TPVG - Earnings call transcript Q2 2020 | TriplePoint Venture Growth BDC Corp.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and welcome to the TriplePoint Conference Call. [Operator Instructions]. Please note that, this event is being recorded. I’d now like to turn the conference over to James Labe. Please Jim, go ahead.

James Labe

afternoon, good and operator, everyone. Thanks way to I’ East of storm Coast. mentioning make its some by are d which way in the made tropical like us the remote that by to start locations up continuing and has its affected the in during apologize may any advance issues for now And that or technical arise call. of families continue and that way. are TPVG, to hope our that we behalf healthy On shareholders their and stay

this supporting is priority of the pandemic. our portfolio protecting during and first Our our companies health global employees

As entrepreneurs, the work capital a continue with closely to global firm, and we our venture venture partners, within investors ecosystem.

past the follow the first this playbook in we outlined all For continue quarter. quarter, that to we

by right this times. market. in our it this reflected and approach believe maintaining Although quarter cautious was this given stability a We was uncertain the volume, our light approach goal of

business during well through economic held environment. as to the quarter see you weathers Our we continue this up can as

negotiate lending or our which we both and These positions, equity likes business Sajal sauce. in than the is combination portfolio to quarter, a significantly, or our stock achieved during venture XX.X% even net as or invest. warrant benefited share, we transactions. investment venture weighted select $X.XX the we part income of lending transactions. For a of the companies quarter. component was for from model it our attests of back we This our lending the more our annualized covered equity to typically part the average powerful And returns. our the quality investments of $XX.X venture to that One is the that quarter per capital also dividend. differentiated of are secret million the yield which than Most call more component NII of

the quarter, held in sales recognized gains that CrowdStrike. through million almost we stock unrealized $XX During of alone publicly the we received the

initial Most for overall stronger. its whether our equity maintained or companies year. portfolio our in debt and last as To more our are return to with extended as company pony. related half we other to portfolio This And get as exits, reductions they pleased stronger rate, plans companies CrowdStrike. long capital venture their such runway we've the this that's XX% the runway. we lending significantly fact bad the with result a forecasted liquidity detail continue few positions, our This of others. portfolio is Nutanix, through we'll Quite are generated still works. had cost few is strategies list and debt plans portfolio pandemic. not and has internal many Sajal Shave into and of the hold a response And rate CrowdStrike there's the result benefit not in in of get are trick implementing and including but as since of to-date, companies already beating and an companies in operating lower already this we've club resiliency in follow a the not Many there outlook a and our successful another that to of ago. company. one investment have a Club, is Chris implying healthier led cash now shares a with into As the extended of more in to burn months companies that will business, component situation to equity these equity join TPVG as are Wring ,Dollar portfolio Topec as such inflows, in had a also more

billion hand impressive have more cash months we're the of total through proceeds this capital. far, on and raised than And our so COVID XX two-thirds than start of of portfolio an quarters had more $X.X of companies additional in period year our XX% or fact, of closing companies today. the this than of in for since capital of the In more process

capital the more what done period. it these leading relationships and three market, in and the pause. in an stabilization continues a actively half. be to While are management me we of of of portfolios of select had work period now amounts calling getting long venture the first and profitable are with standing through of that they've which uptick originations month deals during active demand to This more will many we existing at through funds, second round increased we've was telling busy Many in those and deploying their the and investments are continue our working foresee assess handling are COVID their worked this capital

large, the by and companies have their adapted environment. new Nowadays, portfolio to

this already. Our powder year, of amount billion select $XX of we this these this year which funds ignore more alone new closed $XX funds since than of of half can't XXXX have that there's and in first multibillion raised also billion of XXXX through the raised here dollar five was last were

lack as equity So no there's of capital. result, a

support source now new is reserved capital investments have in this close select they but and powder generally dry beginning towards companies, Our VC deals. actively it, market for they not only turning of their continue to purpose, the are and so think as to and called new

pickup in result, this second and our up notch are here continued activity. maintaining originations right by and a these the increase already in balance follow while carefully a As turned foresee a of investment year originations we end playbook, a our through continue the we in given have notable half to this

Given these woods are let and at of don't more pandemic. the that mislead sciences of to that phase numbers growing in the it in venture period. in technology surfacing equity unfortunate first virtual new new want venture address stabilized increasing life now there's These ecosystem. And you the anyone we now, the coming post-COVID dollars. are up include out the them through many aimed have investment services of portfolio, period. and all telemedicine we're certainly, environments are and and investments this I yet. out that and are But made capital think fact, enormous amount of and post-COVID many safe digital many office opportunities both and in And the

and financing increased venture new is investment also opportunities companies for future lending at as the this remains helping activity stage as providing promising valuations include for strategies. purposes, planning navigate growth lending sheets there in While opportunistic acquisitions, in timing other balance round pre-IPO well. needs financing These lines and of and optimization lines in for uncertainty equity companies their and timing venture

backed scale, considered but these out ones a that with very significant specific finding have also select capital companies. challenge now we're But have are Finally, historically opportunities there These lending. line. right worth and profitable Many previously candidates. venture days they're flush top the equity never are VC at been

remains the As first our in fresh capital debt equity Along of a final quarter the with get will and we this note, liquidity strong. into, as Chris raised year.

