SSSS - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to GSV Capital’s First Quarter 2019 Earnings Conference Call.

During today’s presentation, all parties will be in listen-only mode.

Following the presentation, the conference will be opened for questions. This call is being recorded today, Wednesday, May 8, 2019. the to turn now will conference Mr. over I Fife. Ben Please go sir. ahead,

Ben Fife

call our of the gsvcap.com relate not risks, and Actual company’s including, GSV on copies required website, our from and and today’s to filings, condition for factors, not such Investor may or does or of call joined at Klein; that but Allison corresponds is by results do and financial unless joining call management of customary of release condition. slide to, number a Statements SEC’s financial press law. a you conference under remarks time in available earnings update our Corp, our information form that issued prohibited. those call. limited the broadcast future statements, Please at uncertainties. visit forward-looking filings statements undertake GSV also earlier website Financial guarantees SEC latest being with of forward-looking To sec.gov. to note Green. is the a us These Mark those property future made regarding time to SEC. Capital is in in release which forward-looking statements of performance today’s please a press Officer forward-looking Thank www.gsvcap.com Replay presentation Executive in our on any or the I’d reproduction Today’s like on number or to I’m our from Relations future www.gsvcap.com. a included GSV at Officer, result Capital’s live presentations. call in website Chief future unauthorized or today not Capital, today. events recorded described by is and estimates today’s information. Chief to obtain performance materially may so to Management to is and disclosures as involve of today’s constitute in by strictly attention this webcast results call website This the of your are differ statements

to I Klein. Mark Now turn over like to the call would

Mark Klein

Thank you, Ben.

We are quarter pleased first GSV XXXX. of the Capital's share to results

the will to we value. an and recent then update initiatives Green hand the are to I review key open portfolio. up I Allison financial brief including the executing will for I Then enhance call To will will quarter, key on for shareholder developments over in call First, a conclude, provide we overview questions.

from asset end fourth million start $XXX was quarter. $XXX of Let's $XX.XX value the value asset net per in million the to compared quarter, the quarter. share, share slide X. in approximately with first totaled At fourth up $X.XX Net the per

our investors. increasingly attention companies As of private attracting portfolio scale, the gained they're

contribute net and trend to We growth value. X. turn to slide of asset to continue our expect this Please the to

the and As our announced determined this an Capital equity to shareholders eliminate the interests the of internally to it expense transition investments managed portfolio given during development, unique in in At of our the call, on that structure. best asset in GSV our March stage established manager. we XX. was market, fund position of We our

between markets in share NAV. on the internally has past public been and The our the incentive performance an We and in our continue this near-term rewarded balance liability as this reflected value statement price a as managed are fees structure friendly will on tangible the and this and fees accrued Based change will BDCs. close this internal believe drive initiative we management long shareholders, create believe of nature previously help sheet. shareholder NAV monthly excited to for about term eliminates primarily structure of income and gap and manage

AUM increasing a developments outside and Capital shift leverage, other call, increase our as to names this coincide discuss a key selectively in are will shift slide operating with affords portfolio. of GSV increase the we Later to portfolio longer Additionally, to Allison expenses. – degree in area focus the Please will greater no operating proportional X, of new the be taking explain steps our adding to overall continues and value. investment X shareholder turn of

fundraising invested serves as and that IPO over the universities general with better a in QX, mid leading a time, progress $XX campuses, a is we growth targeting we company Neutron event. round. known shaping Limes we to-date. continents. on-demand as future size will Holdings, significant across towns, of At a rule, of As communities cities, in million on bike the throughout XXX We returns. five or compelling make countries stage company where underwrite D equally line the with In present Lime premiere we portfolio, scooter can Lime, given pleased and view of liquidity to investments companies XX late to Series positions sight are $XX and to are micro-mobility electric our transportation an opportunistically follow same a million

our at in evaluating actively our the opportunities top in demonstrates investment Beyond of strong XXXX, Nextdoor.com and investment and investments sourcing companies VC-backed operating Lime in are end fundamentals. new that we

period, XX a lockup of securities any to intention While of communicated is public the management its relevant period. through ensuing our to within and the previously intention period monetize it now stabilization public months lockup hold positions exploration

We Accordingly, companies, portfolio are invest identify a position tasked in -- gain. on manage late and Spotify public to sold not our companies. a stage backed public to mid entire source, for of we venture to diligence sizable

