Hercules Capital (HTGC) 6 May 222022 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Hercules Capital Q1 2022 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] Please be advised that today’s conference is being recorded. now today, hand Mr. would to conference I speaker your Instructions] like the to over [Operator Michael Hara. Mr. floor the Hara, is yours.

after from us first Thank and you, Bluestein, accessed results Meyer, can XXXX. CEO the and Investment are XXXX financial CFO. welcome everyone, and Relations call just With quarter Investor be Seth to Hercules’ and were from Chris. conference today’s call Scott Good Hercules close on Hercules section the afternoon, Hercules market at Officer; quarter today Chief for released first htgc.com.

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

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

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

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

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

you we business for we us gross of in and thank you, gross that QX, all over joining over in million The our and of QX record and commitments $XXX momentum debt today. fundings Thank new originated Michael, equity throughout $XXX XXXX where million. continued experienced

take with team, importantly abating we expected, our us The early we during continue the a record over well have than what million to portfolio payoffs debt environment infrastructure able achieved growth have More platform investment substantial more of even and market business. positioned we to in to advantage investments $XXX our view quarter. as made first that net for of be favorable

of bolstered by asset rate activity will remainder that Given loans in QX, reduced in X.X% of performance year. in the QX of highly believe XXXX. with our dramatically is fact QX with debt from the being debt our is portfolio investment cost XXXX our that to income of Hercules be floors. variable net be QX growth the X% And strong over XX.X% able sensitive our further to quarter-to-date company strong deliver and we This well-positioned the in

of fixed with our exception Our liabilities are the credit facilities.

raises annually. FOMC earnings increase of the approximately additional As $X.XX rates basis generates each XX an interest point

recap for me the of some performance highlights of Let our key QX.

again once both performance during quarter. was and delivering sciences activity originations life strong technology teams QX record Our driven the by our

between balance Our our core verticals. two commitments and funding activity demonstrated

waited were of XX investments Although, to quarter towards QX new We borrower relationships. companies capital the funded technology. in XX during were our which different

and expect milestone gross funding the this the we show on new existing billion we performance strong in that in new based portfolio were drive for In tranches commitments quarter. to portfolio and and of milestones $X.XX remainder achieve strength companies levels that the on committed portfolio we again the Based our accelerate companies, continue strong fundings funding also activity XXXX, expand during once companies able unlocking XXXX numerous to funding debt to of of relationship to follow for to addition with equity delivered continued record of trend to and year. increased the

strongest QX, have our towards XXXX, of deal the an we with activity closed billion, in million of During Combined May $XXX signed as and Inclusive new waited additional $X.X Since fundings and of funding during the was commitments month to performance, of closed ever three quarterly end sheets. of QX, term our XX% delivered of that of is of any and million of new in March. already quarters. through million commitments has the team start year now over $XXX $XXX exceeds $XXX pending period. over of QX had backend commitments our commitments new quarter the we currently occurring million close the we which have X, gross non-binding the our over gross consecutive year-to-date new have and fundings pending this

QX. continue trend We expect in to this

Our and new remains pipeline and investments. billion potential $X deal of healthy currently active exceeds very

stage near for of companies our result medium-term a companies, trust. markets, to the across volatility As pipeline as the providers debt that they continue look capital to to from non-dilutive expect growth creative we continue equity and solutions for continued particularly structured to strengthen

volatility. equity clear year particularly permanent base of market are plus track periods business, record of in equity differentiators scale, capital Our our XX and

continued we is the indicated Consistent risk market with to in this QX short-term, growth. on adjusted expected believe value normal underwriting business we in in last exactly than to debt be later disciplined long-term historical on the our what profile credits benefit terms in net as we conditions. at current it opportunities are investment new year-to-date. for challenging with approach stage increasing market is February, being increasingly we companies our new macro we remain and equity selective net while on QX, seen and credit, underwriting even patient stage irrespective on call increased portfolio established of better net have the we a This an more volatility and market will As of asset and originations, in negatively may to did the companies of certain our where impact more Based environment, volatility and terms time. emphasis growth

During industry QX, pulled and had QX. three healthy our complete IPOs, events remained one and that we’ve across company the company one companies in but or announce M&A this including four back, exits transactions, and QX their five portfolio Year-to-date, for companies portfolio. liquidity closed in week complete

million or five have $XXX million approximately significant or have XXXX. in well a for have $XXX and million we SPAC $XX their to into transaction. million repayments addition, $XXX In decrease our guidance public entered via were IPOs go that below agreements definitive from Early loan companies registered QX merger to of