unfunded this, $XX from We foresee have ample not presently non-accruals manager. credit to significant any meet we TriplePoint remains we precaution keeping any utilize commitments our run million our the To operating and new announced a have practices deterioration and BDC. established capacity do this This Capital our first backstop one that a advisor the all or to experience facility conservative add has to not invest-in-class need to quarter. did of and our the up, our with Again we in priority To as continued previous in remotely. XXX% and is been safety more past quarter. the wrap

of will impact to the current While progress, and our work through environment with the the our we pleased we're continue portfolio's operate by health in economic playbook.

portfolio demand maintain to our We to its manage this the and marketplace. we the have now the increased the well are team to as stability responding in period. as manage right And through liquidity

COVID shock getting We're through. of initial and now been impact the having its deals done. With worked

year. of now, portfolio with Sajal. busy of turn We our a never are health handling and continued and investors, deploying strong are continue period. for as activity companies. than in to of work Sajal. look all reputation, wish call These more ecosystem to We important our Rs, origination during to relationships, our venture now me increased you let and ever entrepreneurs important over our more venture And references. finish and firm the the this foundation amounts we this increasing X has capital Right been the forward good

Sajal Srivastava

Yes, sorry.

was Thank stakeholders our you, of I Jim, their remain all and afternoon, hope I everyone, hurricane. and and Sorry, dropped. the healthy good safe precaution challenging families times. of these during

I where so am Just as okay, well.

important always periods during As, our volatility. Jim more our of existing but mentioned, is portfolio significant managing even priority, highest has been

from our the are proud efforts of the and portfolio, investment our the which over portfolio performance long-term, course, of of quality returns the on our potential believe uniqueness the We fronts additional and the the strategy, of developments companies, of accretion of team. we value within and our for reflects durability a and and investments number experience

sheets quarter, growth at companies venture that million with term second of commitments quarter, we four sheets million the during $XX debt During $XX signed signed companies of TriplePoint have prior with the from Capital, TPVG. enclosed up term million $XX stage

and markets, platform mentioned, in a venture firms of group robust flexibility our our best Jim strategy, the investment concentration and As COVID frequent activity critical for platforms platforms lending deal benefit is investment with select and opportunities vehicles Capital the continue limits. on of the our start maintaining TriplePoint capital its COVID Since as portfolio relationships, we communication as and exemptive to our sponsors but across dynamically of Furthermore, of and vehicles capital quarter-over-quarter. assigned relief sheets co-invest we highly of capital, or targets demonstrated having stage from allocations and order smaller our allocate liquidity term benefited co-invest by by level TPVG as our and higher diversification focus multiple and growth investment venture venture able these weather selective on crisis. flow the available from acquired our has based

rest expect commitment to liquidity given portion we growing and larger to As of debt position, as new the year, we a TPVG Jim take of co-investments. the look substantial mentioned, TPVG

investments During funded of we seven million debt quarter, companies weighted with average the XX.X% to a yield. $XX

equity in and We valued $XXX,XXX in $XXX,XXX. four warrants companies received at also company one of invested

investment million QX. from in million this Our $XX of fundings of fundings was our quarter down $XX debt

and financing Our demonstrates a have companies, position cash fundings to-date in runway our confidence us investors dependable portfolio reduced capital as is they and that as strong operating many venture their the and at of level trust partner. consistent the exists and well of

year, to the to we of to the million per range expect As the see look million by $XX QX. returned fundings to quarter rest $XXX we

yield rate $XX U.S. QX, in overall which reduction prepayments, XXX was March. the company in portfolio a principal and XX.X% Core the weighted average an yield stable resulted quarter impressive million point During in portfolio basis prime we portfolio had of prepayments. XX.X% for in despite the excluding

have So which $X $XX million pre-payments far of million generated in of had QX, income. approximately accelerated we've

of durability the continued to Although we activity believe as market whole. the be lending higher reflect portfolio a prepayment companies we our and expected milder, levels venture

also as loans, during principal additional short-term and quarter. $XX of amortizing million for demonstrating which the each liquidity scheduled quarter, an received source serves TPVG of We of amortization the our second nature

