CNL Strategic Capital LLC, a publicly registered non-traded limited liability company, has reported its operating results for the year ended December 31, 2020, its third year of operation. The company acquires controlling equity stakes in combination with loan positions in privately owned middle-market businesses.
CNL Strategic Capital received approximately $125.3 million from the sale of approximately 4.4 million shares during the year, bringing total gross proceeds to $291 million.
As of December 31, 2020, the company had approximately $314.1 million in total assets, compared with approximately $175.5 million for the same period in 2019.
The company closed on investments of approximately $64.2 million in three portfolio companies in 2020 bringing total portfolio companies to seven as of December 31, 2020.
The portfolio generated $22.8 million in unrealized gains in 2020.
The total investment return based on net asset value after incentive fees per share for the year was approximately 13.2 percent for Class FA shares, 11.9 percent for Class A shares, 10.1 percent for Class T shares, 10.7 percent for Class D shares, 12.0 percent for Class I shares and 12.8 percent for Class S shares.
The total investment return based on net asset value after incentive fees per share, since inception through the year ended December 31, 2020, was approximately 36.1 percent for Class FA shares, 30.8 percent for Class A shares, 25.6 percent for Class T shares, 24.4 percent for Class D shares, 31.9 percent for Class I shares and 12.8 percent for Class S shares. All returns listed are prior to any applicable sales load and assume shareholders reinvested their distributions.
In 2020, CNL Strategic Capital declared distributions of approximately $9.9 million to its shareholders. Since beginning operations in February 2018, the company has declared distributions of approximately $19.3 million.
“We are pleased with our portfolio companies’ performance during 2020, particularly given the disruption from COVID-19,” said Chirag Bhavsar, chief executive officer.
As of December 31, 2020, the portfolio consisted of investments in seven companies across six industries. The investments at fair value grew by approximately $87 million to nearly $231.2 million as of December 31, 2020, compared to $144.2 million for the same period in 2019.
CNL Strategic Capital closed on investments of approximately $64.2 million in three portfolio companies in 2020. In January 2020, the company closed on an investment in Resolution Economics, a leading specialty consulting firm that provides services to law firms and corporations in labor and employment and commercial litigation matters. In March 2020, it invested in Blue Ridge ESOP Associates, a third-party administrator of employee stock ownership plans and 401(k) plans. In July, the company invested in Healthcare Safety Holdings LLC, which produces daily use insulin pens, syringes and related products for the human and animal diabetes care markets.
For the year ended Dec. 31, 2020, distributions were paid from multiple sources and these sources included net investment income before expense support of 42.2 percent, reimbursable expense support of 33.2 percent, and offering proceeds of 24.6 percent.
CNL Strategic Capital is externally managed by CNL Strategic Capital Management LLC and Levine Leichtman Strategic Capital LLC.