Hercules Capital (HTGC) 30 Jul 212021 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the Hercules Capital Q2 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session [Operator Instructions] I would now like to hand the conference over to your speaker today, Michael Hara, Managing Director of Investor Relations. Please go ahead.

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

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

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

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

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

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

the We hope follow-up today. market delivered is and investment investment platform a Thank our continue record saw we all XXXX momentum joining or portfolio to that QX. strong QX company record our QX a number and portfolio our set-in The to results, in frothiness. events. and exit further We you in thank strengthened announced with you was accelerated discipline us despite credit for expanded QX solid of operating year-to-date everyone Michael, completed emphasize well. across

continued record Our new investment in gross performance half debt both and team and and fundings. commitments equity momentum their QX delivered for first XXXX

private continues We maintaining continue liquidity sheet, underwritings, by an the markets. manage to conservatively our perform balance core markets well equity and exceptionally there new and flexibility. to liquidity business a substantial staying and on abundance strong maximizing continue operational public across of disciplined The be ensuring to

fundings originated recap gross key equity commitments with commitments the and and new the and some saw strong Being of us to the fundings million of and $XXX has in delivered half of sciences key for be equity $XXX debt million our differentiator the have business. from record million. verticals performance fundings debt million. life again balance Combined two gross our performance our total $XXX over and $XXX continued and over over we Let with our new a teams. of for of competitive new a year record We market our both QX. first equity established to strong a advantage gross between me highlights and technology debt for We setting significant of core of QX, commitments in able in and

to deliver while debt discipline. staying to structured continued of capital and historical Although continued prudent has investment challenges credit team terms equity has in our create business origination, an of true new loosely abundance our to

that us our the and serve approach stakeholders long will a well We over disciplined continue underwriting term. to believe to

that closed commitments. on our commitments strength that equity closed give a billion terms million active current of pending QX currently $XX to pipeline, continue quality close remains debt, reputation we brand Based of the new investments. and new of and and Since record July for has the commitments the Hercules of our and active will potential scale of pipeline has in pipeline platform exceeds strong. companies exposure $X our an as expanding million annual, $XXX expect of year commitments. Our XX, us The Hercules Capital XXXX in be of to XXXX, of and

of with combined levels million investment but of broader repayments early our at drove portfolio, or terms company to X our million guidance IPOs to strong M&A $XXX high very decreased QX, During the companies slightly loan X events. continue through liquidity Early transactions. and portfolio we This, either additional public mid-range again continued XX strength to at that of offerings and payoffs. events, see of companies performance nearly had SPAC we in Year-to-date, portfolio completed mergers agreed exits stack their $XXX traditional were million, in QX. across million company that $XXX have $XXX from

For generated and In and growth managed deliver a during year share. both have income to higher QX, before. investment investment and income seeing the investment increase compared we $XX net net we $XXX change we investment $XX our attributable QX, investment or momentum of materially team primarily progress to the the in Year-to-date own over early after income portfolio, to fund credit our is quarter. million, advisor. the to portfolio $XXX continued and to are growth across net as The on that million, prepayments to in $XXX.X fundings this we $XX.X investment per was our we elevated of although levels investment total be our is $X.XX through which the quarter allocating that million of of between quarter the fundings of investment registered total as based wholly expect debt produced Even of million during debt payoffs, could with million the investment million portfolio managed private new investment of diversified level fee strong income initial net million $XX number platform. income the

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

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

had value $XX.X legacy equity a to losses Hercules one write-off of net that fair of due QX, investment had million, of primarily During realized zero. the

during realized of had impaired record Excluding QX. million of we gross from the $XX.X of write-off position, gains that warrant sale equity the fully investments and

our since strong IPO reported of As per ended strong available XXXX. robust our anticipated portfolio, business the QX sheet performance liquidity $XX.XX. share and that and our we million is $XXX We strong net per markets us QX exit well equity and commitments value over QX share of coverage exceptionally unfunded $XXX value believe of across balance our have exceptionally activity, provides million, activity. is the net and we to the increased our ability X% capital substantial continued with which of highest Overall, fund a positioned. by to strong with that result asset ongoing This asset

to we venture for a exceptional overall discuss, Seth QX to ecosystem capital. to sheet and continue record capital The in our ways QX. As optimize will balance down our after further look strength of debt continue drive exhibit cost will

