Q3 2021 Triplepoint Venture Growth BDC Corp Earnings Call
Good afternoon, ladies and gentlemen, welcome to the Triple point adventure growth BBC core third quarter of 2021 earnings conference call.
At this time all lines have been placed in a listen only mode.
After the speaker's remarks, there will be an opportunity to ask questions and instructions will follow at that time.
This conference is being recorded and a replay of the call will be available and an audio webcast on the triple a boy point venture growth website come.
Company management is pleased to share with you the company's results for the third quarter of 2021.
Today, representing the company is Jim <unk> Executive Officer, and Chairman of the board subtle Srivastava, President and Chief Investment Officer, and Chris Mathew Chief Financial Officer, before I turn the call over to Mister La Bay 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 relates to the future events or the company's future performance or financial condition, which are considered forward looking statements under federal Securities Law you.
You were 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 that to update any forward looking statements or projections unless required by law investors or caution 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 latest SEC filings. Please.
Visit the company's website at Www Dot T. P V G Dot com.
Now I'd like to turn the conference over to Mister La Bay.
Thank you operator, good afternoon, everyone. We're glad you could all join T. P V choose third quarter conference call today.
Quarter was one of continued growth and execution of the 20th 21 playbook weird outlined on earnings calls.
This year has been filled it is expected on track for stronger second half and a promising and exciting look for 2022.
The quarter's performance continues to demonstrate the potential of T. P V cheese differentiate adventure lending muddle an investment strategy.
We are encouraged by the quarterly trends in our playbook that started earlier this year <unk>.
Or expectation is to continue on this path in the quarters ahead.
Notably we grew the investment portfolio to a record $767 million and we significantly increase net asset value achieving the highest quarterly nerve per share accretion since our I P O.
Arnez, which reflects at 10 cents per share a special dividend. We paid last year is up 58 cents from the December 31, 2019, Prepandemic level headed dollar seven since this started the pandemic and two 120 20.
So in term sheets in the quarter at T. P. C for venture gross teach companies increased by more than 20% over the previous quarter, representing the second tie this level since T. P V cheese I P O.
This is the sixth consecutive quarter of increased sign term sheets.
This level of origination bodes well for future dip commitments in the fourth quarter and beyond.
New customer dead funding swear up more than 54% for the quarter.
At 117 million funding so squarely in a forecasted range and represented the third highest quarterly total center I P O.
During the quarter. We also increase her leverage ratio continued to diversify a portfolio and strengthen the portfolios credit quality as measured by your quarterly scoring system.
98% of our debt investments were performing add or better than expectation has of quarters and.
Does this underscores the benefit of our strategy of focusing on high quality select back venture grow stage companies and technology driven categories.
The increase in NAV this quarter shows the power of our model with a considerable upside potential built into the portfolio from the warrant an equity kicker set we negotiate as part of our debt transactions.
Demonstrating T P V G strong potential to create long term shareholder value.
Among the most significant contributors to increasing NAV is a continued equity fund raising rounds close by your portfolio companies, which increases the overall enterprise value of our investments.
This quarter. The most notable was revolute equity financing room.
We're proud to be part of a company with the highest valuation ever achieved at a privately held venture back technology company in the United Kingdom.
Exit events at our portfolio companies also remain welcome contributors to her now.
We continue to experience and expect increased takes it activity in our portfolio all translating into future realized capital gains for shareholders.
Ford truck and next generation Cloud Security company completed its I P O during the quarter.
Toast a management platform for the restaurant industry also completed its I P O during the quarter.
And rent the runway popular fashion platform completed its I P O subsequent to the quarter.
Stack mergers continue to provide another avenue for exit including nerdy completing their this last quarter enjoy technologies in October and for others now on track to complete spec mergers in the quarters ahead.
Finally, as a reminder, mergers and acquisitions a portfolio companies also represent potential future capital gain contributors.
[noise] during the quarter portfolio Company class pass was acquired by mind body and a private transaction and we foresee a positive outlook for the combined entities.
