TriplePoint Venture Growth BDC Q2 2024 Earnings Call Transcript

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Provided by Quartr
August 7, 2024

There are 6 speakers on the call.

Operator

Questions and instructions will follow at that time. This conference is being recorded and a replay of the call will be available in an audio webcast on the TripA Point Venture Growth website. Company management is pleased to share with you the company's results for the Q2 of 2024. Today, representing the company is Jim Labe, Chief Executive Officer and Chairman of the Board Sushil Srivastava, President and Chief Investment Officer and Chris Matthew, Chief Financial Officer.

Operator

Before I turn the call over to Mr. Labe, I'd like to direct your attention to the customary Safe Harbor disclosure in the company's press release regarding forward looking statements and remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial condition, which are considered forward looking statements under federal securities law. You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. The company does not undertake any obligation to update any forward looking statements or projections unless required by law. Investors are cautioned not to place undue reliance on any forward looking statements made during the call, which reflect management's opinions only as of today.

Operator

To obtain copies of our latest SEC filings, please visit the company's website at www.tpvg.com.

Speaker 1

Now, I'd like to

Operator

turn the conference over to Mr. Labe.

Speaker 2

Thank you, and good afternoon, everyone, and welcome to TPVG's 2nd quarter earnings call. During the Q2, our focus continued to remain on navigating through what the NVCA labels as a generational market shift in the venture capital markets. Given the continued volatility and challenges in the venture capital market, as well as the public markets for technology companies, we stayed on our path of selectively increasing our investment activity to capture growing investment opportunities coming to market, proactively managing our existing investment portfolio, maintaining strong liquidity and taking the steps that we believe will enable us to position TPVG for the future. While we're seeing a modest increase in investment activity, we do not believe this marks an inflection point. The imbalance continues between the levels of venture capital investment activity and the continuing limited exit opportunities through IPOs, our merger acquisitions for venture capital backed private technology companies.

Speaker 2

Private company valuations have not fully reset and we expect the valuation overhang at venture growth stage companies to continue to be worked through over the coming quarters. VCs continue to be patient with their investment activity, balancing the need to preserve their dry powder and also growing mindful of the need to generate distributions for the limited partner investors through exit activity. While all at the same time taking advantage of new investment opportunities they are seeing at investor friendly terms in today's market. Turning to the market for debt financing, the demand for venture lending continues, many from companies who have raised capital in the current market environment or a meaningful existing cash runway and are looking to complement that capital with debt financing given their continued operational success. Combining this continued increase in demand and our previously stated expectation of an increased investment activity in 2024, signed term sheets for venture growth stage companies at TriplePoint Capital increased 44% over the previous quarter and new debt commitments by 4 20% and fundings by 186% at TPVG.

Speaker 2

In terms of the current portfolio, our team continues to monitor and maintain close contact with all of our portfolio companies and their venture investors, and we remain heads down managing through existing credit situations. At the same time, we're encouraged by the strengthening operating performance and improved fundraising activity from a number of our portfolio companies, which are also across several industry sectors. In aggregate, almost 1,000,000,000 dollars was raised by our debt portfolio companies in the first half of this year. That's more than double that of the previous year. And it excludes Metropolis, which in itself raised $1,000,000,000 in Q2 as part of its acquisition of SP Klutz.

Speaker 2

This increased fundraising activity we are seeing continues across multiple sectors, including software, FinTech, robotics, cybersecurity and others that we have been talking about and citing in these calls. Touching on our warrant and equity positions in our portfolio, we have outstanding warrant positions in 94 portfolio companies and equity positions in 46. We believe these positions bode well for our ability to improve NAV over the long term. I'm also pleased to report that we've made notable progress over the past year and a half in reducing our unfunded commitments, boosting our total liquidity and reducing our leverage ratio to fall within our target range. Unfunded commitments went from a high of $205,000,000 1 year ago to $71,000,000 as of the 2nd quarter.

Speaker 2

And more importantly, we reduced our gross leverage ratio from as high as 1.76 at the end of last year to 1.15 as of quarter's end. We also announced earlier today the renewal of our revolving credit facility, which provides us a meaningful source of capital and financial flexibility for us in our go forward plans. These efforts have provided us with substantial liquidity and will play key roles in positioning TPVG here in the short term and over the long term. The Board took another step on this path forward by reducing our regular distribution this quarter to $0.30 per share. This was not an easy decision and reflects a number of considerations, including our higher than expected repayment and prepayment activity during the Q1.