the on higher. but originating loans provides loans, capital over with existing $X.X portfolio billion and those cash floating addition a loans equity of rate follow six a were private of our same in prime set runway. quarter portfolio debt equity have the floating is As funded quarter, of investments portfolio set continue current which the nine our QX, end the of to or XX% we We're also if during them benefit targeted All loans rate our have will rate and have rounds report equity higher in that success floating million and the pleased were at companies new over XX% have four second prime capital, $XXX and fixed This therefore additional in spreads loans floor QX. with the prime raising have to rate yields rate companies companies raising during as increases. floor of rate XX% to a the raising when

raise in So had portfolio we've works. two far rounds with the companies equity QX, more in

loans system, portfolio X weighted credit quarters ranking investment was initially and X.X. being with rated our our to of new average rated on investment of credit strongest Moving the debt typically the quality, to prior are Under flat one from X, loans too. with are quality rating rating the

marks, the X X. X downgraded to with company During to the quarter was was to category one one upgraded we X in X X quarter, we resulting recovery from and only that quarter. list placed were expect watch asset process during with list X, company prior were upgraded company on categories during regards QX, closed to situations non-accruals. and no then Broadband, Power and from from with credit to Cambridge to X, X, category QX, Consistent on the and or and obligors the from one and category them leaves non-accrual in quarter prior our sales [Manchurian] out removed from d obligors watch no X remove Harvest X recoveries was which second added in finalize obligors non-accruals our our and category and With companies our the consistent completed both from

on a technology have one music X company. watch We company list rated really our

loans During the some quarter, markdown [indiscernible] company. on the assumptions of the turnaround further of reflecting on the our ongoing our with we recovery of impact associated COVID

expect During made couple over to has QX, we of company see trends some progress the the favorable next good and quarters.

our resulting sold of gains. CrowdStrike holdings and $XX.X During we the quarter realized XX% of in million

commitment of our provided our over business grew. $XX to in partnership XXXX commitment we $XX their as them as reminder, million initial time with CrowdStrike. million loan increased As continued part to a And

with our loans the a of private were prepaid our right CrowdStrike the the resulting warrant invest share their [indiscernible] CrowdStrike the loan an of of At In IRR of part were net other price in XXXX per Jim since list an XX,XXX of from average $XX.XX as and of XX, financing. they an initial $XXX,XXX for Our equity offset in went as gains from realized to funding. resulting, XX% mentioned, realized and in in them shares loan quarter, the end share realized public and still QX, resulting of realizations Cambridge included during $XX removing round In sale a These on gains along losses we XX%. our with the quarter. a XXX,XXX XXXX, sold loan, at over form of watch to CrowdStrike. by holding from Harvest next we total shares on IRR of the June

of losses, due to but should again track gains return of which term to record, offset than overtime credit our losses venture horizon materialize. are equity these the for the of only not losses is creation warrants business. our and it also longer loans and sponsors credit lending part generate beauty the gains value a While excess in The and additional that with consistent exists potential generally requires the these but investments,

from As and Harvest CrowdStrike. unrealized by the Net for to changes to related recorded credit during million we've the of adjustments, quarter on reversal previously recorded seen unrealized million unrealized valuation and shares reversal on second the with adjustments investments losses gain offset from $X.X of loans Cambridge were gains the previously resulting related quarter. mark-to-market sold partially the related associated of CrowdStrike $X.X

XX.X% As of quarter XX.X% from basis, investment total of positions flat on portfolio from June XX.X% XX, fair debt our value QX, the top represented last down in relatively a XXXX. and five

scale prepayments co-investment portfolio, to part diversifying of our continue our to portfolio the capabilities. on We focus growth, TPVG overall building utilization thanks of while in and

that record. TPVG billion Since at XXXX, the investment track commitments reviewing have over $X.X minutes hand TPVG gross XXX that I IPO of we a has Before $XXX fees income funded approximately Of $X.X the to companies. made to I'd $X.X of we million Chris, spend income and million and few generated call the portfolio to and investment billion after like expenses. of portfolio investment $XXX so net funded have of all billion, far,

credit Medallia million more This highest. $XX losses loss the keep that at gains credit But meaningful hold quarterly we with realized of excess portfolio Our to on we in have and have cost to very create investments, our returns platform, yet into generated CrowdStrike of factoring additional sitting XX current powerful we yields investments commitments, and of we over play I'll demonstrated metrics at achieved Chris cumulative financial are the to -- turn would net And net still we With same us investors. the equity and from and but translating the to TriplePoint on net $X at stock mind rate asset highlight currently publicly of some XX.X% of lowest of million in win. our to had of has the as and in early the worth debt in we of XX.X% X.X% $X a a have warrant now we another investments which warrant portfolio and generate our traded that, is realize. return this innings, expect meet importantly, yet call in quarter. a value, at equity we source But during on for X.X% to as million, believe million our long-term the basis fundings. $XX are after losses,

