TPVG - Earnings call transcript Q4 2019 | TriplePoint Venture Growth BDC Corp.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the TriplePoint Venture Growth’s Fourth Quarter 2019 Earnings Conference Call. At this time, all lines have been placed in a listen-only mode. After the speakers’ remarks, there will be an opportunity to ask questions 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. Company management is pleased to share with you the results of the company for the fourth quarter and fiscal – full fiscal year 2019.

Financial is Board; Chief Chief Sajal and Mathieu, company Chairman Officer Investment the Chris the of Srivastava, Chief representing Jim Executive Labe, and Officer; Today, Officer. President and

over remind Before I to your you release in to attention regarding Mr. disclosure I customary Harbor company’s would direct Safe to the the turn like Labe, forward-looking call the press statements and condition, management to future this call, law. will may financial future performance or during statements securities relate make forward-looking that that considered company’s events the or federal statements which be certain under

by not refer company’s differ any reliance undue and to company’s that any latest call, as update You’re www.tpvg.com. to asked or unless of obligation obtain the important cause to with are during on website could reflect copies recent any materially Investors of Securities from management’s required not to the to visit Commission factors statements the opinions filings, undertake only please for made To which statements the does forward-looking cautioned most these results place filing at projections statements. law. today. actual Exchange SEC company forward-looking The our

call Mr. over turn Labe. will I Now, the to

James Labe

perform helped a shareholders, as The our everybody. quarter operator, good excellent our to new delivered well. and to returns set Thanks, afternoon, annual venture great XXXX. some platform was us strong We fourth to and achieve finish records continued and lending

by on in encouraged a to XXXX. New momentum results a also We’re good our start which towards the Year, great path continues

short ago achievements was as like from since this well notable very to some Before share years covering month. six a XXXX, I’d which the our only IPO, highlights quarter’s as result, few

been performance returns of one our and has shareholders. strong growth, story Our for continued

fivefold, provided cash-on-cash IPO cumulative IPO, we’ve original portfolio of more price. fundings aggregate distributions, increased which more of than share out investment $X.X made per $X.X our of the We’ve XX% a our billion. than share we investment $X.XX made per and also in on We than Since billion. paid more commitments cumulative return $XX

as our also investment we XXXX, which in growth over XX.X% year. set year, XXXX, XX% prior investment well annual XX% I including over record that up was was up benchmarks the which up over a was also to and new portfolio all-time record level for income, In income, also record record the investment mentioned, performance an prior funding, net business, as

a We our in spillover also year. year, over-earned for for dividend the this resulting income

companies, and three XXXX, in another had occurred within three acquired. IPOs we Medallia the addition, which we and In had were Fiber, portfolio: CrowdStrike,

our also than our on our more equity achieved funding We good very of XX% progress towards diversification return ever, made under increased within capacity first portfolio. the investment-grade and average credit facility, the obtained rating

the and to and up previous over quickly setting Chris new I’d up quarter, more to will accomplishments which quarter. fourth detail, few proud doubling quarterly but providing and like portfolio and XX% wrap equity in high-level Sajal turn previous the a fundings, over in These quarter a include investment commitments, fact, record especially new a debt were we’re be of.

its On XXXX. quarter company TPC which an originations into this, high translate top all-time size, our in business of in should for with new ended the pipeline

results? relationships. asked and and do reputation us experience what how we it’s these continually we’re makes So our our special achieve sure, in For

class to decades now as senior have venture lending. our the members only lending management the first known investment to venture is each of as were old, of team the we’re six among experience, develop we and TPVG Although years new not

our across venture global Capital, us all venture direct believe Our companies, in is development. founded select our and our with relationships, than capital-backed years their and XX more senior of leading with to both with financing companies the an leading sponsor, ago stages TriplePoint We was the marketplace. provides team by provider edge capital a investors

concerns asked development. As given get we conditions about and global broader current footnote, outlook, sometimes market macroeconomic and today’s a

While insulated, and the and concerns a in operate are venture ecosystem by trading capital or they global totally the as global macro might such affected as not directly not markets broader be. in we are national markets isolated

work combined, group the of a venture four $XX years. We billion last with raised capital select than more who investors, have in

investments. than to alone. XXXX last fact, considerable support to In and powder their continues make $XX year U.S. several more capital existing and activity venture market dry be firms remains have new raised collectively Overall, These the companies healthy billion robust.

$XX.X Association. venture This National total reached billion In U.S. second funds marks according as total NVCA, XXXX a decade. for is in the highest past the the capital to whole, which the alone, raised Capital Venture annual

late-stage In segment, at count growth in our $XX totaling companies, surpassed XXXX, time the deal year includes more market for X,XXX the venture the the nearly invested. deals, than venture first ever which X,XXX billion finishing

it’s we’re years, plan While beginning. as success the TPVG’s proud We to last we’re the and upon build mentioned, only the years come year in, of to I previous pipeline, in already portfolio which the six important, performance originations other in is entering among TPVG’s history. our That’s sponsor’s factors, driven drive earnings helps largest XXXX with by pipeline growth. because the the originations

underwriting platform. while continue this of stay reputation strategy We pricing because is increase. to maintaining and this of continues demand XXXX can performance, deal We path our will investment global while and and the to our standards, market achieve on strength TriplePoint’s the flow goals our strong and objectives,

and the its also is It’s the run four the and being our first say, Rs, And business We at fourth heart the venture reputation community we relationships. three by get references return. venture and very I the will the our of with you business. three capital in ecosystem. importance you’re to reputation, can’t to overemphasize first continue as will continue if which R, doing right,

over Sajal. to I’ll now the turn call

Sajal Srivastava

Jim, afternoon, you, and Thank good everyone.

