Capitala Finance : Mount Logan Presentation to Capitala Shareholders

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Presentation to Capitala Shareholders

April 22, 2021

Important Information

Disclaimer & Forward-Looking Statements

This presentation contains certain "forward-looking statements" and certain "forward- looking information" as defined under applicable securities laws (collectively referred to herein as "forward-looking statements"). Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements in this presentation include, but are not limited to, statements relating to the required approval of the stockholders of Capitala Finance Corp. ("Capitala") of the transaction whereby, among other things, Mount Logan Management LLC (the "Manager"), a wholly-owned subsidiary of Mount Logan Capital Inc. ("MLC", "Mount Logan" or the "Company") will become the new investment adviser of Capitala (the "Transaction"), the satisfaction or waiver of certain other conditions to the completion of the Transaction, the closing of the Transaction and the timing thereof, the recurring asset management fees to be derived from Capitala, the use by the Company of Capitala as a platform to grow its asset management business, synergies to be achieved following the completion of the Transaction, the benefits of the Transaction to the stockholders of Capitala including as a result of integration of Capitala with the BC Partners Advisors L.P. ("BC Partners") platform and the opportunities that may be presented to Capitala as a result of Mount Logan's relationship with BC Partners, the expectation of more stable NAV and better trading multiples for Capitala as a result of the Manager's investment strategy, the Manager's overall business strategy, model and approach to investment activities including as they relate to scaling Capitala via strategic transactions, Capitala's ability to secure a flexible credit facility on more favourable terms than currently exists, Capitala paying a regular and consistent dividend, and the positioning of Capitala within the Company's overall business strategy.

Forward-looking statements are based on the beliefs of the Company's management, as well as on assumptions and other factors, which management believes to be reasonable based on information available at the time such information was given. Such assumptions include, but are not limited to, assumptions regarding general economic conditions; industry conditions; currency fluctuations and hedging; competition from other industry participants; stock market volatility; interest rate risk; the creditworthiness of and/or defaults by borrowers; the illiquidity of loans; continued lack of regulation in the business of lending from sources other than commercial banks; continued operation of key systems; the ability of borrowers to service their debt; continuing constraints on bank lending to mid-market companies; future capital needs and potential dilution to shareholders; retention of key personnel; conflicts of interest and adequate management thereof; solvency of borrower clients; limited loan prepayment; and effective use of leverage; and the strength of proposed and existing relationships with financing and sourcing partners,

including BC Partners. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the MLC's periodic filings with Canadian securities regulators. MLC undertakes no obligation to update forward-looking statements except as required by applicable law. Such forward-looking statements represents management's best judgment based on information currently available. No forward-looking statements can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including that the Transaction may not be completed on the terms contemplated or at all, if the Transaction is completed, Capitala may not generate recurring asset management fees or strategically benefit the Company as expected, the risk that the Manager's current plans for Capitala are dependent on the Manager's current relationship with BC Partners and the nature of such relationship may change from time to time, Capitala may not be able to refinance its existing debt on more favourable terms, the expected synergies to be achieved may not materialize, there is no certainty that Capitala will be in a position to pay regular dividends and the matters discussed under "Risks Factors" in the most recently filed annual information form and management discussion and analysis for the Company.

This presentation is not, and under no circumstances is it to be construed as, a prospectus or an advertisement, and the communication of this presentation is not, and under no circumstances is it to be construed as, an offer to sell or a solicitation of an offer to purchase securities of the Company. This presentation is not intended for U.S. persons. The Company's shares are not registered under the U.S. Securities Act of 1933 and the Company is not registered under the U.S. Investment Company Act of 1940. U.S. persons are not permitted to purchase the Company's shares absent an applicable exemption from registration under each of these Acts.

The information presented herein is for illustrative purposes only. The performance metrics included herein are for historical reference only and there can be no assurance that the Company or the Manager and any investments or actions made by the Company or the Manager will perform as anticipated or that the Company or the Manager will have access to the number and type of investment opportunities shown herein.

