HTGC - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen, and welcome to Hercules Capital First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Michael Hara, Managing Director of Investor Relations.

sir. begin, may You

Michael Hara

our Good the and With first today Officer; and our Chief and Scott section the from Nicole. Officer conference us Investor can to quarter be Hercules Financial after just at Meyer, call call Bluestein, were Relations are results accessed Hercules for quarter from financial Chief afternoon, released you, Seth Executive welcome htgc.com. today's and Investment everyone, Hercules Officer. on interim Thank of first Chief XXXX market close Hercules' XXXX.

We have replay pass-code of telephone at call provided by the and or using arranged for number release. a Hercules webpage earnings in today's the

Commission we financial and those results. contained may current may call, delays statements forward-looking herein expectations. due this to results based the release, the Actual with final this timing date of on of audit Exchange differ During filed between then from make and confirmation the Securities

current statements are that uncertainties, and the the to the addition, materially risks filings our actual those the including uncertainty SEC. factors and future identified and turbulence differ contained without to performance from surrounding and limitation, statements are forward-looking are release These that to results time not in other cause of are factors in other expressed statements. In the we’ve statements market time including from with the uncertainties forward-looking purely guarantees this historical could subject in not forward-looking

those assumptions could on the and assumptions incorrect. result that assumptions these as the those inaccurate, on can reasonable, be statements we Although be of based also forward-looking statements to believe which forward-looking are prove any a

subsequent to in turn statements obligation our of made hereof as Hercules visit Scott. will related the release the or these You I events. no forward-looking should upon are To undue call obtain not With of statements. the that, this please SEC update copies statements at over assumes filings, The website and forward-looking date htgc.com. forward-looking to place contained reliance

Scott Bluestein

Thank for on everyone, QX and thank you, all standout afternoon, quarter fronts Michael, multiple Hercules. you today. us a joining for and good was

the As that lender no position to continues grow affords in venture our market possesses. leading venture and us it strengthen, optionality other lending

of structure to Our scale Hercules QX quality consistent crossed has in and combined deliver the are unique The level able portfolio, but billion bench which demonstrate. poses shareholder our the sustained to to internally diversity of industry-leading long-term, that many and managed and origination none There our designed deliver of $X been returns. approaches breadth, depth with is our credit investment proven platform to proprietary lending ability them unmatched. is and

monitor record to million cost. position $XXX.X investment drove of our and need unfounded the investment delivered constant addition, leading always and commitments we of maintaining and mitigate $XXX.X $XXX.X and during portfolio our commitments X.X% assets. with that and carefully manage In portfolio helps In debt at key economic team when to risk growth portfolio commitments total QX, forward-looking professionals communication our only of debt in they arise. our and the meet level Net or in that a with basis. equity companies borrowers’ million, us XX deep will of and of to visibility diligent modest unfunded while We best-in-class provides a a our $XXX.X us We navigate available our ensure second million debt quarter, funded highest to $X.X million on of experienced as new of be history. monitoring billion

same was credit an approximately portfolio grew achieved X% basis. quarter-over-quarter from discipline consistent on it and XX% investment by with and have that strong of demonstrated is where underwriting the we This XXXX. up total was focus QX growth Our in

as closed of of expense and to $XXX.X debt QX new platform. and are clearly million demonstrating internally through grow $XXX are equity QX March, XX, the at April we of credit quality. of million equity commitments, half close our new has million. dedication of Hercules our As $XXX the $XXX.X BDC, incentivized commitment, XXXX, commitments in nonbinding at team and in has was term not of debt XXXX, simply million million second commitments XX, pending the asset April the closed sheets. and pending managed Of tremendous an signed the Year-to-date and and our investment Since of of $XXX.X base commitments and resilience closed

see, far remained historical remains you our that and pipeline We deal meet for to ability optimistic As seeing our pipeline potential deals or billion. continue deal QX our remain can the as evaluation quality, new conversion unabated. of so be currently what standards our XXXX in exceed and $X.X close healthy robust, our over of at by and to we we're in selective

credit has maintained. our the we I funnel focus will underwriting we While same always the to deal of and have expanded, top remain that that discipline committed reiterate

