HTGC - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Hercules Capital Q3 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your speaker for today, Michael Hara.

begin. may You

Michael Hara

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

replay a or for arranged the telephone call and page have We in web Hercules of release. by number at the using today's passcode provided earnings

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

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

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

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

Scott Bluestein

safe XXXX Thank fundings, hope thank to for Commitments, healthy. events on unprecedented and credit XXXX QX. produce joining in records. all portfolio across in company today. that our was no fronts is set continue you and momentum opportunity The the Michael, liquidity exits for all us continues multiple We accelerated saw QX, Hercules. of you, to even staying and that everyone we first liquidity, quality portfolio exception. half and investment more levels

for and Our equity delivered performance both investment and and team QX, new fundings. record commitments XXXX debt year-to-date gross

three of a for strength commitments our $X quarters As of result efforts debt new the now to expect XXXX. XXXX of total our and record-breaking pipeline, billion equity the first we and exceed through origination gross of comfortably

new have QX, our of abundance this strengthening course material while and cost be our There we Maximizing across to did any through expanding on the balance capital, focus sheet. regard of private on new During to debt continue underwritings, change highlighted markets staying core key of QX. of our we capabilities disciplined liquidity that we see in the our throughout during the XXXX. liquidity, and platform our not continues funds course themes down driving an

record one new $X.XX in new XX% total already established Let fundings funding from increase activity, a a quarter we an million, consecutive of our annual of gross strong the recap in record. originated of remaining $XXX previous over fundings record commitments quarterly We previous quarters $X.XX XX% billion with billion equity with and an of over highlights record of the for commitments, record debt of and have of quarter. With million of and gross three origination year. new from of over me our $XXX increase delivered record the performance some gross over and key our debt quarterly equity

life and between teams our our in technology two core funding again performance once verticals. turned sciences balanced QX. in activity exceptional both was And Our

continued companies, able new type strong show to companies for were strength expanded able we addition of have quarter. teams portfolio our also and activity and continue Being to to during expand relationship funding our the balance that this In technology life to portfolio between with our numerous existing strong ability through in sciences our remains funding historical our significant while support to portfolio credit continues staying general results, frothiness Despite team differentiator true multiple advantage value us the of points our inflection give investment competitive business. and key the companies a to has deliver to discipline. to market, a

done credit deals us screens. to serve do and market see investment long-term. well to believe We fit get stakeholders continue a number we that, that our large underwriting will not our the While a approach in or of standards disciplined

Our and XXXX, equity close scale, break are comfortably strong and the in companies time pipeline and brand consistency us of our the seeing the Based mark the in strong on commitments. million million commitments areas currently way has October active market of of in the in pending the strength our The Since flow current commitments $X history. and $X our to XX, $XXX active deal last reputation pipeline, over pipeline first remains and years expanding the well platform $XXX debt as Hercules closed being we XX for of an that has to billion focus. investments. QX of of on billion across our closed of we annual exposure and potential commitments quality of give are our our to continue new of exceeds

of for XX early levels of high offerings today, with had SPAC or mergers, that registration are very events. our annual company to exits have During continued traditional QX, liquidity of across completed Year-to-date, their portfolio, companies see IPOs again strong or XX. a continue to through and seven companies we of breaking payoffs. terms events, strength either and record This public that have SPAC transactions events agreed liquidity additional in we've in XX as our XX M&A exit of portfolio broader performance and drove previous total combined

this million, increase $XXX early record XXXX's in expect payoffs. and $XXX above repayments have guidance were $XXX we million to significant million QX. exceed this in our million, Early $XXX at And in We million QX. will in payoffs. we had $XXX of pace, nearly million a continue to trend loan of Year-to-date, $XXX from early