While portfolio per prepayments the which reduced our in in resulted lower net well debt level QX us NII positions for of quarter, QX. earnings the record growth it growth strong in early loan beginning share,

and prepayments remain $XXX we be million. million $XXX QX For and expect low to between XXXX,

Although the continuing this strong. remain progressed power give project we’ve longer-term us could an that opportunity change of will the originations quarter. as experienced enhance levels and to lower The assuming are business in payoffs of that to we early the earnings

also generated income million share. the million, of QX, up, origination activity investment seen to to or $X.XX has of increased total business last we funds over ramp of we contributed private net $XX.X that and $XX.X have has levels per which quarters. investment Our continued several the In income

lower the income was $X.X the in of As a $X.X million, million fee $X.X quarter QX levels million down of prepayments, XXXX. during result from total

remains sheet remains very net reported our conservative Credit the quarter. strong generated continued in our of With investment robust consistent was QX. a guidance effective with a XX.X% XX.X% core portfolio the with liquidity a and GAAP balance of of debt for Our yield at our consistent what regulatory yield and QX well-positioned. we across quality XX.X%, which leverage and platform, portfolio in

average of same credit X.XX was internal weighted as the Our rating QX.

at XX.X% were Grade and remained X the QX also the versus at QX. in QX. credits in same credits Grade same relatively Our XX.X% versus X XX.X% X

Our and cost over X.X% up percentage or strong QX, strategic our the raising $XX,XXX,XXX our credits five and QX portfolio raising four quarter. across cost portfolio at In during rated of credits in number to to respectively. companies one rated an on a loans $X total value approximately decreased remain of fair the Capital portfolio billion made company’s and capital of active X.X% with of respectively equity and X%. debt declined investment and with investment the X.X% as investment non-accrual our value

realized unfunded our million, with During gains commitments strong which ability offset The equity and $X.X warrant our one healthy of of according million, positions. Venture is to $XXX to gathered ample business National to gains QX gross activity ongoing billion, activity investment impact million and Capital $X.X extinguishment level pace from to its XXXX the of was the data ended $XXX the PitchBook million our with $X.X exceed excluding activity. the moderated non-recurring continue continued on activity $XX billion, undistributed $X.XX coverage while to of of added Fundraising loss going share. fundraising pace available $XX ecosystem with $X write-off at realized of Hercules million net provide at fund investment of spillover legacy investment of And write-off or billion, to to activity debt liquidity with on million. comprised and the QX invest to in This and due by $X.X anticipated and us spillover XXXX. continue QX Association. by record of continues ability provides million. debt $XXX undistributed the earnings had to distributions We over due with of of flexibility with and venture capital million exited team We The QX us earnings $XXX per the platform. the forward to shareholder our of respect

$X.XX. For declared a distribution of base supplemental of $X.XX and QX, distribution a we

In the grow be variable to start We positioned are advantage and and will to a we as of on growth debt business. conditions the focus continue growth we to market NII the are well to continue power to and expecting we evaluate to of result, take income our distribution closing, particular portfolio materialize. and assets core a a generating XXXX, quarterly earnings terrific the off with that base

remain steadfast of staying strong We and continuing with new while in core our teams and a underwritings, themes on maintaining to platform. balance will disciplined sheet our invest

turn companies, make of Seth. to We investors their to choice. call and thankful that over teams continue many management Hercules now the are to I will the partner

and ladies afternoon, good gentlemen. and Scott, you, Thank

income outlined, Strong just Scott we with key growth, that the give for originations well XXXX. in confidence investment our portfolio which prime being themes the are are rising there based. positioned approximately which Credit majority market. to extremely current continuing, driving This outlook stable of income. to is balance Capital debt environment remains translate of prepayments us respect for additional on And investment rate net our expected increase portfolio slowing, net us in Hercules sheet XX% is of with strong. investment net positions near momentum several that growth. a to Further, As believe is floating the well is our and term

the market volatility, see. maintain to to the environment quickly we are also monitoring macro the any closely ability Given changes we that adapt and

balance goal financial flexibility. and and highlights, areas. perspective following liquidity The in long With several income and sheet this the NAV review outlook. and have we let’s Our year-to-date is leverage unrealized activity, from to finally, regard. and performance the in remain a that the taken steps mind, liquidity, realized And statement

repayments caused the income early from repayments. driven XXXX. was Turning investment income reduction total by by decline Total $X.XX income decrease million, $XX.X quarter, The $X.X quarter compared a decrease or investment quarter, early and QX, a statement million in million repayments. to net during reduction in in share our a to fee million per income prior attention $XX.X in prior again, reduction QX driven in the highlights, early the to the to compared $X.X to a performance was

quarter. Our first fourth in XX.X% in modest yield in XX% was the due effective slight with were compared our and coupon core guidance. XX.X% XX.X% decline quarter respectively The decrease consistent a in and to yields interest and to core the and the was