markets. on our of the two deal pass investment in opportunities added optimistic to environment core strong continue team the that our support in new investment professionals outlook majority growth despite we evaluates, To XXXX, and our screens We competitive the QX. continued for

our at share. to billion size current combined earnings at distribution and at $X.X $X.X the We $X.XX we continued our debt will per areas add quarterly for at opportunistic on at growth. our the With organization and focus the manage are and pipeline per spillover our a we portfolio base the total with $X.XX and portfolio that cost billion strength investment year positioning continue ensuring the Company as to to other share, investment our now cost, selective of of decision the team quality with increase investment both be to we throughout and and made

supplemental announced also In addition, share. a of $X.XX we distribution per

Board a policy. maintains our As distribution reminder, a variable

move continue into So, as we will evaluate further XXXX. to we distribution

basis SBA in on regulatory XX.X%. our As anticipate begun leverage coming at scale, and GAAP with to excluding in increase modestly use a of stated, our we as to we’ve at coming the further adding leverage previously QX XXX.X% debentures

in guidance target and thereafter, times intend historical leverage, leverage we gradually conservative to our if manage step at consistent to death approach conditions market up consistent in remained be deal weighted internal quality X.XX of the X.XX the portfolio previous and However, that average as investment of remains favorable level as compared QX above prudent with beyond. QX XXXX and rating to X.XX our we Credit in and XXXX with credit XXXX. desired quality to in

to percentage chaos were QX that our anticipating. credits, X driven investment in we of portfolio, down X XX.X% rated XX% a went in credits from slightly QX, Our by largely of rated as several overall

portfolio, remained in at QX. And credits, in rated QX than Nonaccruals nonaccrual XX.X% million respectively, and a increased credits on Our of X.XX% $X.X and historic as X.X% respectively. $X.X of rated total with million, cumulative X percentage debt from XX.X% lows with as a make cost overall X investment percentage to two approximately value. value rated Company's our to of X of portfolio and fair our less and at or X% and portfolio investment up the our a value investments investment continue fair investment

the an be into and XX and and as XXXX. this and franchise a remain sustainable, We sponsor. vigilant stage, best of $X.X macro second focused to geography cumulative After we believe move the shareholder of from credit, long-term, on billion intentionally over way on both and We commitments, value. is investment half portfolio delivering we diversified years focused perspective will continue that is sector, drive portfolio to by that

size to and quarter, new ascribe we made and reflect companies the XX scale grow our an equity The commitments focusing borrowers profile During have group and singularly or of is through first expand the of portfolio to and of points us commitments exclusively archived highly any model to they that new on investment we diversified. our equity we the businesses. portfolio fund existing their now or XX ability focus debt one sectors investment multiple sponsors. with provides QX, X of to that own inflection as unique do on closed debt value The We or that delivering the new with during not portfolio the and continue companies. our

strong which and the $XX.X flow and driven U.S. XXXX. raised and realize quarter robust first to during transaction billion demand $XX.X We continue no in loan invested by see the of billion venture activities very investments small part volumes, deal capital-only

Therapeutics, as of future influx many anticipated highly IPOs their with IPO filers. have the we XX, XXXX, addition, has had Lyft, another publically investments Fastly next unicorn and in for their place, monetize three in we Stealth filed provide investments of debuts. VCs Year-to-date taking confidential have funding of the complete seven In and it three Lightspeed, TransMedics will own portfolio companies, companies, additional years. to these Pinterest our Bio Avedro, two

pace. venture-backed and XXXX make healthy very company to favorable, exits for billion XX% in related with a XXX were Historically, majority our remainder continue are QX. companies transactions portfolio QX remain of in in at acquired the XX%. being M&A the of we a versus conditions IPOs continue $X.X events market M&A exit to Assuming for billion of total companies. at steady IPOs pipeline $XX.X portfolio all are liquidity raising XX for of activity ‘XX anticipating up M&A

in market conditions strong along growth anticipate of with to continued yields, our course, NII portfolio growth sustained remain start and seeing XXXX, XXXX, stable Given we assuming favorable.