Christopher Mathieu

Sajal, you, everyone. hello, Thank Great. and

quarter. for consisted results $XX.X during through of annualized increase and second $X.XX driven for income investment incentive operating expenses $X.X fees, management investments primarily $XX.X $XX.X an during million to expenses million for compared second the investment for was portfolio expense the first income million or $X.X $XX.X administrative The or larger the expense, the of and was Net an million management Total income million on you fee driven the weighted second first income share on by as is million The average and million of $XX.X investment of quarter. higher average and fees portfolio update operating XX.X% million million $X.XX from take an interest to Total for the XXXX incentive other share were the in in increase the expenses quarter average quarter per bass pre-payments the in debt fees quarter. expenses. total was compared the operating quarter. fees were from me yield a of the second $X.X second $X.X and the per for increase a the and interest $X.X million quarter, quarter. The by Let of primarily quarter. general in Total earned quarter second for overall first size second for to portfolio quarter. total compared investment as

$X.XX the total we increase totaled discussed $XXX in net as detail to $X.X investments quarter gains At the per or previously $XXX,XXX were in for investments of million per of or XX, net on XXXX. the assets X.X% million or an million As $XXX were cash. We The $X.X realized compared million quarter was $XX.X share XX% $X.XX including March of total We for commitments quarter value of share million at net NAV second quarter-over-quarter. the on per of with value will expire investments million on million total ended fair quarter. of quarter share asset $XX decrease gains end, from million net million in -- expire assets and during totaling and a $XX.XX $XX net first $XXX.X during or $XXX compared net in unrealized operations increase million. per to or this share, $XX.XX total will reported million and $XXX XXXX $XXX funding or

our of liquidity believe of a We to all commitments or higher. as set position quarter-end. strong have floor addition, we unfunded X.XX% a rate In prime have

amortization overall unfunded the lower during strong half has was us such impact notes January The of this $XX public to from loan of our the pre-payments has grow has positive as XXXX. raise capacity gives and our and efforts, our in from loan of proactive funded been -- million leverage credit our March of term our profile private portfolio, back position which and first liquidity existing payments Some May. in liquidity portfolio. accretive strong facility remaining million in in This been advisor generated quality equity $XX $XX our generated or commitments million our excess enhanced high which

and of facility. of of $XXX million additional credit the $XX XX, in under consisting million company $XXX cash an had million availability revolving As of liquidity our June total

$XXX million We of current outstanding an $XXX continue were under the to consisting accordion existing XX $XXX an to feature of in Aggregate million debt credit borrowings June million under which of million revolving have commitment million. XXXX flexibility our to outstanding expand XXXX, $XX $XX by Stock baby up as the facility the York facility. listed in New rate term which which revolving million of matures on under private the retail mature fixed are our $XXX and additional Exchange bonds,

ratio Given our X.XX XX, asset leverage just or we've times a ratio reported aggregate of borrowings coverage XXX%. leverage as of of June an

$X.XX the share second per ordinary we part regular of distributed During as from quarterly income our quarter, distribution.

the August note that per the announce as to with of million to We share the while distributions continuing our that Directors XXth, share We're $X.XX additional spillover XX Board estimate of we stockholders has pleased XX. of support also a future. or approximately declared also distribution are third per of quarter pleased record of XXXX, of $X.X quarter are June distributions for to to our we ordinary covered on of September income for income, in $X.XX to as

completes at our happy remarks. be questions. your this time, So prepared to take we'd this now And

could the And open so operator line at this you please time?

Operator

time, [Operator to momentarily we Instructions]. will assemble this pause At a roster.

James Labe

Operator at question, before the first the Harbor we the we of beginning Safe language our take call. missed

release. So, disclosure our I'd customary press like safe in attention the to direct to everyone's harbor

statements, during condition, forward-looking that be considered certain remind made Law. make to events Securities or future has relate Regarding and future management under or this everyone performance forward-looking Federal financial Company's the and call may statements which statements that will

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

Operator

Finian, comes can Please, Fargo. Our from Wells first from you question Mr. Finian proceed. O'Shea

Finian O'Shea

everybody. Hi, good afternoon,

arena? life indicative in Jim is mentioned your I sciences that think question, you in that remarks, opportunities on you First at looking

James Labe

increase the our that I continue portfolio areas was are focus we're on healthcare medical the in the technologies, of there to now in we're investments. that technologies, those involved looking say are and with I would environment, technologies, environment, related with many in how are is the at and said this always. overall generally, as but commenting technology was but bulk general to new No, overwhelming actively -- having going that, already technologies

a now, But plan in activity right we're capital the is let's following so biosciences not always there's who areas line. our fine our So are investors game technology. venture pure, in predominantly say, because those always there's select unless

