Patrick, take it away.
Yeah, thank you, Brandon. My name is Patrick Schaefer. I'm the Chief Investment Officer of Portman Ridge Finance Corporation. Portman Ridge, for those unfamiliar with our name and our story, is a publicly traded BDC. BDCs are RIC vehicles, very similar to a REIT or MLP structure. As such, we are an income-focused company with a distribution rate that is required to be at least 90% of our taxable income. Unlike a REIT or an MLP, on the asset side, as opposed to focusing on real estate or infrastructure, BDCs are private credit vehicles, and they're typically focused on providing loans to U.S.-based private companies and generating interest income from those loans. So, as you can see here on our stats sheet, and we'll get into our strategy, but our ticker is PTMN.
We are managed by Sierra Crest Investment Management, which is affiliated with BC Partners Advisors, global asset manager. As of the end of May, we traded at $19.89 per share. That would equate to a 12% discount to net asset value, which is $22.57. And then our dividend rate, as mentioned, we are an income-focused vehicle. Our dividend rate of $2.76 per year, or on an annualized basis, equates to 13.9% yield based on the market value of our shares, or 12.2% based on the net asset value of our shares. About Portman Ridge, as mentioned, we are a BDC operating in the private credit space. We are focused on direct origination of senior secured debt investments into middle market companies. And so what does that mean? We are focused primarily on, first, U.S.-based companies, second, private companies, and third, primarily companies that are less than $50 million of EBITDA.
We have an experienced management team with a history of strategic transactions and are centered around execution of a business plan and delivering NI growth for shareholders. We are externally managed by Sierra Crest Investment Management, which is an affiliate of BC Partners Advisors, and its credit platform. BC Partners, as a whole, is a $40 billion alternative asset manager with platforms across private equity, private credit, and real estate. On the private credit side, our credit platform has over $7.5 billion of assets, allowing Portman Ridge to realize the benefits of scaled investing that other similarly sized BDCs lack. The last bullet point here, as well, we do have exemptive relief that allows for co-investment across all of our vehicles here at BC Partners Credit. Investment portfolio at the end of March, we had $527 million of assets and about $211 million of net asset value.
As of March 31st, 2024, over 90% of our debt securities were floating rate, with a spread primarily to SOFR. Then the last bullet point on this page, I will note we have 103 portfolio companies with an average position size of about $3.1 million, which equates to less than an average of 1% per position, which means we are an extremely diversified company. Taking a step back, we in our space, private credit and where we operate in, we believe that there have been a significant dynamic shift from banks to private credit over multiple decades. Starting from the left-hand side here, you have kind of starting in the early 1990s, banks beginning to consolidate. You saw the rise of Bank of America, J.P. Morgan, Wells Fargo through M&A.
What that led to in the 2000s is a focus of those banks into providing capital to larger companies. The bullet point here that I think is very important is the very bottom, which is in the high-yield market, the number of high-yield deals that were $300 million or less declined from 39% of the market in 2004 to 5% of the market in 2019. Again, you know, leading to a lack of capital in the lower market, lower end of the market. As you shift now to the third column here, private equity rises, over those, you know, the end of the 2000s as well as the 2010s, you saw a significant increase in private equity growing about four times since 2002.
And in fact, you saw private equity deal volumes surpassing public equity deal volumes starting in 2015, and that trend is only , is only continued. And so what you get with those, with the combination of those two middle columns, on one hand, you have, you have banks moving towards large public companies, combined with dollars and equity dollars being raised primarily for private companies, leads to a significant market opportunity within private credit. So, so I kind of just laid out the, you know, the decades-long trend towards away from banks and towards private credit. This just gives an example of a recent event and how those recent events tend to accelerate long-term trends. So, as everyone is probably familiar, what we have here, the blue chart or the blue line is loan growth for U.S.
Banks in 2002, and you see a relatively consistent growth from kind of bottom left to upper right. The red chart is the beginning of 2023, and what you saw was banks were, you know, trending in a very similar manner in 2023 up until the collapse of Silicon Valley Bank in February, March of 2023. After that period of time, you saw a significant stagnation of loan growth in those banks, as shown by the red chart being relatively consistent at the sub 2% growth. With that, it is just an example of how, you know, there needs to be capital that fills the gap between the red and blue lines, and that is generally where private credit managers and alternative asset managers typically increase their market share.