XX fiscal term we sheets debt $XXX closed at quarter, we of stage basis, million with $XXX with of companies million Capital During debt at On sheets $XXX term $XXX venture of commitments growth a TriplePoint and companies fourth million closed signed with companies the signed million at commitments TPVG. and of XX year TPVG.

as for $XXX with level million XX XX.X% achieved investment to a companies. we mentioned, a investments, quarter, funding yield this our portfolio record weighted debt of average of Jim the result As

invested XX warrants million $X during investments debt XXX,XXX XX companies as companies valued in of also XXXX. $XXX companies, fiscal received year to We of $XXX and On in basis, at company funded equity to a million. million fiscal one XX year we to compared

$XX had XX.X%. portfolio yield portfolio million weighted prepayments, which was our contributed our XX.X% During quarterly company QX, portfolio we Without prepayments, average overall to in yield.

received of quarter, the million we $X repayments. During also amortization scheduled and

portfolio had XXXX. we prepays, million $XXX XXXX, million as of in to prepays compared company of During $XXX

Core rate portfolio in during stable the despite yield reduction was the U.S. prime XXXX.

to X.X% and reminder, at during XXXX, a since was has QX December As X.XX%. U.S. been reduced prime rate the X% from

those As floating of debt XX% Of rate floors, funded had loans. higher. and, debt XX% investments rate fact, our or rate or of our X.XX% had investments funded were X% in QX, of to rate prime floors were prime rate loans, XX% fixed and floating XX% loans set

X.XX% that Given prime rate the a have rate I’m of set say X.XX%, floor to prime loans pleased higher. to or XX% drop floating our now to

facility a is So warehouse especially rate our decreasing we well-positioned environment, well. in credit as variable based rate are on a given

or XX% to X.XX% rates, from prime based set floors or $XXX set believe have have to our rate X.XX% XX% XXX% higher. our higher, we’re rate commitments. higher, floors unfunded set further unfunded on prime million floors and prime Of insulated to have We commitments, rate X.X% declining or of

thresholds. we debt total As we return generally loans, new originate focus on

rate prime then our and So a current decreasing based rate spreads target prime well the as it when we on adjust goes and so environment increasing the floor, protected in up. set

five, to compared at end of to credit quality. two. investment the $X.XX strongest on credit rating QX, as quarter. rated one the are with one being our weighted from system, average of investment new debt loans Moving at the initially our was The prior of Under portfolio $X.XX and loans are rating generally the rated ranking end to

During Red. from we Yellow, Clear, one Harvest downgraded White White company, Power, was one upgraded from from company to companies the quarter, to Orange to three and downgraded were

completing offering in company million $X.X to in January, QX, our mentioned the Power a our expect an equity received million recovery first-half the result $X.X We XXXX. of value liquidate receive and mark the sell in reduced we to As $X.X million from to million in during the on QX as assets. against and accelerated prospectus remaining loan Harvest the process to $X.X of we’ve $X.X million

we equity investments fourth During public the our million quarter, public with had Medallia. CrowdStrike attributed portfolio associated the and continued and loss companies, the of unrealized volatility to warrant $X.X our of

two companies stock unrealized $XX the basis low the Having of investments these XX. million on December said volatility, with And that, in net with. from price to even equity warrants these begin cost gains public have over we our of as were

realizing million of holdings In Limited, we gain unrealized $X.X $X.X a sold million in addition, resulting at our during and quarter, of the the public reversal Farfetch gains. prior

I would highlight additional already the for in covering return that was NII our by total as our result $X.X the million, like best-in-class incentive to a of fee of through structure, to per resulting investors. quarter requirement dividend NII our fee despite reduced share $X.XX of

raising the over fundraising in continuing quarter, portfolio in in and during XX to robust of rounds total fundraising companies in we private robust activity continue see $X.X with see portfolio billion here this We QX. activity the equity

from investment five top a the portfolio of debt value fair XX.X% positions QX and down our of last XX.X% in quarter quarter’s-end, XXXX. As XX.X% represented from basis, in total

We part thanks capabilities. overall of our prepays portfolio our to in growth, continue in progress to co-investment make utilization portfolio, diversifying and

co-investments us as flexibility has financial with gives receiving exemptive and Since meaningful proprietary the XX our TPVG we vehicles, made this scale order, TPC’s business.

