Triplepoint Venture Growth Bdc Corp. · NYSE:TPVG
Triplepoint Venture Growth Bdc — Q1 2019 Earnings Presentation
37 slides from Triplepoint Venture Growth Bdc's earnings presentation, May 1, 2019
Slide 1: Investor Presentation
Investor Presentation Q u a r t e r E n d e d M a r c h 3 1 , 20 1 9 May 1, 2019 w w w. t p v g . c o m
Slide 2: Forward Looking Statement
Forward Looking Statement Some of the statements in this presentation constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation involve risks and uncertainties, including statem
Slide 3: TriplePoint Venture Growth BDC Corp. Snapshot
TriplePoint Venture Growth BDC Corp. Snapshot Structure Publicly traded business development company (BDC) TPVG (NYSE) – Common Stock Symbol TPVY (NYSE) – 5.75% Notes Due 2022 (1) IPO Date March 5, 2014 Market Capitalization $341.5 million as of March 31, 2019 Net Asset Value $13.59 per share at Mar
Slide 4: TriplePoint Venture Growth BDC Corp. Overview
TriplePoint Venture Growth BDC Corp. Overview - The 4 R’s - HIGHLY DIFFERENTIATED Relationships Reputation BUILT FOR SUCCESS References Returns ALIGNED WITH PUBLIC SHAREHOLDERS DELIVERING RESULTS 4
Slide 5: Overview: Highly Differentiated
TriplePoint Venture Growth BDC Corp. Overview HIGHLY DIFFERENTIATED Lend to venture capital backed companies at the venture growth stage INVESTMENT Target companies backed by a select group of leading venture capital investors STRATEGY Focus on technology, life sciences, and other high-growth
Slide 6: Overview: Built for Success
TriplePoint Venture Growth BDC Corp. Overview BUILT FOR SUCCESS Externally-managed business development company (BDC) Common stock trades on the New York Stock Exchange: “TPVG” STRUCTURE Approximately $75 million of notes trade on the New York Stock Exchange: “TPVY” Managed by an affiliate o
Slide 7: Overview: Aligned with Public Shareholders
TriplePoint Venture Growth BDC Corp. Overview ALIGNED WITH PUBLIC SHAREHOLDERS 1.75% management fee 8% annualized hurdle rate for income incentive fee SHAREHOLDER FRIENDLY Total return requirement whereby incentive fees are capped at 20% of FEE STRUCTURE cumulative net increase in net assets r
Slide 8: Overview: Delivering Results
TriplePoint Venture Growth BDC Corp. Overview DELIVERING RESULTS DEMONSTRATED $2.9 billion of signed non-binding term sheets ORIGINATIONS $2.1 billion of cumulative originations CAPABILITIES (1) $1.1 billion of cumulative fundings $457.7 million of funded investments HIGH YIELDING, Include
Slide 9: First Quarter 2019 Highlights
Financial Highlights FIRST QUARTER 2019 HIGHLIGHTS Earned net investment income of $9.9 million, or $0.40 per share; Generated a net increase in net assets of $11.1 million, or $0.45 per share, resulting in a net asset value of $13.59 per share; Signed $250.0 million of new term sheets at Trip
Slide 10: Recent Developments
Financial Highlights RECENT DEVELOPMENTS The Company closed $17.1 million of additional debt commitments; The Company funded $39.8 million in new investments; and TPC’s direct originations platform entered into $95.0 million of additional non-binding signed term sheets with venture growth stag
Slide 11: Investment Highlights
Investment Highlights Industry Leading Differentiated Sponsor With Premium Investment Brand, Track Record Strategy and Platform Attractive Risk- Large And Growing Adjusted Returns Market With High With Equity Upside Barriers to Entry Potential Experienced Team Strong Financial Profile With Time-Test
Slide 12: Highly Experienced Management Team