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Executive Summary

An affiliate of Mount Logan Capital, an alternative asset management company

managed by executives of BC Partners Credit, to become the investment

adviser of Capitala Finance Corp. ("Capitala")

• Mount Logan Capital Inc. ("Mount Logan") is a publicly-listedCanada-based alternative asset management company focused on investing in and actively managing credit investment opportunities in North America
• • Mount Logan Management LLC (the "Manager"), a registered investment adviser and wholly owned subsidiary of Mount Logan, will become the investment adviser to Capitala under an advisory agreement substantially similar to the current agreement between Capitala and Capitala Investment Advisors, LLC
  • The Manager is an affiliate of BC Partners Advisors L.P. ("BC Partners") for U.S. regulatory purposes
• After running a fulsome advisor search process, the Board of Directors of Capitala unanimously selected Mount Logan as its new investment adviser
• • The transaction has been well received by the market and Capitala's shareholders, and shareholders representing more than 20% of Capitala's outstanding shares already have indicated support for the new advisory agreement
• Mount Logan has a highly qualified management team led by Ted Goldthorpe - Chief Executive Officer / Chairman of Mount Logan and Head of BC Partners Credit - as well as Matthias Ederer and Henry Wang - Co-Presidents of Mount Logan and founding members of the BC Partners Credit team
• Capitala stockholders will benefit from the added scale and resources through the Manager's relationship with BC Partners and the extensive investment and BDC experience of BC Partners' investment professionals
• • Access to enhanced sourcing capabilities and ability to co-invest with all vehicles across the BC Partners platform
  • Focused liability management to extend duration and reduce cost of leverage
  • Immediate integration of Capitala within BC Partners' state of the art operational and support teams
  • Proven track record of efficiently repositioning publicly listed vehicles to improve trading performance
• The transaction is expected to close in the summer of 2021 and is subject to approval of the new advisory agreement by the stockholders of Capitala and other customary closing conditions

Note: All figures in this presentation are in USD unless otherwise specified

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Compelling Transaction for Capitala

Stockholders

		 Capitala will be able to access the full range of resources of a leading asset management firm
		 Partnership with a large and growing credit business will enhance sourcing capabilities and provide the ability
	Fully Integrated		to access larger deals
	Platform with BC		The lack of information walls within the BC Partners platform allows the Manager to access industry diligence
	Partners		and expertise from across the firm
		 Access to BC Partners' broader resources, including relationships and institutional knowledge from over 30
			years of private market investing
		 It is our belief that a BDC focused exclusively on the Middle Market lending space will lead to better long
	Focused Investment		term performance, a more stable NAV and a better trading multiple
		Target capital structures which are overlooked by our best-in-class peers, who have had to move up-market
	Strategy		due to the size of their funds
		 Able to capitalize on opportunities in non-sponsored and niche specialty verticals alongside core corporate
			lending
		 Strong focus on balancing yield while mitigating the risk of principal impairment through financial and
	High Quality		structural protection
		Experience with and ability to complete innovative and complex transactions
	Underwriting and
		Applies the same private equity style investment process employed for over 30 years at BC Partners
	Deal Flow
		Proactive sourcing model not reliant on one individual source or type of source
		 Seek off-the-radar situations for bespoke solutions
		 Senior team members with strong track record managing assets throughout multiple credit cycles at best-in-
	Outstanding		class institutions including Goldman Sachs, Apollo and Carlyle
		Ted Goldthorpe served as President of Apollo Investment Corporation (one of the largest publicly traded U.S.
	Management Team		BDCs) as well as CIO of the sub-advisor to CION Investment Corporation (one of the largest private BDCs);
			today, Ted Goldthorpe serves as CEO and President of Portman Ridge Finance Corp., BC Partners' publicly
			traded BDC, as well as BC Partners Lending Corporation, BC Partners' non-traded BDC

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Investment Objectives and Strategy

Capitala will become Mount Logan's flagship permanent capital vehicle focused on US middle market credit investing

Investment Objectives

Investment

Strategy and

Philosophy

• Focus on direct origination of senior secured debt investments to the middle market; target portfolio company EBITDA between $10-50 million
• Deliver strong and sustainable risk-adjusted returns to stockholders, with focus on capital preservation and downside protection
• Reduce non-income generating exposure over time and opportunistically to enhance NII generation
• Access the entire BC Partners platform to directly originate loans and investments which allows for greater sourcing capabilities, ability to invest across the liquidity spectrum and participation in larger deals
• Seek to generate alpha through market dislocations, structural documentation, relationship advantages and regional expertise; target opportunities where other capital is retrenching due to limited duration and regulatory restrictions
• Focus on capital preservation; maximize margin of safety through financial and structural protection
• Leverage sector expertise and knowledge base across consumer & retail, business & financial services, healthcare, industrials, and TMT
• Apply the same private equity style investment process employed for over 30 years at BC Partners with a long-term focused investment philosophy

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