Speaker 2

And once again, our higher than expected repayment and prepayments last quarter, but also given the impact of reduced fundings, measured investment allocations, the lower level of funding activity relative to prior years, again reducing our leverage to our target leverage range and factoring in what we think will be expected federal interest rate cuts. The dividend is now much better aligned with the earnings power of our portfolio, our core portfolio yield and other targeted leverage, while still providing sizable distributions to shareholders. Complementing these efforts is our continued progress on diversifying the portfolio, including the industry sector and geographic rotation we have been talking about during the last few quarters. Our focus remains to be investing in companies operating in what we believe are attractive investment sectors and ones that have recently raised capital, have ample cash runways, have backing from our select venture investors, have prudent management teams and whose business models have attractive unit economics and high retention rates. We'll also continue to evaluate hold sizes, debt to equity ratios, deal structures and other key metrics.

Speaker 2

We're encouraged by the progress to date and the recent investments we've made, which continue to reflect these goals and parameters. Further, we're evaluating the potential for broadened investment strategies for TPVG, particularly given our sponsor TriplePoint Capital, a multi $1,000,000,000 platform wide venture lending business and potential increased ways in which TPVG could benefit. TriplePoint Capital manages multiple vehicles and has been underwriting venture loans for almost 20 years. To date having committed more than $13,000,000,000 to more than 1,000 venture backed companies during that period. As a leader in the venture lending market with an exceptional brand name and reputation, TriplePoint Capital continues to grow and capitalize on investment opportunities in today's market, including actively expanding its bench and ongoing increases in originations and investment staffing nationwide.

Speaker 2

We believe the sum of all these efforts positions TPVG well for when the venture capital markets recover and believe it could result in tangible benefits to our stakeholders as well as over the long term. Finally, I'd like to take a minute to thank Chris Matthew for his efforts over the past 5 years, not only at TPVG, but also at our TriplePoint Capital platform. We wish him the best in his upcoming retirement and appreciate not only his dedication, but the friendship over the many years. As we continue with our search for CFO, we would like to welcome Matt Gagliani, whom we announced earlier this week to serve as our Interim CFO. Matt takes over the reins this Friday and joined the company back in 2019, and he served as the company's Controller since December 2022.

Speaker 2

With that, I'll now turn the call over to Sajal to cover our activity and outlook in more detail.

Speaker 3

Thank you, Jim, and good afternoon. Investment pipeline activity increased for the 4th consecutive quarter as TriplePoint Capital signed $188,000,000 of term sheet with venture growth stage companies compared to $130,000,000 in Q1, reflecting continued increases in originations by our investment team, referrals from our select venture capital funds and demand from high quality companies seeking debt financing. Although our investment pipeline activity is increasing, TriplePoint Capital and TPVG continue to be very measured in our approach to new originations in light of market conditions. With regards to new investment allocation to TPVG during the Q2, in light of our progress of reducing leverage and mindful of our objectives for portfolio diversification, TriplePoint Capital allocated $52,000,000 in new commitments to 5 companies to TPVG, including 2 new portfolio companies, our highest commitment amount over the past 6 quarters. Commitments to new portfolio companies during Q2 included Affinity, a software based relationship intelligence platform built to expand and involve traditional CRM backed by Menlo Ventures, Care Ventures and other investors and Cresta Intelligence, a software company which leverages artificial intelligence to help sales and service agents improve the quality of their customer service, backed by Sequoia Capital, Greylock Partners, Andresen Horowitz and other investors.

Speaker 3

During the quarter, we also made follow on commitments to 2 recent portfolio companies as well as refinanced an existing portfolio company in conjunction with an upside. Thus far in Q3, TPVG has closed a total of $11,000,000 of new commitments to 1 new portfolio company in the software industry and 1 existing portfolio company. During the quarter, TPVG funded $38,700,000 in debt investments to 5 portfolio companies, which is up from 13 point $5,000,000 in debt investments to 3 portfolio companies in Q1 and is our highest funding amount over the past 5 quarters. We have funded $52,200,000 year to date and $89,300,000 over the past 12 months, which supports our efforts to increase newer portfolio of vintages. The investments funded this quarter carried a weighted average annualized portfolio yield of 15.5% at origination, up from 14.3% in Q1.