For QX, we $XXX we be that million $XXX investment across our portfolio. between and million expect prepayments on to momentum the are based seeing

funds the $XX directly of which wholly-owned as our to advisor. million team of change nearly allocating investment our investment after we growth a continued the new to our advisor are $XX investment could strength that our we the quarter Even of $XXX payoffs, million, Although levels Year-to-date, investment produced deliver this fundings debt strong elevated through quarter. fundings portfolio with managed and our the over debt million credit in is early of net progress growth materially over to net or funding during platform. portfolio registered managed have of

elevated capital the of, borrowers companies. the for companies. and growth, team's partner prepayments enhanced of the directly believe, Although our and validation terms right short-term is events to as we with but for that ability in our driving vast we model clear are debt create seeing portfolio headwinds to best of strong this of net our the liquidity many performing markets year-to-date M&A and prepayments result The select business majority are our a attributable of

$XX.X been maximizing our and or BDC, incremental shareholder In not $X.XX and million, managed has asset internally an our we focus of is base and on total fees. returns investment of always income QX, total investment net million to share. As income growing drive per generated $XX.X

yield core our robust Our rating very a regulatory and QX. slightly investment Credit yield across internal and portfolio another at liquidity improved decreased quality remain XX.X%, previous our credits continued of midpoint in of and in to QX Grade well average record. was with X.XX in XXXX. platform, setting QX to XX.X% on generated GAAP a X.XX in QX. in versus we the a our compared X the Again, of for With effective net again debt conservative XX.X% QX very weighted positioned. Overall, X which guidance at historical a as XX% credit XX.X% leverage of portfolio

Grade XX% XX.X% QX However, X XX% credits credits in X increased QX. Grade versus and reached level. increased in slightly to

at rated respectively. and and In QX, entire debt cost cost remained same fair and portfolio non-accruals relatively with of value. $X value, cumulative total million a the X.X% the the X.X% value of investment fair made three percentage X $XX debt or approximately credits and rated Our X% and up portfolio investment respectively, investments of X company's with a million, as

of of borrowings as debt During QX, and with paydowns million, and with primarily $XXX balance is drive bond moving capital of realized of million, gains the our $XX disclosed. commitments one of the cost ended strong that which unfunded gains due early We our million to gross and recent investment debt continue offset million liquidity available exceptionally realized $XXX comprised the our down our forward. Hercules had $X.X losses ability write-off gross Overall, legacy anticipated of and will activity. of our discuss of institutional us believe million of realized further retirement provides and by strong the ongoing positioned. $XX.X how business QX to sheet our to we Seth previously well coverage raise net of the fund it substantial securitizations of will

the last of of made record have exhibit over years, strength and several are terms first The these half. lowering We cost debt substantial unprecedented ongoing. ecosystem after progress venture capital of our QX, efforts course in continue to the capital a in

three and over a in respectively, Venture according billion first by PitchBook billion invested capital venture billion the already $XXX the to eclipses that the $XXX of $XX Association quarters National raised the funds and billion, For all gathered $XX XXXX. for data Capital of and of XXXX, total US,

$X.XX period our over QX year XXXX announcing did with to we positive level Directors XXXX. of spillover, earnings QX, of and early business, Inclusive outlook this a that as XX% new $X.XX year, share, which a finalize per Board a combination well of increase elected fiscal of last Once year. distribution for next supplemental in we as maintaining in raise have base same shareholders to distribution distribution of year-to-date, has distributions per numbers we we $X.XX the our is our healthy our anticipate as our XXXX, share. supplemental quarter we declared on undistributed Given to policy have the

growing of in provides XXXX, per with QX we flexibility record to and our us generated our the ability final $X.XX million shareholder tax undistributed filings. have with share, forward, subject invest spillover earnings to team to talent These platform. $XXX.X and continue and respect diversified of to going us of approximately investments we As or have add distributions our additional and the to This Throughout the position platform. service and organization designed to our portfolio. of are to all our best infrastructure investment in levels and make continued course XXXX, source, investments support to

As QX, in the of another quarter employee strong employees, of Hercules which our highest record another to was In end XX QX full-time history. count is very we be Capital. for what closing, expect we year in full-time our had

dedicated year-to-date and funding commitment work platform. numbers that of and quality investment the great to speak our Our each the perform record-breaking day our employees