gathered venture compares of cash distribution billion a quarterly consecutive XXXX, per share QX total over of billion QX, year. well billion our distribution XXXX. for over $XXX.X raised we previously Venture of capital declared as all increase Capital We period and XX% $XX.X last $X.XX $X.XX billion $XX funds which National as XXXX discussed is of data on our Association. supplemental For have a and the $X.XX PitchBook the XXth a half in the shareholders to the distributions per Inclusive respectively year-to-date, by share, as of That first $XXX of according to to our same declared US of invested and Call. Earnings

in $X.XX to per This with platform. subject with forward we hires. base XXXX, earnings distribution record respect spillover approximately with final of $XXX.X or variable flexibility our QX invest tax of to provides undistributed new continue have have As million our continue and to team ability going generated us and additional team Year-to-date, add the to our talent filings. to share several we to

We platform. our have also continued and enhance to infrastructure

continue each that a again during dedicated strength Being to they is have best and position talented over once a challenging these it In I institutional of record Capital able them We for to for credit each make that investors perseverance each work do. to be of us continues will closing, I new year-to-date, the partner. their to would will investments also our our tremendous thankful the preferred now sustained time make to Hercules commitment employees, thank their and demonstrate Seth. call to continue great financing and to to turn and of commitments portfolio who companies grateful to like to I'm what long-term success. and many. deliver chosen

$XX to afternoon first the market. per good loan dimensions. strong and the We of $XX.X We of investment records Thank you, again appreciation million resulting delivered our and quarter. cost commitment Scott, half income once share delivered gentlemen. another and the by total funding were by quarter broader grow in portfolio and and able The investment million triggered for strength book ladies team the both NAV had during

million, levels $XXX cost. the credit Net billion to to growth was loan the total which private grow investments $X.X range. Our healthy at within allocations, reduced helped of early the fund guidance payoff our

the As and areas, to following income on and the outlook. unrealized activity, usual, NAV realized and highlights, leverage liquidity, performance would focus and like the I statement

the income growth the to statement attributable increase record and portfolio the quarters decline was of million quarter the compared or QX, as in $XX per income $X.XX QX result solid two investment net XXXX main to million, due largely the loans share payoffs of that consecutive a prior the increase highlights, to the following an payoff. Total to with Turning The performance onetime in loan income of an unamortized investment the vintage to despite off. was the was increase prior size lower paid income compared fees for driver $XX.X quarter. and fee associated and

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

expenses, the recharge operating to the for decreased in prior $XX.X our compared $XX.X to quarter from million. fees and million to the $XX.X Net million the million expenses prior RIA, $XX.X $XX.X our in to were gross cost Turning to expenses quarter. Interest operating quarter. expense decreased million of

pay-down The due million higher taxes, figures and of to of decrease million expenses the relative payroll recharge fundings from former the decreased to recognition which record related the were driven the Net QX the our again to SBA quarterly $XX.X prior securitizations elevated RIA, run period the $XX.X of SG&A by to in license SG&A compensation due million. second pay-off of to expenses quarter ending. for was were the the in decrease the quarter. the debentures par to first expenses at acceleration in fee value quarter. $XX.X normally reinvestment lower and The cost

our Both by Our securitizations figures driven and which the repayments. with debt cost fees the to from weighted small retirements loan SBA were elevated a X.X%, debenture early additional debt of the represents quarterly average quarter. both associated was prior decrease compared

debt consistent quarter prior was excluding acceleration second X.X%. at of the fee quarter cost adjusted The with

the Let's to now the activity. realized focus unrealized NAV and switch

of to disposed increase for main $XX.XX investments unrealized million the This During depreciation share after the mainly quarter, represents The the written in due of prior share $XX.X share. our net an NAV of quarter-over-quarter. $X.XX NAV reversal depreciation per increase per net was of driver million, X% off. or change $XX per unrealized increased to

Our and million appreciation change $XX unrealized by net of entirely was of the in driven portfolio. our warrant mark-to-market equity

the from stable of reversal a relatively was appreciation portfolio million with debt was $X.X Our prior mainly unrealized depreciation.

offset of million receivable quarter. we million that had comprised off one net the recognized quarter pertaining of net paid of on dollars. company that loss previously from positions million escrow position equity portfolio to addition, depreciation been the $XX.X had in million at legacy a of realized The this gains In $X.X $XX.XX impaired an zero one value disposal from fully by of equity realized of a loss $XX.X carrying