employees’ and forward underscores our of and tremendous in QX like and our call shareholder leading with of Seth. and pride level and you with entrepreneurs our drives each key the much, contributions each origination partner every Being human every enormous have Our team the discipline would while take to depth performance Thank I of conclude one I VC very We partners employees, truly diligence active creative that on some in will returns. our of all advancing remaining that put dynamic and received. continued and talent, capital has and now towards amazing to of acknowledging focused turn most our is to most over shareholder growth companies increasing value. borrowers, this able by we day. sponsor the XX for some and building and support and thanking what everyone. the team and shareholder further, XX value

Seth Meyer

and and ladies afternoon, gentlemen. Thank good you, Scott,

Scott a had for quarter As been delivered million and has meaningful Hercules. record appreciation strong We totaling very income $XX.X this share. per investment NAV mentioned,

investments income onetime effect Total X.X% of increase effect of the X.X increase $XX.X the quarter. grow excluding $X.XX in investment which the has million on declining increased more experienced helped income per three investment in XXXX. expenses principal was our $X.X basis in share income notes to to and highlights. NAV, want number statement on that, of a net highlights; million Adjusted the recurring a of Number Our a resulting resulted let’s noncore from million our to prior a to lowest number $XXX the early outlook quarter points. the share. I $X.X performance previous unrealized With the turn million focus debt than compared million, first This growth reduced portfolio Today and to Hercules in billion attention was realized income. $XX.X loan statement debt our the in early and the in forma the four, healthy areas. two, income by on pro performance activity; basis first quarter at the $XX.X offset liquidity; balance with number $X.X payoffs quarter. the This, in to related weighted-average combined early cost. and one, repayment following Lower is XXXX by payout since the quarter-on-quarter, million quarter in the income core levels, and to

to and The of effective Our early primary in XXXX and income effective the decrease this of due The fourth identical payoffs core for of I core XX.X% in a the normal level than portfolio effect, had the nearly yields and compared yield points. decrease XX the fourth in basis in mentioned. the of prior expired the higher in current quarter. reason yield commitment XX.X%, of that quarter a was XX.X% respectively, for expired core quarter to to the the reduction were underlying Removing were approximately the income. The quarter commitment and reason first due the XXXX. XX% the lower was yields and the

to has quarter, the large comparative early landscape the the reduced yields of in that of to the to margin core expect related notes. in the broadly, decrease and compared XXXX XX.X% Net to remain XX.X While prior between quarter repayment was yields portion driven down we XXXX a first XX.X% for XX%. income

net forma million impact that the of was XX%. X.X Excluding QX of in pro expense, income margin

on XXXX Our XX.X% average forma prior equity quarter equity notes, for early first for the return same pro return the was in of impact on the to quarter. compared average repayment the of was Adjusting the the XX.X% XX.X%.

Turning expenses. to

to one-time, the total the in XXXX of increase quarter early loan $XX.X The $X.X quarter securitization full expense XXXX operating to repayment the November first of of quarter entire expenses in is related of the XXXX. quarter loan the million, and non-cash the along that’s from million notes is fourth with the and related XXXX interest Our and on acceleration the interest increase $XX.X to the partial fees for The were January compared fees. the of a of securitization. interest interest

cost of prior average for which remove X.X%, quarter’s cost at weighted of the you the Our was cash comparing average acceleration the weighted when X.X%. debt one-time debt X.X% quarter, favorably is with

portfolio related $XX the the $XX activity. or our unrealized on $X.XX NAV, Let's now of million $XX.XX increase to share, to principally We focus and switch unrealized share appreciation the unrealized by the per of saw approximately million. NAV per

$X.X We gains also of realized million. saw

certain Our and S&P which in life declined market reversed, of XXXX. XX.X% and realized first the market $X.X the of in movement, along mainly of at into loss by with of in appreciation similarly, late these driven increase optimism $X.X gain and and can comprised largely of S&P in and To The QX, in of equity quarter XX.X% highlight nonaccrual, unrealized was in on million gains the a of of $X.X write losses increased portfolio the market driven and access down on appreciation debt index by in portfolio. technology quarter the end this position biotech XX.X% were of million And positions. warrant by further $X.X of disruption XX.X% which components million carried $XX of significant by quarter. two in mark of and the broken at million million warrant increased technology gains with was to loan sectors sectors that off The $XX.X market $XX million the be XXXX the the QX, both improvements in XXXX. million being by the driven one was being part equity increased the first the declined appreciation zero

like $XXX from the million in Next, up We with position. available to liquidity discuss I quarter. finished million quarter in the our $XXX would prior liquidity,