We of over their partner these turn Seth. investors are the our being incredibly I to call the companies, to diversified companies teams over to now platform, thankful that will management support and come. to Hercules model to we look expanded many to choice. and continue forward scale, With business years the able make

Seth Meyer

Hercules active very have and of perspective, and and our the first ladies QX we Thanks, made extremely contributed The very From a well an through good investments a into to heading QX. team finance Capital. and quarter. are had that and our XXXX, we afternoon Scott, active for platform and evening, strong we success positioned quarters quarter gentlemen. in three was treasury

the $XXX two the institutional in utilized X.XX% took $XXX $XX refinance to of that securitization million retail par previously very We the par on to million proceeds at we in are As September. full of of index redeem two by at first in completed also July X.XXX% redemption off quarter fixed were XXXX announced, unsecured run notes Xst. million notes securitization issuing vehicles of attractive value. coupon The a October the of eligible offering at in as our vehicles in steps

our interest has rates XXX As X.X%, which a shift savings. targeted portfolio overall in actions financing based composition resulting interest points a debt These us further to annual of further approximately the of securitization focus vehicles of and bore down to our debt reminder, us help institutional the for X.X% of primary on been unsecured cost basis drive treasury side. the capital,

and performance statement number following outlook. the NAV income usual, activity; As realized number areas: unrealized focus two, finally and I'll Number on and liquidity; and number one, highlights; leverage the the four, three,

also the million in an highlights. attention increase $X.XX Net million, investment income statement the was the income in share to compared prior quarter. was prior increase at $XX rate payoffs an that off. the the performance fees and than fee per increase or loans compared to to investment due lower largely the Total to income unamortized margin. paid a the associated interest size The was vintage $XX.X quarter the growth our to and in Turning increase and the income QX, attributable onetime with in of net

decrease XX.X%, yield the due and decline the interest. in second XX.X% effective respectively coupon in third and Our modest compared to and core slight in in were XX.X% a yields the core quarter. quarter XX.X% to The was

to from the increase SG&A issuance related the million due expenses, prior quarter. RIA, $XX.X were on of to notes RIA, debt record increased million the The cost QX the current million levels to prior and Net my to income. primarily million Turning $XX.X operating in our to and recharge our the of quarter were cost million the shown $XX.X to record higher million. gross the the level than million. realized of fees for in $XX.X expenses is Interest expenses, acceleration $XX.X as in quarter, the The spillover excise prior driven tax of and million guidance was to a to expenses in $XX.X SG&A from accruals to loss higher the by repayment quarter decreased compensation the recharge to $XX.X XXXX previous decreased in of $XX.X the unamortized compared quarter. Net costs quarter. operating guidance. the the expenses funding compared higher expenses separately

Our the the the higher impact the basis The lower compared utilization quarter. weighted which of the was to to $X.X cost securitization quarter the refinancing The expect the average the million SBA point decrease in of of to of reduction XX debt due cost vehicles fourth represents compared quarter realized reduce to million, refinancing will be loans. of a further we XXXX of X.X%. cost the of third is $XX and prior notes only and debt

to NAV Now realized and switching activity. focus the unrealized

was impaired $X.X primarily to of positions. previous realized $XX gains disposal comprised $XX.X and been The publicly non-accrual to quarters. movement that was decrease a million X.X% During and equity of the for QX a NAV mark-to-market million per on $XX.X realized the in quarter, unrealized gain share equity $XX.XX of $XX.X share in of $X.XX depreciation NAV offset positions, million $X.XX of million debt of to to warrant the gains $XX.X related The net NAV. legacy the the was million by decrease our million in - This quarter-over-quarter. our decreased per to $XX.X and traded offset had loss on one by position driver million decreased warrant by share. a change of represents per of realized pertaining decrease main The from in decrease resulting