Speaker 3

Our quarterly gross funding target continues to be in the $25,000,000 to $50,000,000 range. As a reminder, new fundings typically occur at the end of the quarter and don't materially contribute to income in the quarter in which they fund. During Q2, we had $51,000,000 of loan prepayments due primarily to large equity capital raises and acquisitions, up from $31,000,000 of loan prepayments in Q1, representing $82,000,000 of prepayments to date and $153,000,000 over the past 12 months. Prepayment related income this quarter contributed to an overall weighted average portfolio yield of 15.8%, in line with last quarter's portfolio yield. Excluding prepayments, core portfolio was 39%, down from 14.7% in Q1.

Speaker 3

During Q2, we had $28,000,000 of scheduled principal repayments and $15,000,000 of proceeds from the disposition of loans for a total of $43,000,000 up from $7,000,000 of scheduled principal repayments and $1,000,000 of proceeds from the disposition of loans for a total of $8,000,000 in Q1. Year to date, we've had $51,000,000 in total scheduled principal repayments and proceeds from the dispositions of loans and $110,000,000 over the past 12 months. So in summary, over the past 12 months, we've had over $260,000,000 of cash received from prepays, principal repayments and disposition of loans and in light of market conditions over that same time period have had investment fundings of only 89,000,000 contributing to net portfolio contraction of approximately $170,000,000 As we look to the rest of this year, given how the portfolio has contracted, we expect the pace of prepay and amortization to slow down over the remainder of 2024, but do expect the pace of principal repayments to increase in 2025 given contractual amortization requirements. With regards to fundraising activity, 9 portfolio companies with debt outstanding as of quarter's end raised $442,000,000 during the quarter, compared with 8 portfolio companies with debt outstanding raising $584,000,000 during Q1, 5 portfolio companies raising and $57,000,000 in Q4 and 3 portfolio companies raising $47,000,000 in Q3.

Speaker 3

Year to date, 16 portfolio companies with debt outstanding have raised over $1,000,000,000 of capital compared to 14 portfolio companies raising $390,000,000 over the same period last year. As Jim mentioned, we continue to see capital raising activity within our portfolio picking up and continue to have several portfolio companies either in active fundraising discussions or expecting to launch a fundraising process shortly. Last week, Flow Health, a consumer focused portfolio company with $25,000,000 outstanding, announced raising over $200,000,000 at a $1,000,000,000 valuation from General Atlantic. We believe this fundraising activity should strengthen the credit quality for these companies and bodes well for the value of our warrant and equity investments. As of June 30, we held warrants in 94 companies and equity investments in 46 companies with a total fair value of $98,000,000 up from $78,000,000 last quarter.

Speaker 3

Our warrant and equity portfolio experienced a $12,800,000 net unrealized gain in fair value or $0.33 per share for the quarter, primarily driven by an increase in the fair value of Revolut based on its exceptional financial performance as disclosed in its recently filed financial statements and the news that it obtained a U. K. Banking license, both of which have positive implications for its continued growth and profitability. We believe there is the potential for a positive impact to net asset value from not only Revolut, but other companies currently in our worn and neck REIT portfolio, particularly as market conditions improve over the long term. During the quarter, we sold our publicly held shares in Hims and Hers, resulting in a realized gain of $1,800,000 on our warrant and equity investments, representing an over 3 times multiple on our invested capital.

Speaker 3

In other portfolio activity during the quarter, Mine Management was acquired by Roofstock and our loans were paid off in full and our warrants were assumed. Existing credit watch list companies, Outdoor Voices and TFG completed their acquisitions as well. These two companies had previously been marked down by $13,000,000 and we recognized an additional $800,000 loss from these events. During the quarter, one portfolio company with a principal balance of $25,000,000 was upgraded from category 2 to category 1. One portfolio company with a principal balance of $4,700,000 was downgraded from category 1 to category 2.

Speaker 3

And one portfolio company with a principal balance of $13,000,000 was downgraded from category 2 to 3, primarily due to cash runway for financing events underway. In addition, Good Eggs, which has debt with a fair value of approximately $300,000 was downgraded from category 2 to category 4 during Q2 and announced yesterday its sale to Grub Market. Our recovery is expected to be consistent with our mark as of Q2 and the company will be removed from our watch list in Q3. Mined Candy with a fair value of $16,000,000 was downgraded from category 3 to category 4, reflecting year to date performance and other near term challenges for the company, including additional maturity date extensions of our loans. Despite being one of TPVG's oldest investments, Mindcandy continues to receive support from its equity investors as it builds and grows its Moshe Kids app.

