote with minimal. Solicitation expenses and exchange for compensation, when the merger is approved by shareholders
Speaker Change: as a matter of principle and as a matter of good corporate governance,
Our special committee and our board declined to engage in this Brazen attempt to vote buying by Brian the C. Providing the company. So in short. No side deals, no public deals, no, no non-public deals. Nothing.
Speaker Change: We do not make monetary or other side deals for votes. The claims made by 1 act of this investor is, such non-public deals. Are not supported by facts.
Speaker Change: We also have been driving hard to reach this point where we can announce the meeting date and B began collecting votes.
Speaker Change: We're happy to dive into the SEC, review, steps and timeline in detail.
Daniel Wolfe: Contrary to accusations made publicly by one investor and privately by another, we respect the SEC review process and are not willing to take actions that are not permitted under law or regulation. Kevin and I wanted the vote to occur faster than anyone. We have spent the past year engaged with the Mt. Logan team and see the opportunities for substantial value creation for our collective ownership of 180 Degree Cap. We cannot wait for this merger to close and for the value creation of a combined entity to start. We are hopeful that these unnecessary expenses can end their occurrence and negative impact on NAVS.
Speaker Change: If any shareholder would like us to do. So at any time or as part of Q&A, contrary to accusations, made publicly by 1, investor in a privately. By another, we respect the SEC view review process and are not willing to take actions that are not permitted under law regulation.
Speaker Change: Kevin and I wanted the vote to occur.
faster than anyone we have spent the past year engaged with M, Logan team and see the opportunities for substantial value creation for our Collective ownership of 1803 capital
Speaker Change: we cannot wait for this merger to close and for the value creation of the combined entity to start
Daniel Wolfe: If you happen to speak with these active investors, we would appreciate if you deliver the same message. We're also hopeful that we can engage a constructive dialogue with any and all shareholders, even those who continue to defame us in press releases, after what we believed were constructive conversations. We're here and available anytime to speak and look forward to doing so. In the interim, please let us know if you receive calls from any activists soliciting you to vote no on the proposed business combination. This type of solicitation is not permitted under securities laws. We want to make sure that our shareholders are not being disadvantaged by entities that may have a different set of ethics in respect to the law and regulation.
Speaker Change: We are hopeful that these unnecessary expenses can end their occurrence and negative impact on nav. If you happen to speak with these active investors, we would appreciate if you deliver the same message. We're ALS hopeful that we can engage a constructive dialogue with any and all shareholders. Even those who continue to defame us and press releases after what we believed were constructive conversations.
We're here and available anytime to speak and look forward to doing so.
Daniel Wolfe: Our proxy solicitor is EQ Fund Solutions, and you may be receiving a call for them, which is permitted under law and regulation. You can also reach out to them if you have any questions or need help voting as they can be reached at toll free at 800-967-5051. We stand by our results and our strategy and our steadfast beliefs that our proposed business combination with Mount Logan is the best future path for 180 Degree Capital and its shareholders. to build substantial value. We believe the more time you spend with Ted and his team, the more you will share our excitement for this proposed business combination.
In the interim please let us know if you received calls from any activist soliciting you to vote. No on the proposed business combination. This type of solicitation is not permitted under Securities laws and we want to make sure that our shareholders are not being disadvantaged by entities that may have a different set of ethics and respect to the law and regulation our proxy solicitor is EQ Fund Solutions and you may be receiving a call for them.
Speaker Change: Which is permitted under law and regulation.
You can also reach out to them. If you have any questions or need help voting, as they can be reached at toll-free at 800-967-5051.
Speaker Change: We Stand by our results, our strategy, and our steadfast beliefs that are proposed business combination without Logan is the best future path for 180, degree capital and its shareholders.
Daniel Wolfe: We remain committed to engaging constructively with shareholders who share our long-term vision. We also look forward to the opportunity to continue to grow NAV heading into the close, hopefully without negative impacts from the actions of activist investors.
Kevin Rendino: I now turn the call back to Kevin for some closing remarks. Thanks, Daniel. And that brings us back to the most important part of why we're here speaking with you today. That is our recommendation that you support and vote for the proposed business combination. I encourage all of 180 Degree Capital shareholders, as Daniel said, to spend time with Ted and his team. Daniel and I have had the pleasure of doing so for the past year, and they are an incredible group of people. Literally each time we have a meeting, we come out more eager for the next one.
