Achieved Net Investment Income of $2.07 Per
Share for Fiscal Year 2023
15.6% Portfolio Yield on Debt Investments for
the Fourth Quarter and 15.4% for Fiscal Year 2023
DECLARES FIRST QUARTER 2024 DISTRIBUTION OF
$0.40 PER SHARE
TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the
“Company,” “TPVG,” “we,” “us,” or “our”), the leading financing
provider to venture growth stage companies backed by a select group
of venture capital firms in technology and other high growth
industries, today announced its financial results for the fourth
quarter and fiscal year ended December 31, 2023 and the declaration
by its Board of Directors of its first quarter 2024 distribution of
$0.40 per share.
Fourth Quarter 2023 Highlights
- Signed $100.1 million of term sheets with venture growth stage
companies at TriplePoint Capital LLC (“TPC”) and TPVG closed $4.2
million of new debt commitments to venture growth stage
companies;
- Funded $24.4 million in debt investments to six portfolio
companies with a 18.8% weighted average annualized yield at
origination;
- Received $33.7 million of loan principal prepayments;
- Achieved a 15.6% weighted average annualized portfolio yield on
debt investments for the quarter1;
- Earned net investment income of $17.3 million, or $0.47 per
share;
- Generated total investment income of $33.0 million;
- Realized an 18.3% return on average equity, based on net
investment income during the quarter;
- Five debt portfolio companies raised an aggregate $156.8
million of capital in private financings during the quarter;
- TPVG portfolio company Metropolis Technologies, Inc. agreed to
buy SP Plus Corporation (Nasdaq: SP) for approximately $1.5 billion
and secured $1.7 billion of equity and debt financing;
- Held debt investments in 49 portfolio companies, warrants in 97
portfolio companies and equity investments in 46 portfolio
companies as of December 31, 2023;
- Debt investment portfolio weighted average investment ranking
of 2.14 as of quarter’s end;
- Raised $15.1 million of net proceeds under the at-the-market
equity offering program (“ATM Program”);
- Net asset value of $346.3 million, or $9.21 per share, as of
December 31, 2023;
- Total liquidity of $306.6 million and total unfunded
commitments of $118.1 million;
- Ended the quarter with a 1.76x gross leverage ratio;
- Declared a first quarter distribution of $0.40 per share,
payable on March 29, 2024; bringing total declared distributions to
$15.05 per share since the Company’s initial public offering;
and
- Portfolio company liquidity events subsequent to the fourth
quarter include: TPVG portfolio company Cohesity, Inc. announced it
intends to combine with Veritas Technologies LLC’s (“Veritas”) data
protection business, which will be carved out of Veritas, in a
transaction which values the combined company at approximately $7
billion; Monzo Bank Holding Group Limited announced raising a $430
million private round of equity financing at a $5 billion
post-money valuation.
Fiscal Year 2023 Highlights
- Earned net investment income of $73.8 million, or $2.07 per
share;
- Generated total investment income of $137.5 million;
- Paid distributions of $1.60 per share;
- Signed $471.0 million of term sheets with venture growth stage
companies at TPC and TPVG closed $31.5 million of new debt
commitments to venture growth stage companies;
- Funded $125.3 million in debt investments to 23 portfolio
companies with a 15.6%2 weighted average annualized portfolio yield
at origination and funded $0.2 million in direct equity investments
in private rounds of financing to three portfolio companies;
- 19 debt portfolio companies raised an aggregate $593.7 million
of capital in private financings;
- Achieved a 15.4% weighted average annualized portfolio yield on
debt investments[1];
- In April 2023, DBRS, Inc. reaffirmed TPVG’s investment grade
rating, BBB Long-Term Issuer rating, with a negative trend
outlook;
- Raised $21.1 million of net proceeds under the ATM Program;
and
- Estimated undistributed taxable earnings from net investment
income (or “spillover income”) of $41.5 million, or $1.10 per
share, as of December 31, 2023.
”Venture capital markets continued to be challenging in the
fourth quarter,” said Jim Labe, chairman and chief executive
officer of TPVG. “We remain focused on our established priorities
that we believe will enable the Company to navigate the current
market environment.”
“We will further concentrate on delivering strong investment
income, overearning our dividend, and managing our portfolio and
credit quality,” said Sajal Srivastava, president and chief
investment officer of the Company. “We plan to utilize our strong
liquidity to capitalize on emerging opportunities in 2024.”