to our portfolio hitting us in leverage here importantly, to our for enabled raised credit our over-earning pleased look diversification. achieved rating, yield, capital and targets XXXX portfolio dividend support XXXX, the which achieving diversification, goals scale more and portfolio ratio, in our equity continued target I maintaining our investment-grade and are growth, an set for and As significant while we culminated we have to

Before in over for to would I Chris, call objectives hand helpful some XXXX. here have goals it and we thought I strategic to share be the TPVG

how resulted the our thoughtfulness to equity. from has and the platform mentioned, stage our for growth and select high-quality deal companies, As Jim progression and their continued of venture and structures investment their optimize and direct VCs these companies debt of industry-leading capital equity both with natural flow significant following VCs demand portfolio in strong which strong debt activity position reflects for

a we perspective, diversify portfolio to sheet As XXXX, only a scale in TPVG to from here as balance see path well. not and but a from a result, continue perspective

quarterly expectation portfolio to year in million Our $XX is million basis. growth gross range on to be this $XXX fundings a for for the

$XXX million somewhere $XXX as million of expect expect million really but see basis, fundings, gross be million we For had the and given full-year of to fundings, to $XXX of commitments least QX. unfunded at we of $XXX between

As don’t income fundings occur last a next of the typically quarter the month perspective from until in an reminder, meaningly quarter. and contribute the

yield to again, core leading profile to in impact be portfolio we’ll the XX% and the to to expect stable be continue the our We prepays. range, the of XX% of industry prior

part regards a be prepays, they of to the to With continue business.

material had activity think we’ve past back, XX in We bit potentially a XXXX. quarters. XX Looking could of prepays this slowdown in the

we our haven’t the though benefit yet a higher example, had For prepay in maintain scale ability will which portfolio leverage a ratio. and to QX,

continue serve to for credit we for primary our leverage funding to of Capital for XXXX take strategic we some growth we of us source in partnerships further partners. asset to intend to using plus scale, programs, the advantage approval and investment-grade the and advantage XXXX, co-invest diversify our take rating well in of intend take as the order rest coverage the as the and Given as entities TriplePoint shareholder portfolio with requirement, exemptive platform lower origination of of TriplePoint of other our and among us, relief to advantage as other

goal As for capital to our ratio is short asset consistently received equity more approval with lower run at stated peaks the above target leverage raises. our when coverage, prior we and to

to our on investment, expect continue be in let to yield that that, their me ahead them manner our to highly and grow while disciplined of for XXXX, scale achieving stockholders will and attractive an diversification. is and we goals as with provides say With a portfolio that, we our accretive look

key the fiscal I’ll the during of metrics quarter the now and Chris call some achieved turn over to highlight to year. financial

Christopher Mathieu

and you, Thank Sajal, everyone. afternoon, good

TriplePoint. XXXX year As exceptional for was heard, you’ve already an

the a quarterly get XXXX. milestones just year highlight we the Before the $XX.X ended figures, would investment I reached fiscal the record again total for to income of like year few of We with into of high share and record fair or $XXX record investment assets of million; million. $XX.X ending net change NII $X.XX; of net in NII, income per million; share of at per value portfolio net $X.XX;

shareholders which we net paid income. fully distributions investment $X.XX by share, covered addition, of to In our per was

was total for a and a average XXXX total to and investment fourth ago, $XX.X higher a the of other income. increase and portfolio and quarter, In generated by in Now in compared $XX.X the portfolio portfolio yield results. turning year yield million of The to driven average with investment balance investment our increase weighted income debt million was QX an total quarter a XXXX, XX%. prepayment XX.X% in income other

expense Total balance of fees the million, XXXX. interest $X asset $X.X $X.X higher generated primarily operating administrative interest was $X.X million. and higher, increase expenses in for and average a million, borrowing growth, in of fee operating related was management The million, and to from increase fee consisting in expense expense which management million expense an of larger quarter base general $XX.X of income of incentive

or share, compared fourth $X.XX quarter million, $XX.X or for in investment per income, was quarter per million, share Net or of the to $X.XX NII $XX.X the XXXX.

quarter, recorded per fourth million, company. position a one or the equity the $X.XX portfolio in share company $X.X sold net as gains investments, During on we realized of

share, the credit-related affecting investments net of the equity and $X.XX unrealized quarter the reversal $X.X or estimates gains in changes two from recorded per value market for adjustments of our recognition price-related and were primarily fourth traded investments, income unrealized and resulting fair Net on publicly losses warrant into realized gains, on portfolio. previously and million,

to Power, received result we process Sajal our already of reduced adjustments expected related the where credit-related that Harvest million, the are debt The $X.X we million. to primarily of which investment regarding have alternatives of mentioned recovery strategic the developments $X.X

share, XXXX. of million, total million million, or $XXX value. the were fair per to in per investments was $XXX net year-end, compared increase Net of assets At quarter for quarter million, $X.X $X.XX for $X.X the $X.XX share or including assets at fourth

