Business Development Companies

#InsideAlts Business Development Companies ODERATOR Carl Delfeld Managing Partner Chartwell Partners PANELISTS Ira Wishe Managing Director BDCA Brody Browe Executive Director, Fund Strategy Franklin Square Capital Partners John Kneisley Managing Director Prospect Capital

What is a Business Development Company? 1940 Mutual Funds 1960 REITs 1980 BDCs History:! Enacted by Congress in 1980 through the passage of the Small Business Investment Act! Created to facilitate increased capital flows to small and mid-sized US businesses Requirements:! BDC s must distribute at least 90% of income and capital gains! Restricted to investments in privately held or small publicly traded US companies! Quarterly net asset value disclosure! Currently restricted to no more than 50% leverage Institutional Communication Not For Further Distribution A Core Income Alternative 2

The Growth of the BDC Industry $70 Total Assets for Publicly Traded BDCs ($ in billions) $60 $60.0 $50 $45.7 $40 $36.5 $30 $25.1 $25.1 $30.2 $20 $16.2 $19.7 $19.6 $10 $3.2 $7.0 $10.7 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Company Filings Institutional Communication Not For Further Distribution A Core Income Alternative

Tranches of Credit Priority of Claim on Assets and Cash Flows of the Company First Lien Secured Debt Second Lien Secured Debt Mezzanine Debt Common Equity Institutional Communication Not For Further Distribution A Core Income Alternative

Middle Market Senior Secured Loans! Security Typically Secured by a First Lien on Assets! Priority First Priority of Payment in a Bankruptcy! Middle Market Tighter Structures Lead to Stronger Lender Protection! Recovery Historical Recovery Rate of 80.3% on Defaulted Loans*! Interest Rate Protection Floating Rate! Stability U.S Corporate Borrowers *Moody s Investor Service, Annual Default Study: Corporate Default and Recovery Rates, 1920-2013, February 2014 Institutional Communication Not For Further Distribution A Core Income Alternative 5

Business Development Corporation of America ( BDCA ) is a publicly offered, non-traded business development company. BDCA invests in the debt and equity of private U.S. middle market companies. CLOSED TO NEW INVESTORS Offering Details 250,000,000 shares of common stock Current Offering Price $11.15 per share Fund Type Publicly registered, non-traded Business Development Company Portfolio Investments Senior secured loans, second lien loans, mezzanine loans and preferred equity in private U.S. middle market companies Business Development Corporation of America II is a publicly offered, nontraded business development company. BDCA II invests predominately in first lien, floating rate loans and, to a lesser extent, second lien, floating rate loans of U.S. companies with large principal amounts that are broadly syndicated and have, or will have an active secondary trading market. Offering Details 300,000,000 shares of common stock Current Offering Price $10.00 per share Fund Type Publicly registered, non-traded Business Development Company Portfolio Investments First lien, floating rate loans, and to a lesser extent, second lien, floating rate loans of U.S. companies The AR Capital BDC Income Fund s ( the Fund ) investment objective is to provide a high level of income, with the potential for capital appreciation. The Fund will invest substantially all (and under normal market conditions, at least 80%), of its net assets in common stocks and other equity securities of business development companies that are traded on one or more nationally recognized securities exchanges. A Core Income Alterna.ve 6

For More Information! This is not an offer or solicitation for the purchase or sale of any financial instrument. It is presented only informational purposes. Information and statements concerning financial market trends are based on current market conditions, which will fluctuate. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities.! These slides are not intended to be used to make any specific recommendations or imply/guarantee any type of market performance for the asset categories discussed. The information contained in these slides was taken from third-party sources that we believe to be reliable, but cannot guarantee its accuracy or completeness.! Performance data quoted herein represents past performance, and past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.! Prospective investors should consider the investment objectives, risks, and charges and expenses of the AR Capital BDC Income Fund (the Fund ) and BDCA II carefully before investing. The Fund s prospectus contains information about these important issues as well as other information about the Fund. A prospectus for the Fund may be obtained by calling (877) 373-2522 or writing us in care of: AR Capital Real BDC Income Fund, 405 Park Avenue, New York, NY, 10022. You may also download a copy of the Fund s prospectus by going to www.arcincomefunds.com. Please read the prospectus carefully before investing. Institutional Communication Not For Further Distribution A Core Income Alternative

