TPVG - Earnings call transcript Q3 2017 | TriplePoint Venture Growth BDC Corp.

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Operator

Good afternoon, ladies and gentlemen, and welcome to TriplePoint Venture Growth Third Quarter Earnings Conference Call. At this time, all lines have been placed in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer period and instructions will follow at that time. This conference call is being recorded and a replay of the call will be available as an audio webcast on the TriplePoint Venture Growth website. I would now like to turn the call over to Mr. Officer Venture Financial Chief Olson, of Growth. TriplePoint Andrew Mr. please go ahead. Olson,

Andrew Olson

everyone operator, us and you, for thank Thank you joining today.

We are the XXXX. for the you pleased to third share quarter with results of

Chairman Labe, and President Investment Officer. Executive Jim Sajal Chief are me Board; and with Officer Here and of the Srivastava, Chief

projections statements Before the statements, during the factors our for in press Exchange to to regarding forward-looking call update with Jim, Securities to do actual that SEC statements. certain Company’s turn refer make Law. copies to by results or that, to call, would I’ll to like relate financial law. it and that statements to visit disclosure which I the required materially at may cause With we undertake the obtain that your website please Company’s Safe considered Securities attention Harbor remind important filings, Jim. or from turn To events unless tpvg.com. and these this you that not our differ forward-looking under direct to over future We recent I condition, Commission you the latest could future We over ask customary obligations most our release Federal of or performance forward-looking any filings may the be statements

Jim Labe

Thanks, Andrew.

and level previous the yield only the income net record The This follows third a sheets. portfolio the grew a but level heels a not investment achievement in we quarter record new set of of record we a We records, record was another set term TPVG. quarter and of fundings exceptional on portfolio investment for quarter. signed also some and performance of

a of of not TPVG, as purchased AIMS, team Sachs $XX worth you at after TPVG executive here million in Goldman long know, Group Asset placement. myself, & Investments many We Sajal, private Andrew GSAM of Manager along Management the stock quarter, Selection announced, with also the Alternative may the and

with to analogies in We I AIMS, I earnings to makes is now. largest look pleased the although season football baseball this say, currently these GSAM the continue that calls, in it guess investor are To stock. our use

is truly we off to the quarter warming in start. and The series stepped in this million has we we’re inning more already additional only the for $XX To-date, an a into investments had last While and absolutely third a current of to already have quarter quarter, play the outstanding little team away than is up our next [ph] quarter. great XXXX. or funded

earnings bit do and call that the call what quarter. earnings the our our serve shareholders to it’s for translate at current portfolio this a pipeline, the backdrop, I then in we in the beyond. going market great compare growth as review to that believe and XXXX I’d highest different. objectives is as something and I and strong the which to With last level generating attractive basis performance would thought little a a conditions Given am I is ever and been, into this key goals returns outlined

achieving the you These TPVG. when goals strong would these. that see, portfolio, every to of believe will one We on it. set. investment were review increase our lower we the the something, of on the say increase gains, dividend our cost briefly coverage, progress and like quarter, drive realized key for made to lever we balance I identified in sheet, the As fundings, up up capital. we single several I deliver grow we Last goals

worth a sheets signed new thanks investments On portion in companies. increasing unfunded million of record the was this This which quarter, the $XX from importantly, past commitments, fundings, more fundings this to $XXX also debt portfolio quarter to was goal million we part investment quarter. but $XXX term of record this utilized of we had quarter’s the during of XX of of million last

unfunded we indication portfolio commitments good As said, are for a always near-term growth.

million On worth the QX, prepayment and $X was of goal that of by $XX it amortization. million customer nearly million after the portfolio, $XX growing and in of grew scheduled

On have have into portfolio $X.XX our to share the we a $X.XX to share year-to-date of absolutely than income. quarter and we than There should Compare no million in yield. add, dividend the more XX.X% this coverage, concern million $X.XX [ph] I investment $XX we’ve already have with goal out. generated cover increasing ability should a paid recognized million we more investment this Keep dividend of income net in per $XX year. funded XXXX. on per alone or $XX be And share or total income basis, in or about the the spillover projected had dividends this mind, a

this add which dividend, And So, our part exceptional will regular a without profile to with cover go business and even we our forward continue of ability to expect model. customer prepayments. attractive assets yield our improve remain or we that’s

of On On the while remained we back our a the our here mentioned have portion in from where gain realizing our of gains this to million experienced realized from we a quarter, fourth the goal leverage more holdings new unrealized basis, gains, now and we our began last I increasing in unchanged of increasing to to portfolio progress ratio expect sell the of on $X our we quarter, already goal given leverage quarter. and get realizing our of are leverage, some our targeted gains Nutanix we gross investment range. company fundings realized

from trading have complete double ago are we mark our As few and just currently weeks short MongoDB QX. at you company it’s portfolio may roughly to IPO its a know, pleased also

majority sure stake in that outstanding period Nestlé’s given short I’m Blue of you announced capital very saw many a development a from of great Bottle, Finally, is our time.

