TriplePoint Venture Growth BDC Q2 Earnings Call Highlights

TriplePoint Venture Growth BDC (NYSE: TPVG) reported second-quarter results that reflected increased investment activity, continued portfolio repositioning and two monetization events intended to improve liquidity and reduce exposure to payment-in-kind income. Chief Executive Officer and Chairman Jim Labe said the company is working to strengthen its portfolio and financial position by diversifying investments, expanding income-generating assets and rotating away from legacy investments made between 2020 and 2022. During the quarter, the company funded more than $47 million in debt investments, up more than 80% from the prior quarter and at the high end of its guidance range.

TriplePoint Capital signed approximately $307 million of term sheets with venture growth-stage companies during the second quarter, compared with $256 million in the first quarter, according to President and Chief Investment Officer Sajal Srivastava. The broader platform’s pipeline exceeded $3 billion of deals under evaluation. The adviser allocated $29.8 million of new commitments across five companies to TPVG during the quarter, compared with $1 million across two companies in the first quarter. The company funded $47.8 million in debt investments to 10 companies, carrying a weighted average annualized portfolio yield of 12.8%. Srivastava said the company expects quarterly new fundings to remain in the range of $25 million to $50 million through 2026, despite what he described as robust demand for financing from venture growth-stage companies. TPVG received $28.6 million in loan prepayments during the quarter. Subsequent to quarter-end, it sold its debt and equity investments in Prodigy Investments Limited for $43.8 million, a transaction completed at the investment’s June 30 fair value. Prodigy had been the company’s largest outstanding loan position at quarter-end. Management said the Prodigy sale was part of its effort to rotate the portfolio into newer investment vintages, enhance diversification and lower PIK income. In response to an analyst question, Srivastava said the company conducted a sale process in coordination with Prodigy and identified a European lender familiar with the company as the buyer. TPVG also sold a portion of its Revolut equity during the quarter through the company’s share buyback program. The sale generated a $12.8 million realized gain. Management said its remaining Revolut warrant and equity investments had a fair value of $48 million at June 30.

Total investment and other income was $22.1 million in the second quarter. Net investment income was $8.3 million, or $0.21 per share, compared with $9.1 million, or $0.23 per share, in the first quarter. Chief Financial Officer Mike Wilhelms attributed the sequential decline primarily to lower accelerated income from repa...