FS Investment Corporation Overview MARKET LEADING DIRECT LENDER 3 rd largest externally managed business development company (BDC) by total assets 1 $2.5 billion market capitalization 1 Focus on direct lending and opportunistic investments MANAGED BY FRANKLIN SQUARE CAPITAL PARTNERS & GSO / BLACKSTONE DISCIPLINED STRATEGY WITHIN ATTRACTIVE MIDDLE MARKET SECTOR Franklin Square Capital Partners: Largest manager of BDCs with $14.5 billion in BDC AUM 1 GSO: Credit platform of The Blackstone Group with $75.0 billion in AUM 2 Platform delivers scale, access, pricing power and other competitive advantages Focus on long-term credit performance and principal protection Traditional bank lenders exiting the middle market due to regulatory and capital pressures Able to offer value to borrowers including certainty of execution, financing customization, reputation and access to the Blackstone Group Purchasing Organization (GPO) 1 As of March 31, 2015. Franklin Square Holdings, L.P. does business as Franklin Square Capital Partners (Franklin Square). FB Income Advisor, LLC (FB Advisor), an affiliate of Franklin Square, is the investment adviser to FS Investment Corporation (FSIC). Assets under management (AUM) include assets of FSIC, FS Investment Corporation II (FSIC II), FS Investment Corporation III (FSIC III) and FS Energy and Power Fund (FSEP). 2 As of March 31, 2015. GSO / Blackstone Debt Funds Management LLC (GSO / Blackstone), a subsidiary of GSO Capital Partners LP, is the sub-adviser to FSIC.

Introduction to Franklin Square Capital Partners FS Investment Corporation (NYSE:FSIC) FS Investment Corporation II (FSIC II) FS Investment Corporation III (FSIC III) FS Energy and Power Fund (FSEP) FS Global Credit Opportunities Fund LAUNCH January 2, 2009 June 18, 2012 April 2, 2014 July 18, 2011 December 12, 2013 INVESTMENT OBJECTIVE Income Income Income Income and growth Total return FUND TYPE BDC BDC BDC BDC Closed-end fund ASSETS UNDER MANAGEMENT as of 3/31/2015 $4.4 billion $5.0 billion $1.4 billion $3.8 billion $1.2 billion FUND FOCUS Senior secured loans of private U.S. companies Senior secured loans of private U.S. companies Senior secured loans of private U.S. companies Senior secured debt and equity of private U.S. energy and power companies Global credit $125 Million Sponsor Commitment 1 1 As of March 31, 2015. "Sponsor Commitment" means proceeds from investors affiliated with the investment advisers of FSIC II, FSIC III, FSEP and FS Global Credit Opportunities Fund and GSO / Blackstone, including certain members of the board of directors (or trustees) of such funds.

Franklin Square s Fundraising Model WE BELIEVE UNLISTED FUNDS ARE AN EFFICIENT STRUCTURE TO RAISE EQUITY Franklin Square BDC Assets Under Management 1 $13.8 billion FSIC does not need to be a serial equity issuer for Franklin Square to generate growth Continuously offered funds enable Franklin Square to raise and deploy capital during all market conditions $10.3 billion $5.9 billion $2.3 billion $110 million $782 million Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 1 Includes assets of FSIC, FSIC II, FSIC III and FSEP. 11

FSIC s Competitive Advantages SCALE INVESTMENT EXPERTISE ACCESS COMPETITIVE ADVANTAGES LARGEST MANAGER OF BDCs OVER 250 employees 1 SCALE allows for one-stop financing solutions and low cost structure 308 PORTFOLIO COMPANIES across entire BDC platform 2 LEADING MANAGER OF ALTERNATIVE CREDIT focused on non-investment grade corporate debt GLOBAL PRESENCE with 260+ employees 1 INVESTMENTS IN ~1,100 issuers 3 $25.6 BILLION in directly originated transactions 1 LEADING MANAGER OF ALTERNATIVE INVESTMENTS LEADING FRANCHISES in credit, private equity, real estate, hedge fund solutions and financial advisory BRAND AND SCALE provides exceptional access BLACKSTONE S GROUP PURCHASING ORGANIZATION available to FSIC portfolio companies 1 As of March 31, 2015. 2 Includes portfolio companies of FSIC, FSIC II, FSIC III and FSEP as of March 31, 2015. 3 As of March 31, 2015. Includes all issuers covered by GSO s Customized Credit Strategies team, including, but not limited to, broadly syndicated assets, middle market assets, high yield bonds, mezzanine transactions, CLO or other structured products, and originated transactions.

