TriplePoint (TPVG) Q3 2026 Earnings Call Transcript

DATE

Wed, Nov. 4, 2026

CALL PARTICIPANTS

• Chief Executive Officer and Chairman of the Board - Jim Labe
• President and Chief Investment Officer - Sajal Srivastava
• Chief Financial Officer - Mike Wilhelms
• Incoming Chief Investment Officer - Ian Schworer

TAKEAWAYS

• Total Investment Income -- $20.2 million, decreasing from $22.1 million in the previous quarter due to the July 1 disposition of the Prodigy investment.
• Net Investment Income -- $0.16 per share, representing a sequential decline from $0.21 per share driven by lower investment income and reduced loan prepayment acceleration.
• Net Asset Value -- $8.32 per share, falling from $8.67 at the end of the previous quarter primarily due to $8.3 million in net realized and unrealized investment losses.
• Weighted Average Portfolio Yield -- 12.4%, compared to 12.9% in the prior quarter, reflecting a core yield of 12.0% when excluding the 0.4% impact from prepayments.
• Debt Fundings -- $700,000 in the third quarter, which management attributed to timing and discipline as several transactions shifted into the start of the fourth quarter.
• Quarter-to-Date Fundings -- $57.4 million as of Nov. 3, 2026, already exceeding the company's guided quarterly range of $25 million to $50 million.
• Asset Disposition -- $43.8 million from the sale of debt and equity investments in Prodigy Finance, which was previously the largest loan position in the portfolio.
• Unfunded Commitments -- $171.6 million at quarter-end, with $54 million scheduled to expire by the end of 2026 if not drawn by portfolio companies.
• Liquidity -- $168 million total, consisting of $18 million in cash and cash equivalents and $150 million in available capacity under the revolving credit facility.
• Leverage Ratio -- 1.18x gross and 1.12x net, representing a decrease from 1.26x gross and 1.22x net as of June 30, 2026.
• Portfolio Composition -- 50 debt portfolio companies, 120 warrant positions, and 57 equity investments with a total fair value of $717.3 million.
• Payment-in-Kind Income -- $2.5 million, representing 12% of total investment income compared to 14% in the prior quarter and 21% in the third quarter of 2025.
• Accelerated Income Guidance -- More than $2 million expected in the fourth quarter, driven by $72.6 million in principal prepayments received since the end of the third quarter.
• Credit Quality Ranking -- 2.24 weighted average, compared to 2.28 in the prior quarter, following the upgrade of one company and the downgrade of two consumer-sector companies.
• New Debt Commitments -- $43 million across eight companies closed during the third quarter, representing a 45% increase over the second quarter.
• Portfolio Yield at Origination -- 11.2% for the debt investments funded during the third quarter.
• Venture Pipeline -- More than $2 billion, representing leading venture growth stage companies seeking debt financing from the platform sponsor.
• Targeted Annual Returns -- 10% to 18%, which remains the company's objective for its venture debt financing instruments.
• Share Repurchase Program -- $12.5 million authorized by the board in May 2026, though management confirmed no shares have been repurchased as of Sept. 30.
• Portfolio Capital Raising -- $2.6 billion raised by seven portfolio companies in private financings during the quarter, with five debt companies accounting for $1.5 billion of that total.

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RISKS

• Srivastava stated, "we saw movement within our legacy consumer portfolio due to market factors and performance," when explaining the credit downgrades of portfolio companies Flink and JOKR to the Yellow (3) category.
• Wilhelms stated that "refinancing our $125 million of unsecured notes maturing in February of 2027" remains a highest financial priority, as management evaluates alternatives to ensure execution certainty.

SUMMARY

TriplePoint Venture Growth BDC Corp. (NYSE:TPVG) reported a quarter focused on portfolio rotation, shifting away from 2020 through 2022 vintage investments toward newer sectors such as artificial intelligence and infrastructure. Management reported that the disposition of its largest loan position and a temporary lull in funding activity impacted near-term earnings, though activity accelerated significantly in the early portion of the fourth quarter. The company stated it is maintaining its focus on balance sheet strength and liquidity as it prepares to address upcoming debt maturities. The investment adviser extended its incentive fee waiver through 2027 to support net investment income and dividend coverage during the portfolio transition.