Speaker 3

While our total percentage of watch list investments was relatively flat this quarter, a number of these companies are in the process of completing equity financing or strategic events that are underway as well as improving operational performance, which if completed or achieved could result in improved credit outlooks. As we look to developments not only over the past 6 months, but also looking forward over the next 1 to 2 quarters, our e commerce and retail focused companies continue to face challenges. They generally have made the hard decisions to pull back on growth, cut burn and focus on achieving profitability as soon as possible as they come to market for follow on financing or strategic processes, including M and A to enable them to continue the journey, reception continues to be chilly as investors and inquirers generally remain on the sidelines. And these companies, their investors and in many cases we as lender, must all decide if they continue to wait out the market or transact at whatever price the market will clear despite the progress they've made. Our teams continue to track these companies as well as other watch list situations.

Speaker 3

As we take a step back and assess not only market conditions and our recent performance, but also our outlook for the market, our playbook continues to be focused on building a strong foundation for TPVG. We've reduced our net leverage and have access to substantial liquidity that we intend to deploy in a measured fashion to companies in attractive sectors to further diversify the portfolio. Our team is continuing to focus on bringing credit situations to a close or positioning companies for the longer term when market conditions

Speaker 1

are better.

Speaker 3

We believe that our market conditions improve, our warrant and equity portfolio will have a positive impact to our net asset value. We are also valuing opportunities to broaden aligning expectations, including the decision to reduce our distribution to be more consistent with our current portfolio size and earnings power without creating pressure to deploy assets and with the potential to generate excess earnings to stabilize and grow NAV. In summary, we have a plan and I'm optimistic for our future. And with that, I will now turn the call over to Chris.

Speaker 1

Thank you, Sajal, and hello everyone. For the 2nd quarter, total investment income was $27,100,000 and a portfolio yield of 15.8% as compared to $35,000,000 or a portfolio yield of 14.7% for the prior year period. The decrease in total investment income was primarily due to a lower weighted average principal amount outstanding on our income bearing debt investment portfolio. For the Q2, total operating expenses were $14,500,000 as compared to $16,300,000 for the prior year period. These expenses consisted of $8,700,000 of interest expense, which included $1,800,000 or $0.05 per share of a one time fee related to the minimum utilization clause on our credit facility.

Speaker 1

Dollars 3,800,000 of base management fees and $2,000,000 of general and administrative expenses. There were no incentive fees this quarter. For the 2nd quarter, 2nd quarter, net investment income totaled $12,600,000 or $0.33 per share compared to $18,800,000 or $0.53 per share for the prior year period. During the Q2, the company recognized net realized losses on investments of $18,800,000 consisting primarily of 20 point $2,000,000 of net realized losses on the investment portfolio from the write off and restructuring of investments and partially offset by $1,300,000 of net warrant and equity gains from the sale and disposition of investments. Net change in unrealized gains on the investment portfolio for the 2nd quarter was $14,900,000 consisting of 12,800,000 of net unrealized gains on the warrant and equity portfolio and $10,900,000 of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period, offset by $8,800,000 dollars of net unrealized losses on the existing debt investment portfolio.

Speaker 1

As of quarter end, net asset value or NAV was $353,000,000 or $8.83 per share compared to $346,300,000 or 9 point $2.1 per share as of year end. The company declared a regular quarterly distribution of $0.30 per share with a record date of September 16 to be paid on September 30. As of June 30, the company had estimated undistributed income or spillover income of $39,300,000 or $0.98 per share. Now just an update on unfunded investment commitments, overall liquidity and balance sheet leverage. We successfully reduced our unfunded commitments from $118,000,000 at year end to $71,000,000 as of June 30.

Speaker 1

Of the $71,000,000 of unfunded commitments, dollars 5,000,000 will expire this year in 2024 $66,000,000 will expire during 2025. We are pleased to share that subsequent to the end of the quarter, the company fully renewed its revolving credit facility. The company elected to reduce total commitments under the facility to $300,000,000 to align better with the company's anticipated utilization while maintaining an accordion feature that allows the company to increase the size of the credit facility in the future up to $300,000,000 under certain circumstances. After giving effect to the renewal, the company had total liquidity of $340,000,000 consisting of cash of $50,000,000 and available capacity under the new revolver renewal of $290,000,000 We continue to maintain a diversified capital structure. As of quarter end, a total of 4 $5,000,000 of debt was outstanding consisting of $395,000,000 of fixed rate investment grade term notes and $10,000,000 and $10,000,000 outstanding on our credit facility, which currently has a $300,000,000 aggregate commitment.