____________________________________ 1 Please see the last table in
this press release, titled "Weighted Average Portfolio Yield on
Debt Investments," for more information on the calculation of the
weighted average annualized portfolio yield on debt investments. 2
This yield excludes the impact of $2.0 million in short-term loans
that were funded and repaid during the three months ended March 31,
2023, which carried a higher interest rate than our normal course
investments, and the impact thereof on our weighted average
adjusted annualized yield at origination for the period presented.
PORTFOLIO AND INVESTMENT ACTIVITY
During the three months ended December 31, 2023, the Company
entered into $4.2 million of new debt commitments with two
portfolio companies, funded debt investments totaling $24.4 million
to six portfolio companies and acquired warrants valued at $1.1
million in two portfolio companies. Debt investments funded during
the quarter carried a weighted average annualized portfolio yield
of 18.8% at origination. During the quarter, the Company received
$33.7 million of principal prepayments, $8.5 million of early
repayments and $9.2 million of scheduled principal amortization.
The weighted average annualized portfolio yield on debt investments
for the fourth quarter was 15.6%. The Company calculates weighted
average portfolio yield as the annualized rate of the interest
income recognized during the period divided by the average
amortized cost of debt investments in the portfolio during the
period. The return on average equity for the fourth quarter was
18.3% based on net investment income. The Company calculates return
on average equity as the annualized rate of net investment income
recognized during the period divided by the Company’s average net
asset value during the period.
As of December 31, 2023, the Company held debt investments in 49
portfolio companies, warrants in 97 portfolio companies and equity
investments in 46 portfolio companies. The total cost and fair
value of these investments were $850.1 million and $802.1 million,
respectively.
The following table shows the total portfolio investment
activity for the three months and years ended December 31, 2023 and
2022:
For the Three Months
Ended
December 31,
For the Year Ended
December 31,
(in thousands)
2023
2022
2023
2022
Beginning portfolio at fair value
$
870,178
$
962,430
$
949,276
$
865,340
New debt investments, net(a)
23,687
92,528
122,654
407,587
Scheduled principal amortization
(9,173
)
(3,464
)
(47,461
)
(22,910
)
Principal prepayments and early
repayments
(42,238
)
(69,431
)
(131,638
)
(240,727
)
Net amortization and accretion of premiums
and discounts and end-of-term payments
2,245
3,488
11,773
13,903
Payment-in-kind coupon
3,702
1,727
11,648
6,320
New warrant investments
1,120
1,109
2,622
5,942
New equity investments
392
725
1,712
7,471
Proceeds from dispositions of
investments
(1,634
)
(7,680
)
(4,807
)
(12,542
)
Net realized gains (losses) on
investments
(52,086
)
(28,830
)
(75,769
)
(43,483
)
Net change in unrealized gains (losses) on
investments
5,952
(3,326
)
(37,865
)
(37,625
)
Ending portfolio at fair value
$
802,145
$
949,276
$
802,145
$
949,276
________________
(a)
Debt balance is net of fees and
discounts applied to the loan at origination.
SIGNED TERM SHEETS
During the three months ended December 31, 2023, TPC entered
into $100.1 million of non-binding term sheets to venture growth
stage companies. These opportunities are subject to underwriting
conditions including, but not limited to, the completion of due
diligence, negotiation of definitive documentation and investment
committee approval, as well as compliance with the allocation
policy. Accordingly, there is no assurance that any or all of these
transactions will be completed or assigned to the Company.
UNFUNDED COMMITMENTS
As of December 31, 2023, the Company’s unfunded commitments
totaled $118.1 million, of which $29.2 million was dependent upon
portfolio companies reaching certain milestones. Of the $118.1
million of unfunded commitments, $86.7 million will expire during
2024 and $31.4 million will expire during 2025, if not drawn prior
to expiration. Since these commitments may expire without being
drawn, unfunded commitments do not necessarily represent future
cash requirements or future earning assets for the Company.
RESULTS OF OPERATIONS
Total investment and other income was $33.0 million for the
fourth quarter of 2023, representing a weighted average annualized
portfolio yield of 15.6% on debt investments, as compared to $34.9
million and 15.3% for the fourth quarter of 2022. The decrease in
total investment and other income was primarily due to a lower
weighted average principal amount outstanding on our income-bearing
debt investment portfolio. For the year ended December 31, 2023,
the Company’s total investment and other income was $137.5 million,
as compared to $119.4 million for the year ended December 31, 2022,
representing a weighted average annualized portfolio yield on debt
investments of 15.4% and 14.7%, respectively.