see spread also facility. again, process Simply we the renewing we into venture growth lending our goal we of in Andrew and great TriplePoint the specifics set. capital plan last companies the the on the I heading to are to and our our more the the goals the up, that both us. and our We the lowering delivered capitalize XXXX and of warehouse stage lowered pipeline capital, we’re into venture the reputation said, will XXXX, on on way quarter about of cost of significant wrap markets. given platform Finally, global opportunities set a on go we bonds detail the but To in in and venture strength opportunities those out reaching growth in equity of in quality once

of successes few of our and tech quality portfolio firms our of would decades biggest strike science the investors, always, continue leading the group venture with capital that life and venture select past companies. of As to we’ll sponsored work backed some have high capital the

XXXX, already quarter to pipeline, growth, expect the to the well to our and to As this based on now hope we win we over you commitment Sajal. to underway next build continue sense, I portfolio call which look levels and momentum is turn upon ahead series the I’ll aim year.

Sajal Srivastava

equity and debt signed than year-to-date On equity debt than $XXX sheets you, we have $XX a more quarter, million of million Jim, $XXX investment year-to-date Furthermore, we good than we more have at more during of nearly million bringing of the as and new third $XXX and In more afternoon, total the closed million of investments. equity term Capital more term everyone. $XXX a quarter investments. Thank signed TriplePoint basis, than XXX of closed fundings and million, sheets debt mentioned, had Jim to and the and million. record than

provides working products neighborhood neighborhood. in the Kleiner $XXX Perkins, and cameras provider of home a security quarter that its has others. whose suite a of and rings OUTFITTERY, clothing, shopping Goldman personalized company recommendations focused capital capital for to than BlueVine preferences Fortress streamline human Capital, FinTech has customer from that men’s your Menlo more very European and medium of financing residential provide and its sized underwriting with leading online exciting included leverages Ventures, security machine-learning Ring around New to and door offers kits algorithms bells, Sachs, high Richard Lightspeed is stylists, more of front outdoor and Investment home capital and management equity the data security using raised million technology service $XXX advanced businesses, process. BlueVine proprietary subscribers. Group to a customer raised Ring, Ventures, than and the other company million small others. of profile video customers which door, technology and and from Branson, to

developed described Some for Berlin, from Europe. $XX as European Northzone Ventures investors and fit tech major others. and Ventures Octopus men more Highland [ph] a OUTFITTERY OUTFITTERY into based than the in up, Europe, raised is is has which million including equivalent in of

for alternative spend Europe’s of equity and companies foreign During digital in FinTech raised than for them money the banking has an fast-growing Balderton no Ribbit more that one send, individuals also Capital. quarter, to from investment allows and Index and we globally made Revolut profile and million Capital, businesses exceptionally $XX higher Ventures Revolut, international exchange fees. exchange

nearly two in acquired the debt million During XX.X%. average new in companies, at during seven equity had funded valued quarter and in weighted debt million yield portfolio The a $XXX,XXX QX, to of investments of we investments companies, XX investments $X.X $XX warrants companies. funding

also We two of prepayments million had portfolio companies. $XX.X from

from of floating Approximately, quarter we was portfolio. our winners. portfolio a was the XX% QX. to in continue the the superior kind XX.X% these our companies quarter, this XX% XX% for of Consistent our Without portfolio a capital quality up events the for amount which activity time, including to and We our prepayments, testament yield prior from at hold to portfolio rate with view in our see in was up quarter. as of we companies healthy XX.X%, ability second yield select is portfolio Our prepayments. with the of

equity MapR’s disclosed equity $XX rounds financing. QX million of Some financing of publicly $XX for occurred ForgeRock’s million equity and the that during rounds rounds include of

portfolio companies but a rounds disclosed. equity of not raise We also publicly had been number yet have

portfolio raise rounds companies We equity three additional here expect QX. to to another in five

backed plus company portfolio QX well. Nestlé highlights venture strong very here announced from Nutanix MongoDB include stake public majority mentioned, a the in Some been Bottle capital trading to realized $X our on of gains to of sale investors. million our based disciplined Blue its and went Jim group continued shares companies other see and portfolio the unique path select sale for by as of growth and We lending has venture approach stage growth

at new million long-term continues between quarter. Our total our year momentum so with in fundings the quarter prepayments far. during $XX of and quarter. $XX that into this that end into exceeded current the any million during a pipeline. are we of from commitments far will from in quarter investments prepayment principal resulting we this those also finish $XX course the not scheduled in quarter quarter the for should amortizing receive XX% are unfunded our for expect time to mention fundings activity, of and and funding but by heading so healthy current targeted funded strong nearly aware mature the with million back of are assets given the This I prior growth of deals And

again, and growth result the are track as lower of portfolio to QX. we our track target the continued approach of ratio for a end end So, towards on on leverage