Moving XX.X% repayment XX.X% the respectively, compared quarter GAAP and to decreased of the regulatory due our to leverage partial the securitizations, leverage, prior in two which now are natural leverage was and to leverage sheet, strong respectively, balance next was the XX.X% runoff. the position putting and GAAP heading with in into regulatory us Netting a quarter. out cash on XX.X% and our which very

to annual access interest license an SBA $XXX.X down of an third for million million qualified debentures additional We SBA attractive of and additional X.XX%. of $XX.X drawing our had an funding cost investments. utilize to continue We

quarter $XXX managed subsidiary. million. we excludes raised of funds result, by a RIA liquidity capital As strong ended the our wholly-owned with This by the

our As to normal be payoffs. continues enhanced by a reminder, our course early principal well interest as liquidity collections as and monthly

points. the outlook Finally,

for Our XX% guidance continues core yield XXXX. QX to to XX% apply of

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

will decreased at Although recognition on fee fee $XX with million due of event NII. of redemption X.X XXXX million quarter value. modestly, increase impact July in the our is notes our The a $X.X we X.XX%, one-time accelerated completed of QX to cost and X early million and will to recognition increase fees underlying par expect third borrowing of disclosed previously the interest

the in we cash value. to expect shares the note us with to trigger the any maturity, of This the to leverage option settle will an and in In for which managing principal bond addition, run-off for of With to recognition. conversions allow cash the principal appropriately. while XXXX natural increased our we now number the two component and continue pay holders converting of are securitizations, irrespective to expect convertible dilution fee capitalized respect February

$XXX activity Scott very difficult million in expect in as predict to to quarter. Although communicated, we the third prepayment

third call, RIA Laurie, pleased looking to a the call closing, Laurie QX. we you. in and first will portion the similar to expect another expense of to on the we of of For to In forward successful what with saw level we're begin over to Q&A allocation now half quarter. quarter, I building the XXXX turn our over

Piper [Operator question Sandler. from is question. Our first Love ask Please of Instructions] Crispin your

one the So, spillover. on

are million you So you NII have have per that a of $X.XX assets. if to need about record $XXX would bit any your much can talk do if then there or when share can are plans how there, you with something And XX% there me is you you spillover that have restrictions net and can what with or remind so restrictions? you

the second first Sure. Thanks, Crispin. speak to terms of restrictions. the take then I'll can part part Seth and in

fact us a continue of large both pleased flexibility, also in basis. and platform and a we to continues our said. that policy respect provide evaluating it we've consistently with very on reevaluating have our terms in I significant team, Obviously, to spillover the by being with distribution invest think able to got we're and So the to to but in quarterly such

circumstances and Our per sense what quarterly distribution the of each distributed in XXXX, of be QX, be makes board supplemental on quarter for which beginning time. announced And based $X.XX four evaluates XXXX. the the in think year the basis of as is will variable, at we facts will distribution we then quarters quarterly a $X.XX the on this the base of

XXXX what we program to of further a at is on potential be course of appropriate. evaluate year, distribution level this basis we will distribution for the quarterly supplemental a base plan Our reevaluate and end would most think

on And Crispin what of are. part question, limitations your second your asked on had the you

As our registered required basically investment a distribute company, to year. of XX% a we're earnings over

of are that about. than we're an that if greater talking So earnings that income on you're we the XX% earnings, then annual ordinary ceiling accumulate reaching

but from period side that measurement would distribute would see on that then to October. October, And about after so to the really we have to we position is what of capital and XX% we it, So need distribute it. to November have gain be

debt then heard are you've to versus be overall to the levels. higher $XXX expected the helpful. million to key or little recently been thanks, would the you And comments prepayments at $XXX in bit third Okay, the two given seeing And that on least that's cognitive that there. elevated these expect are last quarters increase decrease a the portfolio your range, portfolio I prepayment the million- that quarter in what changes

Crispin early Per to QX now. they pending think to $XXX really in pipeline the very portfolio or down, to so up we us commitments and strong. be signed as disclosure, continues QX quarter of Sure, to starting we It's will million have healthy the whether just be very that too already for opine our the we're very, start

things. terms for driving, think the QX, a I couple of of elevated prepayments In what's

So, sort the last quality course health spoken portfolio the of quarters. of about one, several of the be consistently and the over our

right to well companies be which capital aware and pending we a of frankly and in we lot potential eight prepayment. companies also and least we now performing Right lead completed elevated of disclosure level QX QX, timeframe good have to to per then of some a expect at so position events events at M&A expect the IPO time several in now is portion our raising seen those and that the we're in portfolio Our we SPAC in incredibly capitalized. are these haven't the

who comments my selecting really and job, and it's just as of things are doing great said goes think companies that mandates positive to and being incredibly with by have opportunities driven winning lot a healthy I some credit, and and incredible team, financing in an our optionality. all is I So picking the