Highly Experienced Management Team JIM LABÉ SAJAL SRIVASTAVA CHRIS GASTELU Chairman & President & Interim Chief Executive Officer Chief Investment Officer Chief Financial Officer Co-Founder of TriplePoint Co-Founder of TriplePoint Joined TriplePoint Capital Capital Capital in March 2019 as Int
Slide 13: TriplePoint Capital Platform Overview
TriplePoint Capital Platform Overview KEY HIGHLIGHTS Founded in 2005 by Jim Labe and Sajal Srivastava Headquartered on Sand Hill Road in Silicon Valley with regional offices in New York City and Boston Provides debt, equity and complementary services to privately-held, venture capital-backed c
Slide 14: TriplePoint Capital - Financed 400+ Leading Companies
TriplePoint Capital - Financed 400+ Leading Companies (1) (1) Selected list of current and past TriplePoint Capital customers 14
Slide 15: TriplePoint Capital's Unique Lifespan Approach
TriplePoint Capital’s Unique Lifespan Approach BDC’s Target Stage Identifies Strong Opportunities and Establishes Relationships Across All Stages PUBLIC Publicly traded shares VENTURE GROWTH STAGE LATER STAGE “Crossed the chasm” Generally at least $20 million in revenues EARLY STAGE Further
Slide 16: TPVG's Approach / Venture Growth Stage
TPVG’s Approach / Venture Growth Stage WE TAKE OUR CUSTOMERS THROUGH THE RED ZONE TO THE END ZONE Venture Seed Early Later Growth Stage Stage Stage Stage 16
Slide 17: Venture Growth Stage Market
Venture Growth Stage Market Fragmented Market with Limited Competition Given High Barriers to Entry S E E D S TA G E EARLY STAGE E A R LY S TA G E DEBT FUNDS L AT E R S TA G E LATER STAGE OTHER DEBT FUNDS VENTURE BDCs VENTURE BANKS V E N T U R E G R O W T H S TA G E OPPORTUNISTIC DEBT FUNDS PUBLIC 1
Slide 18: Compelling Relative Risk-Adjusted Returns
Compelling Relative Risk-Adjusted Returns HIGH YIELDS TO MATURITY WITH VC EQUITY SUPPORT AND LOW TOTAL LEVERAGE Generally short term financings (3-4 years) Higher Return Potential Typically amortizing facilities Through Warrants and Prepayments Prepayments boost returns from acceleration of fe
Slide 19: Illustrative TPVG Product Pricing Summary
Illustrative TPVG Product Pricing Summary CUSTOMIZED DEBT FINANCING BASED ON ANALYSIS OF THE PROSPECTIVE OBLIGOR TRANSACTION PRODUCT SIZE TERM COLLATERAL WARRANTS Growth Capital $5 Million - $50 36-60 Months Senior on All Assets Typically Loans Million Equipment $5 Million - $25 36-48 Months Equipme
Slide 20: Time-Tested Investment Process & Portfolio Management
Time-Tested Investment Process & Portfolio Management BENEFITS FROM MORE THAN 25 YEARS OF EXPERIENCE & EXPERTISE INVESTMENT & INVESTMENT ORIGINATIONS LEGAL INVESTMENT PROCESS CREDIT ANALYSIS COMMITTEE Leads and initial Initial screening Transaction presented Transaction screening performed t
Slide 21: High Yielding, High Quality Portfolio
High Yielding, High Quality Portfolio (1) (2) $424.4 16.5% $158.2 $18.0 $158.2 $15.3 MILLION(1) YIELD(3) MILLION(2)(1) MILLION MILLION(2)(1) MILLION DEBT PORTFOLIO YIELD PROFILE WARRANT PORTFOLIO EQUITY PORTFOLIO DEBT INVESTMENT FAIR WEIGHTED AVERAGE YIELD WARRANT FAIR VALUE DIRECT EQUITY FAIR VALUE
Slide 22: Portfolio Overview – Secured, Diversified Lending
Portfolio Overview – Secured, Diversified Lending (1) DIVERSIFIED ACROSS SUBSECTORS OF HIGH SECURED BY EITHER THE ENTIRE ENTERPRISE GROWTH INDUSTRIES OR SPECIFIC ASSETS Consumer Retail, 2% E-Commerce - Personal Goods, 3% Human Resources/Recruitment, 2% Direct Equity, Biofuels / Biomass, 3% Wireless
Slide 23: Strong Credit Performance and Proactive Monitoring
Strong Credit Performance and Proactive Monitoring (1) CREDIT RATINGS CATEGORY FAIR VALUE % OF DEBT INVESTMENT # OF PORTFOLIO COMPANIES Clear (1) $81,225 19.1% 4 White (2) $293,911 69.3% 20 Yellow (3) $40,163 9.5% 3 Orange (4) $6,886 1.6% 1 Red (5) $2,211 0.5% 1 $424,396 100.0% 29 Weighted average i