So, next page, very quickly, again, going back to the market share, as you can see here, in the chart, this is capital provided, both through banks as well as fund managers, i.e., alternative asset managers. And starting in where this chart starts in 2008, you can see they're roughly equivalent, you know, 50/50 in terms of banks being a capital provider and alternative asset managers being a capital provider. If you fast forward all the way to the end of this graph in 2023, you're now seeing, you know, private credit managers and private asset managers, collectively representing close to two-thirds of capital provided, whereas banks have, you know, significantly decreased their share as a percentage of total. Going back to our longer-term trends, again, private equity continues to drive growth and tailwinds within the private credit space.
So, this is a very, you know, a long, a long timeline of, you know, number of companies that are owned by private equity firms, as well as, you know, the value of those companies. And, and the thing just to point out would be, you know, from 2019, pre-COVID, through, you know, end of year, end of year, 2023, you know, the value of assets and companies held within private, private equity has almost doubled from, you know, about $1.5 trillion of assets to, to closer to $3 trillion of assets. As on the very bottom of the chart here, median hold period has increased from about 5.25 to 5.5 years to a little north of 6 years.
And so, you know, from our perspective, what that means is we should expect to see significant deal volumes in the private equity and private credit space on a go-forward basis, given the overall growth in that market. So, why private credit? Why is that an attractive market? We find private credit to be significantly attractive for investors due to the extensive diligence, downside protection, and structuring of private credit as opposed to a more traditional, you know, public credit. For example, in a high-yield deal, they're generally led by banks who are underwriting the transaction but are looking to sell and syndicate out the entirety of their exposure while not holding any. And so management of a company does a week of road shows.
Investors get a relatively limited set of information memorandum and financial historical financials, deal prices and closes in a week or two weeks, and typically has a relatively loose and light credit agreement or bond indenture. As compared to, in our market, private credit, we're typically underwriting companies and loans for multiple weeks up through multiple months. We negotiate covenant packages within our credit agreements that include, depending on the company, minimum EBITDAs, leverage levels, key performance metrics, negative covenants, and lien stripping. We have structural protections such as asset liens, these sometimes guarantees, call protection, scheduled amortization, cash flow sweeps. And if you look here on the right-hand chart, you know, what you see is where we operate, which is primarily in the less than $250 million, $250 million tranche.
You see, a significantly limited amount of deals that are covenant-lite, i.e., the vast majority of transactions that we engage in involve significant amounts of, you know, the aforementioned covenants, structural protections, negative covenants. Finally, last slide, why private credit is, for the most part, private credit tends to be, or at least, BDCs in private credit, the assets are floating-rate loans. And so this chart is a little bit busy, but the private debt line here is the dotted yellow line. And what you have seen from pre-COVID through today is a very consistent and stable return profile for private credit as compared to, you know, even the equity markets or investment-grade and high-yield, which have fluctuated their returns based on the rising rise of benchmarks and their duration, therefore reducing overall prices.
So, from our perspective, we believe our asset class is; it provides a very durable, stable return for investors. So, who are we? Who is Portman Ridge? As mentioned, I'm on the bottom. My name is Patrick Schaefer, Chief Investment Officer. Brandon Satoren, our Chief Financial Officer, is also on the phone, prior to joining BC Partners in 2021. Brandon worked at PennantPark, which is another, another BDC, another public BDC, so has a significant amount of BDC accounting experience. Our CEO, Ted Goldthorpe, is the head of BC Partners Credit and founded the business in 2017. Prior to that, he was the president of Apollo Investment Corporation and Chief Investment Officer of Apollo Investment Management. He ran the U.S. Opportunistic platform and oversaw private origination and was on the senior management committee at Apollo.
