SuRo Capital (SSSS) 8 Nov 232023 Q3 Earnings call transcript

Good day, and welcome to the SuRo Capital's Third Quarter 2023 Earnings Call. Today's call is being recorded. [Operator Instructions]

I will now hand you over to your host, Adam Bates, to begin today's conference. Thank you.

am of by and SuRo Officer, Green. I Chief Chairman Chief call, Allison Officer Executive Capital, today's joined the today and Financial On Mark Klein; remarks slide at website under Investor Presentations. to Please on and www.surocap.com presentation Events that is available a today's note prepared by Relations, management our corresponding and being . Today's on website, call recorded is www.serocap.com. our live broadcast Replay inform is included in our press release issued today. in property of unauthorized this call the SuRo reproduction prohibited. strictly and the any Capital is is call This form of

customary or results involve of and statements disclosures to regarding uncertainties, which industry like the does differ the the the plans, do required including, our call estimates detrimental undertake number results constitute a the of unless or to time that Management differ economy law. reflected or to events press those are made your number also including and and and with from to results not result guarantees risks statements future forward-looking to business, our future a global those by could update today's These forward-looking be to as of from of but portfolio not from actual and would Actual release that financial may filings to, in or SEC. attention the time factors, such forward-looking statements. described in future may not cause limited suggested in so I company's volatility earnings today's materially forward-looking expectations in forward-looking webcast condition statements, by Statements statements any materially information. performance in intentions our companies, the to performance to conference relate market call impact our a condition. financial of or may future

at To or SEC's obtain the at www.surocap.com website please latest our of sec.gov. filings, copies website SEC visit Capital's SuRo

the to Klein. Now to like I Mark over would call turn

you, Thank us. and joining thank Good for afternoon, Adam. you

XXXX. SuRo results Capital's third pleased are of to share the We quarter

into quarter, was rates. believe and equity from XXXX weakness interest recent Economic fourth the ongoing in to or the raising characterized by a continued investors of done the the has may third be done Fed public reports markets. although led bond has and The quarter close Reserve broad Federal commentary uncertainty

of interest wars the price. be Israel with market. during and geopolitical all in first that unrest, to has significantly several comparables. with and view IPO delay will the including back a The the first or IPO volatility as reopen likely markets other occur. companies IPO in continued to the of more year, QX, debuted the poor second many While XXXX. we rate well performance volatility consumers have market in could companies the coupled their private broadly secondary led of inconsistent in with which, IPO markets. did expressed fee equity open notable hikes the are believe done in fact, the tech has in the public we were there half Ukraine, that while view fueled in our today, markets, that . In these market Unfortunately, pulling The with has led in apparent as IPOs trading stocks Idaho being the market instances, The as the declined public these quarter the in pause is of from closed of

and disconnect public the markets. pricing recent As between for performance quarters, of of secondary is we highlighted late-stage a have there several opportunities

remain of private be find are believe than markets what to couple fortunate these to than higher components. the excellent rule and a as we been their have opportunities, valuations the we inconsistent public exception While more of

XX% apparent within of very To or time that opportunities end, up we no periods with have observed trading secondary around catalyst. private short down

noted stocks bid different prices. meaningfully and Additionally, in we have simultaneously offered

their where To have that them, the rigorous levels it price have are critical the us It Finally, opaque. to we and these their instructive, indicated secondary to is through IPO private an finally was and it observed were valuation that secondary first wide-ranging trading in at most companies navigate meaningfully participants. with markets be such we is IPO perform perhaps To is priced. opportunities. above constant imperative opaque analysis to capital dialogue the market, of as deploy prudent against clear in myriad

of companies As active and private many until prospects companies with has IPO, our seeking lines remained face some prolonged extremely liquidity. time investors pipeline

With potential our more investments on said, very fact, continue we we entry In times. always, as that than to focused see other potential remain levels.