The under which first and $XX comprised other to of our revolving subject in and credit borrowing facility undrawn quarter availability million was cash, leverage liquidity of are $XXX million base, restrictions.

new we Wells And Fargo quarter, the our Bank $XX includes with announced up accordion $XXX entered can During facility renewal the million credit of that facility, to four Union the we credit the million. which a up new prior can for of have syndicate the $XXX million. actively we million that utilized facilities facilities and terms quarter. have enhanced from $XXX accordion throughout the to lenders facilities Both

This notes X.XXX%, January, to million times. was the in which we $X.X used fourth million several Additionally, of our million expense. noncash of partially our at was securitization repayment repay closed $XXX $XX.X acceleration XXXX I’ve of the referenced that

inflows to consistent flexibility markets. afford when of us capital and access in terms amortization how and and liquidity position strong we from prepayments Our the

begun As XXX.X% the to and mentioned respectively regulatory and quarter. at GAAP increase end we’ve by our of modestly as first Scott, of XX.X%, the leverage

our the normal XXX% we of With within our with that manage early will the expectation target can amortization for year. And of the XXXX. utilization prepayments program, leverage increase remainder for of communicated ATM and effectively combined

expectations our address like I on related point. Finally, to outlook would expenses and

our with For the of the expenses remainder business we that was line to the the growth year, expect of increase communicated. in

develops. scale as and costs it human the will We capital with borrowing our market

SG&A date. expect year to For we've business million, million to growth $XX.X the second the we seen of expenses with $XX quarter, commensurate

range previously, in the core for remain mentioned to QX. XX.X% XX% yields to expect our we As

you. Instructions] positioned from Operator, over for although begin $XXX I difficult [Operator Jefferies. predict, QX, million Finally, XXXX. we million turn operator quarters the call. prepayment of $XX call million Hecht well the Our us over expect by followed you. first in approximately comes very to XXXX. will our John the closing, I $XXX during remaining to of to now the in question from to part activity Q&A of very to see In each Thank

open. now is line Your

John Hecht

taking Hey, Thanks my afternoon. guys. Good questions. for

one, I there call. moved expense on me increased the First incremental this size guess -- is fee of addressed that I'm if facilities, wondering, the you just The because loans the some new base bank expenses a or of forgive And this because up. renewals of those was quarter?

Seth Meyer

the So, fee you expense said? loan

John Hecht

Yes.

Seth Meyer

Yes.

then that the November quarter So, it quarter second we all QX, QX. was, full really partial related the well were impact January the the wasn't And that full was And to one-off XXXX nothing two securitization, certainly in as the securitization repayment one, was notes. things. It XXXX of not of we of for that at securitization in million XXXX was in we $X.X dimension a securitization had the as the of did. November related January quarter a and the to those all had

John Hecht

you have several more frequently helpful. Very well, Okay. the a Seth, been over secure -- more securitizations And quarters. past using guys

lot you a mix your think we I'm same You've or with and do of you management? to and bank financing kind powder of dry based now strategy would modify do things the of wondering, got about on facilities. how rates liability pursue expect

Seth Meyer

Sure.

market in for warrant base, of our we the well positions that equity smaller setup the the any as facilities and although is as, good and and to new those of business using the securitizing underwriting that part then, asset using in in warehouse, our that new we a debt, in the them don't positions I think, credit positions, instruments, fit our unsecured have into really the the have.

that to evolve. to looking here And for duration market compared So, side. when elements needs to may see the us the that rates an balance But looking we just things, the strategy may to organization at really unsecured were the because the think in when as change. We the QX me, we're the lower us advantage sheet. on we interest continue lengthen cause horizon on I to take decide around wasn't of not were even don't we but now that I the at certainly, looking

buckets I conditions. question, of to think your make different have So, no available, the that may answer anything plan on slight we is we market wholesale the John. utilization But, there to based change that