The venture capital market continues to be remarkably strong year to date through the third quarter total deal value was already 43% higher than it all of 2020.
V C investments in the consumer Tech Enterprise Tech and Fintech categories have respectively surpass last year's total is already by 38%, 50% and 92%.
Demand remains high of course for Ipos by V. C back companies total legs it value what's on pace to double last year's record total public offerings accounted for 88% of all exit value a year to date.
To further capitalize on this incredibly healthy V. C market. We believe we have the right team motto select V C partners an investment strategy.
We continue to stick to her knitting, an exercise investment discipline.
Focusing on companies Backfire select group of leading venture capital firms and not growing simply for the sake of growth.
We continue to have our eyes and companies with strong growth prospects that are developing new technologies redefining, how we live work and play.
T P V G investments in the technology sector on pace to comfortably surpassed last year's total.
And we are well positioned to generate strong returns for shareholders continue to grow our NAV and produce NII that covers a distribution over the long term.
We believe T. P V G as well positioned for the remainder of this year in the long term.
Momentum is already continuing here in the fourth quarter.
Off to a really good start with a robust pipeline and strong liquidity.
Which physicians us to continue to grow the portfolio and provide financing to companies that meet are highly selective criteria and requirements.
A great deal of the playbook, we planned earlier in the year is coming to fruition and central to our game plan is continuing to execute on it for the benefit of our shareholders.
With that I'll now turn the call over to schedule <unk>.
Thank you Jim and good afternoon, as Jim mentioned, we achieve the objectives, we identified for the third quarter and remain well positioned for the remainder of the year and for 2022 with regards to investment activity during the quarter <unk> capital signed 304 million of term sheets with venture grow stage companies and we closed.
116 million of debt commitments to seven companies at T. P V G.
We continue to partner with exciting and promising companies and a new portfolio companies. This quarter include some marquee names in the Fintech consumer and e-commerce ecosystems, such as and 26 and mobile banking company earn in a financial platform that enables users to take control of the <unk>.
Financial future.
Good eggs and online grocery and Milky Company and Forum brands are data driven Amazon business acquisition platform.
We also welcome back stab fit fun, a women's lifestyle and shopping experience focus company, which had previously paid us off in 2020 after closing in equity around and has now returned to the portfolio.
During the third quarter, we added to both our warrant and equity portfolios. We received warrant in 10 portfolio companies valued at 1.7 million in conjunction with our debt commitments, increasing our year to date total a warrant in twenty-seven portfolio companies received in conjunction with our <unk> commitments worth.
$5.5 million.
We also made six direct equity investments valued at 1.2 million, reflecting the access we have two high quality investment opportunities and the robust equity environment.
This brings our total to three $7 million, a direct equity investments and 11 companies year to date.
During the third quarter, we hit our targeted range of gross fundings for the quarter with $117 million of debt investments funded to 15 companies, which represented an increase of more than 50% from our fundings and Q2.
All knew that commitments made during the quarter had all or a portion funded in Q3 and 95% of the new commitments. We've made in 2021 had been fully or partially funded year to date.
As a result of this strong funding activity as of the end of the third quarter, we had that investments outstanding to 40 companies an increase of almost 20% from 34 companies at the end of the prior quarter.
So far we have funded 14 million of new loans here in the fourth quarter and our gross funding target range continues to be $100 million to $150 million for the fourth quarter.
Portfolio yield remains strong during the quarter that investments funded carried a weighted average annualized portfolio yield of 12.8% are core portfolio yield was 12.1% up slightly from 12% last quarter and 11.9% in Q1.
Our overall weighted average annualized portfolio yield was 12.3% as a result of only $18 million loan prepayments during the quarter.
So far in the fourth quarter, we've had a 28 million loan prepayment, which will generate approximately $1 million from the accelerated end of term payment.
We continue to see substantial equity fund raising activity in the venture capital industry generally and within our portfolio, specifically, which is a testament to our portfolios quality.