We XXXX. will million achieve upon unfunded a Company’s debt the of and $XX.X at existing in quarter’s $XX million if million to scheduled the companies is our during portfolio million which to is of this commitments million them. XXXX reaching to if $XXX.X will growth commitments unused expire end totaled due to XX in milestones which dependent $XX becomes the unused before part expire available $XXX.X

no unfunded commitments expired. QX, During

credit to on quality. Moving

the the of at X.XX September of credit internal end X.XX of portfolio debt weighted the compared as As the XXth, was quarter. rating prior to average investment

downgraded system, totaling to are million due the of rating fundings loans are the new fundings X to XX.X two X from category two to million loan well And XX category category of of as X.X to X new upgrades removed loans included new X prepays. loans to our initially credit totaling under generally X. were reminder, a quarter were Changes X. being X as strongest million loans portfolio with rated million X. raised and from million companies. X As finally XX.X added loan rating category category in XX.X to

During the the by numbers trustee. quarter, were finalized KnCMiner’s the

report subsequent over the from acquired full expect we to recovery the to pleased which by up party from from million $X.X recovery $X.X also distribution annual quarter-end, to the the we’re be two revised million expect total prior assets. I’m QX, quarter and from received very KnC expect continue so, against expectations trustee our which next the we that at XXX,XXX to as and pleased balance and report over recovery $XXX,XXX time remaining a And GoGreenLight, a that remaining sharing. will GoGreenLight to We basis profit recover our another from we reflected trustee our investment a bringing to-date cost one recoveries our quarters. then the in to

hand off with would further our Goldman to like Asset Management. Before elaborate I Sachs to on I recent Andrew, placement

As transaction, press are for and in investment the release our lending they million view as space $XX.XX. X.X lending. mentioned the the was the shares and purchased an GSAM for outlook by NAV excited QX by GSAM in the and venture at this $XX.XX, leader venture

We an creative relationship the look with our team million and shares for all also XXX,XXX to purchase with is buy this GSAM underwriting additional TPVG’s price GSAM after expand an was invested forward no XX-month at So, them. alongside lockup. and associated next there’s $X strategic finding offering. also management ways premium investors Executive offering. to to and fee obligated equity agreed

I account we shares to financial Andrew $XX.XX, quarter. added prudent our approach the take that our repurchased now point when of per an I’ll highlight some million during like of key another $X.XX over to through turn example at issued Finally, to of call we into the XXXX in would million to and or the of X our average capital NAV, buyback you stock program X management. that shares so at of fact the metrics achieved $XX.XX almost out share

Andrew Olson

$XXX long-term quarter to fundings as Sajal. to and total of from over third $XX million metrics. prior investment you, the up results, another had We key September over quarter report performance million XXth, Thank investments drove quarter. or XX% I’m our pleased which strong of

in As XX investments had of QX, we XX companies.

Our consisted rates. XX% included floating investments total those investments, of approximately investments, investments. debt and at to debt cost these The investments million XX of million $XXX investments warrant XX XX was direct of of $XXX equity were and which

bonds continue sheet, time the dips manage drag. have not inefficient in our our liability credit On financing with capital to we of cost the excess and capital of long-term balance ensure with to did or flow a unsecured periods of side through of our cash combination Careful cash facility. just we

bonds of This of this during million and As raised to our priced disclosed approximately options at redeem strategy quarter $XX.X to part net and we at issuance million the priced served bonds from exercised of many subsequent QX, unsecured X.XX% proceeds X.XX%. transaction capital the of XX.X purposes.