$XX.XX or million, consisting year the availability undrawn to subject $XXX cash credit We in compared ended land $XX.X of the prior under with year. total million, $XX.X liquidity million base $XXX per or million, $XX with ended and to million total other facility, our We at or assets, share, per of NAV $XX.XX year borrowing the of and revolving share of conditions.

baby XXXX With revolving our at the we drawn of the which bonds, fixed borrowing $XXX.X of or mature of reported ratio year a million of consisting outstanding $XXX level Total end leverage rate long-term borrowing, million was in $XX of million, retail and notes facility. X.XX this under outstanding times. the credit

of maintain capital our continue ratings to We to investment-grade from order our lower borrowing evaluate options our and in higher-end of access of the to cost diversify markets. overall range target and take to our debt to the advantage leverage DBRS seek

an share. public the underwriters in shares an we Given offering per of offering, leverage, company of we shares were successful XXX,XXX stock. common granted option $XX.XX stock underwritten connection at And in in successfully completed target the million X reaching an the to offering of common additional January. XXXX The with price a of purchase was offering

closed and net $XX XX, of the on an received XX, as proceeds their to on fully the underwriters a the additional January from January And million XXX,XXX of $XX the initial result offering million sale. exercising company the company option The shares. purchase additional received

aggregate, proceeds in company net was So to $XX.X million. the the

will offering in will our this few proceeds were next proceeds over down While to deployed used the expect accretive these support quarters. credit facility, revolving and XXXX needs liquidity the pay net initially our be

quarter, $X.X share the with distributed year $X.XX million, And per share. consisting our estimated ended or for and spillover $X.XX income quarterly year, we of During we per of $X.XX the fourth share, per regular distributed dividend. the

of share the of distribution first XX. $X.XX Board have declared quarter has a to distribution. our This quarter March March XX XXXX, consecutive quarterly our XXth also on on pleased maintained announce we per Directors and payable stockholders record for I’m the of that to of increased marks

please the participants. open At I’d happy operator this ask for to to be time, we take and your questions, the line would

Operator

the question Our O’Shea from will with Instructions] first Fargo. [Operator We today Finian comes now begin session. Wells question-and-answer

Finian O’Shea

a the let’s for we’re start I guess, lot capital investment. question the Thanks guess, continued venture taking Congratulations of the I on seeing quarter. when I’ll to major idiosyncratic with company, on lender afternoon. for asset of the good class sector a of Sajal, position on higher-level say, Hi, venture headlines through risk risks question. your our funding discussions up. as the for my a outside one on a is dries

real-time seeing So a withdrawal today? in that would say you are capital venture sectors major investment the of VC in any

Sajal Srivastava

question. Yes. Fin, great

So that but broadly popular would of sectors popular say, out sector out sector of of out Historically, in speaking, favor. capital world, out was was just the a telecommunications that not was and speaking, clean say, an private in element I going there went as general, VC generally that I’d equity favor, of favor. yes, is is the necessarily tech in sectors, in went – world are that And favor, intensive of well.

say, is us or an disposable as of not look and concern, nature and obviously area I’d the – we eye for on consumer keeping income. just but concern an for e-commerce spending to

not speaking, of I a mindful in And say a that’s portfolio well-positioned. favor, those sectors to out be companies sector are we but of. so And it’s want generally our that would sector

the our to of raised have consumer equity XX companies almost we all XX analysis e-commerce portfolio in fresh think months. I the did last

curve driving unit So giving these them than have ahead the growth path unit costs. in rather company, by of profitability, all on at terms significant economics since VCs, they’re backed runway, amount our – strong been of top tier focusing equity to a and plus of

feel that So are the ahead companies like our of portfolio we perspective. from curve

Finian O’Shea

there amount co-investments of us BDC you meaningful private post-quarter in amount from where mentioned equity there’s you a you across for lot your perhaps million filing, amount, BDC, you’ve deployment Sachs. in a sense the in of that on $XXX these outlined the raised XXXX, Thanks you for pretty tell elsewhere platform, to hear? color. Goldman Can platform you And Okay. was position a how the raised hit given that and alongside feel the targets your capital

Sajal Srivastava

for question. the Fin, thanks

to With high-level. not offering regards still to offering, of private BDC, that just maybe that in an private specifics So a since and allowed it’s we’re ongoing the conducted vehicle. was discuss

wanting strong the broadly portfolio would least we’re last the say, we’ve about and that size But or potential, growth balance overall, but scale. speaking, for at with talking diversification demand, balancing more and seeing several years, I been strong, strong to

we’ve fantastic TPVG to originate across capabilities on a co-investment borrowers, of done that using and so allocate the And the they of to grow. job as funding our but continue needs side meet our our transactions vehicles to diversify

And the to vehicle. vehicle, the pipeline across that to from raises expect ability we any so it the new – allocate benefit would be platform the and

one vehicles leader thoughtful the So, very this I word in this. the for think, like win, win, class asset thought – win BDC use

a And we so for think similar that from it’s TPVG perspective. shareholders opportunity

Finian O’Shea

or that forgot – I’m Was me that. I kidding.