During the third quarter eight portfolio companies raised approximately $1.8 billion of capital. In addition to the 16 portfolio companies that have raised 1.6 billion of capital during the first half of 2021, one financing. The highlight is revolute, who is 800 million raise it a 32 billion values.
Nation resulted in an increase of 13 million and unrealized gains for us this quarter or equity in warrant investments in revolute are now valued at $15 million in total fair value.
Moving to credit quality this quarter, we achieved one of our highest quarterly credit quality rankings. The weighted average investment ranking of our debt investment portfolio improved to 194 compared to 2.06 as of the end of Q2 and 2.11 is the end of Q1.
Consistent with the first half of the year no companies were added to category 345, and no companies were placed on non accrual during the quarter.
During the quarter, one company was upgraded from category to category, one and our one remaining category three company from Q2 was upgraded to category too.
Or one category for portfolio company Rowley is our only loan on non accrual and represents 2.2% of our total debt investments at fair value.
During the quarter, we successfully worked with the team at Rollie to secure financing from a new lead venture capital fund and in conjunction with this view sea Investor put the company through an administration process whereby the newly emerged company called Luminary has assumed all of our outstanding debt.
We have also received equity ownership illuminate luminary as well.
Although her loan was assumed in full including full end of term payments and accrued interest based on these events, we recorded and 8 million unrealized loss against our prior loan fair values during the quarter. While the company is not out of the woods. We believe they are now in the best position they have been in some time to capitalize on.
Peloton for piano hardware and software offerings.
During the quarter to portfolio companies successfully completed ipos for <unk> and toast.
Since beginning our partnership with fours rock in 2016, TPG has learnt the company 45 million of which $30 million is still outstanding and our warrants in the company were valued at $9.4 million at the end of the quarter, resulting in an 8.2 million unrealized gain during Q3.
Our initial 35 billion loan commitment to toast was made in 2018 and the fair value of our warrants was 5.1 million as of the end of the quarter, resulting in a 4.7 million unrealized gain even though toast never drew on their deadline and their unfunded committment expired unused.
With regards to specs nerdy completed their spec merger in Q3, and we received a 1 million cash success fee as a result.
Transfixed announced their spec merger during the quarter and they along with bird rides in sparano and sounder represent our four announced company spec mergers and process. So.
So far in queue for rent the runway completed their IPO and enjoy completed their spec merger.
As of quarters, and we are holding shares and warrants and publicly traded companies valued at 17 million, which includes $13.5 million a cumulative unrealized gains. In addition, the current private warrant an equity portfolio held by TPG has a record 30 million.
Cumulative unrealized gains based on private round valuations as of Q3.
As Crowdstrike forge rock toast, Farfetch and others have proven when exit events do occur there is the potential for even more gain from the winters above our balance sheet value.
We continue to be heads down focused on growing our portfolio in a disciplined manner with line of sight to covering our dividend without the benefit of prepays, maintaining our solid credit profile growing N. A V and working with some of the most exciting venture grow stage companies backed by some of the industry's best venture capital firm.
Once we.
We are optimistic for a strong finisher in 2021 and excited for what's in store for <unk> in 2022 with that I will now turn the call over to Chris.
Great. Thank you schedule, an hello, everyone.
During the quarter, we grew asset significantly while operating an administrative expenses rose only modestly we continue to see high utilization rates on our new commitments, we increase the leverage ratio, while maintaining excellent credit quality in our portfolio and we entered Q4 with ample liquidity at the ready.
So let me take you through our financial results for the Q3 2021.
Total investment income was 21.2 million with a portfolio yield of 12, 3% on total debt investments for the third quarter as compared to $23.1 million and 14.1% for the prior year period.
Total investment income reflects a lower average that investment balance year over year due primarily to significant loan prepayments during the first half of 2021 and reduced income from lower levels of prepayment activity in the current third quarter.
We are pleased that the onboarding yields continue to be strong and stable.
Total operating expenses were $11.3 million as compared to $10.9 million for the prior year period.