• Ian Schworer, a 12-year veteran of the firm, will succeed Sajal Srivastava as Chief Investment Officer effective at the end of 2026.
• Management noted that AI infrastructure is a primary driver of capital formation, with CEO Jim Labe stating, "hyperscalers alone [are] issuing approximately $225 billion of investment-grade year-to-date debt."
• The company continues to hold a significant position in Revolut, with a fair value of $56 million following reports of a private transaction at a $115 billion valuation.
• Despite shares trading at a discount to net asset value, CFO Mike Wilhelms stated the company has not yet utilized its buyback program because "we're more focused on our liquidity and our targeted leverage."
• Management identified several portfolio companies as candidates for potential initial public offerings as the IPO window for venture-backed companies begins to broaden.

INDUSTRY GLOSSARY

• BDC: Business Development Company, a type of closed-end investment company that helps small and medium-sized businesses grow.
• PIK: Payment-in-kind, a type of interest that is paid in the form of additional debt or equity rather than cash.
• Venture Growth Stage: Companies that have progressed beyond early-stage development and are scaling their operations with backing from venture capital firms.
• Warrant: A financial instrument that gives the holder the right to purchase a company's stock at a specific price within a certain time frame.
• Weighted Average Investment Ranking: A metric used by the company to assess the credit quality of its portfolio, where a lower number indicates higher quality.

Full Conference Call Transcript

Operator: Good afternoon, ladies and gentlemen. Welcome to the TriplePoint Venture Growth BDC Corp. Third Quarter 2026 Earnings Conference Call. [Operator Instructions] This conference is being recorded, and a replay of the call will be available in an audio webcast on the TriplePoint Venture Growth website. Company management is pleased to share with you the company's results for the third quarter of 2026. Today, representing the company and on today's call is Jim Labe, Chief Executive Officer and Chairman of the Board; Sajal Srivastava, President and Chief Investment Officer; Mike Wilhelms, Chief Financial Officer; and Ian Schworer, who will be assuming the role of Chief Investment Officer at year's end. 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. To obtain copies of our largest -- of our latest SEC filings, please visit the company's website at www.tpvg.com. Now I'd like to turn the conference over to Mr. Labe. Please go ahead.

James Labe: Thank you, operator. Good afternoon, everyone, and welcome to TPVG's third quarter earnings call. Over the past several quarters, our focus has been on continuing to advance our investment sector rotation and diversification strategy by investing in high-quality venture growth stage companies across AI and other attractive venture investment sectors while steadily reducing our exposure to and monetizing our vintage 2020 through '22 portfolio investments. We will continue along this path as we seek to enhance TPVG's portfolio quality and durability, strengthen our financial position, grow our income-generating assets and increase NAV over the long term for the benefit of our shareholders. Starting with some key highlights from the quarter.

We're continuing to see strong demand for debt financing from leading venture growth stage companies. We signed $106 million of term sheets with venture growth stage companies at our sponsor, TriplePoint Capital, and our venture growth stage pipeline now exceeds more than $2 billion. In the third quarter, TPVG closed $43 million in debt commitments across 8 portfolio companies, a 45% increase over the second quarter. We also lowered our leverage and saw an increase in our average new deal yields on signed term sheets.

We are continuing to execute on our plan of investment sector rotation and portfolio diversification across very attractive sectors, investing in companies such as Eridu, Heron Power, Thoughtspot and Muon Space, and we remain focused on backing category-defining companies that are at the forefront of adopting and deploying AI across their product offerings. While we funded $0.7 million of debt investments during the quarter, which was driven by timing and discipline, subsequent to quarter's close, TPVG has already funded $57 million through yesterday, and we're only about 1/3 of the way or so into the fourth quarter.

