Office 1600 Rosecrans Ave., 4 th Fl. Manhattan Beach, CA 90266 Tel: 800.579.1651 Bill Hansen

1. Office 1600 Rosecrans Ave., 4th Fl. Manhattan Beach, CA 90266 Tel: 800.579.1651 Bill Hansen Chief Marketing Officer Email: bhansen@southlandcapitalmanagement.com BDC Fund II L.P.  Invest in debt. Visit Us @ www.southlandcapitalmanagement.com

2. BDC Fund II, L.P. – Disclosure This presentation is not an offer to sell or a solicitation of an offer to buy an interest in the Fund. This presentation is intended merely to determine expressions of interest in the Fund. Any offer or solicitation may only be made after formation of the Fund and preparation and delivery of the Fund’s Confidential Offering Memorandum. This presentation does not include certain information that should be considered relevant to any future investment in the Fund, including , but not limited to, significant risk factors and complex tax considerations. As will be more fully set forth in the Fund’s Confidential Offering Memorandum, the Fund will not be limited in the types of investments in which Southland Capital Management may invest or on its use of margin. An investment in the Fundis suitable only for qualified investors who understand the risks of such an investment. Each investor should carefully read the Fund’s Confidential Offering Memorandum when available and, as necessary, ask questions of Southland Capital Management and consult with his or her own professional advisors, before making an investment determination. An investment in the Fund is subject to a variety of risks. There can be no assurances that the Fund’s investment objectives will be achieved or that investors will not suffer losses. Certain Information contained in these materials has been furnished by third - parties which Southland Capital Management deems reliable but which has not been independently audited and is not guaranteed.

3. BDC Fund II, L.P. Only “hedge fund” principally invested in the common stock of Business Development Companies (“BDCs”). Fund utilizes up to 2x margin debt leverage to arbitrage dividend income and price appreciation. Manage Fund volatility by strategic investments in BDC Notes, High Yield Bonds and Floating Rate debt. Fund pays dividend monthly and has no lock-up.

4. 1 Highest Yield Leveraged Debt sector: 9.0% p.a. 5 Reasons To Invest In BDC Sector 2 BDC Asset Coverage Requirement = Low Risk 3 Managed by top financial groups 4 Fast growing: total assets, number of players 5 Sector increasing in popularity but still under-valued

5. A Brief BDC Primer On Business Development Companies

6. As part of the Small Business Incentive Act of 1980, Congress created a public investment company vehicle called a “business development company” in order to encourage the flow of public capital to private businesses. BDCs are publicly registered, closed-end investment companies with shares that trade like stock on an exchange. As a result, BDCs are available to public investors who otherwise would not generally have access to private equity funds. Unlike traditional private equity funds, BDCs operate for an indefinite period and continually recycle their contributed capital. Historically, BDCs have made debt and equity investments in small middle-market companies and returned the bulk of the profits to stockholders in the form of quarterly dividends.

7. The Business of BDCs BDCs provide capital in the form of senior debt, subordinated debt and equity to Private Equity-backed middle-market companies. Capital usually required for buy-outs and re-capitalizations. BDCs serve both as financiers and buy-out sponsors. BDCs income consists of interest on senior and subordinated debt, and gains from sale of equity interests. BDC expenses consist of interest expense on borrowings, operating expenses & management fees.

8. Tax Treatment of BDCs Generally, a BDC will elect to be treated as a regulated investment company (RIC) for tax purposes to avoid corporate level taxation on ordinary income and capital gains distributed to its stockholders as dividends. As a RIC, a BDC is required to distribute at least 90 percent of its ordinary income & realized net short-term capital gains in excess of realized net long-term capital losses and to meet specified source of income and asset diversification requirements. Distributions out of capital gains to individual stockholders are generally eligible for favorable capital gain tax treatment.

9. BDCs may utilize leverage, but are subject to 1940 Act Limits which generally require at least 200 percent asset coverage as measured after any borrowing. Effectively, a BDC’s debt NEVER exceeds 100% equity. Currently, average debt to equity around 0.6 : 1.0 BDCs have very low leverage compared to competitors such as banks, finance companies or CLOs, where debt can be 10-15x X equity. Restrictions on Leverage

10. BDCUniverse 80 active public BDC Companies - Includes some smaller BDCs not worth the trouble and VC oriented we ignore We track 50 public BDC companies, (plus OXLC and KED-which are not BDCs) Also track 45different BDC Notes As of December 31, 2016 BDCs tracked had combined equity market capitalization in excess of $45 billion

11. BDCCompetitors BDCs compete with: Banks Insurance Companies Private Leveraged Debt Funds Private Investors

12. Why invest in BDCs Regular Dividends Recession Resistant Diversified Liquid Regulated Top Tier Asset Management Organizations High Yields

13. Regular Dividends Required by law to pay-out 90% of taxable earnings. Virtually all BDCs pay a dividend monthly or quarterly. Typically 7% – 12% yield per annum. 2009-2016: 49 of 50 BDCs paying regular cash dividend

14. Recession Resistant Great Recession However 4 of 21 BDCs Distributions Dropped 54% Top Ten BDCs of 21: Dividend Down Only 14% Dividend Unchanged or Increased Through Recession No BDC Has Ever Filed For Bankruptcy

15. Diversified BDCs invest in senior, subordinated and equity. BDCs invest in hundreds of different industries. BDCs invest in over 2,000 private companies of all sizes. BDCs loan sizes from $50k to over $100 million.