Speaker Change: To build substantial value. We believe the more time you spend with Ted and his team, the more you will share our excitement for this proposed business combination. We remain committed to at can at engaging constructively with shareholders, who share our long-term Vision. We also look forward to the opportunity to continue to grow nav. Heading into the close hopefully without negative impacts from the actions of activist investors and I'll turn the call back to Kevin first, some closing remarks, thanks, Danielle. And that brings us back to the most important part of why we're here speaking with you today. That is our recommendation that you support and vote for the proposed business combination. Our encourage all of 180 degree Capital shareholders is Daniel said to spend time with Ted and his team Daniel and I have had the pleasure of doing so for the past year, and they are an incredible.
Group of people.
Kevin Rendino: My 35 plus years of experience and Daniel's 20 plus years of experience working in finance, we have not met a more capable value creating team and we're truly good people. As significant 180 Degree Capital shareholders, Daniel and I feel honored to have the opportunity to own a material portion of our combined business from which I believe the future is bright for the creation of material value and wealth for our combined shareholders. If we just trade at one times of our combined book value, that is approximately 126% of our NAV as of 6-30-25. If we trade anywhere near our multiples on a, peers on a multiple of FRE and SRE, the value of 180 Degree Capital's ownership of the merged company is much greater.
Kevin Rendino: I believe this value is just a floor in terms of our NAV rather than a ceiling. There's one thing you can take from these comments. I hope it is that there isn't one way to create value or build wealth. And we strongly believe that the proposed business combination is the best way forward to create significant value for all of our shareholders.
Literally each time we have a meeting we come out more eager for the next 1, my 35 plus years of experience in Daniel's 20 plus years of experience. Working in finance, we have not met a more capable value creating team. We were a truly good people. A significant 180 degree Capital shareholders Daniel and I feel honored to have the opportunity to own a material portion of our combined business from which I believe the future is bright for the creation of material value and wealth for our combined shareholders. If we just trade it, 1 time of our combined Book value, that is approximately 126% of our nav, as of 630.25. If we trade anywhere near our multiples, on a multi peers on a multiple of F and SRE, the value of 180 degree capital is ownership of the merge company is much greater. I believe this value is just a floor in terms of our NAD, rather than a ceiling.
Operator: With that, we'll open the call for questions. Thank you. If you wish to ask a question please press star followed by one on your telephone keypad now or click on the ask a question icon if you're participating via your computer. You will be advised when to ask your question. If for any reason you want to remove your question from the key please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally.
Create significant value for all of our shareholders with that. We'll open the call for questions.
Thank you. If you wish to ask a question, please press star. Followed by 1 on your telephone keypad now or click on the ask a question icon, if you're participating via your computer.
Speaker Change: You will be advised when to ask your question.
Speaker Change: If for any reason you want to remove your question from the queue, please press star. Followed by 2.
Speaker Change: When preparing to ask your question, please, ensure your device is unmuted locally.
Pratik Agarwal: Our first question comes from Pratik Agarwal from CIF Financial. The line is now open, please go ahead. Thank you so much for taking my questions. I have two questions.
Speaker Change: Our first question comes from practic agricult from CIF Financial.
Speaker Change: The Line is now open. Please go ahead.
Kevin Rendino: Firstly, congratulations on the on the transaction. Now that SEC has approved the business combination, just wanted to understand sort of the updated timeline and the next steps to complete the merger. And then I have a follow up question as well. Absolutely. Thank you very much for that question. So the now that we are effective, we're able to start collecting votes, that process will begin has begun, the materials will be received by our shareholders, by shareholders, both companies with in the coming weeks, we would encourage all of our shareholders to pay attention to materials. And if you have any questions on them, reach out, you can file the votes through the through the links or phone numbers that are on the car proxy cards that will be there.
Speaker Change: Thank you so much for taking my questions. I have 2 questions. Um,
Speaker Change: uh, firstly, congratulations on the, on the transaction. Now that SEC has approved the business combination, just wanted to understand sort of the updated timeline and the next steps to complete the merger. Uh, and then I have a follow-up question as well.