Strong Historical Returns FSIC OUTPERFORMED LOANS AND HY INDICES IN 1, 3 AND 5-YEAR PERIODS 1 12.0% 8.0% 2 FSIC BaML U.S. High Yield Index 4 CS Leveraged Loan Index 7.2% 3 11.1% 11.1% 8.4% 8.9% 5.8% 5.8% 4.0% 2.5% 2.1% 0.0% 1-Year 3-Year 5-Year 1 1, 3 and 5-year returns as of December 31, 2014. 2 FSIC s average annual returns equal the NAV per share as of the applicable period end, plus any distributions declared during such period, divided by the NAV per share as of the beginning of the period, compounded quarterly. These total return figures do not represent an actual return to stockholders. 3 Represents the average annual return of the Bank of America Merrill Lynch High Yield Index, compounded quarterly. 4 Represents the average annual return of the Credit Suisse Leverage Loan Index, compounded quarterly.

Blackstone GPO Program Can Create Value 5.4% AVERAGE EBITDA SAVINGS FOR COMPANIES IN GPO PROGRAM The first Franklin Square BDC portfolio company joined the GPO program in August 2012 Since that time, 14 more Franklin Square BDC portfolio companies have implementations underway Several portfolio companies in process to join Program available to all direct originations in FSIC s portfolio GSO recently hired an employee to help manage the GPO program for Franklin Square portfolio companies Company Implementation Start Base EBITDA 1 Annual Savings 1, 2 % of EBITDA Company 1 Q3 2012 $13.5 $4.4 32.3% $34.9 Company 2 Q1 2013 23.3 0.4 1.7 2.8 Company 3 Q2 2013 34.0 0.4 1.2 2.6 Company 4 Q2 2013 23.0 0.1 0.4 0.5 Company 5 Q3 2013 8.0 1.2 15.5 7.7 Company 6 Q3 2013 7.0 0.5 7.1 2.4 Company 7 Q4 2013 24.0 2.1 8.6 12.8 Company 8 Q1 2014 19.5 0.4 2.1 2.4 Company 9 Q1 2014 143.0 3.8 2.6 22.5 Company 10 Q1 2014 11.2 0.2 1.6 1.2 Company 11 Q2 2014 34.1 0.7 1.9 5.2 Company 12 Q2 2014 59.6 0.7 1.1 5.4 Company 13 Q3 2014 144.7 2.3 1.6 14.9 Company 14 Q4 2014 177.6 3.0 1.7 19.5 Company 15 Q1 2015 18.9 0.2 1.1 1.4 Enterprise Value Impact 1, 2 Total / Average $20.2 5.4% $136.3 1 Dollar amounts in millions. 2 Average of estimated values based on GSO projections.

PROSPECT CAPITAL CORPORATION NASDAQ: PSEC MIDDLE MARKET FINANCE AND PRIVATE EQUITY #InsideAlts

PSEC IS THE LARGEST MULTI-LINE BDC SIGNIFICANT DISTRIBUTIONS CREDIT QUALITY / DISCIPLINE EMPHASIS ON SECURED LENDING NUMEROUS INVESTMENTS NO INDUSTRY CONCENTRATION ORIGINATION MIX DIVERSIFICATION LARGER BORROWER SIZE Attractive double-digit dividend yield, paid monthly 13.6% as of 6/30/2015 Non-accruals are 0.52% of total assets as of 3/31/2015 3,000+ opportunities originated per annum Only ~2% of the opportunities reviewed per annum survive the due diligence process to result in closing Continued focus on secured lending, with approximately 75% of the balance sheet as of 3/31/2015 comprised of secured loans Portfolio has 132 investment counterparties with the average exposure at 0.76% of the portfolio Portfolio is invested across 29 industries with deep centers of industry expertise within the Prospect team Nine yield-oriented origination strategies: (1) private equity sponsor finance, (2) direct non-sponsor lending, (3) one-stop operating buyouts, (4) one-stop finance buyouts, (5) structured credit, (6) real estate, (7) online lending, (8) aircraft leasing, and (9) syndicated debt investing Flexibility to vary our origination mix profile in accordance with relative attractiveness, providing discipline from a multi-line model As our scale and average deal size each have grown, so has the size of our average borrower (weighted average portfolio company EBITDA $40+ million) Larger borrowers better equipped to withstand a downturn Source: Company filings, investor presentations and management. #InsideAlts

