PNNT seeks to generate both current income and capital appreciation through debt and equity investments. We invest primarily in middle-market private companies in the form of senior secured loans, mezzanine debt and equity investments.
Our approach is focused on the needs of our financial sponsor, middle-market corporate and intermediary partners. Consistent, timely, no-surprise feedback is our goal. Our screening and due diligence process is designed to ensure creative and value-added financing solutions.
With permanent equity capital, we can be a patient provider of flexible capital. As an independent business development company, we have no affiliations which may create conflicts of interest with our financial sponsor, middle-market corporate and intermediary relationships.
Target Characteristics: We focus on identifying and investing in companies with positive cash flow, strong management teams, and defensible market positions that lack access to the public financing markets or are underserved by traditional lending sources.
Investment Size: Our typical investment size is approximately $10 – $75 million per company. We are flexible and willing to invest larger or smaller amounts or to partner with other capital providers to provide additional capital in transactions. We strive to structure transactions in a manner that enhances the financial flexibility of managers and shareholders.
Investment Structures: Debt investments are principally structured to provide for current cash interest and, to a lesser extent, non-cash interest. Equity investments can be structured in the form of preferred stock, common equity co-investments, warrants or direct investments in common stock. PennantPark is comfortable making non-control debt and equity investments in U.S. middle-market companies.
We are committed to a value oriented philosophy used by the investment professionals who manage our portfolio and seek to minimize the risk of capital loss without foregoing potential for capital appreciation.
PennantPark seeks to use its experience and access to market information to identify investment candidates and to structure investments quickly and effectively.
Our selection process is focused on:
Our rigorous due diligence process draws from our Investment Adviser’s experience, industry expertise and network of contacts, and typically includes:
Upon the completion of due diligence and a decision to proceed with an investment in a company, the team leading the investment presents the investment opportunity to our Investment Adviser’s investment committee, which determines whether to pursue the potential investment.
The Investment Adviser monitors our portfolio companies on an ongoing basis to determine if they are meeting their respective business plans and to assess the appropriate course of action for each company.
Evaluating and monitoring the performance and fair value of our investments may include:
As a business development company, PennantPark offers managerial assistance to certain portfolio companies upon request.