TriplePoint Venture Growth BDC Corp. · NYSE:TPVG
TriplePoint Venture Growth BDC — Q3 2019 Earnings Presentation
37 slides from TriplePoint Venture Growth BDC's earnings presentation, Nov 6, 2019
Slide 1: Investor Presentation Quarter Ended September 30, 2019
Investor Presentation Quarter Ended September 30, 2019 N o v e m b e r 6 , 20 1 9 w w w. t p v g . c o m
Slide 2: Forward Looking Statements
Forward Looking Statements 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 state
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 $410.0 million as of September 30, 2019 Price $14.19 per share at September
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 ▪ $3.4 billion of signed non-binding term sheets ORIGINATIONS ▪ $2.3 billion of cumulative originations CAPABILITIES (1) ▪ $1.3 billion of cumulative fundings ▪ $526.9 million of funded investments HIGH YIELDING, ▪ Include
Slide 9: Financial Highlights: Third Quarter 2019
Financial Highlights THIRD QUARTER 2019 HIGHLIGHTS ▪ Signed $301.2 million of new term sheets at TriplePoint Capital LLC (“TPC”), and TPVG closed $81.2 million of new debt commitments to venture growth stage companies; ▪ Funded $84.7 million in debt investments with a 13.0% weighted average annualiz
Slide 10: Financial Highlights: Year to Date 2019
Financial Highlights YEAR TO DATE 2019 HIGHLIGHTS ▪ Earned net investment income of $27.2 million, or $1.09 per share; ▪ Generated a net increase in net assets of $26.1 million, or $1.05 per share; ▪ Signed $754.9 million of new term sheets at TPC, and TPVG closed $377.9 million of new debt commitme
Slide 11: Financial Highlights: Recent Developments
Financial Highlights RECENT DEVELOPMENTS Since October 1, 2019(1): ▪ The Company funded $94.3 million in new debt investments; ▪ The Company closed $61.3 million of additional debt commitments; ▪ The Company received $26 million of principal prepayments generating approximately $2.8 million of accel
Slide 12: 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 13: Highly Experienced Management Team
Highly Experienced Management Team JIM LABÉ SAJAL SRIVASTAVA CHRIS MATHIEU Chairman & President & Chief Financial Officer Chief Executive Officer Chief Investment Officer ▪ Co-Founder of TriplePoint ▪ Co-Founder of TriplePoint ▪ Joined TriplePoint Capital Capital Capital in 2019 as CFO ▪ Pioneer of
Slide 14: 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 15: TriplePoint Capital - Financed 400+ Leading Companies
TriplePoint Capital - Financed 400+ Leading Companies (1) (1) Selected list of current and past TriplePoint Capital customers 15
Slide 16: 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 17: 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 17
Slide 18: 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 19: 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 20: 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 21: 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 22: High Yielding, High Quality Portfolio
High Yielding, High Quality Portfolio (1) (2) $477.8 13.0% $19.5 $158.2 $28.7 $158.2 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 23: 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 E-Commerce - Personal Goods, 2.4% Biofuels / Biomass, 1.4% Consumer Retail, 1.9% Human Resources/Recruitment, 1.9% Direct Equity, H
Slide 24: 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) $92,778 19.4% 6 White (2) $336,884 70.5% 17 Yellow (3) $20,870 4.4% 2 Orange (4) $24,598 5.1% 2 Red (5) $2,658 0.6% 2 $477,788 100.0% 29 Weighted average
Slide 25: 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 Growth Capital Loan Equipment Financing Gr
Slide 26: Portfolio Overview – Warrant and Equity Investments
Portfolio Overview – Warrant and Equity Investments 26
Slide 27: Financial Highlights
Financial Highlights As of September 30, 2019
Slide 28: Financial Highlights: Portfolio Size and Yield
Financial Highlights PORTFOLIO SIZE * $600.0 $526.0 $496.0 $457.7 $500.0 $433.4 $48.2 $401.3 $398.4 $372.1 $351.3 $51.3 $400.0 $328.4 $33.3 $311.1 $21.0 $28.1 $253.8 $20.0 $23.2 $300.0 $15.4 $27.5 $18.4 $444.7 $477.8 $200.0 $17.9 $380.3 $405.3 $424.4 $352.1 $375.2 $313.0 $292.7 $323.8 $100.0 $235.9
Slide 29: 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% 12.0% 10.2% 8.9% 10.0% 8.0% 7.8% 8.0% 10.3% 9.7% 9.0% 9.4% 8.3% 8.6% 6.0% 7.7% 4.0% 5.7% 6.0% 5.2% 5.1% 2.0% 0.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18
Slide 30: Financial Highlights: Statement of Operations
Financial Highlights STATEMENT OF OPERATIONS * THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS FINANCIAL HIGHLIGHTS ENDED 9/30/19 ENDED 9/30/18 ENDED 9/30/19 ENDED 9/30/18 Total investment and other income $15,690 $17,678 $52,122 $46,849 Total operating expenses 8,577 7,668 24,971 22,092 Net inves
Slide 31: Financial Highlights: Statement of Assets and Liabilities
Financial Highlights STATEMENT OF ASSETS AND LIABILITES * PERIOD ENDED 9/30/2019 6/30/2019 12/31/2018 9/30/2018 Investments at fair value $526,001 $496,021 $433,417 $351,315 Short-term investments - - $19,999 $69,866 Cash** $60,627 $24,371 $9,949 $14,060 Total assets $591,083 $525,267 $467,054 $438,
Slide 32: Overview of Leverage
Overview of Leverage SUMMARY OF REVOLVING CREDIT FACILITY Facility Size: $300 million (upsized from $265 million in August 2019) Lenders: Deutsche Bank AG (Syndication Agent), KeyBank, TIAA Bank, Union Bank, Hitachi Capital and NBH Bank (updated in conjunction with facility amendment in August 2019)
Slide 33: 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 Chris York Ryan Lynch Christopher Nolan (415) 835-8965 (314) 342-2918 (212) 409-2068 cyork@jmpsecurities.com lynchr@k
Slide 34: Appendix
Appendix
Slide 35: Venture Market
Venture Market VENTURE INVESTMENT BY QUARTER $35.0 1 $30.0 1 Number of Deals $25.0 $27.5 $28.7 $28.2 1 $ in Billions $24.9 $24.7 $20.0 $23.0 $20.3 $21.1 1 $15.0 $19.6 $19.1 $15.2 0 $10.0 $5.0 0 $0.0 0 Q1 -2017 Q2 -2017 Q3 -2017 Q4 -2017 Q1 -2018 Q2 -2018 Q3 -2018 Q4 -2018 Q1-19 Q2-19 Q3-19 Investmen
Slide 36: Venture Market: Exits and Exit Timing
Venture Market VENTURE-BACKED EXITS BY YEAR 900 779 800 726 711 700 Number of Deals 600 502 492 482 500 437 394 372 400 300 200 117 50 49 81 77 58 85 67 100 39 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 7 6 6 Years to Exit 5 6 6 4 5 5
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