MidCap Financial Investment Corp 2024年度报告

2024 ANNUAL REPORT April 2025 Dear Fellow Stockholders, Wewould like to start by saying thank you for your interest in MidCap FinancialInvestment Corporation (“MFIC”, “the Company”, “our” or “we”). We are pleased to present youwith MFIC’s 2024 Annual Report.i Successfully Closed Mergers with Two Affiliated Funds In 2024, we were delighted to announce the successful completion of MFIC’s mergers withtwo affiliated funds, Apollo Senior Floating Rate Fund Inc. (“AFT”) and Apollo Tactical Income FundInc. (“AIF”) (collectively, the “Mergers”) with MFIC being the surviving entity.iiMFIC’s investmentstrategy remains unchanged following the closing of the Mergers. MFIC remains squarely focusedon investing in first lien floating rate loans to middle market companies sourced by MidCapFinancialiii, a leading middle market lender managed by an affiliate of Apollo Global Management,Inc. (“Apollo”), a high growth global alternative asset manager with approximately $751 billion ofassets under managementiv, as of December 31, 2024. Following the closing of the Mergers, MFICcontinues to be managed by an affiliate of Apollo, from which we believe it derives significantbenefits. MFIC is able to avail itself of the more than 5,000 employees at Apollo to gain valuableinsights into the broader economy, as well as specific companies and industries. The Mergers represent a significant milestone for MFIC, increasing its size and scale. As aresult of the Mergers, MFIC’s net assets grew by over 43% providing MFIC with significantinvesting capacity. We believe these Mergers will continue to deliver significant value to ourstockholders,including potential enhanced returns,greater scale,improved portfoliodiversification, and operational synergies. We have been executing our plan to deploy the capitalacquired from the Mergers and we believe MFIC’s future results are well-positioned to benefit aswe continue to execute this plan. Affiliation with MidCap Financial is a Significant Competitive Advantage for MFIC MFICis very fortunate to have access to the necessary origination to successfullyimplement its strategy owing to the strategic relationship between MidCap Financial and Apollo.MidCap Financial is a lender of choice for many financial sponsors. Founded in 2008, MidCapFinancial is a privately held middle market-focused specialty finance firm that provides senior debtsolutions to companies across all industries through first lien secured loans and asset-based loans.Since its inception, MidCap Financial has been working with management teams and financialsponsors to deliver thoughtful debt solutions which helps drive deal flow. MidCap Financial hasone of the largest direct lending teams in the United States with over 300 employees.vMidCapFinancialhas a long track record that includes closing on over$130 billion in lendingcommitmentsvisince 2013vii, including over $21 billion in 2024. MidCap Financial’s originationactivity in 2024 is particularly notable given the overall muted sponsor M&A activity in the market.This extensive origination history provides a vast dataset of middle market company financialinformation across all industries, which we believe makes MidCap Financial one of the mostinformed and experienced lenders in the middle market. MFIC’s ability to invest in loans sourced by MidCap Financial is one of MFIC’s mostsignificant competitive advantages, providing MFIC with a wide origination funnel which allows for investment selectivity. We believe MidCap Financial’s scale and breadth of product offeringenables it to be highly selective as demonstrated by its closing on less than 7% of identifiedopportunities since its inception. Review of Market Environment In 2024, M&A activity remained relatively slow due to high interest rates, persistentinflation and valuation gaps between buyers and sellers, among other factors. Throughout theyear, we saw financial sponsors take advantage of borrower friendly market conditions to repricedebt. We believe M&A activity in 2025 will be correlated with economic and interest rate stability. Privatedebt has become an increasingly important source of financing for financialsponsors, especially in the middle market, which is MFIC’s primary focus. In addition, we believethe core middle market offers attractive investment opportunities across cycles as it does notcompete directly with either the broadly syndicated loan market or the high yield market andgenerally commands higher spreads and better documentation. Given the current increase in tariff-driven volatility as of the writing of this letter, webelieve it is important to provide an interim update on the implications for MFIC. Financialsponsors appreciate the reliability that direct lenders can provide in volatile conditions. While weare not completely immune from the impact of current U.S. tariff policies, we are generallyunderweight businesses that are heavily dependent on imports and exports. However, some ofour borrowers may en