our saving $X.XX per XXX it points, or us foremost, annually. approximately First lowered by and $XXX,XXX cost of share borrowing basis

room the it take our it And the date we long Second, extended for in giving market. maturity opportunities debt. base, advantage the term capital third, to and expand leg added $XX of us to see million

with September This us had our cash total put million of million the we under opportunity million from new at or giving $XX.XX million market the our and X.XXx, quarter comparable leverage flat Also, current strong QX share, drive slightly fill X.Xx. ratio the $XXX.X ended us generally that we XXXX, position runway facility. XX, in of the X.Xx $XXX was available see of million. but As a plenty to assets and quarter down of to leverage $XXX.X a per of demand for of to revolving credit $X.X and we us target $XXX.X

the Now, turning income statement. to

weighted We and continue see on other robust in yields, income earnings. million core $XXX $XX.X top-line to of was million. outstanding portfolio investment principal Total strong resulting

higher base with fee and XXXX. our incomer fee on quarter prior of XX, fundings to $X.X incentive down period ended Total month consisting were QX other be net were expenses of from income QX in for of million, over $XX.X the fee and and or in the months occurred of million, of half expense incentive the Total XXXX Total of of totaled $X.X lower full management approximately XXXX. September $X.X $X.X recognized for million, beyond. quarter, of nearly flat million. in impact million our slightly that million fees the of income same $X.X income and expenses the million, the less quarter and will than administrative investment generally XX% interest Given XX% of general the expenses $X.X nine QX that and up last accretion due

share, $XX.X As to XXXX a We quarter included of investment or notes gains same or per from prior the per quarter. the We the $XXX,XXX income $X.X ended investment sale totaled $X.XX prepayment XX,XXX gains interest $X.XX realized income of the the of approximately XX, robust net of million shares share nine or per in $X.XX overlap of ended from our reminder, share million, company XX% or million months sold nearly one-third of from with for prior publicly in down in the due investments the had experienced net a required or $X.XX level XXXX $X XX-day quarter for the million per $X.XX in our current $XX.X from the XXXX. up quarter share, Net period. notification traded per sale approximately of we position expenses where due of the entirely Nutanix, to realized $X.X consisting million share September period income over QX. on

$XXX,XXX as in million to our to replace related on with X.X generated annualized notes previously we September gains realized approximately months exercise return investment debt XX, of extinguishment notes elected on X.X% to equity an loss noted, of $XXX,XXX basis, the return of On $XXX,XXX previously our activity. recorded of our unrealized them This addition, In option of XXXX on income resulted a no offset and unrealized of the the was of realized XXXX. our related quarter. one-time of assets gains XX.X% a on unamortized to which the to investment XXXX acceleration costs. a or material to and issuance Nutanix. ended changes regards With of of by activities to there sale portfolio reversal the We mark-to-market losses non-cash unrealized for nine the consisting gains change approximately primarily recognition related of in return unrealized appreciation credit to a were net losses, had and mark-to-market net redeem during the

net share. in per ended $X.X or nine $X.X assets increase from or per XXXX. net months million $X.XX Year-to-date income for was XX, the share or million net $X.XX $X.XX up Our share $XX.X September million per was

Directors of our Board to the with or of of proud QX, I’m back NII for XXth. it Jim. I’ll as payable quarter, of on a by Xst declared the distribution stockholders record on As $X.XX. million December fourth of exceeded $X.X share our to report turn November end the distribution $X.XX that over to per our And

Jim Labe

At this happy point, take open Andrew. could Thanks, to questions. be the you we’d your line? please Operator,

Operator

question-and-answer you. [Operator Thank from ahead. begin first session. Instructions] Wells comes Bock Please question Securities. of We’ll go the Our now Fargo Jonathan

Fin O’Shea

which Fin O’Shea Jonathan question solid taking Bock. goals of It��s one our outlined, guys. realized congratulations first and on other quarter. gains. your afternoon, Good We a for is in Thanks question had on for

portion level, I give low reasonably some that an keep progress of kind mature not if move guys of in you on have of they think IPO don’t Can of this us repayments a these to do a off might you as the equity broader you Nutanix, noted say portfolio at lot names, sense your pay and kind of portfolio recently a ability equity? and of MongoDB. terms your

Sajal Srivastava

here. Sajal and please take Fin. and first jump Hi, then in. Jim the I’ll cut, Andrew,

you’re correct. So,

sit. take an not a we’re forward don’t investor. equity We So, we’re lender,

small insight again, investment I stage But, keep VCs approach to to overall investments, of companies control the investment venture definitely we would approach. M&A our high that’s timing in just any can��t our think we deals say, of targets other again to. they’re our of and is, the our over equity even a companies for monetize. With these the given IPO, portfolio So, interesting get tier growth work, perspective percentage opportunities is, attractive portfolios given access exit, is -- I the the have regards top that get portfolio. to not the quality both we do direct access when

to shareholders. you public And so, those offer proprietary quality need investments access to high

portfolio. be And significant not the so, a opportunistically advantage like intended of to think, but we take portion it’s to again, investing, we investment total of