Dropbox, to monetize to We the do future. near plan have we which also in to continue in started position our

sales have meaningful we Spotify our realized and of gains on Dropbox. stated, As

our on remaining well in Dropbox our position in as We expect position sizable to as Lyft. realize gains

forward do our not any Given we to will current distribution year. shareholders a that in expect price result meaningful we losses and levels the have carried these positions, legacy this exits from if

the We that accomplished want Lyft on expires their congratulate year-over-year. transportation know and second themselves According billion. per lockup this of to position XX% carry our $XX.X reported on over or and out fundraising. Coursera, Enjoy at XXth and their they've Lyft share share at million from million offering round now and In Series Coursera an an $X.XX million Lyft Dropbox to QX, company report priced active $XX $XX a riders, are as year. leading positioned we Beyond Lyft [ph] Lyft, public our E position XX% Spotify, one $XXX Pittsburgh, announced milestone on $XX and pleased position latest and $XXX in million aggregate. at year-over-year largest The XX on company. generated per we values increase increase developments noteworthy to of the in September recently revenue, approximately of March

offers through in taken Capital people QX, of to has at start-up, University to jump now from XX of courses rounds greater providing XX% million education their Coursera classes online below specializations in or reference, that the Michigan. XXXX. have globally the been with significant Columbia $XXX Roughly Coursera University, courses For GSV part Coursera XX their value be million and for feel E access journey. including instrumental Coursera a million fundraising noted currently Series and valuation. we and XXX X,XXX partners Johns in Hopkins the almost University

to our XX% a creating Enjoy is from only our of in Enjoy partnerships Please Sonos invested, deliver companies XXXX with through on end. turn CEO is nationally an its a ex-head fair deliver invested for positions recognized brand. of not and raising products of Google, technology to Johnson, Treasuries. the highlight CEO excluding X March when Enjoy in of at quarter's subsequent hours. Ron and AT&T few We X round. Apple in a Series Enjoy we five Slide a first retail were GSV and A Enjoy, ex-nations first Hero. was XXst review in top investment the would which retail Coursera, for door as setup like and and on Course Lyft, and the reinventing position store by quarter developments in portfolio focused is your at to portfolio accounted These top way is Spotify, expert Another position Capital's value like mobile we portfolio. notable now is the XX Palantir, a to and sending Since positions approximately

allocation dynamic our second portfolio of portfolio. believe our quarter's five at top portfolio approximately is end. our this investment XX% evolution of representing XX% for GSV Treasuries. value To our Marketplaces into education is by the top market the as fair opportunity portfolio. approximately fair Segmented general of of of emphasizes XX accounted million approximately positions the approximately the combined of XX, March our Capital's the positions perspective, five portfolio XX% total or As largest XX% top value technology investment put of a representing million to March the excluding the the XX themes, $XXX category, for at $XXX was We capitalization of investment of significant risk/reward investors.

on we believe successfully investments, historically investing trends, focused themes in represent long-term opportunities. and new evaluate we compelling As we we new on are identifying have

Looking we that believe value. deliver well-positioned GSV Capital to long-term is shareholder ahead,

of We a the stock. and continues with I attention. our IPO strategy show to environment growth the hand are you strong has Thank investment of will your executing Allison. which with And strong been for We are our tailwinds. disciplined that, historically strength portfolio against believe over to catalyst fundamentals it signs to

Allison Green

initiative, internally update our of Mark's to XX more I on managed follow of current Thank and results review financial liquidity you, a Mark. would repurchase share our transition as program our expense our position. with BDC, detailed to an reduction like update March and our

Spotify the $X.XX as financial We with unrealized our first the in was exit sum, and one-time on sales our driven reporting. share $X.XX per quarter investments. of our loss ended in $XX.XX, share share the slide XX announced realized offset a NAV shown expenses. most $X.XX NAV by investments, as the that and an on depreciation our operations was by previously loss net This of of are acquisition quarter result driven March report over pleased on with per in in sale increase offset consistent is or on to did internalization increase Declara first breakdown of From the approximately third the XX. net by per of on increase we of during In during quarter of an portfolio notably increase share per the NAV a perspective realized gains a by

per one-time of were the incentive by of $X.XX a share. expenses to resulted increase in net NAV approximately accrual reversal those the and offset However fee

most the mentioned significant GSV the impactful the quarter to of internalization date perspective value and a first from the during Capital. shareholder management change is of As and

cost we managed reduced As an structure. a will internally significantly have BDC