<unk> expenses for the third quarter of 2021 consisted of $4.1 million of interest expense $3.2 million of management fees $2.5 million of income incentive fees, a half a million dollars of administrative agreement expenses and a million dollars of G&A expenses.
While the total assets under management were up sharply during the quarter based management fee was actually down quarter over quarter. Given this fee is calculated on the trailing two quarter gross asset that two quarters gross assets, which were four in the first half of the year.
Interest expense increase this quarter as we used our credit facility to successfully increase the leverage on the portfolio with cost effective that offset by savings from the elimination of the higher cost baby bonds earlier and Q2.
Again, while we experienced a significant increase in total assets administrative expenses were up only modestly given continued operating efficiency in 2021, along with lower allocation of overhead expenses related to economies of scale at the administrator.
TNA in Q3 included one time workout costs and accruals for excise tax associated with spillover income generated in periods, where income exceeded distributions over time.
Net investment income was nine $9 million or 32 cents per share for the third quarter of 2021 compared to nine $4 million 30 per share for the second quarter.
During the third quarter the company recorded $3.1 million of net realized losses from the right off of equity in warrant investments, while net while net unrealized gains for the third quarter were $32.1 million, resulting primarily from $36.5 million of net unrealized gains from fair value in other.
On the company's warrant and equity portfolio that both Jim and subtle highlighted earlier.
Partially offset by $4.4 million of net unrealized losses on the companies that investment portfolio.
Net asset value increased quarter over quarter and year to date as we achieved the highest quarterly NAV accretions since our IPO.
For the third quarter net increase in net assets, resulting from operations was $38.9 million or $1.26 per share.
Will the nine month period ended for the third quarter net increase in net assets, resulting from our operations was $62.7 million or $2 three per share.
As a quarter and total net asset value was 300 was $431 million or $13.92 per share compared with $400.4 million or $12.97 per share as of year end.
I'm pleased to announce that our board of directors has declared a regular quarterly distribution of 36 cents per share to stockholders of record as of November 30th to be paid on December 15th.
This includes 30 per share from ordinary income and six cents per share from long term capital gains.
We continued to retain significant spillover income, which totaled $8 million or 26 per share at the end of the quarter to support additional distributions in the future.
As we continue to experience portfolio growth over time and further record portfolio loan prepayments, we expect to see net investment income grow to a sustained level to cover our regular current distribution.
Consistent with our long term track record.
Now, let and let me move to our investment commitments. We're pleased to note that we continue to experience high utilization rates on our new commitments during the third quarter. We ended the quarter with $156 million of unfunded commitments to 21 portfolio companies of.
The $156 million $45 million of the total will expire during 2021 and another $96 million will expire during 2022, if not drawn prior to exploration <unk>.
60% of these unfunded commitments have contractual floating interest rates all of which have a primary set to 3.25% or higher this.
This compares to the existing loan portfolio outstanding at quarter end, which had 52% contractually floating interest rates.
Now just a quick update on our credit facility or term notes and overall liquidity.
As a quarter in we had $85 million outstanding on our credit facility and 270 million outstanding on our fixed rate investment grade term notes.
The revolving credit facility as compared to fixed term that allows us to efficiently manage our interest expense by reducing our outstanding get when prepayments occur.
We ended the quarter with a 0.82 times leverage ratio an increase from leveraged levels of just 0.67 times at the end of the second quarter.
As of the second quarter.
Excuse me as at the quarter and the company had total liquidity of $288 million, consisting of $23 million in cash and 265 million available under our credit facility.
We expect to draw funds under the credit facility when needed to grow the portfolio with accretive debt financing, which will benefit our shareholders.
I believe that we have sufficient available liquidity to execute on the funding estimates that had been provided by social or when you're on the call and.
And we continue to see ongoing contractual repayments and prepayments is a natural important part of our high quality and diversified lending portfolio.
In addition to our strong current liquidity the existing seasoned and diversified portfolio provides continuous cash flows, which bodes well for sustained liquidity into 2022.
That is complete our prepared remarks, and we'd be happy to take your questions and so operator could you. Please open the line at this time.