Turning to expenses.

repayment RIA, $XX.X quarter-on-quarter million October the $XX.X to expenses for quarter on million repayments. compared again, the expenses related as lower by reduced shown the in premium SG&A the early decreased to million to guidance. decreased, the expense fees previous expenses the of loss The the Net million debt is quarter. The our tax guidance of and to operating prior in quarter cost were acceleration of million. separately $XX.X realized $XX.X SG&A decrease variable and $XX.X quarter Net from million expense in to of my million the the to quarter. a driven notes lower cost recharged was cost to compared gross prior compensation RIA, in to due the the the in the prior from Interest recharged $XX.X and operating $XX.X million. XXXX current $XX.X than unamortized decreased quarter. expenses Our decrease issuance and to the NII were

our As convertible and matured of of at average was combined X.X%. Scott of debt due of million, $XXX basis of $XXX in weighted to of a represents of with X.XXX%. a debt average notes to which October $XXX January unsecured institutional retirement notes, decrease compared cost a point coupon early interest XX prior X%, the is fixed mentioned, quarter of refinancing The the the that of million X.X% February rate issuance XXXX approximately million reduction carrying further the

positions The or the Switching over to $XX.X NAV offset during X.X% loss in mark-to-market net ROAA depreciation, offset decrease value main or primarily average first reduced was $X.X net of option the by movement disposal X.X%. the gains The communicated $X.X of by million $X.X our the to issuing respectively the quarter, Our notes This gain unrealized share of offset million share. repaid supplemental share XX% the per driver legacy quarter-over-quarter. per equity by to value quarter. shares and million million one March, losses, warrant $XX.XX NAV realized resulting the gains, impact The share was million $X.X NAV decrease further extinguishment NII activity, program of that relating of non-accrual. completely of through decreased and on during by $XX.XX increased $X.X unrealized million assets to our $X.XX and realized million a of and $X.XX comprised equity NAV for price our NAV. right per our distribution an the decreasing debt by the change off in debt in of over was equity total at the of dividend traded positions. convertible NAV decrease February average $XX.X share position of represents the from to was the of $X.XX ROAE publicly was was and on of for settling average the of per ATM NII realized previously of accretive related an on paid in quarter

prior respectively. $XXX in reminder, GAAP our net of compared GAAP ended investments. increased in leverage XX.X% of was regulatory the out and leverage with liquidity funds was Regarding RIA XX.X% with raised the quarter net leverage as sheet, a wholly-owned which to the due XXX.X% by cash our this our capital leverage Netting subsidiary. growth and and We the managed liquidity, regulatory respectively, million, XX.X% balance excludes quarter to the on by

million redeem proceeds an X.XXX% notes As with of institutional small previously to $XXX redemption. the rate disclosed a $XXX convertible we in notes February of of $XXX early for January, XXXX and upon and coupon million notes X.XXX%. million unsecured attractive of The issued premium maturity utilized fixed X.XXX% in were October

points. On the outlook

quarter, is our guidance. guidance first XX% For second which quarter consistent is core yield with XX.X%, the to our

floor. a with As is XX% approximately of portfolio reminder, floating debt our a

So will the interest yield in our yesterday like anticipated going benefit hikes XXXX, rate forward. core

to second Although $XXX to million the we predict expect of X% result due very Scott, $XXX rate lower the quarterly acceleration vintage in in communicated recognition prepayment the to prior a difficult of activity expect payments. with prepayment consistent fee guidance, as to to of million average quarter, we X.X% by in

of this to and over to to growth we’re over closing, call. call expense positioned prior of for expect first will a our million from we income. of In portion we compared SG&A expect quarter. core now I RIA our second second to similar look well compared remain forward the benefit market to you. the the Chris, Q&A level quarter. $XX $XX to quarter stable finally, begin continued of expenses the allocation our million gross to And and to interest to the Chris We expense quarter, turn

question [Operator Love Crispin Our of from Thank you. first Piper Instructions] comes Sander.