Sajal Srivastava

names We here. don’t name

Finian O’Shea

Okay. know much. think was. me. for No, I all Thanks so who I That’s it

Operator

question Compass with next comes from Our Casey Point. Alexander

Casey Alexander

afternoon. good Hi,

Before that targets origination you mentioned? the I you start, restate could

Christopher Mathieu

funding those Sure, were targets. Casey,

our for targets $XX funding to quarter. So million on a $XXX quarterly basis, million each

we sight it’s full-year $XXX-plus $XXX million. low-end, the of So from at right of unfunded existing mean, line have commitments, the have given backlog on – we the million a there. I basis But

likely again, $XXX So $XXX we million million the number want prepays. before low-end, be we a sandbagging but on and between of the will think, to be the impact completely don’t

Casey Alexander

loans generally, to repayments. far you quarter, any have is up that so moved that stuff clear, right thus some $XXX you into the prepayments Are is million don’t worth $XXX – given in Clear? million are surprised foreshadowing up which generally of goes you’ve when Okay. And a now, that of or

Christopher Mathieu

in maturity cash liquidity but a of It’s companies the having only strong position, not of also date excess function own. our of runway

it’s interesting think a I prepays yes, expect comment and mentioned So we companies slowdown bit. we portfolio point, said, to we this or think, our I when potentially

then thoughtful that kind those second-half of the – I changes. significant of the liquidity. maintaining And just more see of year, think, everyone we’ll is being strategy if

Casey Alexander

Right.

Okay.

leverage – offering, even back kind below of the ratio not Now, target. the subsequent with while to that’s the

arena? sheet, towards from next you or Should seem you would light As of unsecured be, I what with more gearing capital suspect say would a be raising is build the continue the round come balance to to the unsecured expect debt that little we debt. there

Sajal Srivastava

Chris, take want do you question? to that

Christopher Mathieu

Casey, Yes, – sure. think fair I Yes, I a that’s assumption.

$XXX then and credit gives and to that It’s accordion the our flowing ebbing our and will, as facility. make about the prepay. with of of million an you up we’ve percentages, us We that $XX and unsecured now, parent additional or moved sheet are companies unsecured have million, debt at of think the on our debt only if other debt But sense would it to unsecured level. balance funded

Casey Alexander

Okay.

Sajal Srivastava

investment-grade in of credit light our Especially rating.

not advantage so So that. of and leverage since we take expect have raised that, we to

Casey Alexander

Okay. contractual was issued appreciate looks That’s discussion because am And $X of credits to individual loans. loan I Roli. What’s some that Roli One I non-accrual. you – it did on And like your – the you very discuss, did an status you helpful. your floors additional Roli? did million your about you guys discuss was on

So is non-accrual? still on that

James Labe

Correct.

is Roli credit ongoing situation. during quarter more as more companies work the did company We or the money they process. – through to that fund So an sorry,

Casey Alexander

still it is non-accrual? But on

James Labe

Correct.

Casey Alexander

left number A, And say, terror in of which do right. people a this Founder finally, have And apparel, I a fits Outdoor name the has China. Okay. Voices, the that in and apparel source and from is then laid the retail; company companies off. fits All B, would been many

helpful it the be think had I you would color on Outdoor any at So if Voices? situation

Christopher Mathieu

and forms omni-channel they economics, being living other call establishing of to well physical we’re the driving mentioned presence. they which funding as have, on activities, regards on within or ahead fundraising to mean, curve in to always doesn’t means path obviously, whom But during profitability the less with earlier that customer focusing e-commerce expensive good out prior of our using specifically the the Facebook consumer make it the particularly question, I the then and as news than focusing I company. Yes. going Instagram, press. is, unit as acquisition comment general, companies And on I’d say to

potentially would or potentially growth curve the raising Outdoor including strong then through additional path Voices I in to ensure sake time to it. terms companies our ahead to and economics, So, of and focusing on unit taking they non-profitable off, growth’s – or growth for capital profitable say, sufficient driving have accelerator having and of the and runway do the

Casey Alexander

I additional issuing just very feels if transactions some roll roll place. like we sort to Should not guys don’t bridge If of to some this a I sort of Roli, a million there transaction transaction Roli and much over back the $X loan just And non-accrual Okay. a – back it’s $X to sending I essentially quickly, you can can is pun. to a see taking on company of to seeing further it. could fun expect for that that that conclusion? mean, on I bring a million you very

Christopher Mathieu

we decision to to say, we capital protect that and make have the credit about of or We credit interest more working I’d sight when commit confidence full recovery. a either through we’re situations. preserve manager, know our Yes. line

obviously, don’t of with getting capital specifics, back. bigger wouldn’t think of So the our it we we very but Casey, because talk term, was beneficial all general deploy if didn’t goal more capital we

Casey Alexander

you for I taking appreciate Thank great. Okay, questions. it. my

Operator

with Securities. comes from Chris JMP Our York next question

Chris York

thanks and my for guys, Good afternoon, questions. taking

above cause pre-released missed but your per net me maybe investment reconcile share help Forgive transpired me if the range? to even to can event be that your I income you this, events or