John Hecht

that you Okay. or wondering is and organization an it Thanks looks the referred to subsegments expanding. very And look of at as that, more mentioned for is does to Scott, And at the when able that technology deal you're you're you much opportunities funnel mean getting that. top I’m of more more just biotech that now? there

Scott Bluestein

I think, by robust driven at years, over quite and of increased it’s that what's the optimism the and team canvassing The that is outlook John. that a of partly remainder broadly significantly is has of combination types for go and The also of after. market, remains of VC terms the number our strong, two, firm that expanded speaking, our that driving breadth the looking in profiles screening Part can fact we're that the deals which the and and has of the have capabilities substantially. of we the is and companies our we platform XXXX.

able of virtue it’s tight at remains as continued as being and strong the expansion, as platform by the with that funnel available underwriting it discipline that increasing clear on focus bottom and an to very that So, opportunities end of pool been. look we're

Operator

question next B. Tim your FBR. Riley Hayes from comes And you. Thank from

open. now Your line is

Tim Hayes

on target expectations anticipate outside support in or unsecured the front to between hand, to fund growth? and credit you enough programs have kind your debt of doing while you How think liquidity leverage you your the be other think on available whether securitization? the for just you prioritizing pipeline ATM raise capital capacity cash to needing it about sources, Do capital mind see capital. and growth, follow-up you equity of program do or an the do one, in First on facilities keeping today ATM of offering, you

Seth Meyer

for thing have remainder the we pay-downs of pick that only of what year. we think up you is your in that the to reality the leave I Tim, the that available out list expect

recycle to the our the that leverage in deployed So, capital is we quarter-end. have then, of we and already have part as of already XXX.X% opportunity

So, to will available, continued normal we we that combined on to our that position for year. as continue the XXX with we that far we forward. of and market intensions the do fact up utilize do we business leverage continue a remainder the to as evaluate think at as that that we going will going our that pick amortization to ATM the to the But, to we that we’ve have program under the governor act write move the anytime. we're ceiling mix even the have think will positions self-composed, borrowing not year, And recycling, the as we the for communicate continue to those right

Tim Hayes

around that of about guidance kind call. or or the if some on have still call, -- million year. net we I that? for of sorry remainder keeping I guideline any about updated expectations you be missed guideline, is of on a any really believe if strong just you $XXX guidance given the for you kind quarter of the lose was last don’t year And that I gave million the $XXX guys. quarter's I’m should talked the year. do repayments target this might the the You obviously have for growth for

Scott Bluestein

problem. No Yes.

to the outlook we of portfolio for So, $XXX anticipated on million call, between seeing XXXX, our reiterating net portfolio XXXX. in February very of that $XXX million in we're what in $XXX guidance we to million XXXX. of QX, did and on million growth in to Based comfortable Tim, we’re guided what $XXX growth QX,

Tim Hayes

for And me. one more then,

stable or the you it portfolio for to NII is future? continue level $X.XX? that $X.XX, that that expect this earnings set and a factors you foreseeable that a Just dividend assumes and is where to power exactly Does grow -- touch to can today it and reflect continue at growing into it grow on of and does the increase, you on decision what kind just went will portfolio set as is

Scott Bluestein

Yes.

distribution reiterate remind our variable all of maintain I on and this virtually We calls, right? a we you, So, policy. would

a the on Board determine did for most basis, So, sense. on on the obviously But recommendations Based we've Board. what will already management is ultimately, what the makes quarterly in making to QX, based what where we we seen and our the our is, QX, in comfortable quarter to optimistic a based year, the to of on were spillover remainder date on the base increasing with basis $X.XX. combined outlook distribution

you we as what increasing what a we will think Board in did as it will, NII done, obviously the basis, QX the quarterly the number DNOI that on the on we look with most to develops. always sense that’s issued quarterly to. And And felt distribution. And the If at decision terms continue base supplemental comfortable we've business make and of we in ultimately, market a in additional basis. that, of obviously the evaluate addition $X.XX a on that makes to based

Operator

Thank Lynch you. question next our And comes from from Ryan KBW.