Speaker Change: Absolutely, thank you very much for, for that question. So, uh, the now that we are effective, we are able to start collecting votes, uh, that process, um, will begin has begun. The materials will be received by our shareholders by Cheryl's book companies with the, in the coming weeks. Um, we would encourage all of our shareholders to, um, pay
Attention to the materials. And if you have any questions on them Reach Out, you can file the votes through the um,
Kevin Rendino: Our goal is to collect all those votes and be in a position to have the mergers approved at our meetings that are scheduled on August 22. And then the goal would be to close the transaction shortly thereafter, pending a few steps in the closing process. So we're probably looking at some time in very early September. There is the possibility that we extend the meeting date to collect more votes if we need to. But that is the timeline we're operating on currently. Awesome.
Speaker Change: Through the links or phone numbers that are on the car proxy cards that will be there. Our goal is to collect all of those votes, um, and be in a position to, uh, have the emergence approved at our meetings that are scheduled on August 22nd. And then the goal would be to close the transaction shortly thereafter. Pending a few steps in the closing process. So we're probably looking at some time and, uh, very early September, uh, there is the possibility that we, uh, extend the meeting date to collect more boats, if we need to. Uh, but that is the timeline we're operating on currently.
Kevin Rendino: Thank you so much for Yeah, second question is what are the benefits of this strategic combinations for the MLC Mount Logan shareholders? Yeah, it's a good question. I mean, from our perspective, we're incredibly excited about You know, I think it does a bunch of different things. Number one is, you know, moving to a U.S. exchange, I think it's going to really greatly help us from any perspective, and also, we'll have improved stock liquidity, both because we're NASDAQ listed and just because... Number two is, you know, obviously we've got a pretty decent pipeline of M&A opportunities, plus, you know, opportunities to organically grow.
Speaker Change: Awesome. Awesome. Thank you so much for
Speaker Change: Yeah. Uh second question is, what are the benefits of um this this strategic combinations for uh, the mlc Mount Logan shareholders.
Speaker Change: Yeah, it does. It's a good question. I mean, from our perspective, we're incredibly excited about this.
Speaker Change: I think it does a bunch of different things. Number 1 is, you know, moving to a US exchange I think it's going to really greatly help us uh through many uh perspective and also well have improved uh stock liquidity both because we're NASDAQ listed, just because of scale.
Kevin Rendino: So we think this gives us capital to do that and strengthens our balance sheet. It should expand our research coverage. Again, we get a best in class management team that can open up a brand new source of sourcing for us. So we've made a lot of money in our past of providing private solutions to public companies. And Kevin and Daniel obviously give us a segue into that market. And so from our perspective, this is a real, real big win for Gotcha. Thank you so much.
um number 2 is, you know, obviously we've got a pretty decent pipeline of m&a opportunities plus you know opportunities to organically grow
Speaker Change: So we think this gives us Capital to do that and strengthens our balance sheet. If this should expand our research coverage, um, you know, again like we get a basting class management team that can open up a brand new source of sourcing for us. So, you know, we've made a lot of money in our past um of uh providing private solutions to public companies and Kevin. And Danielle obviously give us a segue into that market.
Um and so from our perspective, you know, this is a a real real uh big win for Developers.
Operator: I'll pass the line. Thank you.
Gotcha, thank you so much. I'll pass the line.
Martha Song: Our next question comes from Martha Song from TD Cowan.
Speaker Change: Thank you.
Martha Song: Your line is now open, please go ahead. Thank you for taking my question. I also congrats again on the on the deal.
Our next question that comes from Martha song from TD Cowen, the Line is now open. Please go ahead.
Martha Song: I also have two questions. First one is, I'm just trying to understand what are some of the factors driving Mung Logan's Q25 book value, the sharp increase to $103 million.
Martha Song: And then I have another follow up.
Martha Song: I thank you for taking my question. I also congrats again on the on the deal. Uh I also have 2 questions. First 1 is I'm just trying to understand what were some of the factors driving em. Logan's q25, Book, value that the sharp increase to 103 million. Um,
Speaker Change: And then I have another follow-up.
Nikita Bosman: Hi, Martha. Thanks for your question. I can take that one. My name is Nikita Bosman.
