Hercules Capital Inc (HTGC) 2023 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Hercules Q1 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand over the conference to today's speaker, Michael Hara, Managing Director of Investor Relations. Please go ahead, Michael.

美好的一天，謝謝你的支持。歡迎參加 Hercules 2023 年第一季度收益電話會議。 （操作員說明）請注意，今天的會議正在錄製中。我現在想把會議交給今天的演講者，投資者關係董事總經理 Michael Hara。請繼續，邁克爾。

Thank you, Mark. Good afternoon, everyone, and welcome to Hercules conference call for the first quarter of 2023. With us on the call today from Hercules are Scott Bluestein, CEO and Chief Investment Officer; and Seth Meyer, CFO. Hercules financial results were released just after today's market close and can be accessed from Hercules' Investor Relations section at investor.htgc.com. An archived webcast replay will be available on the Investor Relations web page for at least 30 days following the conference.

謝謝你，馬克。大家下午好，歡迎參加 2023 年第一季度的 Hercules 電話會議。今天來自 Hercules 的電話會議是 CEO 兼首席投資官 Scott Bluestein；和首席財務官 Seth Meyer。 Hercules 財務業績在今天收盤後發布，可從 investor.htgc.com 的 Hercules 投資者關係部分獲取。會議結束後至少 30 天，投資者關係網頁上將提供存檔的網絡廣播重播。

During this call, we may make forward-looking statements based on our own assumptions and current expectations. These forward-looking statements are not guarantees of future performance and should not be relied upon in making any investment decision. Actual financial results may differ from the forward-looking statements made during this call for a number of reasons, including, but not limited to, the risks identified in our annual report on Form 10-K and other filings that are publicly available on the SEC's website.

在此次電話會議中，我們可能會根據我們自己的假設和當前預期做出前瞻性陳述。這些前瞻性陳述不是未來業績的保證，不應作為做出任何投資決定的依據。由於多種原因，實際財務結果可能與本次電話會議期間做出的前瞻性陳述不同，包括但不限於我們在 10-K 表格年度報告和美國證券交易委員會公開提供的其他文件中確定的風險網站。

Any forward-looking statements made during this call are made only as of today's date and Hercules assumes no obligation to update any such statements in the future. And with that, I'll turn the call over to Scott.

本次電話會議期間作出的任何前瞻性陳述僅在今天作出，Hercules 不承擔在未來更新任何此類陳述的義務。有了這個，我會把電話轉給斯科特。

Thank you, Michael, and thank you all for joining the Hercules Capital Q1 2023 Earnings Call. Following our record operating performance in 2022 and despite a volatile market backdrop, partially driven by the failure of our largest competitor in the asset class, Hercules Capital delivered another quarter of record operating performance in Q1.

謝謝邁克爾，也感謝大家加入 Hercules Capital 2023 年第一季度財報電話會議。繼我們在 2022 年創紀錄的經營業績之後，儘管市場背景動盪，部分原因是我們在資產類別中最大的競爭對手的失敗，但 Hercules Capital 在第一季度又實現了創紀錄的經營業績。

Our ability to consistently deliver strong results speaks to the quality of our employees, the strength of the platform that we have built in our 18-plus years of operating with an emphasis on prudent underwriting, asset and liability diversification and an unwavering commitment to the venture and growth stage ecosystem that we service.

我們始終如一地提供出色業績的能力說明了我們員工的素質，我們在 18 多年的運營中建立的平台的實力，強調審慎的承保、資產和負債多元化以及對風險投資的堅定承諾和我們服務的成長期生態系統。

Building a venture and growth stage lending business that operates at scale and consistently delivers strong credit and financial performance does not come easily or by accident. Since inception in 2003, and throughout our history, we have focused on sticking with our steadfast core principles, steady, patient and disciplined underwriting, diversifying and strengthening both sides of our balance sheet, maintaining strong liquidity and continuously investing in our team and systems.

建立規模化運營並始終如一地提供強勁信貸和財務業績的風險投資和成長期貸款業務並非易事，也並非偶然。自 2003 年成立以來，縱觀我們的歷史，我們一直專注於堅持我們堅定的核心原則，穩健、耐心和紀律嚴明的承保，多元化和加強我們資產負債表的兩側，保持強勁的流動性，並持續投資於我們的團隊和系統。

From the beginning of 2021, our platform has raised more than $2.5 billion in new capital and significantly increased our credit facilities with better flexibility in terms. We further enhanced and expanded our reach and capabilities with the creation of our wholly owned RIA, which manages our 3 private funds. And now with the unexpected changes in our competitive environment in Q1, we are presented with a tremendous opportunity that we believe will grow our presence and further strengthen our leadership position in the venture and growth stage lending landscape.

從 2021 年初開始，我們的平台籌集了超過 25 億美元的新資本，並顯著增加了我們的信貸額度，條款更加靈活。我們通過創建全資擁有的 RIA 來進一步增強和擴大我們的影響力和能力，該機構管理著我們的 3 個私募基金。現在，隨著我們第一季度競爭環境的意外變化，我們面臨著巨大的機會，我們相信這將擴大我們的影響力，並進一步加強我們在風險投資和成長階段貸款領域的領導地位。

The current market requires a combination of playing skillful and selective offense in terms of new business and disciplined and tight defense on credit. We intend to do both and we believe that we are uniquely positioned to be able to do so successfully.

