BCP Investment Corp

BCP Investment Corporation (BCIC) operates as an externally managed, non-diversified closed-end investment company regulated as a business development company (BDC) under the Investment Company Act of 1940 ¹. The company's investment objective is to generate current income and, to a lesser extent, capital appreciation, primarily from investments in senior secured term loans, mezzanine debt, and selected equity investments in privately-held middle market companies ². BCIC defines the middle market as companies with EBITDA of $10.0 million to $50.0 million and/or total debt of $25.0 million to $150.0 million ³. The company also invests in debt and subordinated securities issued by collateralized loan obligation funds (CLO Fund Securities) ⁴. BCIC has elected to be treated as a regulated investment company (RIC) for U.S. federal income tax purposes and intends to distribute substantially all of its net ordinary taxable income and net short-term capital gains over net long-term capital losses to stockholders ⁵.

BCIC's core business model revolves around originating, structuring, and investing in various debt and equity instruments of middle-market companies. Revenue is primarily generated through interest income from secured term loans, bonds or notes, and mezzanine debt, with capital appreciation from equity investments being a secondary objective ⁶. The company employs a disciplined approach focusing on preserving capital with an appropriate return profile relative to risk, emphasizing an underlying issuer's net cash flow after capital expenditures for debt servicing ⁷. Customer segments are privately-held middle market companies, and the company also invests in CLO Fund Securities and joint ventures ⁸.

As of December 31, 2025, BCIC's total investment portfolio at fair value was $501.0 million ⁹, spread across 41 different industries (excluding CLO Funds and Joint Ventures) and 108 different entities ¹⁰. The Debt Securities Portfolio represented approximately 82.2% of the total investment portfolio at fair value ¹¹, totaling $411.6 million ¹², and was primarily comprised of senior secured loans (93.8%) and subordinated debt (6.2%) ¹³. The weighted average annualized yield on the interest-earning Debt Securities Portfolio was approximately 12.9% ¹⁴. Investments in joint ventures, KCAP Freedom 3 LLC and Great Lakes Funding II LLC, had fair values of approximately $10.7 million ¹⁵ and $37.5 million ¹⁶, respectively, as of December 31, 2025. CLO Fund Securities represented approximately 0.4% of the total investment portfolio at fair value, totaling $1.8 million ¹⁷.

For the year ended December 31, 2025, BCIC reported total investment income of $45.808 million ¹⁸, which was a decrease from $46.895 million ¹⁹ in 2024 and $58.403 million ²⁰ in 2023. Net realized loss on investments for 2025 was $21.407 million ²¹, compared to a loss of $29.380 million ²² in 2024 and $26.896 million ²³ in 2023. The net change in unrealized appreciation on investments was $6.547 million ²⁴ in 2025, a notable improvement from $1.006 million ²⁵ in 2024 and $3.322 million ²⁶ in 2023. The net asset value per share was $16.68 ²⁷ as of December 31, 2025, down from $19.41 ²⁸ as of December 31, 2024. Total assets were $523.641 million ²⁹ and total liabilities were $314.485 million ³⁰ as of December 31, 2025.

Year-over-year, total investment income decreased by $1.087 million ³¹ from 2024 to 2025. The fair value of the total portfolio increased from $405.021 million ³² in 2024 to $500.975 million ³³ in 2025, largely driven by $153.394 million ³⁴ in investments acquired as part of the LRFC Acquisition. The Debt Securities Portfolio's weighted average annualized yield increased from 11.3% ³⁵ in 2024 to 12.9% ³⁶ in 2025. The number of investments on non-accrual status increased from six ³⁷ attributable to five portfolio companies in 2024 to thirteen ³⁸ attributable to ten portfolio companies in 2025.

During the fiscal year ended December 31, 2025, BCIC completed the acquisition of Logan Ridge Finance Corporation (LRFC) on July 15, 2025 ³⁹. This acquisition was accounted for as an asset acquisition, with a total purchase consideration of approximately $52.8 million ⁴⁰ allocated to LRFC's identifiable assets and liabilities, resulting in a purchase discount of $20.9 million ⁴¹. On August 22, 2025, the company changed its name from Portman Ridge Finance Corporation to BCP Investment Corporation and began trading under the symbol "BCIC" on August 25, 2025 ⁴². The company also executed a tender offer on November 12, 2025, to purchase up to $9.0 million ⁴³ of its common stock, with the company intending to purchase approximately $7.6 million ⁴⁴. This tender offer was executed on December 12, 2025, resulting in the repurchase of 557,960 shares ⁴⁵.

BCP Investment Corporation intends to continue to make monthly or quarterly distributions to its stockholders, with the determination of these distributions made by its Board ⁴⁶. To maintain its RIC status, the company must timely distribute an amount equal to at least 90% of its ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, reduced by deductible expenses, out of the assets legally available for distribution, for each year ⁴⁷. To avoid certain excise taxes imposed on RICs, the company is generally required to distribute during each calendar year an amount at least equal to the sum of (1) 98% of its ordinary income for the calendar year, (2) 98.2% of its capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (3) 100% of any ordinary income and net capital gains for preceding years that were not distributed during such years and on which no corporate tax was paid ⁴⁸.