Finian O'Shea

for Understanding would Sure, capital second more that. And be just thank question, or then give And that just part quarter you another urgent color, there and that type coming clarifying. us some you round normally second Sajal nuance would of the post-COVID or unscheduled, high-level or would raises. the is dilute Jim, where bespoke. on more instances effectively your ahead or position. Can can be raises. were what new Are to very any than normally structures there unscheduled be they capital venture

Sajal Srivastava

question, Yes. Fin. great

and please into and due so, an Let us jump of the me Zoom. I like was for many concern I going of to VCs in. investors area say Jim QX, remotely think conduct start diligence the would using ability for

in during in ends person. have met been As that rounds place. equity sheltering were done, QX number that we QX, rounds the started had that at around have of a saw before closed Diligence been

persons processes funding in investors met teams to not in the And think so, here COVID management investment the QX rate where with of of that and have midst issuing and pleased activity new started in we I see term electronically. sheet in QX were

in think pre-COVID would promising I the we're investments the where are I they're companies that's near from more a to rounds and support us. that's because say activity financing existing convertible with equity that these the next of valuations. of their continued, year Typicaly are definitely then say seeing terms capital. the versus in promising to showing financing. There the same form would in debt raise those way so, but speaking rounds, putting doubt along of sign sign. nevertheless financing bumps and in I to tailwinds And nature regards want the nowhere ability they investors that of new a your to COVID we for impact traditional from ago don’t some a equity capital would generally benefiting companies were And comment follow-on in the are of no have where set level

lenders to all all the not do place. or the we're over junior convertible of to So, even capital or debt realities business senior it's convertible I right whether from the VCs debt. if COVID, are But the of evaluations or equity think period given is where capital secured, it's were capital That us. the is is

an closed the investors the I to not a positions lower would look And impact opportunity so, incremental conditions. been say our rounds companies either where the the result the rounds valuations warrant in and that no in capital. impact those than security press about market impact million on or if the flat-to-down book, to from mark sit change downs result where result that on equity of you as XX equity the cost at prior advantage as equity of which book, some warrant our flat the us but had interim basis take have a has talked and has to been financings. structure And has we I any But of there were number of basis

James Labe

emergency rates, a generally nicely. cash situations. said runway. plans generally burn not longer much covered helping I as kind anything of and round which think are Yes. lower environment they I of These are kind the new are if through Sajal that And

company, which cash towards breakeven hand. some cash. plus are years them We of have flow, or aimed on And profitability of cash realistic using plans three more say let's existing

say flexibility more of we're any of the And bit front yes, any capital our guess of I'd coming venture economic kind in equity I little view a aware it's environment. So, or in saneness and of debt. not circumstance in

Finian O'Shea

Very helpful.

just And into questions. the thank portfolio can go final then always, We you you. expand, As a our company.

limited Looking the which international at XX.X is there of information with provide obligation? is sized can that the My color you loans that Prodigy Is maturity of student my XXXX, a on now Finance, understanding I'd students end context at for status challenged. any decent million. pretty lender or that's imagine

Sajal Srivastava

Yes. I'll take the first cut.

So, that's just a graduate to international students. to clarify lender

tier So, those graduate to I'd students school say lends engineering business top law school, school. attending Prodigy and

So, crisis. the higher jobs folks likelihood that regardless have of getting a of

then focused under law would just not lending say then on engineering small schools grads, or schools, top programs lending to again schools. degrees not thoughtful focused of and graduate approach any very but a And particularly I to they're percentage those approach, So, they're schools business very the only.

quality very or students. good higher So, than focused traditional obligor is I'd say the sorry based company on news

Finian O'Shea

Okay, thank That's that's helpful. from me, all you.

Sajal Srivastava

thanks Fin. Great,

Operator

George, Our Bahamondes question the can Deutsche Bank. George Please make from your question. you comes from next

George Bahamondes

Great, in a your you. remarks. missed I thank prepared point

spillover for mentioned some that here, you income just flag You've Can please minutes. quickly me dividend. for the

James Labe

Sure. will that Chris you take

Christopher Mathieu.

Sure.