Operating expenses for the fourth quarter of 2023 were $15.7
million as compared to $14.5 million for the fourth quarter of
2022. Operating expenses for the fourth quarter of 2023 consisted
of $8.3 million of interest expense and amortization of fees, $4.5
million of base management fees, $0.6 million of administration
agreement expenses and $2.3 million of general and administrative
expenses. Due to the total return requirement under the income
component of our incentive fee structure, our income incentive fees
were reduced by $3.5 million during the three months ended December
31, 2023. Operating expenses for the fourth quarter of 2022
consisted of $8.4 million of interest expense and amortization of
fees, $4.2 million of base management fees, $0.6 million of
administration agreement expenses and $1.3 million of general and
administrative expenses. The Company’s total operating expenses
were $63.7 million and $55.9 million for the years ended December
31, 2023 and 2022, respectively.
For the fourth quarter of 2023, the Company recorded net
investment income of $17.3 million, or $0.47 per share, as compared
to $20.5 million, or $0.58 per share, for the fourth quarter of
2022. The decrease in net investment income between periods was
driven primarily by lower total investment and other income and an
increase in general and administrative expenses. Net investment
income for the year ended December 31, 2023 was $73.8 million, or
$2.07 per share, compared to $63.6 million, or $1.94 per share, for
the year ended December 31, 2022.
During the fourth quarter of 2023, the Company recognized net
realized losses on investments of $52.0 million, resulting
primarily from the write-off of investments in four portfolio
companies, of which $32.5 million was previously included in the
Company’s unrealized losses. During the fourth quarter of 2022, the
Company recognized net realized losses on investments of $29.0
million.
Net change in unrealized gains on investments for the fourth
quarter of 2023 was $6.0 million, consisting of $34.1 million from
the reversal of previously recorded unrealized losses from
investments realized during the period, reduced by $12.6 million of
net unrealized losses on the existing debt investment portfolio and
$15.5 million of net unrealized losses on the existing warrant and
equity portfolio resulting from fair value adjustments. Net change
in unrealized losses on investments for the fourth quarter of 2022
was $3.3 million.
The Company’s net decrease in net assets resulting from
operations for the fourth quarter of 2023 was $28.8 million, or
$0.79 per share, as compared to a net decrease in net assets
resulting from operations of $11.8 million, or $0.33 per share, for
the fourth quarter of 2022. For the year ended December 31, 2023,
the Company’s net decrease in net assets resulting from operations
was $39.8 million, or $1.12 per share, as compared to a net
decrease in net assets resulting from operations of $20.1 million,
or $0.61 per share, for the year ended December 31, 2022.
CREDIT QUALITY
The Company maintains a credit watch list with portfolio
companies placed into one of five credit categories, with Clear, or
1, being the highest rating and Red, or 5, being the lowest.
Generally, all new loans receive an initial grade of White, or 2,
unless the portfolio company’s credit quality meets the
characteristics of another credit category.
As of December 31, 2023, the weighted average investment ranking
of the Company’s debt investment portfolio was 2.14, as compared to
2.10 at the end of the prior quarter. During the quarter ended
December 31, 2023, portfolio company credit category changes,
excluding fundings and repayments, consisted of the following: one
portfolio company with a principal balance of $10.0 million was
upgraded from White (2) to Clear (1), three portfolio companies
with an aggregate principal balance of $55.5 million were
downgraded from White (2) to Yellow (3), one portfolio company with
a principal balance of $25.0 million was downgraded from White (2)
to Orange (4), and one portfolio company with a principal balance
of $6.0 million was downgraded from Yellow (3) to Orange (4).
The following table shows the credit categories for the
Company’s debt investments at fair value as of December 31, 2023
and 2022:
December 31, 2023
December 31, 2022
Credit Category
(dollars in thousands)
Fair Value
Percentage of Total Debt
Investments
Number of Portfolio
Companies
Fair Value
Percentage of Total Debt
Investments
Number of Portfolio
Companies
Clear (1)
$
100,309
13.8
%
7
$
55,921
6.6
%
3
White (2)
471,195
64.5
28
699,008
81.9
48
Yellow (3)
117,792
16.1
8
88,912
10.4
5
Orange (4)
40,091
5.5
5
9,110
1.1
1
Red (5)
908
0.1
1
—
—
—
$
730,295
100.0
%
49
$
852,951
100.0
%
57
NET ASSET VALUE
As of December 31, 2023, the Company’s net assets were $346.3
million, or $9.21 per share, as compared to $419.9 million, or
$11.88 per share, as of December 31, 2022.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2023, the Company had total liquidity of
$306.6 million, consisting of cash, cash equivalents and restricted
cash of $171.6 million and available capacity under its Revolving
Credit Facility of $135.0 million (which excludes an additional
$50.0 million available under the Revolving Credit Facility’s
accordion feature), subject to existing advance rates, terms and
covenants. As of December 31, 2023, the Company held $1.8 million
of stock and warrant positions in publicly traded companies. The
Company ended the quarter with a 1.76x gross leverage ratio and an
asset coverage ratio of 157%.