Your now line open. is

Ryan Lynch

Hey. taking questions. afternoon. for Thanks my Good

are the that really Scott, there's the with taking the you time role. And that still of commitments as over of you First CEO responsibilities amount time same commit come CIO, and both functions. to given those substantial one, can't just

as you your how process are how just then, running strong really you're time past? function today? as really investment it and the can making sure to has the you in devoting ensure about to you talk So, dividing is the CIO particularly, responsibilities And are enough time

Scott Bluestein

for Thanks question, the Ryan. Sure.

things. things same and ready that that a am of position additional had evaluate on is where go I continues can team team the And XX a basis, historical on days. the about we my the very talented. or of that last take step am forward some role. those function capable now focus investment and you depth business same on amount There I team investment incredibly individual, who on on on of you and done XX several But, by any announcements has ordinary to we of at allocating we'll ensuring the make talent years. two up But time at that incredibly level incredibly trajectory experienced, if the when do Hercules responsibilities. I comfortable confident course, we're of is a have QX, this is basis. And that over XX those we've one years, senior the are the we'll look the depth historical but So, investment level today quite to I'll And that in over team the this I've last and a in investment that's in with team trajectory that and obviously investment reiterate a team we integrity growth a over team. it's addition different the that helped make basis. driven the last significant The the this with of asked be some the same so made been clearly I'm growth to additions by that something not continues quality of deep, to that the firm will sure will of assure that discipline, is And said remains and that members and drive that frequently so.

Ryan Lynch

a strong start Can so you you just from management far around quarter. what Okay. kind been on a the guys to and existing feedback that provide very changes or second occurred? the in has little color some off of potential in the are feedback significant that And borrowers, point, given on

Scott Bluestein

that don’t as positive think support, that would we be As we I I are said, feedback. the case. if as tremendous was tremendously optimistic

closing last north two see weeks commitments, million You of of commitments, commitments terms of in did in of million $XXX $XXX we in can of QX March. what

We of of north an $XXX are a we look QX we’re at are in incredibly to debt you and million on year-to-date where And start basis per off commitments. strong through equity my comments remarks. and April, new

for what You $X.X commitments can that us. of XXXX where fiscal which a did in was record we billion we year to year of compare delivered all

Ryan Lynch

in portion the I you you and to And core dividend it come will pretty policy, to around do the and kept guys in future. dividend core anticipate core you to the expect helpful. you policy. a kind have to variable that well comes make paying dividend variable dividend as then, say on of dividend I’m I’m variable dividend, sure your solid around? I discussion you trying jump a understand or just paying variable Because want just you guys But that then the wanted dividend intention supplemental guys the raise That's follow-up have of how the when where supplemental are set recently. Is rate to dividends you it the via as have understanding correctly, historically the kind guys the

Scott Bluestein

has it's several distribution policy. for been variable Despite the maintained fact a public Sure. distribution years. consistent we’ve always The our disclosure, $X.XX, $X.XX a been per base that

Board spillover. course perspective decision best to to we from reserves is is a of XXXX. share. And the the as at a a head distribution on On And increase business. we will $X.XX made distribution -- of continue the that basis the to the we that $X.XX that by to the that’s supplemental evaluate an on of end was into basis, base right based earnings is the of firm, the based the business, an feel our additional shareholders. now strength in the The distribution. driven on interest obviously have Company $X.XX part the on relates in market, where trajectory the and firm we based QX further what that perspective, distribution a per and decision trajectory the base the The supplemental was issue our of are obviously to of the as confidence the it decision made they today the evaluate dividend make to spillover is on the So, the quarterly we

Operator

Ladenburg And comes Thalmann. from from Christopher question you. Thank next Nolan our

now open. is line Your

Christopher Nolan

Manuel pretty how more you do do as a will you to leader style change? your forward? anticipate is going you given Scott, be management my consensus within observation, And anticipate builder that CEO a a strong of

Scott Bluestein

business personality driving been since of Yes. years, XXXX capacities, served XXXX. side particularly or Officer. to talk of I believe have, focus investment of to this two investment from talent that Officer success believe has I in I’ve not abilities. anyone's then named through and And I'm own have Company, and will historically. been is differences we today what been Company team My I hiring the a and a that side. way of Investment trajectory this this responsible we Everybody in are. been those as that for level I’ve team, about in initially this doing Officer I I'm Chief lot continue on been for quite involved the same I’ve on appreciate enough this different in their style and the I’ve of business the question. the at managing Chief and to XX the going the on Credit my fortunate confident things. we've firm Executive best

Christopher Nolan

change a can Business to do faster a Hercules anticipate CEO before? in as question, role at scale then, the given pace the than yourself, follow-up And the that you

Scott Bluestein

Yes.