the several new quarter, able investments. we execute to During were

SPAC agreements to our one merger companies. SPACs of with target announced and previously previously X as other Additionally, merge investments closed its definitive discussed, announced

of in made exchange in business portfolio. X the as visibility million fourX We chain sports And Kite, through we secondary invested during in a $X.X $X software invested quarter. a state Capital's as exchange million betting transaction part supply the company a also SuRo We trade, primary new through transactions. investments profit

and that and includes the good and XX companies millions impressive where impact is are visibility solution. brands us technology X. goods most top chain onto clientele a as loaded they being leverage time to X,XXX company the of efficiencies has Please finally initial recognized all for delivery over a FourKites the companies. onset is FourKites FourKites recognized of such pioneering them of should the leading Slide a of of its XX at of XX that when a idea know their a evidenced been food year. unlock helps supply FourKites turn visibility real-time reach destination. beverage consumer world's brands truck behind the The save Today, real-time in dollars packaged X to from which

their complex additional and a they FourKites that of believe business as position is the market to share We expanding continue some unique supply capture customers needs. target with in chain most

and experience wagers driven a seamless New future. that own a platform gone The a their on outstanding investment from sports from million makers. is is providing Profit options best $X to live have in different pricing request expand regulates exchange incumbent in transaction. extensive is has on now the legal to both We pick betting profit Betters states the or with in other peer-to-peer through also betting exchange in the and the a by the licensing made exchange primary and focused better users market to ability plans through Jersey company operators.

execute We team are market U.K. the the about profit opportunity the in the opportunity. the exchange in Betfair we had has technology excited success the the exchange believe large U.S., wagering has both given to on and and

to Please X. turn Slide

Square. a a patriotic leading York PSQH warrants, with as on combination July New consumers the businesses quarter, the that Square marketplace Corp., and SPAC During began in symbol on closed Acquisition PSQ Public its and is we Exchange of under successfully the business also both known XX. Public stock Colombier own Stock which trading Holdings,

business subject are as our Allison later pricing to a expired X-year end, restrictions will million. our at approximately warrants shares we investment with on that Public our Square the combinations call. period and provide The quarter Square common August unlock closing valued would in $XX earlier. the XX, our approximately million $X.X lockup condition in and additional the of lockup At shares cost position a basis details is on Public on

technology and definitive and The discussed, the combined Oklo As advanced On XXXX symbol is the to transaction, well named by for XX, close has company. Corp. agreement an approved filed On Oklo late Board will SEC. S-X The to to Oklo in July and September and early of New Oklo the on XX, which with AltC closing company Stock and we as with Exchange announced of subject York as nuclear the other with conditions. shareholders expected signed been XXXX previously company is vision AltC O-K-L-O. XXXX. by to Directors a fuel the be XXXX, the approval intend and Acquisition in merge list

quarter, to corporate announced a The the during Boards August shareholders other medium-sized Lastly, XXXX, approved compounder, VII specialist expected Directors Capital in as in and U.K. X, as small- a CorpAcq Corp. as business been Churchill SMEs VII merge conditions. is the 'XX, and enterprise, approval acquiring known agreement and CorpAcq subject with on definitive also signed the Churchill and close VII to closing of Churchill well to early transaction by has of by CorpAcq,

net third an from $X.XX or $X.XX increase and $X.XX the XXXX. up a is share. a in up assets, of quarter. in share from of net a to of This value in $XXX QX We per ended million Turning quarter XXXX with the share asset QX

Please turn to Slide X.

first Turning to to positions. highlight X want our our top I position. cash

representing As of U.S. assets. cash our approximately investment of available short-term million, XX% $XX gross our for end, quarter were Treasuries and

We continue conditions. continue seeking to have environment new market to from this in antageously emerging positions having current out us opportunities cash believe

at These Blink fair positions as September XX SuRo's Learneo, of the and investment of portfolio top approximately positions Health for XX% StormWind. accounted Public X value. Square, were

of as at Additionally, top approximately XX value. fair September the accounted portfolio XX, of for investment positions our XX%