While we had a light funding quarter, based on the pace and momentum of the current quarter so far, including the $57 million of fundings, another $60 million of commitments, some $125 million of signed term sheets already, coupled with our large pipeline, we're expecting a strong finish here in the fourth quarter accompanied by the strong liquidity to service it. Turning to the portfolio. We continue to focus on actively managing and working through our vintage 2020 through '22 credit situations, while building what we believe is a stronger and more diversified portfolio. As noted on last quarter's call, we exited Prodigy in the third quarter, which was our largest outstanding loan position.

This represented an important step in our ongoing efforts to rebalance and diversify the portfolio. We expect to use these proceeds to further strengthen our liquidity position and enhance our financial flexibility. Most of our watch list exposures relate to these 2020 through '22 vintage investments, which have been on the watch list for an average of approximately 6.25 years. Looking at our investments beginning in 2023, while newer, they continue to perform well and are trending positively, which we believe reflect the benefit of our sector rotation and diversification efforts. We're also pleased to see the fundraising activity among our companies increased significantly last quarter.

Reflecting the strength of the VC market, 5 of our debt portfolio companies raised $1.7 billion in capital in private financing rounds during the quarter. All of them had increased upticks in their valuation, including Inspiren, Eridu, Etched, Muon Space and Encharge. This brings the year-to-date total to 12 debt portfolio companies raising approximately $2.8 billion. On the investment side, the venture capital investment environment remains robust. According to PitchBook, an estimated 5,000 deals closed during the quarter, the second highest quarterly count on record. Through the first 3 quarters of the year, U.S. VC deal value reached a record $515 billion, almost 44% of the prior 5-year high.

AI remains a dominant theme, accounting for 83% of the year-to-date deal value, the highest annual share on record. Venture growth stage investment in 2026 has nearly surpassed every prior year, both in capital invested but also in deal count. This growing base of large, well-capitalized, later-stage private companies continues to expand our addressable market. On the exit side, liquidity for VC-backed companies remains concentrated. M&A generally remains a primary path. According to PitchBook, year-to-date exit value has reached a record of $2.3 trillion, but that was driven by a handful of large IPO transactions. The IPO window for tech venture-backed companies has yet to broadly reopen.

Within our own portfolio, while no M&A transactions closed in the third quarter, there are several in the process, and 2 transactions recently closed post quarter, including Synack and FitOn. Given that, a development as of only yesterday, in fact, was the announcement by Salesforce that it has signed a definitive agreement to acquire our TPVG portfolio company, Cresta, while -- where we hold warrant and equity positions associated with our former debt line. We believe we remain well positioned to benefit as liquidity broadens across tech venture-backed IPOs and this M&A over the coming quarters. As a reminder, we maintain a sizable equity and warrant portfolio that continues to grow.

As of September 30, we hold warrant positions in 120 portfolio companies and equity investments in 57. A number of these companies have also been identified in publications lists of top candidates for venture-backed IPOs in the U.S. and Europe. TPVG continues to benefit from the AI investment megacycle. AI infrastructure remains a primary driver of capital formation with hyperscalers alone issuing approximately $225 billion of investment-grade year-to-date debt. That's more than the last prior 4 years combined. VCs are increasingly focused on infrastructure as access to compute becomes a key competitive advantage. We're also seeing growing investments in other attractive sectors, including defense, aerospace and energy, where data center demand is driving capital towards power and grid infrastructure.

Demand for venture debt remains strong as financings continue to shift towards larger, later-stage transactions. We also continue to benefit from the strong support of our platform sponsor, TriplePoint Capital, which is a leader in the venture lending market with direct origination capabilities. The adviser has waived its full quarterly income incentive fees since Q1 of 2025 and previously committed to maintaining that waiver for each quarter through the end of this year. In a continued demonstration of alignment with TPVG shareholders, the adviser has now amended its income incentive fee waiver and will waive its quarterly income incentive fee for all of 2027 as well.