Our ask next Securities. of question. from is question JMP your Devin Please Ryan

question, talk far overall This fund pursuing to satisfaction in so can is Kevin your utilizing about first extend for Devin. My private opportunities? investment platform credit you the and

Sure.

so So raised what QX. We fairly to activities very be we've terms can QX. seen in with we're pleased its first effort our investment started in early the continues We I the fund think far, of in evolution.

So into quarters it. we're two now essentially

which of been $XX terms look essentially the benefiting you inclusive of vehicle it that and Capital, expected what it's and at the I frankly to in is amount ahead of how overall, If private to think we're million, we've allocate expectations capital of QX we Hercules at QX able our doing to do. initial roughly it's

first, allowing over is increasing that the constrained think of couple I perspective. a three. market, from it BDC aggressive frankly pursue pie we in number spread we the And is in transactions us couple were some debt larger funding Number overall it It more parts helping different specific a to is pursue able and of the stage are us later to be then internally of the a vehicles. very model. managed where two,

look And by sort two quarters incredibly we at performance the pleased in, today. of so we think it, I are when

about communicated kind And leverage talked quarter, that's view obviously you're to that past going story next you helpful. get know of thank elevated quarter. one curious prepayments, you portfolio in term. in longer you're looking then, the target the how where range is Okay the the I we've to in just I'm be your

again ceiling we leverage sure. would back see and Our to ourselves target try for to start we've X.XX get self-imposed that ceiling, one-to-one target prepayments equity on would above we stabilize to our to That's Yes. that as

question. Our Wells Please Fargo next O'Shea from Securities. is of ask Finian your question

stage, areas into. sort its more new is finding going that areas the investing, all color fundraising with anything, what it you Can and the on you traditional fronts. way talk it venture equity about growth stage, other private any all or Is mostly give into or that late of is money capital,

It's widespread Fin. Sure. been pretty

of you at what If the incredible terms numbers, seeing. look it's in pretty we're

different at through greatest XXX tend of stage, and record in VC we've it at billion been each following XXX raised billion first stage, although XX a and and already we capital of early buckets, stage, bucket invested. and increase are half area that stage, three seen of raised buckets look established of XX had Year-to-date, has then then the market. sort where the later three year, in terms part the to just You invested. expansion being invested billion equity established We of of later outperformance and we're in this billion XXXX those

How given. to follow-up where Okay, record that plans on it grow comfortable again it that's I flat going and would the feel consistent fundings. labor is? helpful. great. just on a with think guided or SG&A, And in markets SG&A, business of Seth which the your part your stay What's does we is How with

have we moment, has base COVID employment, very good a which the stable of to very at So, the been environment.

result as And we to his projects different dialog Our seek to were really cost. time, at that a The well underway are that we mentioned. costs are in make behind didn't we organization, processes work to a very mentioned same systems make investments add to and prepared that and investments not and dramatically because to lower have other really the to so that Scott remote people high-tech in resources that. continue continue replace at that we

invest growth. it the savings and the really So is reinvest a smartly into

of our to capital. Now human main business the element

done. think you I

that a for of we and of a said, a actually right just think terms towards a are were really now Seth the as add additional efficiency investments and will the savings platform would driven the increasing doing, if infrastructure, technology lot of things sort is long-term of of you lot it those making in and we of use at have look lot the I company. that

of labor result that that so is seeing given related the market. offsetting And the of increase the costs employment we're in some a

of ask is Lee Markets. Capital question your Kenneth Please question. from next RBC Our

thoughts just around balance comments to about further the can optimize Just funding your mix, that further share around wanted expand perhaps and there. one to if sheet upon you Thanks. some

Sure.

look mix sciences. think XX-XX fundings XX-XX. was close the It the split In almost in once a pretty perspective were between technology QX, and near this quarter. from So in to funding again was and both as saw We life QX, evenly at exactly we a it from commitment I again perspective.

commitments you fundings, focus. the or was XXX technology So of look and if XXX the sciences once our again split pretty at in evenly life it between

terms more factors near a little term, either talk in what origination then bit the you either for the originations Thanks. about higher of just rest or And or could wonder just the drive the over if volumes of year. could lower