Sajal Srivastava

please? like that, would to you handle Chris, So

Christopher Mathieu

Yes. absolutely. Yes,

his two to So drivers. cap One, referred it main fee really, relative was the Sajal comments fee. in the incentive to it’s

calculation in the $X.XX resulted given $X.XX there was change per related to that due share So to a incentive was a that directly NAV back. fee the

fees closing of piece we the of end the go unfunded the completed and commitments. commitments not year, was, the the it’s are offering, had of we the unfunded expire, a you year. that books imagine, extent And records, as And there a process then additional that And of that end given the at the looking have we at can the accelerate. timing the through of process at to

had And the so XX/XX through not relative for gone close of as year-end to the was at that expirations we additional accounting income that normal part cycle. previously

Chris York

it. Thanks, helpful. Chris. Got Very

strategy, to we’ve of I commitments. deliberate and of product kind a sequentially meaningfully assets. unfunded like in XXXX of a is it’s it just focus been the seems on years wanted percentage it of or lowest as more yes, Is level did simple So that this at It decline a expiration decline of couple commitments? a

Sajal Srivastava

is Sajal a This of utilization. I would here, function, it’s say, Chris, high one

that off again, $XXX it was a in And so the that activity year. fair do investments, we robust So, QX, mentioned, have of fiscal Chris then from of funded perspective. as million amount burns at end every

the So I change than if any over strategically couple wouldn’t there’s years. of other say, we look past

commitments new they’re We year. utilization from have course seen during higher made as the of fiscal the

And so that was something ago. strategically we made years a change many

to want capital to approach that and other difference strategy our our is unfunded we commitments, our on returns in them. say no earn than or would I been there But has precious

thoughtful And companies so our we’re being to as mindful portfolio we and committed.

James Labe

here and not of I we do want with And out concur not plus would commitments. That’s unfunded with that, Yes. supersized be either. amounts a to

Chris York

following maybe And a utilization. on little sense. up makes bit then Yep,

So costs, as from months, the on of opposed VC-backed last growth commitments? focus for the to companies maybe profitability, later capital, change recent has couple stage your or over debt use of the at unfunded the all demand

Sajal Srivastava

jump maybe in. start thoughtful Jim, can A question. you I’ll and

again, that, profitable I’d say unit would I profitability, say, So economics.

revenue or success of for say, that to opportunity growth technology-focused are companies, So market the growth. with companies primary small related because percentage growth it’s for shoot product or fundamentally I’d metric profitability, overall a

– us I perspective, an acquisition from maintaining the they’re or the has balance would a not say, to portfolio to a on And seven being companies liquidity. ample having the on of structure, still from the R&D of to I and our partners a been be to financing venture-backed a focusing to mindful benefit customer journey so spend and multiple but then both XX-year IPO closed And a and it’s investors of causes fact companies would for is that VC more efficient sides sheet themselves. say, from opened cost whether volatility to markets or the – event, and the to company and exit

And so good just benefit And I between people exits. those think market the volatile, as prepare from IPO companies exit are overall we and benefit to faster. are run wanted grow demand and or times from when longer we times demand time during for when the then

seeing volatile so, enhancement to select say, focusing I’d that credit that’s approach capital think times. funds we more and a way our we’re on what And for venture to our – is again, additional generally during these outperform and,

Chris York

thoughtful Sajal, color and here. that nice I appreciate set helps. undistributed That’s level Last very on sequentially, income question color. increased a is great that,

to that income exiting addition gain you sizable on in your CrowdStrike. be could distributed In pool,

likelihood So investors should special the to in dividends how think about distribute XXXX?

Christopher Mathieu

I’ll… Yes,

James Labe

yes, – you Chris that, why don’t Chris? tackle Yes,

Christopher Mathieu

Yes.

I the we that over-earned have in is, we quarter actually was our we spillover, spillover did effectively the spillover it. XXXX, used given carryover that dividend in about point did this first not we year, of And only think XXXX. increased but

ordinary not capital we largely I all point think income spillover, realized your or we spillover also substantially have gains. do income have that is only is potential

gains of end realized capital measurement The the October. date would be

credit realized To to year prior we adjustments the end that something think realized that of extent, the the had would the gains in exceeded about have we any on is that XXXX. So to side.

Chris York

That’s for questions. Thanks me. it Great. my taking for

Operator

from comes question with KBW. next Our Ryan Lynch

Ryan Lynch

and taking for questions. good thanks my afternoon, Hey,

run G&A your at. have quarter, First guys double about historically of what one, you just I guidance was noticed expense this

was this any that one-time number items there So quarter? impacted that

Christopher Mathieu

Yes.

ended line that that I I observation. were impact last to think SOX We internal was was external and of through a the was would XXX largest cycle costs the the as and the period, a the good where that say have, compliance of – last compliance. implementation full internal exempt the full year we substantial control audit five-year – audit the G&A we process. compliance now as auditors. were to as well relative the There from control additional function internal we

year. XXXX. the could think more but not down lot will level, that a to I considered is that back would normalized for we new come standard. So I certainly not A directionally be levels this this G&A of the at say And that, experienced one-time

James Labe

Okay.