We will now begin the question and answer session task of question. Please pass star one on your Touchtone phone.
If you are using a speaker phone please pick up the handset before pressing the keys.
To withdraw your question. Please pass Star then.
Well now pass for a moment to assemble our roster.
Our first question today will come from Kristen labs with Piper Sandler.
Good afternoon, and thank you for taking my question So uhm.
First on that funding and the and the fourth quarter. So we know you're forecasting I think it's 100 $150 million of that funding I think in the past that you've said that.
You would expect to be at the high end there in the fourth quarter. So I'm wondering if that still stands and then just would you be able to also give a little bit of color on Directionally. What you would expect in first quarter of 2022 do you think there should be kind of a pullback pullback there due to some.
<unk> or do you think the momentum could actually remained elevated.
Oh I Chrisman this is subtle.
Yeah, I'll I'll I'll start with I would say listen I think the key thing with with portfolio fundings to take away too is that they occur late in the quarter and so when they do happen. So they don't necessarily contribute to income in the quarter, which they occur but more likely occur contribute into subsequent quarters first starting point to the <unk>.
Second point with regards listen I think we give a range because we're comfortable with the range it and so I would say.
We feel again Q4 is generally the busiest quarter.
Obviously, we've had $14 million are fundings quarter to date, but we continue to be really confident about the range that we give and cautiously optimistic about being towards the high end, but but there's a reason why we've given a range with regards to 20 to listen I think we're continuing to be cautiously optimistic that this.
Momentum or this is not a momentum is the wrong word, but this step increase in venture equity and venture that demand will continue into 22, and so I would say, although we haven't yet kind of formulated our business plan for 22, I wouldn't be surprised to say that we would take up our original.
First half of the year numbers as compared to 21 over 22, but I'm not yet ready to I don't think we're ready yet to say Q4 to Q1, but I would definitely say that the first half of the year is generally slower and I think we would expect that 22 would be higher than the first half of 21.
Okay, great. Thank Sasha that's that's all very helpful.
Just one other question from me so in the past I think you've you've talked about having a 2 billion dollar pipeline, but I don't think that was mentioned today. So I'm just curious if that still holds and I know that's the whole triple flat platform. So I'm also a little bit curious.
What related to just add $2 billion pipeline or whatever the pipeline is now.
Now is related to TPG or kind of also the.
Triple platform as a whole.
Yes, great question Crispen so the.
The pipeline continues to be very strong at some over 2 billion at the platform level task answer your question and higher than last quarter and with the venture growth stage TPG companies, it's over $1 billion up there.
Great. Thank you Jim and thank you both for taking my questions.
Our next question comes from Casey Alexander with Compass point.
Hi, good afternoon would it be your expectation.
That in the fourth quarter.
Given the amount of funding that you achieved in the third quarter as well as the prepayment that you already see in the fourth quarter.
Would that be enough for you to believe that you would cover the dividend with net investment income in the fourth quarter.
Christy won't take that course, yeah. So Casey. Thanks for the question that clearly is something that's on our mind I think we are on a journey here going from 30 to 32 cents and working our way up to the current dividend of 36. So I think we have line of sight on originate.
<unk> activity.
Prepayments Luckily have been a little lighter than what we've seen in the first half of the year. So as you can see we successfully leveraged up the the portfolio. So it's all of those things combine that will drive.
Ultimately, what we're trying to get to.
At year end, which is which is getting to the 36 pennies or covering the current dividend. So we see a line of sight towards that one of the one of the challenges that everyone has is his time of funding. So with 100 to 150 million target origination activity or funding origination activity would be when.
Does that happen and so.
If we hit those numbers and fund them all in late December it would be more challenging obviously to make that so I think the proof is in the putting over the next 60 days of when our timing of fundings will be and the contribution to margin and two NII. So we're on the path. It's still too early to tell but we definitely have line of sight on it.
Okay. Thank you for that secondly, subtle you discussed a lot of capital markets transactions that are taking place for your portfolio.