Transitioning to investments. public our

previously is positions our stability in unrestricted In lockup monetize public we restrictions positions. line As positions a continued with our it trading. public stated, and when public to approach, our this objective expire have is sell to given relative

continue publications we our subsequent began Square to our remaining most to monetizing monetize as end, our next quarter, warrants. monetized third to plan opportunistically of quarter's in the conditions During and position improve. We market door Public position we in

extension repurchases XXXX. to end, for share August $X an As that authorized program of shareholder-friendly on Directors October our previously XX, the we focus our share To continue X discussed, additional Board initiatives. on million through repurchase an of and

significant efficient repurchase of the to share our deployment net the which value, the asset to continuation discount compared be stock and program accretive in determined trading Given capital. of is current we an

as new add us opportunities. to to and continue selective our public opportunity volatility companies our to high-quality patient capital market remain both investable evaluate private to We we an portfolio. persist, As and believe we affords considerable

will attention. hand Officer. Chief that, over And for Allison with you our Thank Financial Green, I to your it

repurchase Mark's you, like detailed position. I our followed of liquidity financial portfolio as follow of the to the our September results since of a third would and on Details start update by . Thank quarter. with activities program, XX, finally, XXXX, our review share Mark. more the

to on activity to does investments in and not U.S. like investment detailed provide the I'd include more end. treasuries. our This a First, for short-term quarter third portfolio update subsequent quarter

space. the million secondary million Heart is and even X investment we $XXX,XXX shares, through third future or investment a transaction, new and B a follow-on equity a in for in simple common also profit During $X Series X via $X.X $X.X received These and we total for exchange which SuRo preferred million quarter, shares words. in of a Capital investments. investment invested agreement a include a follow-on

We the realized Over next of public resulting continued shares. approximately to of our next loss the in SuRo net Capital XXX,XXX of $X.X sold common for course million. third monetize approximately net proceeds, $X.X million shares door quarter, of we a

related to sales on received In repayment approximately and as of addition December in to as due and interest from income. traded Avenue interest principal loan publicly we term XXXX investments, dividend our Second XX% $XXX,XXX investment proceeds the well other unrestricted

note. a in sold end, gain SuRo net $XXX,XXX net through through At and proceeds, the convertible approximately yesterday, quarter of Holdings, PSQ resulting Sports Inc. for Capital approximately XPoint's $XX,XXX. of to quarter made Subsequent warrants end investment we as we well $XX,XXX follow-on realized XX,XXX a

Finally, from loan subsequent net as interest interest Second approximately XXXX interest to Avenue term related as dividends well end, XX% on proceeds in and quarter other to income. we and received $XX,XXX due December repayment the principal

of portfolio the and data second our and of technology Marketplaces Slide representing The Please top investment portfolio the of was technology, invested portfolio education portfolio approximately our investment value. the accounted was XX% Segmented our investment at fair quarter category turn at was XX% big general companies. XX% portfolio. cloud XX% largest approximately themes, investment of of end the approximately category, X for X. approximately to representing in to by allocation financial

of Social for value and of our portfolio fair sustainability approximately mobile our less accounted September than of for and of the as value XX. accounted of X% the X% portfolio fair

Slide to Please X. turn

XXXX. repurchase $XX As on million through Directors of Board August XX, authorized X, a and the Mark share of expansion repurchase October our program program to share the $X million mentioned, to extension an

approximately of its During XX, XXXX, September the repurchased stock program, for XXX,XXX company $XXX,XXX share restrictions. common quarter subject shares the to regulatory the under repurchase ended

a and approximately repurchase both auction we is of various under have of XX, remain $XX.X via repurchased for shares $XX our common program remaining $XX.X and authorized the repurchase stock of X.X to This our the million on by a million deployment XXXX, total million Since the share program Board. August X.XXX,XXX approved total currently this expire Dutch the Year-to-date, share a does share tender program include during for time the offer, October not of repurchases set repurchase the million have repurchase million offers About shares period. XXXX. approximately $XX.X authorized program. repurchased in deploy under we under to share inception of tender and $XX.X have modified million

program, Under the its that open prohibitions common trading in procedures repurchase with may the the share outstanding Capital stock under repurchase policies regulation. provided its and SuRo insider and market complies applicable