Ryan Lynch

we tax as in didn’t the excise have well? Chris, QX And

Christopher Mathieu

little the the We G&A part the yes. to the spillover that, extent, noise that X% the excise year. did, our of income, process. in you so or relative Yes, Remember calculation you have from a tax excise expense have of bit to there’s end of carryover is at a

Ryan Lynch

prepared look lows X%. wondering, And I to at today, treasury guys at also – sheet. rates at had you a of right side in I’m come the out times investment-grade potentially any your rating around of discussions points, it. the then I pricing? the to basis on have mentioned balance mean, guys less the your five-year you have it to because your potentially Just down recent look build historical your in Got couple than risk-free XX-year preliminary do the press release looking comments, about use just at XX it’s

credit the spreads pricing I’m size? rates, helpful? a the historical spreads from just if you as I’m bond preliminary very would goes not discussions, credit have that much BDC out potentially So if at wider, thoughts tapping guys very it any sure, if any guys like far curious widened like blown haven’t be on out had be but as could you because feels

Sajal Srivastava

Yes. to Ryan, with investment we can’t activity, to have specifically, and lenders dynamic. conversations comment understand the we market bankers continue but obviously, on any

markets. I the think interesting been an week it’s in public

And those will rates market what so weeks feedback from folks of the like look and months of get look quarter. in upcoming to I and and the terms we in think spread see

Ryan Lynch

Okay, it’s fair enough.

I that’s $XXX like million, to have or pretty quarterly to on guided past. in the guidance million to $XX of what you that funding, Your million guys – sort feel $XXX similar

So coronavirus and have week-to-week uncertainty and day-to-day or on even that the changes economic could that the it potential surrounding basis. ramifications given a the just wondering, I’m

you when your you approach potentially you guys like impacts uncertain high-level case of sort potential out environment? just as have deploy are numbers very, that the in evaluating bottoms-up is how put you today that, to of the and are you just just I’m process wondering a coronavirus very fund? a capital specific baseline economy? a Or Do ever-changing guys like guys new evaluating are the company using to U.S. ever-changing thought in when you portfolio looking are kind impacts, of to what any

Christopher Mathieu

question. great Ryan, Yes.

year you first for regards the correct. outlook to say, with are is we the last similar actually That so I’d gave guidance So or that range our is, XXXX.

messaging given takeaways And things on lot of from is, high-level volatility. years, going nature, think a given more the so perspective a one things of or election in I world, the that

and turnover our from like the so it. to see And cards now how is at quarters over markets. perspective, we’re this We’d again the see of the stage, not singling impact the next couple the to various kind on time to of capitalize

perspective, million message or generally with So the commitments. other that’s I’d – aspect so unfunded that say, from $XXX contractual the of is from

we’ve in well close low-end for release. We’re in far, the the low-end, our commitments as term or the sheets disclosed our and QX earnings signed on closed here plus way so to

So very still busy. we’re

still innovating. of still companies that globally and know very the coronavirus. being solve They’re very the I we don’t the though, is you’re right, impact news, We’re our problems. where being The But we’re all good to thoughtful things – are think disciplined. creating

technology. take And technology more advantage so products. they the conferencing meet, When to they people or other to can’t use video use or technology

And so don’t they’ll a they app. their want to – go or card if or bank, use FinTech to

hard it’s want to don’t you know say this if again, comment anything to I here. Jim, early. So,

James Labe

hard very I figure add, just think But this Chris, uncertainty, to a put it’s conservative. would approaching to was word. – future very the I correct out And in. obviously No, we’re

I here. as We’re but you think this of did thinking last year,

ever, now want sorry. we pipeline, we play And the but mind largest our think funding extremely incredible an have strong absolutely opposed rather to performing I predictions, demand. don’t as would safe We to this

how now quarters for Sajal XXXX. stick we’ll we’ll And, says, see our go. numbers the by as So

Ryan Lynch

targets level on Okay. unfunded in percentage turned commitments is of future? commitments funding some have you hand And ways the have of into mentioned hit unfunded historically large your guys, the and fun, then, at just what today. funded historically cumulatively, commitments because rough those chance, the you other by point of to your Do estimate one of

Sajal Srivastava

depending and between the the it’s of XX% It’s Yes, question. on blended generally XX%, and basis, profile XX% between great company. XX%. a But on

Ryan Lynch

I my appreciate are all Those this Okay. time questions. the afternoon.

James Labe

Ryan. Thanks, Right.