we had relating of loss to $X.X extinguishments. addition, the realized In debt million

and sheet, respectively, end, quarter position netting two next due out increased XX.X% Moving cash regulatory October. million leverage issuance regulatory with also and putting the a at into compared our quarter. GAAP resulted to net the the the leverage respectively, XXX.X% was strong heading balance liquidity, and of the a and in leverage in very one our higher to month the XX%, repayment of us leverage cash on and This quarter XXX.X%, balance $XXX securitizations GAAP the overlap prior which the to the and of debt in new was

additional drawing debentures down of attractive an an to We million $XX.X X.XX%. cost third our utilize interest annual at SBA of license continue

We SBA have an million additional access to of for $XXX.X debentures qualifying investments.

on As with basis the ended strong or cash to pro adjusting $XXX the of result, we quarter for liquidity a million in securitizations forma the October. $XXX a million used repay

managed interest of raised liquidation enhanced the our subsidiary. capital continues payoffs and course reminder, As early be as well by positions. the collections normal public funds by as monthly by to our this and excludes wholly-owned RIA our equity liquidity a Further, principal

to the QX on to for our as in to we guidance core be outlook that we at yield although Finally guidance of apply continues XXXX, expect lower end QX. the were XX% XX% do of points,

expenses $XX.X fourth expect quarter. to million quarter, For the million, we gross with $XX.X of the third SG&A consistent

We expect our to fourth October. refinancing due completed quarter decrease cost of to borrowing the in

the loss debt the to issuance of expect realized acceleration debt on We costs of loss. unamortized million approximately of share reflected the to $X.XX related or securitizations per be $X.X HTGC extinguishment

million for as by of QX, prepayments. to to of $XXX $XXX activity a Although, expect in prepayment QX to QX difficult the prepayments at communicated result Consistent due recognition Scott, we the quarter. we rate of X.X% in and vintage acceleration fee predict expect the average approximately million to fourth with the

For similar that our we closing, to with pleased we the forward QX. the allocation will expense operator out of sheet our strong turn begin and the the are call over fourth year. part to level platform quarter, very Q&A a balance a strength to closing our Towanda, saw we expect over of the In look in of now and you. I RIA to call

Operator

Instructions] [Operator with comes the Piper of Our line Sandler. first Crispin Thank you. Love question from

is Your open. line

Crispin Love

Thank good and afternoon. you

there's life if all seeing versus in COVID? your but So sciences strength I been in activity that at for on any commentary, portfolio to the seen just know portfolio. following seems curious, the So I'm life you has a surging growth data, heard technology? any look bit Just quarterly sciences? activity slowed slowdown I it all healthcare book pitch your activity, some you're one during life tech, question you in sciences have at the slowdown looking if in relative at curious that when it

Scott Bluestein

Crispin. Thanks,

any regard. we in slowdown not seen So that have

activity our look QX, we funded $XXX in million. funding at approximately committed approximately We $XXX million. If you

two also what Our consistent and activity was evenly we with nearly between life technology funding saw was very verticals, QX. split sciences, core the that and in

we've consecutive So where that that's seen XX-XX two target to quarters fruition. come

terms continues sciences our life seeing incredibly business to So for what pipeline the business. in our be we're robust both of technology and

Crispin Love

just - Okay, any the you liquidity, of on cetera. is great any months me there or that et think liquidity, liquidity metrics COVID your months XX thanks give past your of in that's you've of the but helpful. given of but question more XX there can liquidity, plus companies, one color portfolio in some And then not I metrics? for middle

So just there's on any companies commentary of your you some of curious on give? and liquidity if could portfolio metrics

Scott Bluestein

respect not do continue we So, months we we with the public both positions. investment don't it data updated our during XX the and of portfolio. to is of that look months that is our XX in provided and that we we holistically tell continue And see it what our months, we certainly or first record terms levels positions to have record across at COVID, liquidity to track. data private of our across liquidity portfolio, continuing you would are levels of have the We see but do I XX something to

Crispin Love

Great, thank my for you helpful. very taking Thanks questions.