We recently announced a leadership transition under which Sajal will be leaving his role as President and Chief Investment Officer at year's end. I will continue as the CEO of TPVG, and we're pleased to have appointed Ian Schworer as our Chief Investment Officer, also effective as of year's end. I want to thank Sajal for a significant contribution to TriplePoint over the past 23 years. Together, we have built TriplePoint into an industry-leading and differentiated venture lending platform. I'm proud of the business we created and excited as TriplePoint continues to work with our venture partners and invest in leading companies to take advantage of strong long-term market trends.

I look forward to continuing to work with Sajal over the coming months with a smooth and orderly transition underway. You'll hear more from Sajal shortly. We have great confidence in Ian, a 12-year TriplePoint veteran with an outstanding technology investment background who's grown up within our ranks and has been instrumental in helping manage our ongoing portfolio transition across the high-growth and diversified sectors that I've been describing. In summary, we continue to make progress in strengthening and repositioning our portfolio for the long term while working diligently to maximize outcomes across credit situations. As a result of the actions we've taken, the post-2023 broader portfolio remains very strong.

As we look ahead, we remain focused on disciplined underwriting, strengthening our balance sheet and diversifying our portfolio to capitalize on the attractive market opportunities today that enhance our long-term earnings power. With that, let me turn the call over to Sajal.

Sajal Srivastava: Thank you, Jim, and good afternoon, everyone. During Q3, we continued to take steps to strengthen TPVG's foundation and position the company for the long term. Beginning with our investment activity, TriplePoint Capital signed $106 million of term sheets with venture growth stage companies during Q3 compared to $307 million of signed term sheets during Q2 2026, and TriplePoint Capital has signed $125 million of term sheets so far in the fourth quarter. With regards to new investment allocation to TPVG during the third quarter, our adviser allocated $43 million in new commitments with 8 companies to TPVG as compared to $29.8 million of new commitments with 5 companies in Q2.

We expect to continue to increase our allocation of new commitments as unfunded commitments continue to expire and as we receive prepayments and repayments over the rest of the year and have allocated $60 million in new commitments to 3 companies so far in the fourth quarter. During the quarter, we funded $700,000 to 4 companies compared to $47.8 million of fundings to 10 companies in Q2. As Jim mentioned, our fundings during the quarter were impacted by timing, as we have already funded $57.4 million in the fourth quarter, already exceeding our guided range of $25 million to $50 million. During Q3, we had $11 million in loan prepays, resulting in an overall weighted average portfolio yield of 12.4%.

And excluding prepays, our core portfolio yield was 12%. This compares to $28.6 million of loan prepays and overall weighted average portfolio yield of 12.9% with prepays and 12.3% without prepays in Q2. During the quarter, we sold our debt and equity investments in our European portfolio company, Prodigy Finance, to a third party for $43.8 million, consistent with our Q2 mark. Prodigy was our largest outstanding loan as of Q2, and the sale demonstrates continued progress on rotating our assets into newer vintages, diversifying the portfolio and reducing our overall exposure to PIK income.

With regards to credit activity during the third quarter, we saw movement within our legacy consumer portfolio due to market factors and performance as we upgraded Trendly, an EBITDA positive and cash flow positive consumer company from Yellow (3) to White (2) and downgraded JOKR and Flink from White (2) to Yellow (3) and made fair value adjustments on other loans as well, including Roli and Hydrow.

As Jim mentioned, 5 portfolio companies raised an aggregate $1.5 billion during the quarter and 7 of our warrant and equity portfolio companies raised $1.1 billion, bringing the aggregate to $2.6 billion of equity capital raised during the quarter, reflecting positive on our portfolio as well as the warrant and equity investments associated with these investments. As of Q3, we held warrants in 120 companies and equity investments in 57 companies with a total fair value of $143.5 million. Revolut continues to perform well with the company previously announcing a transaction at $115 billion valuation and media reports mentioning the company is considering an IPO with an even higher valuation target.