Should we should we be thinking then you've already had one prepayment of 28 million should we be thinking.
You know.
About a number that is measurably higher than that in the fourth quarter. How do you feel about and I know you guys have have a sightline into the capital plans of a lot of your portfolio companies, where do you where do you think that works out in the fourth quarter.
I would say Casey I think we continue to believe it's this one to two a quarter I would say.
And <unk> is a great example, right IP Hood in Q3, and they did pass off.
So I would say we are definitely seeing a slowdown in kind of the.
Immediate reaction to prepay alone after initial capital raise it's some good efforts on our side.
So I would say at least at this time, we don't expect to change in the lower pace of of Prepays, but again portfolio company developments can happen in big equity rounds, but at least right now we continue to guide to that one to two a quarter.
Okay. Thank you I will step back in the queue. Thank you.
Our next question comes from Indiana, O'shea with Wells Fargo Security.
Hi, everyone. Good afternoon.
Jim <unk> can you.
You talk about the new.
Capital formation adventure lending sort of the impact if at all what what you're seeing out there.
The impact for new origination and so forth.
Sure. It sounds like maybe your question is the competitive dynamic of in the eventual lending industry. If that's correct.
Yeah, Yeah yeah.
I would say listen.
Uptake gym's usual statement listen our primary competition is is equity and we are in a strong equity market and so equity from quality institutional investors continues to be a.
Competitive significant competitive element and as we've shown this year, we've been able to compete defend appropriately from the venture lending landscape.
I think from our perspective is similar to our market is very similar nuances to the middle market right. We all have our spots in particular listen we're very much focused on our group of select hike quality venture capital funds Tech only a tech enabled and consumer and so were the trusted partner.
To our corresponsive in their portfolio companies I think as a whole the debenture lending market just like the V. C equity market is very large and growing and so I think as we see new entrants or capital formation or whatever it may be I think it's a big enough market and we all kind of happily coexist.
And we all have our sweet spots and so I'd say, we're not seeing any material change in competitive dynamics or the portfolio isn't showing any change of pricing or prepay activity. So continue to defend based on brand reputation and track record.
Ooh that's helpful.
What would you say there is a shift in.
The yield structures like <unk> or is there still similar E E O T pricing.
For example, we're seeing that come down in some spots across the industry.
Curious if you have.
Any view on that.
Yeah. So so just add to what subject was saying.
Various parties out there have all kinds of different focuses butte equipment life science or whatever and.
This market is not about price.
<unk> threw triplepoint, it's not about.
Competition, along the lines of price and the yields.
Are holding up very very well and we're feeling really good in terms of yield I just want a differentiated in terms of.
Maybe the middle market, where it's more important in terms of price, it's about reputation references relationships track record.
It really isn't about.
This.
Got it that's helpful. Thanks, so much and congrats on the quarter.
Thank you.
Our next question comes from Christopher Nolan with Ladenburg Thalmann.
Hey, guys, what's the thinking on the supplemental dividend is gonna wait until the EPS covers the base dividend before considering that.
Yeah.
Social here, Yeah listen I think.
For us it's premature to talk about a supplement mental dividend I think a good news is we have spillover, it's helping for the earlier quarters. This year, we didn't cover but I would say too soon to discuss unless obviously capital gains and when some of these realized warning equity gains unlock.
Think that would be the timing and so we're still locked up for most of these.
Related assets.
And fragile, we're seeing right now where do you see the direction of the leverage ratio in the fourth quarter in.
Oh I mean.
Would love to continue to grow it right as some of the prior questions right I mean, if we if we hit our game plan.
Of our Funding's target.
We will definitely take leverage up I think the challenge is always prepayment activity and again, we have the good problem of our portfolio amortize. So every quarter. We every month actually we're getting principal back from natural amortization, So I would say borrowing and acceleration of prepayments.
We would expect portfolio growth and leverage to increase here in Q4 right.
Great. Thank you.
Our next question comes from Brian Lynch with Katie W.
Uh-huh.