So the some spillover XX, we XXXX had June into XXXX. end quarter through

as we the in QX $X.X dividend and covered covered our more aggregate So income is estimated QX million. at in spillover so and so

So that's X.XX about per share. penny

George Bahamondes

as maybe underwriting that maybe terms the and some you more due has And environment evolved your how do you diligence diligence think you. assume Great. how to referenced we Thank you obviously have process current seeing kind context just also because Sajal about of the just and in difficult how are from really are meaningfully, maybe has underwriting evolved terms around, what process or of seeing you the pre-COVID? have terms shifted the additional maybe

Sajal Srivastava

Yes.

and Jim start in. me Let please jump

show be venture challenging we to companies VCs and what is only changed tier outperform that group our focus and to to that structures, bull sponsors our dynamics and by select I market demand companies that's that companies. hasn't say changed market portfolio in data portfolio kind say higher we conditions of so With equity as support credit activity and a and by importantly capital will from is validation of the that I'd VCs critical only debt companies continue strategy, those midst to I'd say George on those say risk track our is and one think we and articulated. and leading backed robust our element would Jim markets also that great of records loans I the to better portfolio investment fact jump So investors lend regards outperform as haven't I'd but approach behind a of companies that more of things COVID, well and our more not by say their reason of select focusing regards backed is pre-COVID, during we've the quality and with their mitigation times from pricing during on would materially top there markets

seen spread. in changes material So haven't we

haven't that's continue We activity bank structures terms holding non-bank to see so think I what's and rates go and we and lower. seen also

by they're tailwinds lending automatically by from them to in they're raised to have If haven't would only companies us our were seeing to lower a If we companies maturely lend on cash lend impacted a new that or the our If of this we've If were have that's focused higher soon in or to up that cash of not either again them sponsors. cash. lending opinion to go We rates seen we company backed push terms it been that cash approach. generally we're taking we're or my anything environment companies, of We and we're profile lending bar negatively that's but lending them. out to no of to imply companies or risk that which sector lending challenges runway. we're is to that's are going where COVID quality companies a impacted restricts particularly or not the in yields on from out impact from in commenting plus company us to companies maturely that higher only we COVID.

bar in underwriting and we that have improved holding it on this targets environment. existing cash Anything again regards to way and with our not So raising cash another if Jim? hand to metrics runway add? is the

James Labe

very taking economic understand, It's deterioration not I and in and between obviously very been that due then in Yes. relationships our this current best kind and isn't the capital in references and into far record can and players sacrifice XX and we're really more middle is take of period still who finally is benefit, hasn't venture market a specialized lending rigorous those kinds or but very we're anything is and thing. the lenders reputation or companies I is account. have that and things. that anything also more specialized someone these and venture quality Sajal's things any discipline as that running pricing. not discipline on than opportunities and of there and if are This our terms we same to investment may front our just here. today really, reputation echo they the traditional This with. deals instead of be basis and that it's due market the invest, we investments about point investors absolutely lower. the There a select is with quickly all add BDC There diligence few quality process. environment and of a is fallout There investment this market it and I result agree. in and at backed happen no is track a That's to There they're mean not diligence conducting won't There different change. pricing continued with high any be of a it's and or online shortcuts pricing with meetings points triple spreads the middle venture would them point is about market. barriers because about worked about be very COVID

been commenting other together. Jim it's of the we've day was years One them XX worked

George Bahamondes

lending and of just dynamics kind to That's last comments of you and response now, traditional you venture me for lenders. BDC Thank your helpful. did relative for the the in model question reference business Great. those difference in

in asking the us these relief would some form your if for space about any kind where are of think hypothetical your the understand in of a venture As was environment a in differ and sort wondering of as Can the of sense might typically how you conversations have conversation capital they've and ask some we might about a from positions of we've or that like covenants. for relief a kind for other about think this additional of dynamics amendment obviously of borrowers think around reported spoken BDC me to just as different as lenders a the landing when asked space you traditional go they've and traditional current the have folks earnings they quarters but that few for BDC to covenant how given sponsor sort relief just current of environment? scenario was versus one as help how gone we

Christopher Mathieu

only first George, reveal we want Yes don't secrets. all of our question. to I'd say great

fact, companies. of that we we we I the Jim lending worked there's do. why So know have some opportunities have so, existing is may we with triple see We're It's given just reason we listening of sponsors multiple think be XXX-plus scenarios are number good the our or even versions in portfolios. they approach together portfolio work to transcripts how very long-standing point years sponsors I know level as at relationships and choose it's filings. mean collaborative, in our within they sponsors I a say we've think These of mentioned one-off things so would think, with, high the one a the we of that a have we their how not they