Sure, is of through XX sequent right as the now release days in call of release. robust on quarter-to-date pipeline incredibly the the the mentioned press in first our I million We've closed commitments quarter. XX the

We continue which term assuming close true, in pending have $XXX in are timeframe. looking signed expect quality companies by be the diligence million we we that process to of sheets, the pleased QX again closing would very at. of the to we Overall, the holds

the that I ecosystem. back could vibrancy pipeline a in of of just macro terms or the up the think variables of discussion down, change more that get really to sort of

terms the last us to competitive public of to public where obviously XX few the calls to and on as mentioned continues perspective. just could those from private I've we we've XX DC and based of be or is to equity If pipeline a the of the now both expect actually sort a terms to months, If continues markets because in trajectory our robust, that side. be sort to of increasing think remain it last a threat shift the a equity competitive would on over markets, times, from now. it we be of right the the biggest a Over healthy side Right the now either markets the equity seen, trajectory, tremendous perspective. on beneficial private downside, in couple

of Thalmann. Our Nolan next question is from Ladenburg Christopher

open. Please question. ask is line your Your

The convertible increase in related the in that's - to the XXXX diluted share count notes being

That's correct. Yeah.

of assume because or stocks that I so. a strike $XX conversion price full guess that roughly the is And

is of Yeah. your and is issued at amount we us to been it The correct at set price over a the at originally shares. mechanics assumption provide was of on dilution causing strike now the per what adjusted when X,XXX. impact it distributions It's is the X,XXX

Okay.

So further quarter. dilution you would anything the now shouldn't full be next in taking

Correct.

takeaway China spectrum, with you I supply is chain guess might demise that And be something terms Any sort Is one-off. that there then I us there. of to able in solar of was the write-down of investment. related or that that's a to mean the share

Chris. company years ago We now officially Yeah, obviously to us realization move been new That fully work continue books spectrum the caused down investment. back a six been on resolved. fact when zero has position. impaired That's Sungevity five solar sure. There value quarter to there legacy several going years. or is our carrying nothing was It that is went that What through from the company the the realized this on bankruptcy. the to to and has take it unrealized now of company

all that, positions then have to as that able on where just all the were our believe our are continue now merger. So the It NewCo has And transfer per we able public we I final a dissolution did in from look right value. value that do add take to of disclosed as NewCo a of value fiduciary from at assets, which structure perspective our impact we some of that asset GAAP and we new the we reverse disclosure deal no create is to to publicly realization. perspective, from legacy a of that middle company, of sort part continue would into

possibility have So realization on we we downstream. will hopeful basis, some go-forward to continue a are of that

hard taken the seeing you long. sector follow-up industry. before quick being on a tech earlier VC so companies for stage just Scott, Are out than just an And because so whole the

M&A We we've M&A And see industries. on. stage perspective, very the asset of but to really an continued late and those across we've it in to the We we disproportionate any business haven't the very that of from expansion and seen see each little established core stage, healthy market. robust early areas. stage vibrancy do two stage part areas that seen really in of of XX% IPO continuing activity in in our allocation versus each early is to we're focus

So sector life amount speaks I amount when liquidity technology from seeing our sciences to overall seeing in broad at it just not look you disproportionate the think or we're any industry. particular based, which the We're a in ecosystem. of perspective, portfolio pretty that's

Our ask next Casey your is question. of Compass Point. from Alexander question Please

questions. like of capital quarter? there over the It positions you some were the gain the go that A that more couple quarter, were equity statement significant looks of can publicly the some made the based sales upon meaningful any in in traded of sales of

Sure.

So our we gains in sell a warrant position. entirety dissolution of the did we the was public meaningful of distributions that DoorDash positions have million of realized a portion of the the record did equity approximately not from gross and position, quarter, $XX most

we shares As million of then DoorDash, for hold quarter, the has the XXX,XXX the using a but smaller continue assets the approximately end which that to depending we had $XX of of sale. we're some value QX, closing on of and day sales and during approximately was which $XX meaningful most to million

unfunded quarter? therefore, in of the some a commitments the that timing likelihood coming oftentimes, that's commitments the was funding. Secondly, Is measure of during you those of and just and lift between this increased quite coming quarter the actual see there funded offsetting the some some status, and unfunded prepayments of a during into commitment there