Jim Labe

or I only generally our specific to we we as has in target such quickly the we the acquisitions timeframe, may venture you recall, and one add, would events stage companies investment. IPOs if always been guidance make expect after growth three-year liquidity

Fin O’Shea

of keeping on in to sort thread we here credit discussion relation there’s wanted facility. minimal, to signing concept Another cash to together; drag the a

items Also, a the look are very on those some and much. of potential think appreciate percent with you to look profile post you debt? as of us base deal how portfolio, and I can equity discussion debt at percent should how raises, of quarter future we give investors GSAM want you a the term the your keep at especially or Do that? that reminder

Sajal Srivastava

Andrew it’s here, I’ll and ask as Sajal So, to well. answer

believe in in as So, believe so it. using lenders, definitely we and debt we

great relationships our have We with lenders. warehouse

view we a intent really that’s that. like so, our fund the our commitments. to the facility unfunded revolving And having warehouse essentially And beauty is facilities, of

which So, our again, leverage growth earnings raise then of target our goal profile more is ratio, to get we power significant to opportunities the see portfolio do, continued demonstrates assuming capital. business. again we our And

see think a beauty was for typical it the And critically, so, what investor, when disrupt quality bring of GSAM the equity more was offering. capital to is stock private way you which amount in not you and a meaningful usually a us have placement even the a I of

course and And are the type I manager again -- call all capital so, obviously a and bringing in of of in value, I just-in-time of to of it think critical net our marquee a a very at then investor doing we being asset of space. elements are proud financing premium again slight prudent

Fin O’Shea

-- just small give the to off or Very something well. it you near-term? Are we should the question. they on this one more just Thank keeping debt expect an is Can Packard pursuant just SimpliVity you. update books on investment? Hewlett keeping to roll And

Sajal Srivastava

HP the assumed HP by company, HP. So, yes, it’s parent so guaranteed SimpliVity all is essentially, debt; again,

equipment leases. are on paying they so, And X% I think our us, average it’s on

of prepay them they not their they as have option we to loans far as So, so the yet. the payment, as current prepaid [ph] have and but obviously know

Operator

Research Our next & Point of comes from Trading. Compass Casey question Alexander ahead. Instructions] go Please [Operator

Casey Alexander

quarter, Hi, for you that had many then, sort in existing unfunded; to there’s not it break of the good were funded in came afternoon. you Can third a deployments down the And how was of of many guess, sort yet. of category companies? sort new, I me, how of were the that fundings bolt-on

it’s So, not new break first Can it’s but technically time the of up sort it me way? it’s you funded. for that been

Andrew Olson

we overall to And of front I out at think exact I then funded of in least me, all something million the of draw have additional don’t had them. some number during the have associated unfunded -- we bucket. of with million added the somewhere between investments unfunded $XX positions, $XX of commitments that those period,

So, commitments that. with there made associated the didn’t were were no have a period that during strictly that draw

Casey Alexander

they of or are that you KnCMiner seem was going might you’ve these using to your along in me bitcoin a great get back? they out -- news coin. to X,XXX Because machines home. accelerate coin, -- I acquired about about a is now Secondly, gets interest know changed upcoming they the actually I profit And model GoGreenLight your to all half you it and back. $XXX it’s were sharing it Did bitcoin? you would make mean, the And because your contended it’s money way that when that that payments money bankruptcy completely have still guess with getting still

Sajal Srivastava

releases in press the they’ve some heating issued contracts some they of actually Sweden. GoGreenLight, Yes. regarding here. that Sajal signed Casey,

have. validating observation, then, developments record continue comment to model they gen next they to great that and But yes, business absolutely and levels. continue bitcoins hit mine the bitcoins all So, great

our one given company where mine regards so, And that updating to be look as them annual our perform on the performance. continue expect to to But to are continue bitcoins they they in estimates, we with well. that based recovery updates and would we’ll bitcoins

Casey Alexander

any on update Candy? Mind Lastly,

Sajal Srivastava

they to capital. Yes. is, more continue raise equity Again, good news

to that’s we showing pretty a up But optimistic they’re a great So, investor holiday them. on season, for quarter busy the gearing and for data be big a point, very lucrative hopefully continue and coming support outlook. so

Operator

for Mr. question-and-answer like turn over This I conference Jim the concludes any session. remarks. our to would Labe back closing to

Jim Labe

the in your Well, by support TriplePoint for Venture and appreciation I’ll Thanks by close again Growth. line with soon. everyone interest everyone ask expressing speak and and we’ll on again continued

Operator

now has today’s Thank you presentation. conference attending for concluded. The

disconnect You lines. may now your

TriplePoint Venture Growth BDC (TPVG) 6 Nov 172017 Q3 Earnings call transcript