Martha Song: Hi Martha. Thanks for your question. I can take that.
Nikita Bosman: I'm the CFO of. If we take a step back, thinking about our book value, in January of 2022, we had to adopt I4S17, which was a new insurance contract standard that came into effect, and in doing so, it caused us to take about a $70 million hit to our net reserve, which directly lowered our equity by that amount. And the main reason being IFRS 17 insurance contract liabilities and reinsurance contract assets are comprised of three main components, best estimate cash flows, explicit risk adjustments for non-financial risk, and contractual service margins.
Nikita Fox: My name is Nikita, Fox.
so if we take a step back thinking about our book value and in January of 2022, uh, we had to adopt if for a 17, which was a new insurance contract standard that came into effect and then doing so it
Nikita Fox: Helped us to take about a 70 million hit to our net reserves which directly lowered our Equity by that amount.
and the main reason being, I press 17, insurance contract liabilities, and reinsurance contract assets, uh, are comprised of 3, main components, uh, best estimate, cash flows,
Nikita Bosman: And we can go for a drink to discuss those and how they're determined in detail. However, under US GAAP, the main thing to take away is that the reserve ultimately ends up in a lower net position, because we just look at our estimated future obligations and policy holders, which is offset by the present value of future net premium. So, because there's no risk adjustment or CSM, we have a lower net reserve. So, as a result, then when we went to adopt US GAAP, what happened is that we were able to reverse that day one adoption loss.
Nikita Bosman: And so, essentially, our shareholder equity has gone back to its starting point pre-adoption. We're also pleased that the way our U.S. GAAP reporting up positions Mount Logan, it really puts us in line with other U.S. Alternative Asset Managers and Life Reinsurers for comparability and benchmarking.
Nikita Fox: And contractual service margin and we can go for a drink to discuss those and how they're determined, uh, in detail. Uh, however, under us gaap, uh, the main thing to take take away is that the reserve ultimately ends up in a lower net position? Uh, because we just look at our estimated future obligations of policy holders, which is offset by the present value of future, net premiums, so, because there's no risk adjustment or CSM, uh, we have a lower net Reserve. So, as a result, then when we went to adopt us gaap, uh, what happened is that we were able to reverse that day. 1 adoption loss. And so essentially, our shareholder Equity has gone back to its starting point pre-adoption.
Nikita Fox: Uh we're also pleased that the way our us gaap reporting of positions Mount Logan it it really puts us in line with other us alternative asset managers and life reinsurers uh for comparability and benchmarking.
Nikita Bosman: mentioned another question. Awesome. Yeah, no, no, that's super comprehensive and very helpful. Yeah, my second question, just from your supplemental deck, which of, or can you give me one of the US alternative asset managers that provide the best peer comparison for Mount Logan, if I'm trying to look at it from a price to book perspective? Yeah, so referencing side 11, which is in the supplemental deck, this shows the value creation if we trade a one times book. And again, most of our large scale asset managers, you know, Apollo, KKR being the most obvious ones, trade around five times.
Nikita Fox: You mentioned in another question.
Speaker Change: Awesome. Yeah. No, no that's uh super comprehensive and very helpful. Um, yeah my second question is just from your supplemental deck, which of or can you give me um 1 of the US alternative asset managers that provide the best pure comparison for my Logan? If I'm trying to look at it from a price to book um
Nikita Fox: Perspective.
Nikita Bosman: So I think what that shows.
Nikita Fox: Yeah. So um referencing site 11 which is in the supplemental deck. Um this shows that but the value creation. Um if we trade a 1 time spoke and again most of our uh the large scale uh asset managers, you know, Apollo KKR be the most obvious ones trade around 5 timeslot.
Nikita Bosman: and continue to invest in my business. So, we would say, like, the most relevant comps are probably the scale asset managers that also own insurance companies. Again, we're not saying that we are in the same league as some of these companies, but again, from a trading perspective, things like Apollo, which owns Athene, and KKR, which owns Global Linux, would be good things to point out. That's very helpful. Thanks again.
And continue invest in that business.
Um so we would say like the the most relevant cops are probably to scale that to managers that also own insurance companies. And again we're not saying that we are in the same league as some of these companies. But again, from a trading perspective, things like Apollo, which owns a theme and KKR which owns Global Atlantic would be good things to to point to
Martha Song: I'll pass it along.
