TriplePoint Venture Growth BDC Corp. · NYSE:TPVG
TriplePoint Venture Growth BDC — Q4 2017 Earnings Presentation
32 slides from TriplePoint Venture Growth BDC's earnings presentation, 2018
Slide 1: Investor Presentation Fourth Quarter and Fiscal Year 2017
INVESTOR PRESENTATION Fourth Quarter and Fiscal Year December 31, 2017 www.tpvg.com
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 $225.0 million as of December 31, 2017 Net Asset Value $13.25 per share at
Slide 4: Built for Success and Aligned with Public Investors
TRIPLEPOINT VENTURE GROWTH BDC OVERVIEW Built for Success and Aligned with Public Investors ▪ Provide financing primarily to venture capital backed companies at the venture growth stage Differentiated Investment ▪ Target companies backed by a select group of leading venture capital investors Strateg
Slide 5: Delivering Results Since Our Initial Public Offering in March 2014
DELIVERING RESULTS SINCE OUR INITIAL PUBLIC OFFERING IN MARCH 2014 Highlights From IPO (3/5/2014) Through Total Return Since IPO (2) 12/31/2017 145 ✓ Demonstrated origination capabilities(1) 140 TPVG ✓ $1.7 billion of signed term sheets 135 28.9% ✓ $1.4 billion of total originations 130 125 Peer ✓ A
Slide 6: Recent Developments – Fourth Quarter 2017 Highlights
RECENT DEVELOPMENTS – FOURTH QUARTER 2017 HIGHLIGHTS • Signed $55.0 million of new term sheets and closed $65.0 million of new debt commitments • Funded $80.1 million in new debt investments with a 14.0% weighted average annual portfolio yield at origination and $1.3 million in equity investments to
Slide 7: Recent Developments – Fiscal Year 2017 Highlights
RECENT DEVELOPMENTS – FISCAL YEAR 2017 HIGHLIGHTS • Recognized record total investment income of $51.5 million, or $3.16 per share, an increase of 18% over 2016; • Earned record level of GAAP net investment income of $26.3 million, or $1.61 per share, an increase of 14% over 2016; • Signed record de
Slide 8: 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 9: Highly Experienced Management Team
HIGHLY EXPERIENCED MANAGEMENT TEAM Jim Labe Sajal Srivastava Andrew J Olson Chairman, President, Chief Executive Officer Chief Investment Officer Chief Financial Officer ▪ Co-Founder of TriplePoint ▪ Co-Founder of TriplePoint ▪ Chief Financial Officer of Capital Capital TriplePoint Capital ▪ Pioneer
Slide 10: TriplePoint Capital Overview - Global Venture Lending Platform
TRIPLEPOINT CAPITAL OVERVIEW - GLOBAL VENTURE LENDING PLATFORM ▪ Launched in 2006 and recognized as the venture lending market leader ▪ Sand Hill Road-based global financing provider with a direct originations platform targeting investments around the world ▪ Provides debt, equity and complementary
Slide 11: TriplePoint Capital - Financed 400+ Leading Companies
TRIPLEPOINT CAPITAL - FINANCED 400+ LEADING COMPANIES (1) Page: 10 (1) Selected list of current and past TriplePoint Capital customers.
Slide 12: TriplePoint Capital's Unique Lifespan Approach
TRIPLEPOINT CAPITAL’S UNIQUE LIFESPAN APPROACH Identifies Strong Opportunities and BDC’S TARGET STAGE 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 13: 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 Page: 12
Slide 14: Venture Growth Stage Market
VENTURE GROWTH STAGE MARKET Fragmented Market with Limited Competition Given High Barriers to Entry Seed Stage EARLY STAGE Early Stage VENTURE DEBT FUNDS Later Stage LATER STAGE OTHER VENTURE VENTURE VENTURE DEBT FUNDS BDCs BANKS Venture Growth Stage OPPORTUNISTIC DEBT FUNDS Public Page: 13
Slide 15: Differentiated Investment Strategy
DIFFERENTIATED INVESTMENT STRATEGY Relationships Reputation References Returns DISTINCT FOCUS AND ASSET SELECTION SELECT GROUP OF LEADING VC INVESTORS HIGH GROWTH INDUSTRY FOCUS ATTRACTIVE RISK-ADJUSTED RETURNS WITH EQUITY UPSIDE Page: 14
Slide 16: Compelling Relative Risk-Adjusted Returns
COMPELLING RELATIVE RISK-ADJUSTED RETURNS High Yields to Maturity With VC Equity Support and Low Total Leverage Potentially Increased ▪ Generally short term financings (3-4 years) Returns Through Warrants ▪ Typically amortizing facilities with a meaningful amount of prepays ▪ Target loan-to-enterpri