is to focused of Yeah, know range it's it's be one sort we a sort that at great commitment in to XX% fundings time. we answer. from following to really you of unfunded that number, what Casey, on us percentage fundings from Historically, perspective. commitments and difficult a question, look we the a for really to of XX% tend as to long a When

at XX%. was in the look you business QX, our ratio If approximately

the things. definition but the really, capitalized. going have we end go that deals, we're by particular unfunded now within our range, being some identifying QX market the companies certainly continue larger to later-stage done of increase two, well is of bit the range, amount Number be has team really driven Number a really the lower job in some three by after are larger. one, that in great right is to on just little a very So,

would And typically funding making bit now then unfunded lot and which less to then a and the we're piece to last make legacy some commitments. bit have achieving preset available longer. for little those get of that we we unfunded a piece a those unlock little companies milestones, performance of are just portfolio deals So on is board, right tends that than available

So increase. the that's what's driving

we We now, cover have I liquidity on than Based what more that those of percentage we difficult continue can capital. is commitments. sufficient try I think companies in to right actually get to to and portfolio will our assure those drive conversations the think to doing But these overall with tell all that funded. you unfunded to them become to what can you that incentivize of strength them it's of in we're

of in milestones hit just I give does great a sources running draw you. need from have equity of is portion number competition abundant that capital. and Thank historically last answer. that them unfunded a this commitments companies wonder That's draw that of where it, into on markets to those

just last drawing of companies causing from delay to last TBD, defer or is now, companies are doubt some portfolio the increased. is some over we've that long either that something our that of capitalized How no are liquid portfolio the today. as and our fundings the two time, health seen seen certainly available we've but quarter that better or has that and is an there these liquidity right than perspective, in overall more Yeah,

Barr Our of from Please ask next question your question. is Ryan Jefferies.

for it quarter and and on what sense month you And question point? you just on quick declined timing a in of quarter. give both at or that repayments the picked the any in the Can whether up activity sides originations the saw us

Those see over month, that that of happen perspective our queue typically and as prepayment we things the The really but and A in then just and in today. have been obviously case majority your the on plus closing. waiting of those of of quarter, of for can and this of lot funding from an are from that's But you are seeing things the change last course announced XXX the XX SPAC quarter tied we typically that to off there happen. a happen the the M&A. model are what of the the no SEC and could activity prepayments in an been lot based overall tell sort activity fundings quarter we those way perspective during to are of know the We're for A quarter-to-quarter, the XXX these XX things close of sort is sign month of ultimate month cadence commitments to things could months sort the tied So the escalate not that XX terms of prepayments and last of last typically when will and next the in years. best But month, these the change. is prepayments busy is team in quarter. quarterly variable. each to our guess

is Lynch question. next ask Our Please from of your question KBW. Ryan

and think are market, driving it you You like level that seem in and you near kind the experiencing of just that anything talked and about that around liquidity really kind the prepayments change of that's quarter. the market, floating that marketplace. term having that high to venture are abundance going is to space experience in what's in the wondering, I'm liquidity third of actually probably all the doesn't capital of going

be heavy And so, in like wondering your future for the it prepayments feels I'm what could portfolio. foreseeable

or to there know strategies you or your for I you guys of different to pursue strong at future, up sort don't obviously, to to are kind that? all Were potentially want credit And do so, trying offset areas looking is side anything except, sectors there or any you to on origination the originations help boost that can on prepayments of standards. foreseeable the those anything guys that are loosen boost

Sure, Ryan.

So couple things. of

think question, to the And elevated We So term. prepayment, to first part short of answer on do medium I guidance. clear is our we've levels yes. certainly expect pretty your see of I been think

to that sort did consistent. pretty four range you back QX large the prepayments. if spiking $XXX been look In been over just million and last we've three quarters, see pretty it's relates that, we a just XXX, of it in or now As of last year,

to see portfolio. again another the of We strength QX and in on the based expect now spike overall

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Sherbetchyan B. of Securities. Your Riley question is your question. next ask from Sarkis Please

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XX sense can XX you a color there. it's whether get to Any for want months now. from from Just give now, months

Yes, absolutely.

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the rest Thanks. offline. take I'll

right, Sarkis. All thanks

Thanks Sarkis.

questions Chief at I further remarks. Investment to CEO no Scott Bluestein, and for closing turn this are there And Officer back time, will his over the call

joining operator and you, earnings Thank our to on for QX look thanks call everyone today. XXXX our We to next forward call. progress our reporting

Thank concludes this you conference. gentlemen, and Ladies for participating. today's

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