Speaker 1

Given the $97,000,000 in liquidity events from the portfolio this quarter and $18,000,000 in proceeds from the ATM program, we paid down our credit facility and continued to improve our leverage levels during the quarter as we ended the quarter with a leverage ratio of 1.15 times. Given that we have successfully renewed the revolving credit facility, we are comfortable with our current leverage sources and may look at additional sources should they be presented to us. Recall we have 3 different maturities of term notes. The first maturity is set to occur early next year. Given the very favorable rates on the existing term notes, we do not currently expect to prepay or refinance these amounts until near their maturity dates.

Speaker 1

So this completes our prepared remarks today. And so operator, could you please open the line for questions at this time?

Operator

At this time, we will take our first question, which will come from Crispin Love with Piper Sandler. Please go ahead.

Speaker 1

Thanks and good afternoon everyone. Just starting off, you reset the dividend to $0.30 Net investment income here decreased to about $0.33 I'm curious if you can discuss your outlook for net investment income over the near term, especially with rate cuts coming and your portfolio sitting at around $715,000,000 range at quarter end and when you think you can get back to an area where you're growing the portfolio again? Yes. So, Kristen, I'll take that. So, yes, we have reset the dividend based on our current expectation of the strength of the existing portfolio and maintaining our target leverage ratio, which is where we are sitting now.

Speaker 1

We've also considered the impact of some near term Fed rate changes that are expected to come in the near future as well as looking at the first half of twenty twenty five. Some of the other things we're also thinking about are some of the variables we had this quarter. Management fee tends to be quite flat. So we've assumed a pretty flat management fee. No incentive is expected to be incurred for the rest of this year and for at least the early part of 2025.

Speaker 1

Admin fees and G and A are pretty well baked and consistent quarter to quarter. So all that assumes, we assume a kind of a consistent portfolio size with the leverage we have to the extent such a referred to NAV appreciation. NAV appreciation would result in additional ability to grow the portfolio. So I think that covers the question, I think. Great.

Speaker 1

Thanks, Chris. That's all helpful. And then just in the last week or so, we've seen plenty of volatility in broader markets, credit spreads have widened. There have been kind of more fears of a potential recession. So can you discuss a little bit how you feel about your current credits that are performing, as well as kind of new credits you're looking at?

Speaker 1

It seems like you're taking a cautious approach here. But just curious if anything has changed in your outlook recently or is it pretty stable or just kind of has anything gotten worse? Just curious in the current environment and the volatility that we've seen more recently.

Speaker 3

Yes, Krishnan, I'll take it. Our credit risk scores obviously reflect our current view on our existing obligors and based on market conditions. And so I think our perspective is, as we look to the most major impact to our sector and our industry is venture capital fundraising, venture capital investment activity and I think Jim talked about it, essentially flat Q2, Q1, but still up from last year. So I think we would like to see that activity increase. I don't think the current this week's volatility necessarily impacts the private market investment activity as long as the volatility is short.

Speaker 3

I still think there is that more fundamental mismatch that Jim talked about regarding public valuation multiples and private valuation multiples and we still need that to clear that imbalance. And so I think it will take a few more quarters for that to occur, investment activity to improve and exit activity to improve as well, which are all beneficial for not only new investment opportunities, but our existing portfolio.

Speaker 1

Great. Thank you, Sajal, and appreciate you both taking my questions.

Operator

And our next question will come from Finian O'Shea with Wells Fargo. Please go ahead.

Speaker 4

Hey, everyone. Good afternoon. A follow-up on earnings. Chris, can you give us after the deleveraging, which has been going on for a few quarters, what would like the exit rate be of NOI? You also said the portfolio and leverage would be stable from here.

Speaker 4

So where would earnings say be at next quarter all equal?

Speaker 1

Yes. So without giving you specific numbers, certainly what we did was consider the existing portfolio size and steady state. So we have hit our leverage target. I know we worked towards that over the last 6 to 9 months. And so we're at our target leverage now.

Speaker 1

So it's really more about turning the portfolio and building it from there. So I think you can build your models resetting that portfolio size to where we are today. And then some of the comments I made about some of the P and L expense and items there should help you drive your models.

Speaker 4

Okay. So on the level of the dividend, it sounds like earnings power is revisited given the greater than anticipated repays getting you to sort of your destination. You also talked about the base rate curve, but your payout yield I think is nearly 14% and a base rate curve normalizing would probably have you a bit below that's still much higher than you earned historically. So is there a sort of is there another bridge or lever from here assuming as well normal incentive fees and interest costs?