open. is line Your

you, everyone. and Thank good afternoon,

growth we the rest then plays that the you could you if And with you of and core curve rate for the be year, of Seth how the yields the forward positioned few out the well are just ramp your hikes exit the now, seem we’ve year. as comments thinking numerous of are what NII core said, on building fed already for could through had. expected rest the just also for from pretty that mean as that So of But yields then XXXX? what the

in about well perspective, One on that when of sure. that, the XX think the first majority basis the of it end quarter as thanks originations question. fed Crispin, is, for should was the only as QX things from couple the of the points Yes, I occurred XX. our note effective A of a towards quarter, we by back as increase of rate the March the

So would point see We effective XX basis of increase the benefit even recent today. expect upswing we as QX. without in a to yesterday

we XX would linear. for et cetera. it’s is and we it increase that basis then portfolio is almost to basis what you see can earnings is a that associated do on a $X.XX cents annually points see per earnings So increase, as share, the one increase is translates a $X.XX XX expect the benefiting it point the what side. et estimate when graph one, with an fairly we And ratchet to In up cetera,

portfolio and of SOFR driven, little the a LIBOR noting of And that majority fairly bit move it’s different. is linearly our course, So prime based.

because was going not to from would I same but I it mathematically XX% would out, the assume and a side, to it model do way impact, be expect rate increase it, to would you it. at on also it as to of increases, is yield I if model how yield that all is the anywhere those rate direct the going XX% So I’d Crispin, that’s effective linear fairly

the Thanks, at been you just your that’s tech one the another and for the I earlier very more know fundings with helpful. I looking quarter. fundings? I call mentioned environment higher you rates, that know, for it’s way think or at exposure, life in a markets. are inching equity then And in tech public tech first had least sciences in Scott And tough new

future one fundings you’re what tech drive So about other. sciences or the way I’m just you between waiting curious how and the and could and thinking life

The Crispin. is in some is said for what operative we’re often of in now. Thanks, our diversification. for key focus us Sure. conversations diversification. and publicly And that’s exactly word to and maintaining on volatility, and that trying balance private We’ve periods of balance the us do

XX-XX. exposure Our now is target right approximately

QX, want tech. XX% sciences tech, these we towards will difficult it’s So control to we In because timing close. be may that exact we were QX, life of weighted were In toggle quarter-to-quarter, XX% slightly like when to slightly weighted the life sciences. weighted fundings towards

If medium business allocation, the at certainly, to notes will term last short and almost it’s you look to months, XX-XX target our here. on over the six that be continue the

Thanks, Scott. Thank you for taking my questions.

Sure.

you. Thank

question Next F JMP. Kevin comes of from

open. is line Your

taking some one investment non-accrual could on great. during mentioned your provide up which But Hi, you two insight prepared that In came debt the only quarter? good is on afternoon for and that you non-accrual, questions. thank investments the my debt you remarks, is

Pineapple this a We may bell years was an some Sungevity/Solar debt. a legacy rings that a restructured first The it, several did NewCo capital reverse and months. are had that and now name the over We coming the progress through that up course merger that call. the that was funding proceeding investment those One be ago. for raise a of out which the company insolvency substantial That completed ended significant Energy in on the quarter. company and went company, Sure. is Spectrum pretty a named that of six last of has

a other non-accrual to loss loss. We come the a off, legacy took up investors was current loan And pay but back had small the the are selling quarter. with We to small So one all loan realized small that has one mentioned. the during that non-accrual. They loan Hercules. realized also on that that QX. We Seth came that, off ended in obligations

Okay, targeting then I quarter, appreciate the north you mentioned times. leverage X color regulatory there, believe of last Scott. And

that As end, well X.XX times. at a quarter you’re below

range curious shifted if has all target current backdrop. leverage Just the at given your

of up a prepayments No we on have a And X.XX change equity low GAAP little continue basis basis. continuing ratio We It closer a a one in it. to bit remain on should one. at the to to drive to ambition. ceiling of regulatory do to target remain that

my it. And for That’s thank for me. Okay, you it questions. taking got

Kevin. Thanks,

And Fargo. you. Wells next O’Shea we have Thank of Finian

Your line open. is

Hey, everyone. Good afternoon.