partner signal say conversation pushover. them in say we're the a about profile is equity and in being more their regardless and not can sponsor they're money being cash don't So just of it's to There also only if venture the believe in then for We're of we an all putting seeing venture versus have and months and a the versus the is they're specific itself and they what it's we're way shows us I and sponsor put our only that not to to, and That's a objectives whatever six more so is so a again. That's role money have is and return capital have but and are trying that again are I as it make every for equity that of in there their perspective all also capital middle a going collaborative. collaborative broadly trying It's and lending very sponsors market problem is is trusted very important in existing into solve would you of three putting return. support, and fact I'd great so a lender a trying paid risk from that situation it's to we capital lenders senior the venture say they not off is place much in segment case we different to do great shows approach get a generally transparent. portfolio make return validation. companies but but sign a endless runway the and would they more supplies shows have and investment kick as

the longer trying enough this give the trying achieve what additional to I every companies foreclose to assets this a these to of solve enough is complete raising think of how enough milestones months process or difference and lending. should Plan liquidate term is plan The to we A. do time venture be though validate option company or three we think conceptually do B in kind we're financing company give time is XX on solve XX we're round do problems is milestones give enable ourselves so rounds company to expectation time this to next for too I is and assets. how we to how is but to strategic for

I sponsors. think So we we the our for think play are that's those scenarios I how with it and look

James Labe

through that the would companies according investors, and second plan in this and we're entrepreneurs, things when Yes all the approach go the this to during the lenders, environment. would work together as that to don't I agree. approach; I

George Bahamondes

for Great. Thanks you That's this also afternoon. Appreciate questions. awful for answering guys. color and for that's me it my

Operator

Point. from may you Alexander Our Compass next question from Casey Please comes Casey proceed.

Casey Alexander

company afternoon. in the in through advantage good at the discount, pandemic chosen a the share last backup I potentially One in least place repurchase to at unlike discount significant of why stock? take the this time put Hi, stock has program a and have not questions. a significant traded the is few

Sajal Srivastava

Yes.

and capital at and and sure is a funding We other from other so say that perspective it's needs those come and and in capacity still tantamount we we to pandemic. is BDC know shareholder We capital of liquidity crisis would sufficient sacrifice feel liquidity we when would quarter last or I have the number things premium. platforms the success the middle end going again precious capital our we of said to we're access of to say we as see long-term and get make have. our buyback the friendly the sponsors, one we a but commitments ensuring not excess have priority doing, given to to non-shareholder we're would then Casey as I going making don't out think sense unfunded more reserve liquidity and I meet the

Casey Alexander

the crowdStrike. tough you volatile as liquidity Sajal would when a as pandemic. you that then such of Well, saw sold hold that's soon CrowdStrike to highly the precious dynamics have If asset on were as answer a been

Sajal Srivastava

place have where if unfunded sufficient the a liquidity why more the everything which to position that we coming all the we don't We've a that. meet of backstop happening. facility envision put our again end ensure through was do now crossed in kind had unfunded to think over than that QX that's advisor I for again QX enough our here commitments magnitude we're to capacity again No, of obligations us maintaining liquidity excess in had in and to out of of unfunded came that in came we in QX now commitments

So would and think QX about make during QX. it now or but it to not sense consider

Casey Alexander

second still marked Can I you risk had question I mean XX. think on at problem thus has shareholders what's and XXXX some any and have to to in an it's going additional capital of own don't at in through according us as us [Notel]? raise [indiscernible] is been I specific and has where press the and it's, credit color My reports losses kind of you buckets that give tell been the least to Well to really has unsuccessful maybe with trying it. far to would think problems your reported their pandemic, significant that appreciate tremendous relates

Sajal Srivastava

Yes, Jim then in. jump I start and can

so yellow rated can't watch lender comment So list portfolio company difference again credit specifically our but metric. an cash as runway is they we I always important a think in situations and us for on the are

we by value that support may no we COVID but impacted be that from those capital we that the incremental cash to into credit our negatively then there's fair debt sponsor look our and perspective we ability their account doubt for take for our how and to and look So companies service as runway and our raise Notel. how at so look that's value credit at

James Labe

that companies. it It add and privately only these are held not is can I Yes, that yellow. is than anything lower

you as will and this companies by it talk these for their but we say of we're of So our these touch we'll in to all I with many companies feel about not know a stick of in position be are close the category really continued status support. would we in

We to think at close that are as privately is it it we touch investors I a have leave held can company. and in with

Casey Alexander

you taking questions. for Thank Okay. my

Operator

question you Our proceed. Ryan Ryan from next may Please Lynch KBW. comes from Mr.