Good afternoon, and thanks for taking my questions.
Really excellent quarter guys on several different fronts.
My question has to do with when you guys posted a quarter whiteness with several different equity a warrant positions.
Increasing in value significantly whether it's.
Public market.
Events or increased valuation rounds does that influence at all how you guys are approaching the market. When you guys are looking to do new deals.
With that at all influenced the pricing that you guys are looking to achieve on those loans because.
It seems to be that you could you know when you see big games like this you could be more aggressive on the yield aspect on some of these top.
Top companies that you see in the private Margaret in order to have access.
There is some equity or warrants in those companies.
Just any thoughts on Ah.
Big never like this sort of influence new Matt that interplay between yield upfront yield on the dad versus getting access to equity investments in these these high growth.
Super instrumental companies Yeah. Gregg question right. So let me be clear we are a lender, we're not a venture capital fund or a venture capitalist and so we are in the business of providing fantastic lawyers, let me say that returns that returns to to our our investors.
So fundamentally it's all about the yield the that yield and ensuring that given the risk profile and a risk assessment and ensuring that we get participation with the equity kickers in the warrants and so we don't subsidize one for the other jimena working together and an announcer 24 years.
So we've we've been through this billions of capital of capital to know better and but I'll I'll use. The example of revolute right. I mean revolute is just a great winter and the Fintech space, but guess what TPG lens to Monzo. We just closed a deal this quarter within 26, which are.
Large bellwether fintech companies that actually compete with revolute and we continued despite the fact that Fintech challenger Banks's is such a sector, where we're seeing significant.
Upticks in rounds, and valuations, we continued to hold our pricing on the debt side, while still getting equity Kickers I mean I'll take on in 2006 again, it's in the public domain. They raised a $900 million round at a 9 billion with vision during the quarter and guess, what we learnt to them. So again it just shows you the quality.
How were the go to for the premiere of the season, when we have sector expect to expertise and track record candidly. It creates demand portfolio companies want to work with us because of the knowledge because of the expertise and so yeah. Just again, we would never subsidize one for the other we we've been this in too long.
To know that and to do that and and we just stick to our knitting.
Gotcha understood.
The other question I had kind of address but I, but I want to kind of hit it on a different way.
Right now you have about 26th sense of.
Spillover income or about $8 million.
Is that a level.
That a level that you guys would liked to assume.
Or maintain going forward, because as we look out a year or two there could be potentially big changes in that number so is that a level where you're at today something you want to maintain or or is that something that you guys are comfortable meaningfully.
Growing in the future.
Yeah, let.
Let me start with any closer Jim can add so so maybe first is I would say we haven't.
Formerly established the level of what's the appropriate level of spillover to have other than we're glad to have spillover. It's an important thing I think the balance of that is that shareholders money right. So so for us it's important for our shareholders to benefit from the returns that we make an <unk>.
Distributing to them and again, we have a history of special dividends.
Doing those I think we've done it twice so important for us to do that.
And so I think and again not necessarily related to capital gain events, but also when we have strong core earnings. So so I would say listen I think it's a fine balance of wanting to make sure and to show and demonstrate to investors.
The benefit of the return profile of owning our shares in terms of dividends and special distributions at the same time, it's great to have.
The ability to smooth over some some lumpy quarters like we've had earlier this year, but but listen I think we continue to be confident if you look at the return profile of our assets. They continued to be strong and credit quality continues to be stable. We continue to grow the portfolio and so we're not looking to spillover as an excuse to cover right for us.
We should be covering and we will be covering and it's just a matter of again coming through some strong quarters of prepay activity in reloading our portfolio. So hopefully that answers your question.
Yes.
I appreciate the time this afternoon is really nice quarter guidance.
That concludes our question and answer session I'd like to turn the call back over to Mr. Leblanc for some closing remark.
Thank you operator as always so I'd like to thank everyone on the call for participating in the call. We look forward to talking with you all again next quarter. Thanks again.
Take care of the conference has now concluded.
Thank you for attending today's presentation you may now disconnect.