Our remaining warrant and equity investments in Revolut have a fair value of approximately $56 million as of the end of the quarter. The team continues to focus on building a strong foundation for TPVG and positioning TPVG for the long term by driving portfolio scale and quality, rotating the assets -- rotating the portfolio into newer vintages and enhancing shareholder value over the long term. As announced in September, after 23 years with TriplePoint, I will be leaving at the end of December. I am proud of what Jim and I have accomplished in building TriplePoint into an industry-leading platform on a global basis.

I'm focused on working with the team to ensure a seamless transition, and I wish them all the best as they continue growing the business and capitalizing on attractive opportunities across the venture lending market. With that, I will now hand the call over to Mike.

Mike Wilhelms: Thank you, Sajal, and good afternoon, everyone. Total investment income and other income for the third quarter was $20.2 million, representing a weighted average annualized portfolio yield on debt investments of 12.4% compared to $22.1 million and 12.9% in the prior quarter. The decline primarily reflects the July 1 disposition of our approximately $44 million investment in Prodigy, which had been our largest outstanding debt investment. Approximately 2/3 of our debt investments are floating rate loans, substantially all of which are subject to prime rate floors.

Based on our portfolio and borrowing structure at quarter end, increases in benchmark interest rates would be expected to have a positive impact on net investment income as the benefit from higher investment income would more than offset the increase in borrowing costs from our revolver. We continue to manage our mix of fixed and floating rate assets and liabilities with an emphasis on maintaining financial flexibility. Net investment income for the quarter was $6.6 million or $0.16 per share compared to $8.3 million or $0.21 per share in the prior quarter. The sequential decline primarily reflects lower investment income, which includes a $500,000 reduction in accelerated income generated from loan prepayments.

This decline was partially offset by lower interest expense as we used proceeds from the Prodigy disposition to reduce outstanding borrowings under our revolving credit facility. Including realized and unrealized investment activity, net decrease in net assets resulting from operations was $1.7 million or $0.04 per share. PIK interest income declined to $2.5 million during the quarter compared to $3 million last quarter and $4.8 million in the third quarter of 2025. PIK represented approximately 12% of total investment and other income this quarter compared to 14% in the prior quarter and 21% in the third quarter of 2025. Reducing PIK exposure remains an important component of our efforts to improve the quality of recurring earnings.

Net asset value was $8.32 per share at September 30 compared to $8.67 at June 30. During the quarter, we recorded net realized and unrealized investment losses of $8.3 million. The net investment losses were primarily driven by $13.6 million of net realized and unrealized losses across our debt portfolio and a $3.5 million unrealized loss on our GrubMarket equity investment. These losses were partially offset by $7.8 million of unrealized gains in our Revolut investment and $1 million of net unrealized gains across our remaining warrant equity investments. Importantly, the disposition of Prodigy had no incremental impact on NAV as the investment was sold at its June 30 fair value.

NAV declined by $0.35 per share during the third quarter with approximately $0.20 attributable to net realized and unrealized investment losses. The remaining decline primarily reflected distributions exceeding net investment income, including the $0.06 per share supplemental distribution paid during the quarter. A significant contributor to lower NII was the disposition of our Prodigy investment effective July 1. Given its size and higher yield, Prodigy had historically been a meaningful contributor to investment income. While the reduced near term -- while this reduced near-term earnings, it also represented an important step toward improving the quality of our earnings by reducing PIK income. Lower accelerated income from prepayments during the quarter also contributed to the decline in NII.

There were no income incentive fees earned during the third quarter. Year-to-date, the adviser earned and waived $3.2 million in income incentive fees. As Jim mentioned earlier, the adviser has agreed to extend the income incentive fee waiver through the end of 2027. This continued support from the adviser will benefit net investment income and dividend coverage during 2027. Total operating expenses, net of incentive fee waivers, were $13.2 million for the quarter compared to $13.6 million in the prior quarter. Interest expense and amortization of financing costs declined approximately $400,000 to $7.9 million, reflecting lower outstanding borrowings under our revolving credit facility. Turning to investment activity.