Nikita Fox: That's very helpful. Thanks again. Um I'll pass them on.
Operator: As a reminder, to ask a question, please press star followed by 1 on your telephone keypad.
Ben Rubenstein: Our next question comes from Ben Rubenstein from Roboti. The line is now open, please go ahead. Hey guys, great presentation.
As a reminder to ask a question. Please press star. Followed by 1 on your telephone keypad.
Speaker Change: Our next question comes from Ben Rubenstein from roboti. Your line is now open. Please go ahead.
Daniel Wolfe: I just want to clarify so so has has one of these has one of these degree capital solicited voting agreements from shareholders since the deal with not Logan was announced? Thanks.
Speaker Change: Hey guys. Great presentation. I just want to clarify. So so has has 1 has 1 of the degree Capital solicited building agreements from shareholders since the deal with not Logan was announced
Daniel Wolfe: Hey, Ben. This is Daniel. The answer is a resounding no. We're not permitted to. The rule basically is that until you start a solicitation, you can't, the SEC is basically determining, giving guidance that you can't take voting agreements, enter into voting agreements with shareholders that own less than 5% of the outstanding stock. And so the no. And all of the indication support that we also had before were non-binding. Those were shareholders who believe in the opportunity, believe in the deal, and wanted to express their support in some way, but they weren't able to enter into a voting agreement because of SEC regulation.
Speaker Change: Thanks. Hey Ben. This is Daniel. Uh the answer is a resounding. No. Uh we're not permitted to uh the
Daniel Wolfe: I think as you hear on our call and on our we follow these the rules and regulations and laws very carefully and closely. So I hope that's helpful.
Ben: The the rule basically is, is that until you start a solicitation uh, you can't slow. The SEC is basically determining giving guidance so that you can't take voting agreements, enter into voting agreements with shareholders, that own less than 5% of, uh, the outstanding stock. And so, the know, and all of the indications support that we also have the 40 non-binding. Those were shareholders who, uh, believe in the opportunity to believe in the deal and wanted to express their support in 1 some way. But they weren't able to enter into a voting agreement because of SEC regulations.
Ben: I think as you hear on our call and on our our we we follow these uh the rules and regulations and laws very carefully and closely. Um so I hope that's helpful.
Ben Rubenstein: No, I appreciate that.
Ted Goldthorpe: And then and then for Ted, can you talk about the benefits of owning an insurance business and, and how you intend to use the insurance business over the next few years or in the medium term? Yeah, I think I think insurance, you know, again, I think some of the big alternative asset managers kind of realized this a couple years ago, whereby it offers us, you know, basically some semblance of permanent capital. Obviously, we think we can earn very strong ROEs at the insurance level, and then you get the double benefit of being able to get the asset management fees.
No, I I appreciate that. And then and then for Ted. Ted. Can you can you talk about the benefits of owning an insurance business and, and how you intend to use the insurance business over the next few years or in the medium term?
Yeah, I think I think Insurance you know, like and I think some of the big alternative asset managers kind of realize this a couple years ago whereby you know offers us you know basically some semblance of permanent capital.
Ted Goldthorpe: So you get economics on both different levels and, you know, going back to our comments around organic and inorganic growth, we do think there's a lot of inorganic growth opportunities, but we lay out in a lot of our public filings, you know, how we think about, you know, return on capital, and we think we could generate, you know, mid twenties returns for every dollar invested. So having that, having that, um, Organic Growth Engine as part of our platform is pretty and I'm very, very proud.
To generate, you know, mid-20s returns for every dollar invested. So having that having that um,
Organic growth engine, as part of our platform is pretty strategic and um, and very, very powerful.
Ted Goldthorpe: It's exciting.
Ben Rubenstein: Thanks for the time.
It's, it's exciting. Thanks for the time.
Ben Rubenstein: Thanks, Ben.
Speaker Change: Thanks Ben. Thanks Ben.
Operator: Thank you.
Bob Hoffman: We have a question come in from Bob Hoffman from VH Standard Asset Management.