We important an that Please recognize NAV input shareholders. to share our our Slide X. to turn is per

specifically, the investment Over how portfolio. we to across value more inquiries our attribute NAV, how have received our years, we as determine we

investment GAAP. our discuss company like funds consultation I'd I quarterly venture with price a SuRo at of portfolio companies. assets value in on participants to fair an note frequently or more U.S. investment accordance be which And transfer the results or liability applies NAV. that basis portion for AICPA's briefly Before asset of companies, and of other orderly would value We financial generally the the Capital between quarter, expected of significant the valuation accounting market accounting with our is date. audit from Their defined investments comprises how high our an private for the make for transaction and value or to and very and the guide we guide principles received to most if required. portfolio, paid a equity accounting as a capital our AICPA sell value

based input When value level falls for that measuring fair X measure hierarchy which framework the fair in value hierarchy to the significant fair lowest fair value. based used is establishes the measuring the level is used value into measurement is input hierarchy the in measurement the fall includes levels. value to that different levels GAAP inputs the level determined lowest a is the the to on measure significant inputs classify a the level which to the measurement. entirety. of categorized used inputs within The measurement is value The within the fair fair hierarchy to used on value value that value technique within fair prioritizes valuation its fair to fair in

based than In unobservable as use in asset unadjusted quoted estimate market inputs valuations an that Level secondary assets such in participants summary, prices markets trades. investors. X measurement or X reflect X X generally publicly prices, are on on hierarchy. active the best Level are the in based are on active for observable traded other based Level identical quoted valuations inputs the and what Level or of not an prices at are market would valuations on date. pricing

by indication Level noted, our the be fair a of portfolio level some information value assess pertinent portfolio a determined transaction to deemed classified other fair for appropriate X size transaction, are any are inputs and cost transactions While Unless occur. in regarding than a many occurs more investments share secondary deemed of as closely exception fair rare the as to when in have the review of value. to are guidelines analysis. a companies, transaction X discussed a secondary secondary these inputs, and valuation values will one value our of Further instances, unobservable Level the transaction we

contributing to the $X.XX are end to of from ended primarily per an We per repurchase share share share the a compensation. share a companies. case quarter consist unrealized stock-based NAV was NAV of as XX to The increase due in to of of September to XXXX with by resulting a stock common due and -- third largely portfolio driven from $X.XX $X.XX pleased $X.XX, our report increase in investments to which per net per QX our secondary financial the $X.XX increase net share XXXX was per per of of observed trades the quarter increases reporting. depreciation share per at quarter is $X.XX we due during share the with Also

of use the with of end. in net noted, value previously the we asset as repurchases, As cash quarter connection decrease

asset in value However, an outstanding the the increase net at shares reduction quarter end in resulted per share. of

on NAV per to share and per the $X.XX decrease during quarter. $X.XX to due investments share net per increase loss realized offset due partially share losses The by in net investment decrease was a

unrestricted $XX.X unrestricted like million assets, $XX.X Public approximately XX. with securities and end, in warrants. of held as $XX.X Finally, to the I quarter Next a securities. Global, would ended in approximately in We Forge and million position liquidity public of including short-term million The $XX.X U.S. public quarter moment review Capital's September Skillsoft million liquid Partners, cash, Door, Lake in of to our SuRo as $XXX.X approximately New of our take shares represent Capital Square treasuries

concludes shares would common and That were We At of comments. SuRo outstanding. your XX,XXX,XXX Capital. September you there XX, support like thank of my interest the XXXX, stock company's to for

will to start the call Operator? over turn Q&A I to the Now session. the operator

[Operator to Klein, call over Instructions] today's no There to are like I would hand the your to host, questions. conclude Mark further conference.

your Our call, we appreciate support. greatly

If our out you reach Thank either have to free any through much. e-mail. further IR very you or just follow-on questions, directly portal to feel us through

participation. event. for That Thank concludes your today's you

may disconnect. now You