Ryan Lynch

a been if portion could that afternoon use broader guys to and of about specifically general sell could or CrowdStrike guys you investment a guys like to when Hey sold to it. for traded talk framework good publicly my determine or you guys also position. of I you you held of mean you how you portion on questions. just I investment first process for guys you a a great thanks but equity talk like a that? framework It's about maybe have wanted you'd taking but

use either you So that a a some of to exit it a the you that decision of is but there hold portion traded to the on general investment? it or framework specifically what publicly so or process when about was talk on just framework just can broader what of to guys equity went determine

Sajal Srivastava

Jim start then please will Chris I jump in. Sure. and and

when insiders other other you they of as not as XXX-day we're lockups companies majority our know Ryan, to so are go all public to investors. the if lock-up for portfolio subject subject the our we So employees and

then that and post after stocks venture to distributing that's see expires. the start you minimum on funds or to their the with familiar folks positions months right our we're shortly lockups lockup world returns at any in pressure their six So a naturally LPs least those downward for on lock so at sitting of when and

a So hedge listen we're not fund.

Clearly book is to funds that in and hold positions after to say I'd our obviously reports was of with policy position. volatility companies. lock of one, in again so get have the things an time well generally immediately liquidate number our not balance disadvantaged as pressure to being portfolio number CrowdStrike think the this a and year one to traditional we our investment we want pressured period so our in LPs QX discussions distribute the expired but large a among reasonable to fashion get if are not have model and said orderly other Our obviously, a time priority debt orderly material it analysts also get number the with returns, our of significant credit investors to appropriately credit like the was is employees portfolio managing positions public particularly benefit internally two, and to we've and not other other being funds to employees in a talk insights lockups But period had pressured our lockup expires. so from these for after so process it's portfolio those by to we is time don't I research we but staying in maybe clearly you a and and folks to the larger and then conversations with amount

I was was actually in how million wanted so the the bit money then leave and off that goes of the commitment as there still money we value our little the the real said of our the million to believe they that equal our amount perspective XX table, left we company and house loan some too. a XX it quarter Jim drew think to of take and majority see from and next is

Ryan Lynch

run home sense up position. Okay. and CrowdStrike's in a been makes That

commitments far that but expire it nice end lower Is get guys bit provided about a like of this and allow intention year. you XXX to quite million a looks this go unfunded out kind good at opportunities As that go those expire as you disclosure your to of number ramp kind will guys commitments it outstanding of to some your there the you you at guys of meaning that running hold static. number and or balance comfortable see to just of as up kind to continually are to

towards Just the unfunded amount end with is trying to get you a comfortable of an indication on how of level the guys are commitment year? today runoff that large given coming

Sajal Srivastava

I start in. Jim and then jump Yes. Great question. please will Chris

absolutely have these we I knowledge right. you're mean the of companies. benefit So with underlying

million of of round I material I market a and it's so we're million you've of one, XXX utilization Ryan parsed pick real-time and off number the this the good through the taking end is are amount QX a the platform XXX portfolio on our cash. understanding them there has of in huge that's [Cohesity] positions year also companies in allocate. in are capital So by on multiple financing stockpiles burns of list balance. a and sitting mean a larger is and We're on equity as companies pools of will and and of so news originating expectations analytics raised to of always which part terms which

you back see the much available, originating in case that appropriate other venture saw to so for you capital size in working maximum TriplePoint fact indicated diversification TPVG's as balance in just we transactions we're unfunded to always in come and and as held want the as we a put so to be right per replenish back where flexibility between but to remarks those TPVG is not they saw the best on same on milestone looking I but our a off all because stage now financing TPVG we now deals for to QX a growing of as spigot allocate as in commitments byte would your looking on portfolio. backstop it and the funding mindful commitments, those turning to and it time byte with the size their comes we -- market liquidity at are capital especially it's XXX and that had future grow we're and then we the have on lower milestone in source say the could sponsors growth prepared given portfolio utilization unfunded to rely from the burn we're and and in TPVG and the se be So materially portfolio million to can't light of markets wanting unfundeds for companies these the based perspective we liquidity concentrations

need You or resources facilities. amortizing you liquidity make to credit sure all the up have hand in obligations obviously portfolio either to your existing from order to live on and

James Labe

said it to balance. thoughtful not be was our Yes. especially particularly however and always been a managing our business we cautious thought having to that's I take watch close on to It's would We're mindful a shareholders agree. It's the absolutely here pandemic unfunded according side. or balance. ever on the not that running cautious that and very a during

Ryan Lynch

Okay. Understood. time I afternoon. the appreciate this

James Labe

Ryan. Thanks

Operator

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

James Labe

to expressing wish thank care you to work talk to speak by through short, continued pandemic good maintaining you. again and Thanks and Goodbye. on call; to as to been going line take we continue flexibility focus liquidity really I'd we've continued like operator. will in this soon. about we this talking everyone Please continue interest again appreciation your you close and the but to with and the you, my the In health things many say of we on for

Operator

now has attending for Thanks presentation. concluded. conference been today's The

disconnect. now may You

TriplePoint Venture Growth BDC (TPVG) 6 Aug 202020 Q2 Earnings call transcript