As of monthly fees a the advisory longer directly now XX, management we no the investment by result the BBC. of as March on employed pay termination will is management agreement

of increase accrual the sheet. GSV incentive on $X.XX of XX, share liability March of NAV. accrual a be provided longer an incentive for as immediate the Capital's no $X.X million reversal will over potential Additionally, balance fees The per our to fees

ultimately approximately of to savings We incentive run prior in the $X annual exclusive year internalization the expect result million savings XX% an to internalization. fee of or removal an per rate attributable of our to of expense base the approximately

to in quarter on managing greater We diligence mentioned internalization built focus The expenses structure, about not expense experience and stock, we AUM shares throughout and we the increasing approximately XXXX operating GSV management create in as quarter of in corporate Together, and an convertible the $XX incentive on to-date, credit. expenses rate, of to the any August GSV leverage earlier, operational XX% approved Directors our increases and Mark have limited the Capital long-term management's XXXX. company's XXXX of renegotiation key to NAV. first repurchase declined will forward. internalization have but and to will immediate moving several not and expiration gain as to our refinancing the small our continued quarter optimizing allocation increase a XXXX of and the meaningful compared As changes, change new XXXX, affords degree quarter including XX% Since our expense to immediate recurring of trading several up of end. the cost a initiatives related internally on focus our shares. continued reduce line did savings carried as not of cost fees any first repurchase long-term we Based base inception our first believe restrictions, the to implemented proportional remain operating current several Capital, savings in other operating of status repurchases has million of the will and vehicle. with BDC operating diligent program We reduction common subsequent of the base. Board we the to The the measurement a coincide period the of of made to over expense in share repurchase of but outstanding our nearly have our the shares to repurchase not share managed

liquidity. $XX.X million review Next first million about would to the in like $XX million I $XX.X with including GSV cash and assets, quarter liquid We Capital's of current marketable securities. of ended

and $XX under line cash our to us million had we restricted million and securities, addition marketable In in undrawn also representing less our position of in to $XX.X credit. available securities,

Subsequent balance onetime Spotify Our investment our positions of expenses Dropbox quarter-end, $XX March slightly unrestricted million was shares realizing related in $XX.X Inc., as $XX.X of Spotify. better Spotify at of $XX.X in holdings the our remaining of an and XX. $XX.X cash as as end. proceeds a sold XXX,XXX general we Holdings million operating The XX, the overall Neutron The remaining from Lime million sale on internalization of year of known of decreased our in proximate million March to our marketable with and our to overall result million. decrease gain position securities in expenses Spotify of represents and an of

my also quarter-end GSV thank and million subsequent concludes for Dropbox support $X.X We for a a comments. interest Capital. of realizing nearly your XXX,XXX. gains to proceeds shares and like sold of you We to would XX,XXX That

turn I'll Operator? the the over operator to construct the Now, queue. call to

Operator

And you. Boyle our Fargo comes Thank Network. Financial with question [Operator Wells Instructions] Cynthia from first

Cynthia Boyle

– is anticipated big pretty cogent and would asset or gap price have which value would the question, your buyback presentation. Congratulations consider you a Hi. quarter increasing you be current on between disconnect? very have you what close to the great the I a net The seems market to and

Ben Fife

And to listening the thanks and Cindy. Thanks, your call today words. for kind

be because opportunity or didn't the about significant to As the blackout market have buyback we of as that discount in stayed trading $X.X company But et in the million the do stock corporate have to periods need last few Thanks. we before as cetera. Allison currently. the before, either We for our a We it. insiders expand is months. at recognize

Operator

Instructions] next Capital [Operator JSR from you. Ringer comes Our question Partners. with Jason Thank

Jason Ringer

investments. way question had quick for quarter. Great of terms think. you know on just to there. the you're Hi, I in out I a more fewer the amount you concentrating – of top

positions to I is obviously. the you the to I because only down NAV and But back. last do your going bounced where seems this a some more lift companies have was quarter gotten volatile investors market as you correction XX% bunch You given give below mean, How currently you've quarter example, can think like last that know quarter now since of mark. it's XX% forward? about in your like these we

Ben Fife

QX. since think a the Obviously, of right, both quarters QX extremely QX and in worst QX market, crisis I the financial so. unusually rebound equities Well, there things. in in probably volatile mean was I a was were significant obviously of couple and the one

of in an fortunate contributed value. an to public lot do were also not picture of the only we the some cetera QX sort like we versus the benefits were awful have were increase those unusual. the about Financing that things macro But companies occurred We had Coursera that So NAV. et to to names really have had in can't

companies. markets the quarters to know volatility that responsive two to particular simply Hopefully specific question. because don't that outliers, our of that's in I of the So specific not were your not these just – general portfolio

Operator

for question-and-answer like Thank Mark closing to you. remarks. turn conference to That Mr. I would concludes today's session. the back now Klein

Mark Klein

listen greatly of appreciated. GSV appreciate time Well, be taking to would Thank to and for Capital earnings it's you to to our us the shareholders you. call, like all all of thank

Operator

concludes participation. thank you. for We conference. you today's Thank This your

You may now disconnect.

SuRo Capital (SSSS) 9 May 192019 Q1 Earnings call transcript