Bob Hoffman: Mary, please go ahead. So the question that came in was, can we address what took so long with FCC approval to be able to start solicitation? And thanks, Bob, for asking that question. I think as we put out in a release previously, there's a whole process that you have to go through when you're doing a merger where with other meetings, you can actually just start holding it. You can put out the definitive here. You have to wait until the FCC determines you're effective. And when we first filed our proxy in March, it was because we didn't have the gap financials ready yet for Mount Logan.
Thank you. We have a question come in from Bob Hoffman from VH standard Asset Management.
May I, please go ahead.
Speaker Change: Uh yeah so the question um that came in was uh can we address what took you know so long with FCC approval, um, to be able to start solicitation and they thanks Bob for asking that question. I think, as, as we put out in a release previously, um, there's a whole process that you have to go through when you're doing a merger.
Kevin Rendino: We want to do that because we want to get information out to the shareholder base. The FCC told us two days later, they're not going to review it until those gap financials are in there. And for anyone who's ever gone through the conversion of IFRS to US GAAP or anything, it is an extraordinarily difficult process. And later in, when you have an insurance company, it's that these things take a while and really kudos to Nikita and her team, which did an incredible job on that effort. We were finally got the because and then once they're done, they have to be audited.
Speaker Change: Um, where you with other meetings you can actually just start calling. You can put out the definitive here. You have to wait until the FCC, determines your effective and when we first filed our proxy in March, it was because we we didn't have the Gap financials ready. Yet for Mount Logan, we want to do that because we want to get information out to the shareholder base. Um, the SEC told us 2 Days Later, they're not going to review it until those Gap financials are in there. And for anyone who's ever gone through the conversion of you. Uh, IFRS us gaap or anything. It is an extraordinarily difficult process.
Kevin Rendino: And so they can't do the audit until the financials are done and audits take time, too. So on May 5th, we finally got the audit. The auditor issued the unqualified opinion that we filed the next day with those financials in the proxy. It takes about 30 days for the FCC to get back to the first time we got 41 questions and comments from the FCC. We responded to those about a week later, including all of the updated financials for March 31st. And then they take another 14 to 20 days to get comments back. We got comments back.
Speaker Change: Um, and it layer in when you have an insurance company. It it's that's these things take a while. And, um, really kudos to Nikita and her team, which did an incredible job on that effort. We were finally got the because, and then once they're done, they have to be audited and so, and they can't do the audit until the financials are done and audits take time too. So on May 5th. We finally got the, uh, audit, uh, the auditor if issue, the unqualified opinion that we filed the next day, with those financials in the uh proxy, it takes about 30 days.
Kevin Rendino: Another nine on July 1st. We turned those around in 48 hours. We then started to get a sign off and verbal confirmations that there were no further comments from the FCC, which then allowed us to move forward with getting the point of discussing a timeline for being effective, which came on July 11th. So as you see, there's this is there's an intense process that goes on and at no point in time was there delays from our side. This was responding to the SEC very timely manner. And, you know, we're really happy now to be on file be definitive and moving Thank you.
Speaker Change: For the FTC to get back to the first time. We got 41 questions and comments from the FCC. We responded to those about a week later including, uh, all of the updated financials for March 31st. And then they takes another 14, uh, to 20 days to get comments back. We got comments back, uh, another 9 on July 1st, we turned those around in 48 hours. We then started to get confirm, uh, sign off from and verbal confirmations that there were no further comments from the FC, which then allowed us to move forward with getting the point of, uh, discussing a timeline for being effective, which came on July 11th,
Speaker Change: So as you see there's this is there, there's an intense process that goes on and at no point in time was there delays from our side. This was responding to the SEC very timely manner and um you know we're we're really happy now to be on file. Be definitive and moving forward.
David Maley: We have a question from David Maley from 1102 Partners. Your line is now open, please go ahead. Hi, Kevin, Daniel, Ted. Thanks for taking my question. And thank you for a really informative and straightforward presentation. That was that was terrific. You know, Kevin, Daniel, I've known you guys for at least 10 years, probably a bit more, a lot of respect for how you invest and run the business. So I think Mount Logan is making a great decision to bring you guys on.
Speaker Change: Thank you. We have a question from David mey from 1102 Partners. Your line is now open. Please go ahead.