fund First you are ones question what lines than on undertaking more the be one would what if – the and so or in? Advisor, multiple considering strategies new

two funds distinct parallel the So we business. currently are in private managing fund

are beginning exactly to continue stay helping and what’s transactions earnings And think business. expectations road, them two term near of strategy also now very helping consistent potential for with out for of the of is doing expected but the increase of down that what ramp do private historically. not they’re terms which about We those nothing we’ve out ahead terms funds duration there’s the imminent our funds periods only addressable extending certainly in total power now longer there’s us up laid with the to but stage next the us larger of in borrowers and to increasing the funds time, later and and us, do market nothing discuss we to

is you pretty comparatively Thank But and of if your off be markets, in you that. drastically kind past. in a anywhere I a interesting companies lot today. have Sure. think to it thing. like, exposure that there’d wondering pretty everything’s stock understanding to any on you holding sold That’s of is a commentary, limitations well hit in And with more little in work done yields that’s that – public interesting up think, the, of where the the helpful. And which would think I Is anything but that on healthy you’ve there helpful, is you’re you. all or I terms lot sounds

transactions In terms those of purchases equity or debt companies. for

Equity.

Yes.

the on about our of course continue to investment last in obviously have the proportionally side, not declined securities. has the portfolio X% the months. That equity have as we So six come markets of down over equity X% to

public will it’s specific. We our investments case direct of just make borrowers, opportunistically equity in some

several So But priced RTI, of course view, million majority do part be on the the we over overall that the of several those deals in typically we we on pretty purview. those. we quarterly an of right a the what tend participated fairly basis. our in is get that our somewhere – in And a end range those million companies completed high the last the we’ve do. basis, are had some $X quarters of done equity transactions. small attractively to through which have have in Those large That’s to $X invest that on to

helpful. That’s Thanks Okay. so much.

Sure. Thanks, Fin.

you. Thank

next from comes John Hecht Our Jefferies. of question

open. is line Your

Hey guys, apologize.

But terms miss did were can the just end of comment in timing or terms of the it got, deployments juggling weighted lot but had of in I a they back call the of of in the comment timing earnings. quarter, the because this, you of front we’re on If anything deployments. you you

occurred in investment the commitments, strong approximately $XXX million very the of fundings month activity in of were $XXX March. in million of quarter the quarter the They fundings, of XX%

go the very the some which backend, will obviously and forward towards So QX periods. weighted for significant heavily provide power

percent rates repayments, you here, couple behavior early you And terms to – do a does how from up think of payments or there. How understand Okay. think and rates earnings. will is it’s slow revenues really Helpful. that you affect in can’t unpredictable do there or then start

talked for consistent pretty basis. just the and on we’ve are a that to very difficult think prepayments us I predict about

I just one terms theme $X that several to environment from significant were mentality prepayments speak were just think the sort we’re lot companies. built liquidity and seen market that this of Whereas off from sort liquidity that a absolutely actually course can that’s Boards as year. year is of a the of and saw in in is pay the The using excess last we and Boards of months, companies that these for last a refinancings change and of priority we’ve over last to of nearly up, hearing messaging over why they – debt we different. companies of the billion

companies are a long periods different the pay still staying given longer quality strong book, with off the are some which approach on of our of our taking those the happy that to little volatility Boards very books credit even perfectly the just choosing for So of and deals bit of a again given not the time. debt, and we’re the liquidity, for

in just emphasis sectors might on And given how and inflationary Okay. changes industries any that your kind of or focus different how trends sub impact, work?

that tend we’re Sure. not want to about talk moves making. We to

about this our Just tell given and that only spoke kind would in be I What you is remarks. prepared what that we want to we of of cognizant others are doing.

over the to established into tech on the portfolio begun and absolutely scaled companies, two both life the side. last more course later side have We more the quarters on position of sciences the stage,

biotech pretty majority we booked comment look would those we than much going but at areas are some we’re type tech two we are into, rotating and better in established very deals of in just you from up in companies that think away earlier the not you investing sectors profile risk scaled the I’d are liquidity is continue. that on it’s then that drug the perspective. If absolutely deals risk and those companies now, in we that Right pretty QX of themes are stage, later themes those public are. that larger what There in more QX, booked see side, development general seeing drug borrowers two from to meaningfully opportunities Those adjusted the we’re what majority of strong specifically the is the return on discovery, stage of curve terms a platform think materially. rather and where we diversified not

much. helpful. Very very Thanks Okay.

Thanks, Sure. John.

KBW. Ryan Instructions] comes Thank question [Operator next Our Lynch from of you.