Importantly, on the bottom of this page, BC Partners Credit consists of 28 investment professionals that are dedicated towards our credit platform and investing within our credit business. And that is in addition to the significant amount of operations and accounting teams, you know, managed by Brandon. So, one benefit of shareholders at Portman Ridge is our connection to BC Partners, which is a long-established private equity firm. It was founded in Europe over 35 years ago and is operating in North America for over 15 years. On the private equity side, we have 62 investment professionals, evaluating north of 200 transactions per year. We have an entire portfolio operations team that is dedicated towards organic improvement in portfolio companies. And we also have significant sector expertise.
Our private equity group is focused on four core sectors, telecom and media and technologies, healthcare, business services, and consumer retail. So, from our perspective, we're able to leverage the benefits of our private equity firm and the knowledge and operational expertise that goes into our underwriting. So, where we differentiate ourselves from other direct lenders and other private BDCs, you know, as mentioned, we have, we are connected to a private equity firm and are able to share best practices across private equity and private credit, including our operations team, portfolio companies, compliance, HR, and benefiting from 30 years of investing experience in particular sectors.
Second bullet point, while many direct lending platforms have significantly moved up market from a size of asset, asset class, we are focused primarily on less than $50 million of EBITDA businesses where we believe the risk-reward is particularly attractive and competition is relatively limited as compared to, you know, EBITDA, you know, north of $100 or $150 million. Bullet point three, although we do a significant amount of sponsor-backed businesses, we have the capability and have a significant amount of assets under management that are through non-traditional sponsor-backed, management-owned, entrepreneur-owned portfolio companies. So, for us, you know, our goal is to create as large of a funnel for attractive opportunities as possible, and that includes both sponsor and non-sponsor-backed transactions.
Investment objectives and strategies, as mentioned, we focus on directly originated senior secured loans targeting portfolio companies less than $50 million of EBITDA that are U.S.-based and private. Our goal is to continue to deliver strong and sustainable risk-adjusted returns to shareholders, and we do that, both by utilizing the entire BC Partners platform, but also, you know, we look to generate alpha through periods of market dislocation through our ability to get structural documentation advantages, to focus on opportunities where other capital is retrenched due to various different reasons.
As a good example, you know, some of the fallout of Silicon Valley Bank, as referenced on some previous slides, was a significant amount of regional banks pulled back on their lending, and that affected a number of different borrowers from equipment finance, you know, all the way through regular way portfolio companies who, you know, have primarily used sort of their local regional bank for a credit facility. So, from our perspective, being able to be agile and pivot to where, you know, the opportunities lie, is a very important factor for our shareholders. Our focus, as always, is on capital preservation and margin of safety, and we do that through extensive financial and operational diligence as well as structural protections within our documents.
And then, where possible, you know, we try and leverage our sector expertise within our, our firm as a whole, through our consumer retail segments, business financial services, healthcare, industrials, tech, telecom, and software. So, this portfolio at a glance for Portman Ridge, we have 103 different investment, portfolio companies, which works out to an average position size of about 1%. Almost 100% of our portfolio companies are U.S.-based, and we focus, as you can see in the bottom right, from an industry perspective, we focus on non-cyclical industries with high free cash flow. So, high tech industries is primarily software, business services, healthcare, banking, and financials, you know, things that primarily generate meaningful amounts of cash flow and, and provide a leverageable, leverageable business. So, just a, just a quick point.
Historically, within Portman Ridge, we have made a number of inorganic acquisitions and mergers into the company, as we have listed here. We have acquired three different public BDCs that have been merged into Portman Ridge. At this point, a substantial amount of those assets have all been realized and rotated into our portfolio. And from our, for a shareholder's perspective, we like to highlight this as we are one of the few BDC managers in this space that have a history of successful M&A growth. Now, I'll really only cover two more slides.
I think, I think this one is, you know, probably one of the most important, one of the most important slides of the deck, which is if you look at our, our dividend rate relative to net asset value of 12.2%, we are in the, the top quartile of BDCs from a, performance return perspective. And if you look at the bottom chart, we trade at about, this is a, this is a little bit, a little bit older, price to book is, is, you know, about a week older than, than the cover page. But we're at about a, you know, 12% discount to net asset value from a trading perspective. So, as an investor, you're able to, buy into a, you know, one of the highest in the space relative to NAV, at a below average discount to net asset value.