The Company maintains an ATM Program with UBS Securities LLC,
providing for the issuance from time to time of up to an aggregate
of $50.0 million in shares of its common stock. As of December 31,
2023, $28.3 million in shares remained available for sale.
DISTRIBUTION
On February 27, 2024, the Company’s board of directors declared
a regular quarterly distribution of $0.40 per share for the first
quarter, payable on March 29, 2024 to stockholders of record as of
March 14, 2024. As of December 31, 2023, the Company had estimated
spillover income of $41.5 million, or $1.10 per share.
RECENT DEVELOPMENTS
Since December 31, 2023 and through March 5, 2024:
- TPC’s direct originations platform entered into $93.6 million
of additional non-binding signed term sheets with venture growth
stage companies;
- The Company closed $10.0 million of additional debt
commitments; and
- The Company funded $12.4 million in new investments.
CONFERENCE CALL
The Company will host a conference call at 5:00 p.m. Eastern
Time, today, March 6, 2024, to discuss its financial results for
the quarter and fiscal year ended December 31, 2023. To listen to
the call, investors and analysts should dial (844) 826-3038
(domestic) or +1 (412) 317-5184 (international) and ask to join the
TriplePoint Venture Growth BDC Corp. call. Please dial in at least
five minutes before the scheduled start time. A replay of the call
will be available through April 6, 2024, by dialing (877) 344-7529
(domestic) or +1 (412) 317-0088 (international) and entering
conference ID 2028677. The conference call also will be available
via a live audio webcast in the investor relations section of the
Company’s website, https://www.tpvg.com. An online archive of the
webcast will be available on the Company’s website for one year
after the call.
ABOUT TRIPLEPOINT VENTURE GROWTH BDC CORP.
TriplePoint Venture Growth BDC Corp. is an externally-managed
business development company focused on providing customized debt
financing with warrants and direct equity investments to venture
growth stage companies in technology and other high growth
industries backed by a select group of venture capital firms. The
Company’s sponsor, TriplePoint Capital, is a Sand Hill Road-based
global investment platform which provides customized debt
financing, leasing, direct equity investments and other
complementary solutions to venture capital-backed companies in
technology and other high growth industries at every stage of their
development with unparalleled levels of creativity, flexibility and
service. For more information about TriplePoint Venture Growth BDC
Corp., visit https://www.tpvg.com. For more information about
TriplePoint Capital, visit https://www.triplepointcapital.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release constitute
forward-looking statements. Forward-looking statements are not
guarantees of future performance, investment activity, financial
condition or results of operations and involve a number of
substantial risks and uncertainties, many of which are difficult to
predict and are generally beyond the Company’s control. Words such
as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,”
“continue,” “believes,” “seeks,” “estimates,” “would,” “could,”
“should,” “targets,” “projects,” and variations of these words and
similar expressions are intended to identify forward-looking
statements. Actual events, investment activity, performance,
condition or results may differ materially from those in the
forward-looking statements as a result of a number of factors,
including as a result of changes in economic, market or other
conditions, and the impact of such changes on the Company’s and its
portfolio companies’ results of operations and financial condition,
and those factors described from time to time in the Company’s
filings with the Securities and Exchange Commission. More
information on these risks and other potential factors that could
affect actual events and the Company’s performance and financial
results, including important factors that could cause actual
results to differ materially from plans, estimates or expectations
included herein or discussed on the webcast/conference call, is or
will be included in the Company’s filings with the Securities and
Exchange Commission, including in the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of the Company’s Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which reflect management’s opinions only as of the date hereof. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by law.
TriplePoint Venture Growth BDC
Corp.