Speaker Change: Uh, hi. Uh Kevin. Daniel, Ted, thanks for taking my question. Um and thanks for a really informative and straightforward presentation. That was that was terrific. Um, you know, Kevin and Danielle have known you guys for
David Maley: So congratulations to everyone.
Ted Goldthorpe: Ted, my question is for you. You talked about how with with the 180 team in place, you could offer private solutions to public companies. Can you give an example or two about how that would work? and how that would, you know, accrue benefit to the shareholders of the new company. That would be helpful to understand. Thanks. Yeah, great question. So on the first on the first point, you know, there's lots and lots of companies out there that trade, you know, pretty far below fair market value as possible. And those companies need access to capital to do various things, including buy their own stock and other financial engineering, but as well as also just investing on a couple.
At least 10 years, probably a bit more, a lot of respect for how you invest and run the business. So I think Mount Logan is making a great decision to bring you guys on. Um, so congratulations to everyone um Ted my questions for you. Uh you you talked about how with with the 180 team in place. Uh you could offer private solutions to public companies, um, can you give an example or 2 about how that would work?
Speaker Change: And how that would, you know, a benefit to the shareholders of of the new company. Um that would be helpful to understand. Thanks.
Ted Goldthorpe: So, yeah, we have a long track record of doing anywhere from debt to structured equity solutions within a public company context, and, you know, trying to create or unlock more value for public shareholders. So, today, our team is relatively focused on private solutions. And so Kevin and Daniel offer us not only sourcing opportunities, but also, you know, like, deep seated relationships with a number of managers. So from that perspective, you know, opens up a whole new source of origin. The way we benefit as a, as a shareholder, or, you know, as Bell Logan, is obviously those investments go into our various vehicles.
Yeah, great question. So on the first on the first point, you know, there's lots and lots of companies out there that trade, you know, pretty far below. Far market value is, is most people know, and those companies need access to Capital, um, to do various things, including buying their own stock, and other Financial engineering, but as well as also just investing in our own companies.
Speaker Change: So, yeah, we have a long track record of of doing anywhere from debt to structured Equity Solutions, within a public company context.
Speaker Change: from that perspective, you know opens up a whole new source of origination for us the way we benefit as a
Ted Goldthorpe: And, you know, like our LPs are looking for more and more differentiation amongst their GP relationships. And this is an area that we feel is relatively, you know, differentiated. So we think it might help us raise more money and definitively, you know, achieve better risk reward opportunities, just given the funnel be larger.
Speaker Change: as a shareholder um or you know or as Mount Logan it's obviously those investments will go into our various vehicles and you know like rlps are looking for more and more differentiation uh amongst their GP relationships and this is an area that we feel is relatively you know um differentiated
Ted Goldthorpe: So I think, I think it's, I think it's a really, really, really strategic acquisition for. Terrific. Thanks.
So we think it might help us raise more money and definitively, you know, achieve better risk, reward opportunities, just giving the funnel will be larger. So I think, I think it's, I think it's a really, really, really, really strategic, um, acquisition for our shareholders.
Kevin Rendino: That's helpful. Hi, Dave. Thank you, we currently have no further questions so I'll hand back to Kevin to conclude today's conference. Well, thank you everyone for your time today. It's been a while since we've been in front of you and it's good to be back. What we hope to you take from our remarks is that we are an open book available to speak with any shareholder at any time. We look forward to talking to you about this deal. Look forward to speaking with you throughout the voting process. We as always thank you for all your support.
Speaker Change: Thanks, that's helpful. Appreciate it.
Dave: Thanks Dave.
Thank you. We currently have no further questions so I'll hand back to Kevin to conclude today's conference.
Operator: We wish you all a great summer. Thank you. This concludes today's call. Thank you for joining us.
Kevin Rendino: Well, thank you everyone for your time today. It's been a while since we've been in front of you and it's good to be back on. We hope to you take from our remarks is that we are an open book available to speak with any shareholder at any time we look forward to talking to you about this deal. Look forward to speaking with you throughout the voting process. We as always, thank you for all your support and we wish you all a great summer.
Operator: You may now disconnect your lines.
Kevin Rendino: Thank you. This concludes today's call. Thank you for joining us. You may now disconnect your lines.