The company evaluates strategic opportunities available to it, including mergers with unaffiliated funds and affiliated funds, divestitures, spin-offs, joint ventures, and other similar transactions from time to time ⁴⁹. An example of an opportunity currently in the initial stages of evaluation is a potential merger with one or more of its affiliated 1940 Act funds, which may result in the use of an exchange ratio other than NAV-for-NAV (including but not limited to relative market price) ⁵⁰.

BCIC's investment strategy contemplates that a portion of its investments may be in securities of foreign companies ⁵¹. While most investments are anticipated to be denominated in U.S. dollars, those in foreign currencies will be subject to currency exchange rate risks ⁵².

The company intends to grow its portfolio of assets by raising additional capital, including through the prudent use of leverage available to it ⁵³. BCIC may issue debt securities or preferred securities, and may borrow money from banks or other financial institutions, up to the maximum amount permitted by the 1940 Act ⁵⁴. The 1940 Act permits the company to issue senior securities or incur indebtedness only in amounts such that its asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance ⁵⁵. The company is not generally able to issue and sell its common stock at a price below net asset value per share, but may do so if the Board determines it is in the best interests of the company and its stockholders, and stockholders approve, provided the price closely approximates the market value (less any distributing commission or discount) ⁵⁶. BCIC may also make rights offerings to stockholders at prices per share less than the net asset value per share, subject to applicable 1940 Act requirements ⁵⁷.

The company's Board of Directors authorized a renewed stock repurchase program of up to $10.0 million ⁵⁸ (the "2026 Stock Repurchase Program") for an approximately one-year period, effective March 4, 2026, and terminating on March 31, 2027 ⁵⁹. Under this program, shares may be repurchased from time to time in open market transactions, privately negotiated transactions, or otherwise, subject to legal and contractual restrictions ⁶⁰. The company will selectively pursue opportunities to repurchase shares that are accretive to net asset value per share ⁶¹.

BCIC's future success depends, to a significant extent, on the continued services of the officers and employees of the Adviser or its affiliates ⁶². The Adviser's capabilities in structuring the investment process, providing competent, attentive and efficient services, and facilitating access to financing depend on the employment of investment professionals in adequate number and of adequate sophistication ⁶³. The departure of key personnel or a significant number of investment professionals could materially adversely affect the company's ability to achieve its investment objective ⁶⁴.

BCP Investment Corporation faces several material risks, including those related to its externally managed structure, competitive market, and use of leverage. Conflicts of interest may arise due to compensation arrangements with the Adviser, potentially leading to speculative investments or increased leverage, and the Adviser is not obligated to reimburse incentive fees based on accrued income that later becomes uncollectible ⁶⁵. The company operates in a highly competitive market for investment opportunities, competing with larger entities that may have lower costs of funds and fewer regulatory restrictions, which could hinder its ability to identify and capitalize on attractive investments ⁶⁶. The company's use of leverage magnifies potential gains or losses, increasing investment risk, and its indebtedness imposes financial and operating covenants that restrict business activities and distributions ⁶⁷. Defaults under its Revolving Credit Facility, KeyBank Credit Facility, 2026 Notes, 2028 Notes, 2030 Notes, or 2032 Convertible Notes could force the company to sell investments prematurely at disadvantageous prices ⁶⁸. Investments in illiquid securities, including joint ventures and CLO Funds, are recorded at fair value, which is inherently uncertain and could lead to adverse impacts on net asset value if determinations are materially higher than realized values ⁶⁹. As a non-diversified investment company, significant concentration in a small number of issuers or industries exposes the company to substantial loss if any issuer defaults or an industry experiences a downturn ⁷⁰. The company is exposed to risks from changes in interest rates and spreads, which could negatively impact investment values and net income ⁷¹. Cybersecurity threats, including internal and external attacks, could impair business operations, result in financial losses, and incur substantial remediation costs ⁷². Furthermore, technological developments in artificial intelligence could disrupt markets, increase competition, and introduce new legal, regulatory, and compliance risks ⁷³. Economic recessions or downturns could adversely affect portfolio companies' ability to repay loans, leading to reduced interest income and potential losses ⁷⁴. Global economic, political, and market conditions, including the ongoing Russian invasion of Ukraine and related sanctions, contribute to uncertainty and could negatively impact the company and its portfolio companies ⁷⁵.

Management's overall tone emphasizes a disciplined approach to investment selection and monitoring, focusing on preserving capital with an appropriate return profile relative to risk, and less reliance on realized capital gains from investments. They highlight the importance of understanding both qualitative and quantitative factors in evaluating investment opportunities, including industry fundamentals, competitive position, management team quality, and cash flow analysis. Management also stresses the importance of maintaining RIC status and prudently using leverage to enhance returns. Key strategic priorities include the continued focus on originating, structuring, and investing in secured term loans, bonds or notes, and mezzanine debt in privately-held middle market companies, as well as evaluating strategic opportunities such as mergers with affiliated or unaffiliated funds. Additionally, management is committed to returning capital to shareholders through distributions and the recently authorized 2026 Stock Repurchase Program of up to $10.0 million ⁷⁶, effective March 4, 2026, and terminating on March 31, 2027 ⁷⁷, which will selectively pursue opportunities to repurchase shares accretive to net asset value per share.