Consolidated Statements of
Assets and Liabilities
(in thousands, except per share
data)
December 31, 2023
December 31, 2022
Assets
Investments at fair value (amortized cost
of $850,142 and $959,407, respectively)
$
802,145
$
949,276
Cash and cash equivalents
153,328
51,489
Restricted cash
18,254
7,771
Deferred credit facility costs
2,714
4,128
Prepaid expenses and other assets
2,384
1,869
Total assets
$
978,825
$
1,014,533
Liabilities
Revolving Credit Facility
$
215,000
$
175,000
2025 Notes, net
69,738
69,543
2026 Notes, net
199,041
198,598
2027 Notes, net
124,117
123,839
Base management fee payable
4,490
4,203
Other accrued expenses and liabilities
20,133
23,410
Total liabilities
$
632,519
$
594,593
Net assets
Preferred stock, par value $0.01 per share
(50,000 shares authorized; no shares issued and outstanding,
respectively)
$
—
$
—
Common stock, par value $0.01 per
share
376
353
Paid-in capital in excess of par value
492,934
470,572
Total distributable earnings (loss)
(147,004
)
(50,985
)
Total net assets
$
346,306
$
419,940
Total liabilities and net
assets
$
978,825
$
1,014,533
Shares of common stock outstanding (par
value $0.01 per share and 450,000 authorized)
37,620
35,348
Net asset value per share
$
9.21
$
11.88
TriplePoint Venture Growth BDC
Corp.
Consolidated Statements of
Operations
(in thousands, except per share
data)
For the Three Months
Ended
December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
(unaudited)
(unaudited)
Investment income
Interest income from investments
$
32,424
$
34,430
$
133,249
$
116,573
Other income
548
519
4,241
2,851
Total investment and other
income
$
32,972
$
34,949
$
137,490
$
119,424
Operating expenses
Base management fee
$
4,490
$
4,203
17,893
$
15,753
Income incentive fee
—
—
—
6,651
Interest expense and amortization of
fees
8,309
8,383
36,795
26,761
Administration agreement expenses
574
585
2,293
2,258
General and administrative expenses
2,313
1,283
6,703
4,446
Total operating expenses
$
15,686
$
14,454
$
63,684
$
55,869
Net investment income
$
17,286
$
20,495
$
73,806
$
63,555
Net realized and unrealized
gains/(losses)
Net realized gains (losses) on
investments
$
(52,032
)
$
(28,963
)
$
(75,762
)
$
(46,000
)
Net change in unrealized gains (losses) on
investments
5,953
(3,326
)
(37,865
)
(37,625
)
Net realized and unrealized
gains/(losses)
$
(46,079
)
$
(32,289
)
$
(113,627
)
$
(83,625
)
Net increase (decrease) in net assets
resulting from operations
$
(28,793
)
$
(11,794
)
$
(39,821
)
$
(20,070
)
Per share information (basic and
diluted)
Net investment income per share
$
0.47
$
0.58
$
2.07
$
1.94
Net increase (decrease) in net assets per
share
$
(0.79
)
$
(0.33
)
$
(1.12
)
$
(0.61
)
Weighted average shares of common stock
outstanding
36,457
35,283
35,706
32,690
Regular distributions declared per
share
$
0.40
$
0.37
$
1.60
$
1.45
Special distributions declared per
share
—
0.10
—
0.10
Total distributions declared per share
$
0.40
$
0.47
$
1.60
$
1.55
Weighted Average Portfolio
Yield
on Debt Investments
Ratios
(Percentages, on an annualized
basis)(1)
For the Three Months
Ended
December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Weighted average portfolio yield on debt
investments(2)
15.6
%
15.3
%
15.4
%
14.7
%
Coupon income
12.0
%
11.5
%
12.1
%
10.8
%
Accretion of discount
0.8
%
0.9
%
0.9
%
0.8
%
Accretion of end-of-term payments
1.6
%
1.8
%
1.7
%
1.8
%
Impact of prepayments during the
period
1.2
%
1.1
%
0.7
%
1.3
%
___________
(1)
Weighted average portfolio yields on debt investments for periods
shown are the annualized rates of interest income recognized during
the period divided by the average amortized cost of debt
investments in the portfolio during the period. The calculation of
weighted average portfolio yields on debt investments excludes any
non-income producing debt investments, but includes debt
investments on non-accrual status. The weighted average yields
reported for these periods are annualized and reflect the weighted
average yields to maturities.
(2)
The weighted average portfolio yields on debt investments reflected
above do not represent actual investment returns to the Company’s
stockholders.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240306241071/en/
INVESTOR RELATIONS AND MEDIA The IGB Group Leon Berman
212-477-8438 lberman@igbir.com
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