Slide 24: Portfolio Overview – Debt Investments
Portfolio Overview – Debt Investments Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Equipment Financing Growth Capital Loan Gr
Slide 25: Portfolio Overview – Warrant and Equity Investments
Portfolio Overview – Warrant and Equity Investments 25
Slide 26: Financial Highlights
Financial Highlights As of March 31, 2019
Slide 27: Financial Highlights: Portfolio Size and Yield
Financial Highlights PORTFOLIO SIZE * $500.0 $457.7 $433.4 $401.3 $398.4 $372.1 $33.3 $400.0 $351.3 $28.1 $328.4 $311.1 $21.0 $20.0 $23.2 $300.0 $15.4 $253.8 $27.5 $18.4 $200.0 $17.9 $405.3 $424.4 $352.1 $380.3 $375.2 $313.0 $292.7 $323.8 $100.0 $235.9 $0.0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18
Slide 28: Financial Highlights: NII Returns and Leverage Ratio
Financial Highlights NII RETURN ON AVERAGE EQUITY (ROAE) AND NII RETURN ON AVERAGE ASSETS (ROAA) 18.0% 16.6% 14.8% 14.9% 16.0% 13.6% 14.0% 12.1% 11.9% 12.0% 10.2% 8.9% 10.0% 8.0% 8.0% 10.3% 9.7% 9.0% 9.4% 8.3% 8.6% 6.0% 4.0% 5.7% 6.0% 5.2% 2.0% 0.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1
Slide 29: Statement of Operations
Financial Highlights STATEMENT OF OPERATIONS * FINANCIAL HIGHLIGHTS THREE MONTHS ENDED THREE MONTHS ENDED 3/31/19 3/31/18 Total investment and other income $17,491 $12,619 Total operating expenses 7,576 6,672 Net investment income 9,915 5,947 Net realized and unrealized gains 1,154 1,996 Net increas
Slide 30: Statement of Assets and Liabilities
Financial Highlights STATEMENT OF ASSETS AND LIABILITES * PERIOD ENDED 3/31/19 12/31/18 3/31/18 Investments at fair value $457,695 $433,417 $401,258 Short-term investments $49,994 $19,999 $124,911 Cash** $41,987 $9,949 $18,320 Total assets $554,376 $467,054 $549,725 Borrowings $153,847 $95,943 $169,
Slide 31: Overview of Leverage
Overview of Leverage SUMMARY OF REVOLVING CREDIT FACILITY Facility Size: $210 million (upsized from $200 million in January 2018) Lenders: Deutsche Bank AG (Syndication Agent), KeyBank, TIAA Bank and Union Bank (updated in conjunction with facility renewal in January 2018) Rate: 1-Month LIBOR or Len
Slide 32: Research Coverage
Research Coverage Casey Alexander George Bahamondes Mitchel Penn (646) 452-7083 (212) 250-1587 (410) 583-5976 calexander@compasspointllc.com george.bahamondes@db.com mpenn@janney.com Ryan Lynch Christopher Nolan Finian O’Shea, CFA (314) 342-2918 (212) 409-2068 (212) 214-5082 lynchr@kbw.com cnolan@la
Slide 33: Investment Highlights
Investment Highlights Industry Leading Differentiated Sponsor With Premium Investment Brand, Track Record Strategy and Platform Attractive Risk- Large And Growing Adjusted Returns Market With High With Equity Upside Barriers to Entry Potential Experienced Team Strong Financial Profile With Time-Test
Slide 34: Appendix
Appendix
Slide 35: Venture Market
Venture Market VENTURE INVESTMENT BY QUARTER $30.0 1,416 1,450 1,371 1,362 1,400 $25.0 $27.5 Number of Deals $24.9 $24.7 1,350 $20.0 1,302 $23.0 $ in Billions $20.3 $21.1 1,300 $19.6 $15.0 $19.1 1,229 $15.2 1,211 1,250 1,279 $10.0 1,233 1,200 $5.0 1,206 1,150 $0.0 1,100 Q1 -2017 Q2 -2017 Q3 -2017 Q4
Slide 36: Venture Market: Exits
Venture Market VENTURE-BACKED EXITS BY YEAR 900 779 800 726 711 Number of Deals 700 600 502 492 482 500 394 372 400 300 200 117 125 50 49 81 77 58 85 100 39 12 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD IPOs M&A Deals EXIT TIMING BY YEAR 9 8 8 7 7 7 7 7 7 6 6 6 6 Years to Exit 5 6 6 5 4 5 5
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