Slide 17: Illustrative TPVG Product Pricing Summary
ILLUSTRATIVE TPVG PRODUCT PRICING SUMMARY Customized Debt Financing Based on Analysis of the Prospective Obligor PRODUCT TRANSACTION SIZE TERM COLLATERAL WARRANTS Growth Capital Loans $5 Million - $50 Million 36-60 Months Senior on All Assets Typically Equipment Financings $5 Million - $25 Million 3
Slide 18: 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 screening ▪ Initial screening performed ▪ Transaction presented to ▪ Transactio
Slide 19: High Yielding, High Quality Portfolio
HIGH YIELDING, HIGH QUALITY PORTFOLIO (1) (2) $352.1 $20.0 $100.1 Activity MILLION(1) MILLION (1) MILLION (2) AND PIPELINE (3) DEBT PORTFOLIO WARRANT & EQUITY UNFUNDED COMMITMENTS SINCE DECEMBER 31, 2017 PORTFOLIO DEBT INVESTMENT FAIR VALUE WARRANT FAIR VALUE TOTAL UNFUNDED COMMITMENTS ADDITIONAL NO
Slide 20: Portfolio Overview – Secured, Diversified Lending
PORTFOLIO OVERVIEW – SECURED, DIVERSIFIED LENDING (1) TPVG has exposure to attractive high The majority of the portfolio is secured by growth industries and the current portfolio the entire underlying enterprise of the has diversification across those industries borrower, typically including intelle
Slide 21: Strong Credit Performance and Proactive Monitoring
STRONG CREDIT PERFORMANCE AND PROACTIVE MONITORING (1) Credit Ratings # of PORTFOLIO CATEGORY FAIR VALUE % of DEBT INVESTMENT PORTFOLIO COMPANIES Clear (1) $54,071 15.4% 3 White (2) $243,915 69.3% 12 Yellow (3) $46,187 13.1% 3 Orange (4) $7,879 2.2% 1 Red (5) - - - $352,052 100.0% 19 Weighted averag
Slide 22: Portfolio Overview – Debt Investments
PORTFOLIO OVERVIEW – DEBT INVESTMENTS Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Equipment Financing Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Growth Capital Loan Gr
Slide 23: Portfolio Overview – Warrant and Equity Investments
PORTFOLIO OVERVIEW – WARRANT AND EQUITY INVESTMENTS Page: 22
Slide 24: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 25: Financial Highlights
FINANCIAL HIGHLIGHTS Portfolio Size Leverage Ratio 0.90 X $400.0 $374.3 $372.1 $ in Millions 0.78X 0.80 X $350.0 $14.3 $328.4 $20.0 $308.9 $311.1 0.70 X 0.65X $299.6 $282.8 $15.4 0.60X $300.0 $271.7 $262.1 $16.3 $253.8 $18.4 0.60 X $12.8 0.52X $12.2 0.50X 0.51X $250.0 $12.1 0.47X $13.9 $17.9 0.50 X
Slide 26: Financial Highlights
FINANCIAL HIGHLIGHTS Statement of Operations * Three Months Three Months Year Ended Year Ended Ended 12/31/17 Ended 12/31/16 12/31/17 12/31/16 Total investment and other income $11,105 $10,649 $51,510 $43,635 Total operating expenses 5,956 5,819 25,244 20,624 Net investment income 5,149 4,830 26,266
Slide 27: Financial Highlights
FINANCIAL HIGHLIGHTS Statement of Assets and Liabilities * 12/31/17 9/30/17 12/31/16 9/30/16 Investments at fair value $372,103 $311,136 $374,311 $308,857 Short-term investments 124,909 94,962 39,990 79,829 Cash** 10,006 8,472 15,478 20,762 Total assets 510,284 417,605 434,222 414,346 Borrowings 139
Slide 28: 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, EverBank and Union Bank (updated in conjunction with facility renewal in January 2018) RATE: 1-Month LIBOR or Lend
Slide 29: 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 30: Research Coverage
RESEARCH COVERAGE Casey Alexander Mitchel Penn (646) 452-7083 (410) 583-5976 calexander@compasspointllc.com mpenn@janney.com Christopher Nolan Jonathan Bock (212) 409-2068 (704) 410-1874 cnolan@landenburg.com jonathan.bock@wellsfargo.com Page: 29 Strictly Confidential
Slide 31: Appendix
APPENDIX
Slide 32: Venture Market
VENTURE MARKET Venture Investment by Quarter Commitments by Year 25 1600 45 300 1400 40 20 250 1200 35 Number of Deals Number of Funds 30 200 1000 $ in Billions $ in Billions 15 25 800 150 20 $42 10 $19.8 $19.0 $18.4 $18.7 600 $17.3 15 $31 $32 100 $15.6 $28 $14.4 $14.0 $13.9 $11.7 400 5 10 $19 $20 $
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