So, you're being paid fairly well to wait for, you know, what we believe is ultimately, you know, mean reversion in our stock price and capital appreciation. Finally, to summarize everything before we get into Q&A, Portman Ridge, it's a small-cap BDC backed by BC Partners, which is a global asset manager. Given our exemptive relief to invest across all of our various different platforms, shareholders benefit from being a part of a very large platform, particularly relative to other similar size BDCs. We have an experienced strategic management team with a track record of execution and focus on earnings growth. We've generated consistently solid investment results with a steady dividend history.
We have announced last quarter another $0.69 quarterly dividend, which, as you can see in the parentheticals, is relatively consistent over, you know, the last several quarters. And as mentioned, our dividend as a percentage of NAV is well above the industry average. You know, finally, I would say, you know, we believe Portman Ridge, you know, continues to be passing the inflection point from a scale perspective. We've executed on a number of historical M&A transactions that have allowed us to gain that scale and able to leverage our cost structure for shareholders. And so we think, you know, where we are, you know, we have gained, you know, requisite scale. We have a significantly increase in, you know, share liquidity through, you know, that increased float. And we don't believe that we are done.
We continue to find, you know, the market interesting and would continue to be acquisitive from an inorganic perspective to continue to grow the scale and the opportunity set within Portman Ridge. So with that, Brandon, I'll turn it back over to you and the audience, and happy either myself or Brandon Satoren, our Chief Financial Officer, to answer, you know, any Q&A. Fantastic.
Thank you, Patrick. We can now open the floor for Q&A, and we have a couple of questions in the queue. I'd like to start off with one. I know in the previous slide you showed the discount to NAV and the, you know, discount to book value. Can you discuss your capital allocation priorities? And, you know, I believe I read that the firm repurchased shares in Q1. Can you just talk capital allocation priorities and where share buybacks fall?
Yeah, great, great question, Brandon. So, here's what I'd say, which is every single quarter we run our analysis and provide to our board, you know, what is a $1 invested in new assets versus a $1 of share repurchase and what is the relative accretion to earnings of those two different investments. And for the most part and for the most history of BDCs, what it would tell you is that buying back your stock is more accretive to shareholders than providing a new one, certainly for when you're trading at, you know, the 12%-15% discount to net asset value.
Where benchmarks have moved and where spreads have moved over the course of 2023, you know, that analysis actually flipped on its head and suggested that, providing, you know, for a dollar of balance sheet cash was actually better spent investing in loans relative to repaying, repaying stock. Despite that, we have, we have a fairly consistent share buyback program. It was initiated in 2020. We have continued to buy back share in open windows. There have been some periods of time where we have been blocked out from M&A transactions, but we believe that a relatively consistent share repurchase program and execution is important from a capital allocation perspective.
You know, regardless of what the numbers say on accretion, on accretion versus not, it is, you know, I call it burden, burden hand, to have, to have that level of accretion when you're buying back stock versus putting out new money. So, from our perspective, from our board's perspective, we think that is a very, a very important piece of our capital allocation and, and, and would look to continue to, you know, allocate resources towards that share repurchase, as our, as our, company continues to trade at discount.
Got it. That's helpful. Maybe switching gears, can, can you discuss the competitive environment and, you know, your strategic advantages, you know, versus your peer group?
Yeah, no, good question.
I'd say a couple of advantages that we perceive or that we think resonate with the market, which is, as mentioned, you know, we focus, you know, as much as we can on companies less than $50 million of EBITDA. You know, we have found that to be in general a less competitive space. A lot of the money in the private credit space that has come in over the last, you know, 5 or 6 years, we've kind of shown some of those charts earlier, that has tended to be concentrated in some of your larger asset managers, your Blackstones, Apollos, Blue Owls. And so those traditional lenders have gone significantly up market from a size perspective. So we believe that we continue to operate in, you know, a less competitive piece of the market.