We funded approximately $700,000 in debt investments during the quarter and received $17.4 million in scheduled principal amortization, prepayments and early repayments. We also received $43.5 million in proceeds from investment dispositions. As Jim and Sajal discussed, investment activity increased meaningfully during October. In addition, we have received approximately $73 million in prepayments quarter-to-date, generating more than $2 million in accelerated income that will benefit our fourth quarter results. We ended the quarter with total liquidity of $168 million, consisting of $18 million in cash, cash equivalents and restricted cash and $150 million of available capacity under our revolving credit facility.

Our liquidity position improved by nearly $50 million during the quarter as we benefited from the Prodigy disposition and lower outstanding borrowings. Gross leverage declined to 1.18x and net leverage to 1.12x compared to 1.26x and 1.22x, respectively, at June 30. Looking ahead, we remain focused on refinancing our $125 million of unsecured notes maturing in February of 2027. We are actively evaluating financing alternatives with an emphasis on execution certainty, managing our cost of capital and maintaining financial flexibility. Unfunded commitments totaled $171.6 million at September 30 compared to approximately $141 million at June 30.

Of these unfunded commitments, $14.8 million were subject to portfolio companies achieving specified milestones and approximately $54 million are scheduled to expire by year-end if not drawn. We continue to manage these commitments in the context of our improved liquidity position, anticipated repayments and leverage objectives. On October 14, our Board declared a regular fourth quarter distribution of $0.23 per share. In addition, we previously declared a supplemental distribution of $0.12 per share to distribute accumulated taxable income payable in 2 installments. The second and final installment of $0.06 per share will be paid on December 30. Looking ahead, our financial priorities remain improving recurring earnings, maintaining prudent leverage and preserving liquidity as we execute our portfolio strategy.

That concludes my prepared remarks. Operator, please open the line for questions.

Operator: [Operator Instructions] The first question comes from Crispin Love at Piper Sandler.

Crispin Love: First, on the new debt fundings in the third quarter, very low below that $1 million mark. But as you stated, you did have a nice pickup post quarter end. During the prepared remarks, you did call out that timing was a driver for the softness. But can you dig into that a little bit further? I don't think we've seen a level like that in the history, at least the several -- last several years. So were you passing on deals in the quarter and then just differences between the third quarter and October plus? Just any color there would be great.

James Labe: Yes. It's Jim speaking, Piper -- sorry, Crispin. It's a good question, but periodically, on and off over the years, we've talked about how fundings aren't necessarily always within our control or timing. And quite frankly, the bulk of them came towards the end of the quarter and spilled over early part of this quarter. So we're back on track from the lumpiness aspect. The other thing that's going on when it comes to fundings is documentation. And some of these things take a little bit longer or drag or don't exactly happen quarters in. Having said that, though, as you've heard, just over the month of October alone in a couple of days, we're already at a strong number.

Crispin Love: And then...

James Labe: I'm sorry, it's not related to any kind of market or pipeline or originations or any changes on that front. Those all remain strong.

Crispin Love: Okay. Perfect. Makes sense. And then I think Sajal alluded to this, so I just want to make sure that I have it just for cleanup. But I understand the fourth quarter is going to have higher debt fundings. But is that go-forward guide of $25 million to $50 million as you look beyond the fourth quarter still the right number to be using?

Mike Wilhelms: Yes, this is Mike. Yes, $25 million to $50 million would be a good guidance for going forward. And as always, we have line of sight and we're looking at potential prepayments, scheduled maturities that could drive that range and potentially push us above the $50 million if, in fact, we're seeing more prepayments and scheduled maturities in a respective quarter. But $25 million to $50 million is a fair guidance for future quarter fundings.

Operator: The next question is from Paul Johnson at KBW.

Paul Johnson: So just curious, is the dividend, the $0.23 base dividend, does that still more or less remain, I guess, the earnings bogey for TPVG in terms of where you would like the BDC to be generating, I guess, NII? And then could you maybe talk about the bridge to getting there from the $0.16 and maybe excluding, I guess, you have some accelerated income coming in next quarter, $2 million or so, that's positive but just kind of the normal recurring, I guess, parts of the model, would be curious to hear kind of how you anticipate getting there.