Speaker 2

Yes. What I'll grab that one, but I'd say, as a BDC, we think it's pretty important to our shareholders and myself, Chris and Sajal are in that mix and not very in a significant way. But yes, you got to look at the $97,000,000 of liquidity events that we had last quarter. We have been getting back in our targeted leverage range. And then the lower core portfolio yield, I mean, it's all lower earnings power.

Speaker 2

So I guess you could factor in the Fed rate cuts that we may expect that Chris was talking about. And it just boils it down to it's not an easy decision here, Fin, but it's the right decision and it realigns the dividend with the size and the yield of this portfolio, but still providing some sizable distributions to the shareholders.

Speaker 4

Okay, fair enough. Thank you. I'll hop back in the queue.

Operator

And our next question will come from Doug Harter with UBS. Please go

Speaker 5

ahead. Thanks. Can you talk about your outlook for portfolio yield, both kind of the base yield, but also kind of as you think about repayments as well in there?

Speaker 3

Yes, Doug. Sajal, I'll take it. So I believe as we reported today core portfolio without the benefit of prepayment activity, 13.9%. And so I think as Chris

Speaker 4

sorry, we're getting a

Speaker 3

little background noise. 60% of our book is floating rate, 40% is fixed rate. So as we and again, we set floors on base rate indices depending on when the assets are originated. So we have the lowest prime rate floor we have is 3.25%, but obviously going to as high as where the current prime rate is on our more recent loan book. So I would say our perspective is that generally this 13.9 is a good starting point and then factor in the fact that again as the Fed makes changes and reduces rates, you'll see on a one for one basis, but you'll see the impact of that.

Speaker 3

Yes, obviously, we're onboarding new investments at higher rates, but we have to factor in again balance of the portfolio. And last point is, there is a chart in our Q, obviously, that shows the impact of base rate changes. So I think you can get actually some more specific information.

Speaker 5

Great. Thank you, Sajal.

Operator

And our next question will come from Christopher Nolan with Ladenburg Thalmann. Please go ahead.

Speaker 5

Hey, guys. To pick up on Fin's discussion, and I don't mean to beat a horse here, but did you cut the dividend enough? Because if you look at it as a percentage of NAV, it's close to 14%.

Speaker 1

Yes. So we think we have. We think that based on the modeling we've done and the variance of the revenue that this portfolio generates, we think that we're in the right level. I think the one thing that I forgot to mention to Fin was one of the variables now that we're at target leverage is the prepayment rate and the vintage of those prepayments. I think we've talked in the past that earlier prepayments generate more income to us.

Speaker 1

So that will be one of the variables that you'll have to think about over the coming quarters. But otherwise, we think we have a good handle on the earnings power of the portfolio and some of the variables beyond just the kind of top line revenue.

Speaker 5

Okay. And Chris, on the shares are now trading below book, should we assume that the ATM will not be utilized when the share price is

Speaker 1

going to be booked? Yes, that's a fair question. So we do not have and have never sought the vote to have below share issuance. And so ATM is at the market assuming that we trade above including the any load that we would pay. So yes, that's correct.

Speaker 1

If it's below NAV, we're not issuing.

Speaker 5

Great. And my final question is, given that you guys are sort of in a portfolio reset mode to a certain degree, what areas what industries are you liking and which areas are you not liking in terms of looking at prospective investments?

Speaker 2

Yes, I'd say we pretty much are following what the investment categories and favorable sectors are of the select venture investors that we work with. So probably no surprise and here and there we've mentioned some of these, but AI for sure and that goes there's a lot of ways of defining that. But cybersecurity comes to mind. There's a bunch of health tech space and government technology. We love recurring software companies, enterprise software.

Speaker 2

Interesting enough, robotics and actually semiconductors is making its way back into the mix of the new investment sectors. I'd throw in a little bit vertical software, some environmental sustainability technologies and space and GovTech as folks now call it. I think we are deemphasizing the more consumer focused plays out there and there's less of them.

Speaker 5

Great. And finally, Chris, hope to wish you well in your retirement. I I always appreciate working with you and I appreciate your help and your patience. And okay, that's it for me guys. Thank you.

Speaker 1

Thanks. Thanks for the kind words.

Operator

And this will conclude our question and answer session. I'd like to turn the conference back over to Mr. Jim Labe for any closing remarks.

Speaker 2

As always, I'd like to thank everyone for listening and also participating in today's call. We look forward to updating and talking with you all again next quarter. Thanks again, and have a nice day.

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TriplePoint Venture Growth BDC Q2 2024
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