Your line is open.

afternoon. Good

core the yields just I question, was you anticipating spread are throughout wanted are First guys year. that that, to on just the focus

You about the of volatility today. in marketplaces obviously lot a talked

spread. the pressure attractiveness the of you pricing a can which access put more potential debt, borrowers have would rates, some pricing venture I I but or would you at think think same increasing allow then power, standpoint, little pressure to to from maybe I at time, spread rising on times a think me have which excuse

So I’m playing you just curious, interplay how see those two out. do

Sure.

of of XX.X% for QX that guidance this, We we the yield delivered the we XXXX, the end on driven towards guidance we expect and would core target. but Fed core Fed didn’t for core QX, what gave with do. has what to the the yield consistent terms expect done we continue In from by backend to the yield, to the which largely XX% be higher that that to that a perspective, guidance yield of is mention already is certainly

say overall couple to I’d things with respect In of theme, yield. of a terms

risk. I last So where to a to increased Board. those yield, increased yield a hesitant specific. yield up we the opportunities say It deal we’ve seen been seeing that deals increased structured are market. and number company are not that, deal that there very a are get months by just in pay now increased there that companies across got is are And opportunities is and And the substantially over get chase. several deals from of market being to but would are things historically yield the for leverage, we’ve for to in the basis. course the of very driven opportunities you’ve also those two looser increased some willing It’s perspective It’s right on by that

basis. you go should to us And chase a on forward expect those so not

think I from to next the to but to material expect not not the chase do over course yield going several overall we’re there So increased be it accretion we given and some an of core chase that continue quarters, risk. would quality and to yield I expect perspective, be

secured year debt release, composition portfolio just commentary. about that first shift? less looks press in talk Okay. of year have you little senior your That’s you lien a also portfolio about thing breakdown towards your what’s Can a senior significantly guys It’s like but helpful lien so the noticed the XX% secured, mix ago. from obviously One ago factor kind bit of your I still first to about XX% it driving dropped a from loans weighted and behind today. have that,

Yes.

And that of the out what pointed of prepared the been the our about we’ve that quarters. you in terms what true is the last over few is several about last right it talked as remarks intentionally now from slightly in first in over course correlated senior directly of portfolio was XX% where secured yes, So, lien we doing debt is quarters. down to

bit some companies As bit little many scaled we’ve moved into those a of in tend those cases, later established from credit small, the place. cheap, aggressively be have mature, revolving more to more a relatively little growth more stage, facilities And more companies, companies perspective. inexpensive, a in

are revolving And Prime, provided so in plus larger of Prime stage transactions, going some small commercial one, Prime we from those credit that do structured at we formula facilities later behind one. based minus cases, banks are when some

so those but credit material from our what’s certainly to much causing it’s a tend not move our and companies slightly, perspective decrease And opinion. that better in to a that’s number quality be

capital that XXXX, in up to you was that we a significantly that, see down activity venture Slide last – least was for at if of deployed sense. into fundraising you saw But that there’s on be lay interesting that can then investment not then venture to sort significantly one pace in I any least read if impact in could later just eclipse it’s That look it XX on have see year just potentially year much at on that had, I’m surprising. just what investment when capital XXXX. relative And of to pace Okay. is down so activity. at little anything kind on to the raise, one capital which venture and but your deck, yet out And that of investment you capital you makes to curious the fundraising, and QX. so

Yes.

XXXX. in perspective raised very XXXX to to in much a ecosystem. to funds only $XX our actually not of very XXXX, it’s all all vibrant billion capital expected. $XXX we be it exceed saw strong, think and positive what venture Fundraising but of continues and in QX I And very raised from and to VC speaks billion relative healthy

significantly inflows our exceed So VC speaks, capital to nicely continue. venture last pace growth saw I very to into we what that that year, on think will expectation companies stage

of On it the in side, of VC grand certainly they a QX, the not was in billion scheme things. QX, $XX pullback investment QX. little invested invested In billion. firms in material and when you sort QX, at $XX It in did billion look invested $XX see of a you they bit

come evaluation so it to did in the some is and the you’re down was the perspective. So seeing the given market some fact remaining so from of strong. surprise just rationalization But fundraising and a not that which of slightly, us that healthy volatility

environment raise I remainder be to able think terms capital. being continued in for to of what we speaks from well our very perspective a the of to XXXX, expect strong companies

Okay. Understood. I appreciate the time this afternoon.

Thanks, Sure. Ryan.

any speakers, And see queue. in to closing do over for I back remarks. I questions the the Scott will you. see I conference more Thank Bluestein – turn not

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

participating. Thank all today’s concludes call. conference you for This

have now disconnect may You day. pleasant and a