Mike Wilhelms: Yes, Paul, thanks for the question. Dividend sustainability remains an important consideration for the management and Board. We mentioned that the third quarter was artificially low for the reasons we talked about, most notably the Prodigy disposition and the lower accelerated income. We're encouraged by the increased activity that we're seeing here in the fourth quarter as well as we're expecting a very large, accelerated income for the quarter. But with respect to your specific question as far as bridging us back to the $0.23, ultimately, the Board is, on a quarterly basis, evaluating our dividend policy.

We're factoring in not only the earnings power but also including what we're projecting as far as that earnings power, taxable income, i.e., spillover and overall liquidity and long-term interest of shareholders. So we are in the midst of evaluating that. And as far as the $0.23, it's our target for now, but that's subject to change in the future.

Paul Johnson: Got it. Okay. That's very helpful. And then in terms of the liquidity available, there's obviously a few moving pieces here of the focus within the BDC in terms of just rotating out of some of these assets and improving the ROE. But do you think there's maybe a little bit more of an emphasis on just retaining liquidity until you have exited some of those larger investments, particularly like the non-yielding equity going forward? Or I guess, is that not the case?

Mike Wilhelms: Yes. No, it's certainly something we are evaluating constantly, that being our liquidity and our overall leverage with our target leverage of 1.3 or lower. Paul, at this point, as you mentioned, certainly rotating out of certain legacy credits is an aspect, but also refinancing the February 2027 notes remains one of our highest financial priorities. So that's another consideration when factoring in our liquidity and overall leverage targets. So we're focused on achieving an execution that provides certainty of funding while also appropriately balancing our cost of capital and financial flexibility. So we are focused on the rotation, but I would also say it's a focus on the 2027 refinancing.

Paul Johnson: Got it. Okay. And then in terms of just exits, Prodigy was a positive one. Revolut seems to be shaping up positively as well. Are there other processes within the equity portfolio, equity warrant portfolio where you have the ability to potentially sell or exit -- partially exit that investment on funding rounds with the pickup in fundraising activity in the venture capital space? Or is this just more unique to the much larger sort of unicorn venture capital companies?

James Labe: No. I would say, Paul, those remain as options and there is probably a pretty active secondary market. And as I mentioned, we have a pretty strong fair value warrant and equity position across a number of companies that are progressing and doing very, very well and some such as Revolut, we've monetized. It's something we continue to evaluate, think about, have as an option available to us. It will depend on the facts and circumstances and the pricing, but it's not just confined to the unicorns. It's a sign of the current market and something we continue to actively evaluate as an available resource on the liquidity front.

Operator: The next question comes from Chris Muller at Citizens.

Unknown Analyst: This is [ Nate ] on for Chris. Also congrats, Ian, on the management changes. Just for my question, I'm curious about how you guys are thinking about the buyback you guys -- that was authorized in May. From what I can tell, you guys haven't made any repurchases yet, shares trading in the 50%, 60% range. How do you guys think about that? Is it more like a liquidity constraint issue given what you guys kind of just talked about? Or is it something else? Just any color there would be helpful.

Mike Wilhelms: Yes. No, thanks for the question, Nathan. We recognize that our shares are trading at a significant discount to NAV, and those repurchases would be very accretive to our NAV and to our NII. However, we also need to consider our overall liquidity position. So you mentioned that as part of your question, unfunded investment commitments, leverage and upcoming -- most notably upcoming debt maturities. So we see it as an important aspect to our overall capital strategy. But at this time, we're more focused on our liquidity and our targeted leverage. And so at this time, you're correct. We have not made any repurchases as of yet.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jim Labe for any closing remarks. Please go ahead.

James Labe: Thanks, operator. As always, I'd like to thank everyone for listening and 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.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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