PSEC HAS GENERATED SUPERIOR OPERATING RETURNS COMPARED WITH PUBLICLY-TRADED BDC MEDIAN OVER THE PAST 5 YEARS 80% Dividends Plus Change in NAV Per Share +79% 70% 60% Publicly-Traded BDC Median PSEC +59% Cumulative Returns 50% 40% 30% 20% 10% 0% 2009 2010 2011 2012 2013 2014 Note: Dividends plus change in net asset value compounded on a calendar year basis. Investors purchase and sell shares of PSEC common stock at prevailing market prices, which may be higher or lower than NAV. Information related to past performance, while potentially helpful as an evaluative tool, is not necessarily indicative of future results. PSEC and BDC median net asset values may have declined for periods since 12/31/14. Source: PSEC analysis of Capital IQ data on 24 constituents of WF BDC Index as of 5/29/2015 that have been active from 2009 trough 2014. #InsideAlts

PSEC HAS OUTPERFORMED PUBLICLY-TRADED BDC MEDIAN OPERATING RETURNS IN EACH OF THE PAST 5 YEARS 16.1% Dividends Plus Change in NAV Per Share Publicly-Traded BDC Median PSEC PSEC is one of only 4 BDCs to have outperformed the publiclytraded BDC median in each of the past 5 years (83 rd percentile) 10.6% 12.9% 7.4% 12.6% 11.2% 11.0% 11.4% 7.9% 8.9% 9.6% 12.4% 2010 2011 2012 2013 2014 5 5 Year Average Note: Dividends plus change in net asset value per share compounded on a calendar year basis. Investors purchase and sell shares of PSEC common stock at prevailing market prices, which may be higher or lower than NAV. Information related to past performance, while potentially helpful as an evaluative tool, is not necessarily indicative of future results. PSEC and BDC median net asset values may have declined for periods since 12/31/14. PSEC and BDC median net asset values may have declined for periods since 12/31/14. Source: PSEC analysis of Capital IQ data on constituents of WF BDC Index as of 5/29/2015 for which there is data for each period (24 in 2010, 27 in 2011, 33 in 2012, 38 in 2013, and 40 in 2014). #InsideAlts

HISTORICAL RETURNS OF PSEC SHARES AT CERTAIN DISCOUNTS TO NAV Internal Rate of Return Including Dividends After One Year 94% 110% 57% 60% Discount to NAV 20% 25% 30% 35% Last 3me PSEC stock traded at approx. this discount to NAV 10/4/2011 8/10/2011 3/17/2009 3/11/2009 Share price on this date $8.25 $7.71 $7.61 $7.13 Share price aier one year $11.62 $10.94 $12.39 $12.52 Note: Internal rate of return defined as the annualized effective discount rate at which the present value of all future cash flows is equal to the initial investment. Information related to past performance, while potentially helpful as an evaluative tool, is not necessarily indicative of future results. As share price fluctuate in relation to net asset value, investments at other dates would have resulted in lower or negative internal rates of return. Source: PSEC analysis of Capital IQ data trough 5/29/2015. #InsideAlts

SENIOR MANAGEMENT HAS MADE SIGNIFICANT INVESTMENTS IN PSEC $43.6M Form 4 Purchases (January 2010 to May 2015) $14.8M $12.2M $8.0M $2.0M $4.9M PSEC FSC ARCC FSIC AINV BDC Median 5 Largest Publicly-Traded BDCs by Book Equity Source: PSEC analysis of Capital IQ data on 24 constituents of WF BDC Index as of 5/29/2015 that have been active during this period. PSEC senior management has not sold any of such investments. #InsideAlts