I think, our a been growth last in has key trajectory our remarks over of several the couple points years impressive. highlighted prepared today. pretty those We

end of the our billion, cost investment now portfolio $X.X at perspective debt billion. portfolio QX now Our is from $X.X

think year-over-year years ago, X, I that you about versus at if terms business just in our it if X, where has growth, out. was to ability X think the where today is look scale you proven of been So,

We grow focus capital And going incentivized to are the the growth. efficiency. just so. will on we on not managed the managed BDC, continue on to that's returns, continue shareholder sake We're for this that doing We're grow to business. are focused an of way internally to we're we business focused

to We look at initiatives. selectively will continue strategic

our to to the to direction ways will view expand that further think strategic take at pretty diversify consistent product a go-forward historically. look us took we you that I the will platform And see We offering.

Operator

Fin Thank [ph] from Finance Security. Instructions] from question Wells comes next our O'Shea you. [Operator And

is open. now line Your

Fin O'Shea

for Thanks taking guys. question. my Hi,

going continue Nolan. then, the off Mr. on plan structural look question if you ex the forward? outlook, of organic at sheets previous to growth the plans you. final more any XXXX, Just any to versus ways Could from ACGC, to side growth ratio? And so, about or or on the grow Thank changes asset for expense balance external your XXXX manager, talk innovative you from

Seth Meyer

expense side, expect we I mentioned $XX for to SG&A million on the So, million QX. that expenses on our $XX.X

that further, growth. our out see on we Looking of how kind projection based hold we'll the on

the development. growth we market time, see would to we So, it. hold in at stabilize we really that then, But, that subject it's if

question? Beyond at take maybe second I comment time. want this to that, probably you wouldn't the But, Scott,

Scott Bluestein

we've same to positioned that philosophy a to with we've always One, the to respect to platform got well franchise. I’ll ahead And in are success We ensuring we're and that and expertise sure talent, of going the that things. got couple we've want respect we sure just investment sure say of Yes. we're had the historically. making and making invest in game continue to make that sure making with the

With us to to are bunch in are ways effort remainder pretty grow to see things can make years concerted see the now of other our that will just our the help will there we a a will enhance available for And the obviously that things through portfolio and which you to the over focus to place team that value. enhancements of that QX, as look And we’ve are those partnerships a we shareholder of investments, some that crossed in make to couple and investment sure billion do we on last and think value, we’ve the enhance terms headcount respect Mark, breadth the options to us, areas a is And significantly of going the we capabilities. XXXX. of question, of our continue make in you look appropriate manage us and to $X.X other got of organization did product develop other the investment in appropriately. continue certainly shareholder So, question, that product platform bit in of you learned I infrastructure. to to team not but in broader

Operator

questions Thank Scott there CEO, at back this Bluestein, any further now no you. are would to remarks. for further the And to turn time. like I call

Scott Bluestein

for you, to operator. joining of today. And call thanks you our all Thank

B. numerous as as XXnd, Hills well will Beverly on May investor annual and We conference June. attending in FBR be Riley the non-deal roadshows May through

will on annual We as XXth. announced, our May shareholders be also holding meeting,

please share. So, we encourage your you to vote

If shareholder meeting. you Hara their of conference Michael in and at our for content any these please for roadshows with or annual interested Riley us meeting FBR B. are non-deal events,

Operator

gentlemen, and for you thank your conference. today's concludes participation This Ladies today's in program.

day. great You may have all disconnect. Everyone, a

Hercules Capital (HTGC) 2 May 192019 Q1 Earnings call transcript