Operator

you. Thank

from Our with Ryan of Devin line next Securities. question comes the JMP

is Your open. line

Kevin Fultz

Kevin my you for Hi, Fultz This for good Devin, and questions. afternoon. thank is on taking

deal few past the as you over describe environment question, making First quarters frothy. the

Just you're this the curious seeing could current relative you if year? landscape earlier to competitive discuss what

Scott Bluestein

cases perspective in of those seeing threat the cases on that of we're we transactions, to we've business. or markets, competitive in private of terms lenders pretty transactions we are From going a markets, to it's the and companies each quarters raising over losing continuing really certain and be we When a from to aggressive a where transactions of perspective. continues hasn't our are as see the QX public several the there been equity biggest from done, the to calls. whether from QX now last private competitive public markets much that's lose very always the we're being the markets. think environment perspective, discussed the seen what the equity I majority to Yes, are the debt we've both avoid. But terms or and what Kevin. thanks, the Sure in we've strength change of in similar structuring something Yes,

Kevin Fultz

that quality prepared XX.X%, prior very and as overall, in And is Okay, which talk just bit bucket other that's good that led the there? three mentioned were in the question then in the remarks, credit the up one Can shape. about to XX% you portfolio downgraded quarter. is great from increased I to factors know the you helpful. investments increase a the

Scott Bluestein

on perspective. small X. or scheme I focus small No loans number also between at us that rated talk to about and the make those were investments, There We upgraded. pretty I up were Grade X X Grade quarter. we on buckets tend the rated X movements not the specific look portfolio to less were from the of mean, in things. fair the credits the several Grade at and value. a in that for The move focus but and we X grand that are can't that's a continue X individual than of There it X.X% of a most downgraded and Grade We portfolio

Kevin Fultz

the my Okay, taking sense, congrats questions and for thanks that quarter makes again. and on

Scott Bluestein

Thanks, Kevin.

Operator

you. Thank

Ladenburg Our Christopher with from line next question of the Thalmann. comes Nolan

Your line is open.

Christopher Nolan

guys. Hey,

an as contributed change yield in the the so and you sheet, that knowing environment quarter? the asset have far in in curve balance changes to sensitive Given earnings rate interest

Seth Meyer

to refinancing lending activities that the for It's of and may contributed the with the are has in that mentioned managing and in spread we we cost - at. which of between the the are cost company's the I healthy certainly something increase at borrowing successful noted duration have of that. a existence we've which maintaining - we've spread you really done, been that So, the it that

off a and to of ago. our advantage lower paying we refinance we as instruments opportunities half continue by take just we'll cost that did week to So and have to a and debt try like to continue persist securitizations the of just

Christopher Nolan

higher hikes prepayments concerns for And taxes in coming rate follow-up, is interest months? then in the a anyway or related increase to in as

Scott Bluestein

was We've majority, or of Yes, It more a the closely to at continue like looked had events but M&A number raising prepayment very we activity think large year-to-date. vast either they our from so. companies equity obviously than prepayments, $XXX capital don't million anticipated. be

companies on from plus of now. what on in cash have sitting as several and increase becomes to are we've just a of what, sense tremendous the $XXX balance makes portfolio seen strength in We them sheet a management our liquid we've for activity function based perspective. prepayment that million it investment across the see a And portfolio, subsequent continued were right seeing

We we'll little into expect trend our further in year. continue year next that get to reassess more, we for and expectations QX, then once bit a the

Christopher Nolan

Great thank you.

Operator

Thank you.