Operator

comes Howlett question next Nomura. from with Our Matthew

Matthew Howlett

quarter. Hey, on Congrats a guys, thanks. solid

of Just first question on, everyone now. here obsesses dividends with sort

said in But the be run we’re prepays where you this NII at at point get dividend a without to point of can the guidance strong sort get the year? have following our models, enough point leverage that the new can sort you’d that given We’ll of above now, to quarter. that some have past the to you think a – without cover guys scale, you’d prepayments. obviously like You you rate

Sajal Srivastava

take that do first? Chris, want to question you

Christopher Mathieu

Yes, sure.

generally that, prepayments. we get X.XX prepayment benefit time our leverage that to seeing speaking, to we yields saw without with from think us X to that I kind we’re current in think where are to dividend, gets need quarter you Certainly, be in X the additional But times based of primarily kind So is at where that our that the sustainable ranges of we income. additional the this I current the in market. on cover

Matthew Howlett

point. makes it. And get to that looks That what Got that’s like if it certainly that, you I’ll sense. we’ll a lot congrats certainly, of – update and

tapping up on debt that achievement. on note, I think, know, the And a secured on I the the question markets. huge following mean, I

huge any like early? investment-grade given I do baby low you advantage is First, rates, can there of Just new can that opportunity that to these mean, you – rating? here your seems a bond? to XX there’s penalty that call take

Christopher Mathieu

public that either be way we’re we debt. additive private to what The have. unsecured thinking Yes. is we would that seek extent the about It to or would it now

financing. prepaying we’re existing or about So thinking not refinancing the currently

I that think sources capital, equity think about given more important base having and is vintage the of the what’s multiple growth have. to we in

have life. – legal there we fees that and being The baby banker fees are the do that, with have bonds was fees and now filing associated amortized over

prepay on would over years from cost a And an off perspective, to the debt NII. work additional better ago time a to hit I pay capital as paying top have have off you done overall couple a period those, opposed the facility. in of that to was layer accelerating or that that think, of that hard And lower so and on in cost of capital you it’s of and

Sajal Srivastava

that want Yes. And that I’d and others based see from the side right balance diversification sheet. they add agency the feedback on to only our the rating existing on of

cost best is always lowest the So option.

there’s acceleration income, Chris again our multiple structure, the floating the duration of of showing and financing the concept think the interest verses fixed we As mentioned, ladder of strategically is from maturity, diversification plus long-term. having sources fees the best but in with and provider,

Matthew Howlett

years So from away. that two right? return, too that’s And away is not far it. Got

the any – of the update why And had And that. portfolio? in an pipeline in the Okay, that’s update in give you Sleep. Chris, Casper there? an terms anything can I you got mean, registration, us on from have IPO

Christopher Mathieu

$XXX think, what So in the quarter. did did public, first little referring raise They go to. as $XXX Casper I that’s you’re over – million

going relates So good another to of they that’s now public it good for us raising as amount can markets a company access forward. the yet capital, and

Sajal Srivastava

in number two of in that are may in Toast come have to there terms rounds has public they of top ClassPass a are confidentiality companies here disclosure, QX, come in that existing so portfolio announced been equity no of have companies mind. though I particular, other that have of There so confidentiality. and If add, of out Yes. been portfolio our or Matt, announced that

Matthew Howlett

it. Got

look We guys, the to are for that. we’ll you you? co-invest Well, co-investment I telling done? They strategically, the forward do deals What how this sizes. new does Just platform. are question, with gets if good. sponsors mean, bigger across details potentially, offer game your change does this now, Last Okay, you? can opportunity, on hold opportunity, this more the that

Sajal Srivastava

Yes. Great question.

years. again, Jim speaking, founded around platform, always Capital platform the and So generally TriplePoint I been large. it since our XX-plus is particularly – say, I’d It’s we’ve

we’ve had the large underwrite ability So to opportunity always transactions. and

large it’s for helps portfolio co-investment the the as platform never So the whole transactions. prevented companies demands of meeting its but TPVG, a from

new platform originates we’ve So new to large the transactions I’d loans say, changing the and digest this the how since is opportunity not transactions. had always

raising equity to this periodically I another growth, isn’t to quote thought potentially TPVG leader, think, up TPVG is yes, journey, as capital, and to its the acquiring benefit for win-win addition is So, there to – we again, the portfolios, grow in I think. look leveraging it’s to just means it to right? approach

and this publicly to be financing brand BDCs. so, the their that record very – ability traded to the raise forms And is of managers and few prestige can on accretive based their alternative just have against track

that the benefit shareholders. And so to we is think generally potential, speaking, TPVG

James Labe

doubt. No

I capability larger important While diversification the certainly in more our think, minds, critical sizes, an underlying towards to is driver co-investment. will allow do a it and thing

Matthew Howlett

you. Thanks. A information and more Congrats, Thank again. that. more it. way Got on

Operator

from Nolan comes Christopher Ladenburg question next Thalmann. with Our

Christopher Nolan

My answered. Thank questions you. guys. Hey, have been

James Labe

Thanks, Great. Chris.

Operator

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

James Labe

operator. as Have you and continuing support. pleased very We’d soon. you and, in participating we the today with results your tell you talking we’re look XXXX to to quarterly into you, for can in XXXX. with excited cases, call evening. head Hopefully, thank, and for here a everyone, some good like all Thank our deeper We seeing forward

Operator

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

may You disconnect. now

TriplePoint Venture Growth BDC (TPVG) 4 Mar 202019 Q4 Earnings call transcript