From a strategic advantage relative to others, you know, our platform is not just direct lending. We have a number of different vehicle mandates and strategies here at BC Partners. What that allows us to do is to be solutions oriented to borrowers as opposed to a product focus. By that, I mean what we're able to do is talk to a management team, talk to a sponsor, and really understand what their business needs and what they're looking for and craft a solution as opposed to providing a product, which is a, you know, a unitranche loan through X times leverage.
So what we have found resonates well with borrowers is that, which is being creative and coming up with the solution that is tailor-made for their need and their use case, as well as we truly believe in value-added lending. We are often observers on boards or on boards themselves. We again have an entire operating team here at BC Partners where we help portfolio companies to the extent that they are willing to try and benefit from our scale for through group purchasing or looking over their insurance carriers and their insurance policies, their, you know, HR and health insurance and things of that nature, just simply where they're doing their shipping, FedEx, UPS, kind of all that very basic things.
So we like to provide value to borrowers in addition to just capital, and that has tended to resonate very well with folks.
Great, great. And we have a question, you know, looking at the sector level, can you just talk about how you identify opportunities at the sector level and then specifically as it relates to retail or consumer industries? You know, are you mainly making loans to DTC or internet businesses, or do you also, you know, invest in traditional brick and mortar companies within at the portfolio level?
Yeah, so let me take the last one first, which is candidly that, so that is a sector and an industry that our private equity side is very deep and experienced in.
We tend to, on the credit side, to shy away from that industry, from an investment perspective, just because we find, B2B businesses or companies that are, you know, focused on, on, you know, end businesses to be more attractive, more stable, more predictable, more easier to underwrite, the value proposition of their product, the use case, and things of that nature. So I, from that perspective, that actually tends to be a sector that we have historically shied away from. I found that to be a better equity play versus a credit play. In terms of sourcing and origination, we have a number of operating advisors spread across the U.S. who meet with management teams, attend conferences, and are out there, you know, looking at potential, either working with sponsors on their potential acquisitions or looking at entrepreneurs or management-owned companies.
Additionally, you know, within our various different industry verticals, we have members of our team who are at industry-specific conferences doing deep dives on subsectors within healthcare or within software, whether it is a, whether it's a niche software application. And that is really where, again, from an industry perspective, we are sourcing our, our transactions that are non-sponsor related for, for sponsor related transactions. You know, we're obviously talking directly with the sponsors and they themselves are looking across a number of different industries. And we tend to, you know, focus our resources and energy on those opportunities with the sponsors that more closely align the industries that we find most attractive.
Great, great. Maybe one last question, just curious as to your outlook on balance sheet growth, you know, just kind of focusing on cash and investments as well as the liability side.
Yeah, I'd say, I'd say for Portman Ridge, you know, we're, we're kind of right in sort of the sweet spot of where we think our leverage level should be. We're kind of at about, you know, somewhere, you know, 1.3-ish times net leverage. You know, we've kind of publicly said we're kind of what we think we should be operating between 1.25-1.4 times. So I think we're at kind of a relatively reasonable leverage level. And so what that means, kind of, kind of thinking through the balance of the year, I'd say on the margin we would probably be a net deployer of capital, but I think generally speaking, our focus, at Portman and our focus on the balance sheet would be, would be maintaining or slightly growing the balance sheet, but nothing, you know, significant relative to, relative to where we are today.
We think we're in a good spot. We think we're at a good leverage level. We like our portfolio. I think we would, we would look to be relatively consistent there from a liability perspective. You know, we have a revolving credit facility with J.P. Morgan, that is about $92 million funded today, and, and can go up to as high as, $115 million. So we have growth there. And then there's an accordion on top of that $115 to go up significantly higher. However, we kind of really focus on where our leverage levels are and we think we're kind of in a, in a fairly reasonable spot. S o again, we'd expect, you know, maybe a slight increase in our balance sheet, but generally speaking, you know, fairly consistent with, with current levels.
That makes sense. That's great. Patrick, thank you very much for the time and the overview. You know, we really appreciate it. I know there are a couple of questions we might not have gotten to. If anybody has any further follow-up questions, feel free to reach out to Portman Ridge directly, or you can contact Sidoti. But Patrick, thanks again. We really appreciate it.
Yep. Thank you. Really appreciate it.
Thanks, everybody. Take care.