We believe that we have the following advantages over other investors in corporate debt securities and CLOs:

Experienced Management Team

We seek to capitalize on the significant experience and expertise of the Investment Team, including its affiliation with Palmer Square Capital Management (PCSM), which manages approximately $28.1 billion1 in fixed income/structured credit investments. Corporate debt and CLO investing has been a core component of the Investment Team’s investment strategy since 2009 and is led by Christopher D. Long and Angie K. Long, who collectively have over 50 years of investing experience. As of September 30, 2023, the senior investment professionals on the Investment Team had an average of 21 years of overall industry experience, providing us with a competitive advantage in sourcing and idea generation, investment diligence and recommendation, portfolio construction, and portfolio and risk management.

1Palmer Square Capital Management LLC’s AUM is unaudited. The AUM provided is an estimate as of 9/30/23 and is inclusive of Palmer Square Capital Management LLC and its affiliates.

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Differentiated Liquid Loan Strategy

We believe that this differentiated portfolio of liquid bank loans paired with certain opportunistic investments generates and will continue to generate consistent attractive and stable risk adjusted returns at the lower end of the risk spectrum and supports attractive financing rates. We believe that our liquid credit strategy is well-positioned to benefit from spread widening and market dislocations and overall relative value opportunities in credit. We seek to invest in credit and other assets that the Investment Advisor believes have strong structural protections, limited downside, and low long-term beta, or volatility, in comparison to systemic risk within the broader credit and equity markets.

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Large Addressable Market Opportunity

The corporate debt market segment on which the Investment Team focuses is industry diverse and large and includes small to large U.S. companies. Broadly-syndicated fixed and floating rate loans and corporate debt provides an opportunity set that the Investment Team believes offers an attractive, risk-adjusted return. Specifically, the Investment Team believes it can mitigate risk and achieve our investment objective by: (i) seeking the best relative value, which may equate to buying new loans or other corporate debt issuances at a discount or purchasing in the secondary market, and (ii) seeking to buy loans or other corporate debt issuances that the Investment Team believes have strong fundamentals and low default risk and are capable of withstanding significant downward pricing pressure.

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Attractive Fee Structure

Our fee structure is lower than most externally-managed, publicly-traded BDCs. At our target debt-to-equity ratio of 1.40x to 1.50x, the base management fee payable to our Investment Advisor would represent approximately 0.70% of our gross assets and is payable at a rate of 1.75% of our net assets. Following completion of this offering, our income-based incentive fee will be calculated at a rate of 12.5% of pre-incentive fee net investment income above a quarterly hurdle of 1.5% with certain lookback requirements. We believe this lower fee structure is well-aligned with an investment strategy focused primarily on corporate debt securities.

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Rigorous Investment Process

Our investment objective is to maximize total return, comprised of current income and capital appreciation. However, no assurance can be given that our investment objective will be achieved, and investment results may vary substantially on a monthly, quarterly and annual basis. The Investment Team has an extensive investment underwriting and monitoring process. The Investment Team conducts a thorough analysis of each potential portfolio company and its prospects, competitive position, financial performance and industry dynamics. The Investment Team stresses the importance of credit and risk analysis in its underwriting process.

Across the platform, the Investment Team reviews approximately $350 billion in annual deal flow as potential investment opportunities suitable for us, and PSCM and its affiliates have invested capital of over $45 billion across bank loan and CLO investments since inception. Through the Investment Team’s sourcing and idea generation, we also have opportunistic access to the secondary leveraged loan market, which is estimated to be approximately $1.4 trillion in size, according to LCD. We believe that the Investment Team’s continued adherence to this disciplined process will permit us to continue to generate a stable, diversified and increasing revenue stream of current income from our corporate debt securities and CLO investments to enable us to make consistent, recurring distributions to our stockholders.1

1Source: 1. SEC Filings, as of 9/30/2023.

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Highly Diversified Portfolio

We focus on investing in large, broadly-syndicated loans, instead of small/mid-cap lending, and maintain a smaller pocket for opportunistic credit investments (i.e., CLO investments) where PSCM possesses differentiated investment capabilities. Since the BDC’s inception, we have invested approximately $2.2 billion through September 30, 2023. As of September 30, 2023, we had 219 debt and equity investments in 184 portfolio companies with an aggregate fair value of approximately $1.01 billion across 40 different industries that we believe exhibit strong credit quality and industry diversification.

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