Securities. Our question with B. Sherbetchyan the next line of comes from Sarkis Riley

Your line open. is

Sarkis Sherbetchyan

reevaluate Hi, raising the supplemental Scott for my I to per share And and distribution prepared remarks that thank Where look at you XXXX. here. the the cadence call million question of you'll with you and think that spillover seven. kind supplemental you you're goes $X.XX base the it. maintaining that about on what policy I do of for like? taking think mentioned I'm the you're fiscal $XXX curious would guess

Scott Bluestein

because obviously not Board that early a next made and difficult decision to answer, a question year. It's decision get until will that's

comfortable to that look a distribution, set program, program fiscal announce the income $X.XX I investment And by theme to forward we consistent quarterly very year with for level ordinary year be With that feel our distribution we a to the when distributions. to the us for covered and XXXX. quarter. next at respect early of net expect we that comfort new supplemental in gave think had going respect sort a base can moving supplemental $X.XX we of at distribution from we generally terms

XXXX expect it would what a that number with in of will cadence, to terms the the of terms that in we basis. being end numbers at will and be on similar will after the that something of this tax our quarterly But dividend In of year. finalize finalize Board discussions to it we terms we be be, ultimate

Sarkis Sherbetchyan

is you're of as the debt lower comfortably share. real per more here as guess of And base No, distribution margin you $X.XX seems question it premise the cover and to cost increases, than understood. interest the your I like going even net capital at and my

a kind is it to increase this spillover, of wanted just thought there an get like opportunity core relative to seems the earnings right So Is big that that for sense process? to your distribution.

Scott Bluestein

I think it is.

forward. with We and respect determined, year are what but what positioned characterize fair that is incredibly is distributions to for you I Again is balance all ultimately being that next our to sheet number going well our equal, a think else be characterization.

Sarkis Sherbetchyan

at you shouldn't to just it. commitments, activity? net of pending your commitments why be to reason Got And quarter-to-date closed in here XQ continue and any able kind have looking origination

Scott Bluestein

get based We It's down, further an have closed obviously, up still additional in That of given what estimate our quarter. early between expect million roughly into could is We've on us or or million and in guidance as we signed of the million we change that best the commitments. $XXX already we quarter. $XXX of payoffs. either have that front today $XXX

that historically what XX% We to consistent be is expect XX% to range. the funding has in with ratio commitment been to

we to be. QX But of based on we another that very never guidance quarter we net what the seeing in what growth now comfortable very are strong are be will expect So for we us. give terms right

Sarkis Sherbetchyan

you. thank all That's Great, me. for

Operator

Thank you.

Our next Lynch question of comes with the from line KBW. Ryan

Your open. line is

Ryan Lynch

afternoon. Good

guys my slowing the while? seems something going soon, anytime So to in like Based Obviously to I of the putting your ecosystem doesn't origination kind one, in that or that's capital to anything things there you is kind been that about But driving the wanted outpace prepayments? the portfolio that prepayments question can activity. deals lot a that's mentioned, that's seem grow market are the of capital the your so strategic number prepayments of portfolio level for do. slowdown market equity that be on portfolio. is you it new data out of you of that's when like guys activity structuring just there there to a First top-line today venture of, down and or are capital deploy a is to a you looking just and to in continuing for any, with are any matter guys talk potentially Scott lot deals us of

Scott Bluestein

Sure thanks, Ryan.

its think two I fold.

the we So and has drivers several done business, of has certainly the private things That which activity in of of to funding is number we the that QX fund driver grow our have nicely. initiation one year-to-date. we've that that tremendous big increased continued pie year-to-date increase market the delivered and for been to one, us. addressable and very commitment the launched Biggest of

potentially we some continue to are one activity funding is the and things the going So, commitment to the of prepayment offset numbers. the that of numbers grow

of at granular in terms some is, there us those And be this doing work it sort and paying to response, off prepayments. market in is things but a seeing a the of more deals fact it that that not our the validates continue believe that create yes, that the signal. work view our the the to are model we as business seeing some does think selecting of try the be validates right it a liquidity Because to are pretty the are companies day, to headwinds, strong like that a we would team these companies. where some and prepayments down if really negative structurally, team the clearly of dampen we a we're does. But absolutely that to In that that are of end our we of are in credit prepayments