16. Liquid All BDC stocks and Notes trade on major U.S. exchanges. Shares volume tens to hundreds of thousands a day. Average daily trading volume Investor base: 60% institutions 40% retail $200M

17. Regulated And Transparent As any public company, BDCs must file periodic reports with the SEC as well as proxy statements. Must publicly file quarterly financial statements identifying the current fair value of each portfolio company held by the BDC. BDCs are subject to Sarbanes-Oxley and the corporate governance requirements of the self-regulatory organizations that govern the markets. BDCs books are subject to periodic SEC examinations.

18. Top Tier Managers Most BDCs sponsored by blue chip financial parents with long track records of credit underwriting. Managers include: Apollo BlackRock Kayne Anderson Kohlberg Capital Thomas H. Lee

19. High Yields Current dividend yield of BDCs 9.0% per annum BDC Notes yield between 6.25% - 7.5% per annum Many BDCs expected to increase dividend per share Far higher yield than MLPs, REITs, investment grade bonds etc.

20. Why invest in the fund? Experience of Principals Extensive Risk Management Positive Yield Arbitrage Highly Liquid Investment Transparent Fund Management Manager’s Interests Aligned With Investors Superior Long Term Return

21. Experience of Principals 60 years of combined experience in private company buy-outs. Nicholas Marshi William Hansen Lender with Citibank Investment Banker/Lender/Investor with Kleinwort Benson. Founded and managed two Private Buy-Out Firms for over 25 years. Editor “BDC Reporter”. Investor in BDCs and Leveraged Debt for 10 years + Investment Banker working with middle market companies Fund Raiser and deal originator for NYC based LBO Firms Co-Founder of Private Buy-Out Firm/Investor for over 25 years.

22. Extensive Risk Management Diversify portfolio across multiple Leveraged Debt sectors: to reduce volatility. Implement host of Credit, Liquidity & Interest Rate risk management policies. De-leverage portfolio and/or shift asset mix at times of market pull-backs.

23. Positive Yield Arbitrage Average Asset Yield Across All Debt Sectors: Margin Interest Cost: Net Yield: Low Rates Expected To Continue: 8.0% 1.0% 7.0% 5 Years +

24. Transparent Fund Management Independent Custodian: Pershing Securities / Bank of New York Third Party Administrator: PartnersAdmin, LLC Annual Audit: Weaver &Tidwell Monthly Reporting

25. Highly Liquid Investment All Fund investments are in highly liquid common stock traded on major U.S. stock exchange. Fund could sell 90% of entire portfolio same day, 100% 3 days. Investor has the right to receive dividend income on a monthly basis & repayment of investment without penalty.

26. Manager Investment Manager invested in Fund since inception. Manager has bulk of net worth in Fund. Manager committed to maintaining capital invested.

28. Management Southland Capital Management LLC (“SCM”) Principals: Nicholas Marshi / William Hansen Office in Manhattan Beach, CA

29. Investment Management Target: BDC common stocks expected to maintain/increase dividend, and trading at discount to Realizable Value Diversify portfolio with strategic investments in higher quality BDC Notes, Floating Rate Loans & High Yield Bond ETFs & CEFs. Sell/Short: Over-valued BDCs to realize gains. Shift portfolio mix with changing market conditions. Maintain high levels of dividend/interest income.

30. Monitoring In-depth “bottoms up” analysis on all BDCs tracked through review of all SEC filings, press releases, Conference Calls, etc. Maintain proprietary database on stock price & trends on 100+ Leveraged Debt investments across all sectors. Track performance of individual stock, sector, volatility performance in real-time.

32. Reason To Invest In Fund Now Leveraged Debt credit quality best in years – Expected to continue for years Most BDCs still trading below Realizable Value BDCs have capital to deploy, which will increase earnings/dividends Risk management policies limit downside risk Fund aims to earn double digit return with below average volatility

33. Contact Office 1600 Rosecrans Ave., 4th Fl. Manhattan Beach, CA 90266 Tel: 800.579.1651 Bill Hansen California Registered Advisor Chief Marketing Officer Email: bhansen@southlandcapitalmanagement.com Feel free to call for a confidential conversation about investing in the Fund, and other Leveraged Debt investment opportunities Visit Us @ www.southlandcapitalmanagement.com Accredited investors, Advisors and Institutions Talk to us about the Fund or tailor-made Separately Managed Accounts Follow our highly popular Blog at our site @ www.bdcreporter.com Follow Us