180 Degree Capital Corp. Issues Q1 2025 Shareholder Letter

Core Viewpoint - 180 Degree Capital Corp. is optimistic about its proposed Business Combination with Mount Logan Capital Inc., believing it will create significant shareholder value and enhance its net asset value (NAV) [1][4][13]. Financial Performance - As of Q1 2025, 180 Degree Capital reported a net asset value per share of $4.42, reflecting a decrease of 4.7% from the previous quarter [1][14]. - Mount Logan's financial statements were converted from IFRS to US GAAP, resulting in an increase in reported fee-related earnings for 2024 to approximately $9.1 million and an increase in shareholder equity value to approximately $104.1 million as of December 31, 2024 [2][3]. Business Combination Details - The proposed Business Combination is expected to yield a combined entity with an estimated shareholder equity value of nearly $140 million, with 180 Degree Capital shareholders potentially receiving a portion greater than their NAV at the time of the transaction [4][6]. - The support from significant shareholders, who account for approximately 27% of outstanding shares, indicates strong backing for the Business Combination [12][13]. Investment Strategy and Market Position - Mount Logan has approximately $2.4 billion in assets under management, which is expected to generate predictable fee revenue and provide operational leverage through its association with BC Partners [9][10]. - The focus on the fast-growing private credit market positions Mount Logan as an undervalued opportunity, particularly as it is listed on the Cboe Canada exchange rather than a US national exchange [9][10]. Historical Performance - Since the management takeover in 2016, 180 Degree Capital has generated a gross total return of 198.7% and a net total return of -37.0% as of Q1 2025 [11][14]. - The public portfolio's gross total return for Q1 2025 was 4.5%, outperforming the Russell Microcap Index, which had a total return of -14.4% [11][14].