Ryan Lynch

enough. fair Okay,

sort that second would quarterly a set on member, distribution the dividend at where dividend preference your a be on And and the likely are the The policy to factors of is paid a fit? to be paid various top basis be number year basis. you a based or have policy supplemental, the you certain will distribution but see out you on on then had mentioned quarterly throughout supplemental as that preference Board, other that then set? in distributions policy that it a for distribution of it a XXXX. a same new I dividend core maintain sort variant by Board dividend A know will of the I policy CEO what is of you your as level that to set is question was, going

Scott Bluestein

of or in can on distribution best we there end feel base our quarterly a the net a quarterly program negative. in are former, events terms to is are that a doing And is the we doing And that policy basis out obviously the is we a of given year. in the place payable and objective drive investment we then accomplished did setting think that on best set on a strength income the a number shareholder return. number confident where by believe think sure as that likely positive amount to a XXXX for what potential to by that continue total But obviously higher making that in it covered we change is be XXXX I that our basis do XXXX put with basis if we to our The spillover. is be possible in current supplemental what distribution based quarterly to paying quarterly on I company a

Ryan Lynch

Okay, I appreciate time this thanks for afternoon. the that.

Scott Bluestein

Ryan. Thanks,

Operator

Finian with you. comes the next O'Shea of Instructions] Securities. Fargo question Wells line Thank Our from [Operator

Your open. line is

Finian O'Shea

science dynamic that's pushing you the volume sort away higher, with the everyone, afternoon. are know companies, competitive software mix, follow kind say - much [ph] let just that's perhaps Hi or good A life the in from looks of any the agree of the funding new something it's available of it else? is on if you talk about you lot and any newer or sort something companies of on, you area. a Can if like

Scott Bluestein

Thanks Fin.

the at on look the it in at pretty number in our companies terms of financed, each evenly whether funding If and look at or million, dollar look basis, between split, it's if it that the business. you we you of a $XXX sciences you QX life technology activity, case

did saw we're team's that QX, metrics. quarterly key not within two see the but there core funding. basis, but technology terms mix adjusted a and it's We software this So adjusted number we competitive just in in we of sub Every we the terms on significant was strong call, QX, the on evaluation how between dollars something see the quarter terms and change the not to that's see best and trend bit a space of risk the of sector little quarter, just returns. on become little dollars a on where verticals our that same any there bit team talked based the life will we our the in did of in quarter, in Last industry pull evaluate sciences or with we given our of in sciences about no change respect and the really that funded risk committed, whether companies returns. those being technology/life has really differentiation did market mix being back that that's

Finian O'Shea

comment Okay I on provide to and seems stating the higher just and able follow-up kind level all on, moderately, you you us that's of sequentially, different could security And mean with a Gibraltar, to that there. at - looking be are at color on that? tranches anything helpful.

Scott Bluestein

say we a portfolio company. every as quarter, it's Sure,

quarterly the any you we specific perspective, doesn't I a can supportive very the with The we down. I is high as fluctuate So that and each level and pleased on continue company to basis But fair we're much value a what information are not up going that mark read into provide to investment tell disclose it wouldn't be investment. our of investments from quarter-to-quarter individually. or does very of too will

Finian O'Shea

sense. Thanks Okay makes so much.

Operator

for Scott the questions will to Thank in turn remarks. Bluestein queue. back I no over you. I'm showing further call the now closing

Scott Bluestein

today. you, Thank everyone call thanks for and joining to our operator,

on Real in Jefferies November As XX a Summit on BDC and JMP be participating Securities Estate Services Conference the Financial will XX. note, we the and virtually November

arrange everybody the Hara. management like our financial Thanks and a our with next please If Hercules call. of earnings or Michael forward you We team, institutions would look a contact meeting progress year-end each day. the to reporting on directly great to have

Operator

that you Thank for Ladies gentlemen participation. and your conference concludes today's call.

now disconnect. may You

Hercules Capital (HTGC) 29 Oct 212021 Q3 Earnings call transcript