當前市場需要在新業務方面巧妙而有選擇性地進攻，並在信貸方面嚴密嚴密防禦。我們打算兩者都做，我們相信我們具有獨特的優勢，能夠成功地做到這一點。

Q1 was another quarter of investment in the company, where we took additional steps to strengthen our platform, originations capabilities and back office functionality and sophistication. We added talent across the organization and now have in excess of 105 full-time employees. During the quarter, we also established a new private credit fund vehicle and raised additional capital to enhance liquidity in the BDC.

第一季度是對公司的又一個季度投資，我們採取了額外的措施來加強我們的平台、發起能力以及後台功能和復雜性。我們在整個組織中增加了人才，現在擁有超過 105 名全職員工。在本季度，我們還建立了一個新的私人信貸基金工具並籌集了額外資金以增強 BDC 的流動性。

As of the end of Q1, we managed more than $3.9 billion of assets across our platform, an increase of 33.2% year-over-year. The investments that we have made provide us with continuing optimism and confidence in the trajectory of our business for the remainder of 2023.

截至第一季度末，我們在整個平台管理的資產超過 39 億美元，同比增長 33.2%。我們所做的投資使我們對 2023 年剩餘時間的業務發展軌跡保持樂觀和信心。

Let me recap some of the key highlights of our performance for Q1. We started out 2023 with record gross fundings for our first quarter with over $476 million, which led to strong net debt investment portfolio growth of over $153 million. This is the fifth consecutive quarter that we have been able to deliver in excess of $100 million of quarterly net debt investment portfolio growth, which positions us favorably to be able to continue to drive earnings momentum in 2023.

讓我回顧一下我們第一季度業績的一些主要亮點。 2023 年初，我們第一季度的總融資額超過 4.76 億美元，創歷史新高，這導致淨債務投資組合增長超過 1.53 億美元。這是我們連續第五個季度實現超過 1 億美元的季度淨債務投資組合增長，這使我們有能力在 2023 年繼續推動盈利勢頭。

Our Q1 originations activity was driven by both our technology and life sciences teams, delivering strong funding performance during the quarter. Our funding activity demonstrated balance between our 2 core verticals, while our new commitments were weighted slightly more towards technology companies. We funded debt capital to 31 different companies in Q1, of which 9 were new borrower relationships.

我們的第一季度發起活動由我們的技術和生命科學團隊推動，在本季度提供了強勁的資金表現。我們的融資活動顯示了我們 2 個核心垂直領域之間的平衡，而我們的新承諾略微偏重於科技公司。我們在第一季度為 31 家不同的公司提供了債務資本，其中 9 家是新的借款人關係。

Consistent with what we saw throughout 2022, we were again able to expand our funding relationship with numerous portfolio companies that continue to show strength and achieve performance milestones during the quarter. In Q1, we were also able to provide new commitments to 6 current borrowers, which strengthens our incumbency position in several strong companies. We expect this trend of increased follow-on fundings to existing portfolio companies to continue in 2023.

與我們在整個 2022 年所看到的情況一致，我們再次能夠擴大與眾多投資組合公司的融資關係，這些公司在本季度繼續展現實力並實現業績里程碑。在第一季度，我們還能夠向 6 個現有借款人提供新的承諾，這加強了我們在幾家強大公司中的在職地位。我們預計這種增加對現有投資組合公司的後續資金的趨勢將在 2023 年繼續。

The momentum that we saw throughout 2022 in terms of originations accelerated in Q1, following the failure of SVB and general turmoil across the regional bank landscape. We intend to use our experience and best-in-class underwriting acumen to selectively target the best opportunities that present themselves and avoid the many marginal deals that we are currently seeing.

在 SVB 倒閉和整個區域銀行格局的普遍動蕩之後，我們在整個 2022 年看到的發起方面的勢頭在第一季度加速。我們打算利用我們的經驗和一流的承保敏銳度，有選擇地瞄准出現的最佳機會，避免我們目前看到的許多邊際交易。

Given our strong funding performance in Q1, we expect funding activity to be weighted towards the second half of Q2. Since the close of Q1 and as of May 2, 2023, our deal team has closed $1 million of new commitments and funded $3.9 million. We have pending commitments of an additional $510 million in signed nonbinding term sheets. We expect deal quality and terms to continue to get better as the year plays out, and our balance sheet and liquidity is positioned favorably to be able to benefit from this.

鑑於我們在第一季度的強勁融資表現，我們預計融資活動將集中在第二季度下半年。自第一季度末和 2023 年 5 月 2 日起，我們的交易團隊已完成 100 萬美元的新承諾並提供了 390 萬美元的資金。我們在已簽署的非約束性條款清單中有額外 5.1 億美元的未決承諾。我們預計隨著今年的結束，交易質量和條款將繼續改善，我們的資產負債表和流動性處於有利地位，能夠從中受益。

Volatility across the equity and credit markets increased in Q1 and in particular, in the financial markets due to the SVB situation. Valuations for both public and private companies remain under pressure, and the capital markets have stayed more selective on the equity side. Given the dislocation created, we recently established a new credit lending program to provide capital to help the disruptive companies navigate the challenges from the recent market events.

由於 SVB 的情況，第一季度股票和信貸市場的波動性增加，尤其是金融市場。上市公司和私營公司的估值仍然面臨壓力，資本市場對股票方面的選擇更為嚴格。鑑於造成的錯位，我們最近制定了一項新的信貸計劃，以提供資金幫助顛覆性公司應對近期市場事件帶來的挑戰。

Consistent with our historical approach to underwriting credit, we will remain patient and disciplined on these new opportunities, and we will always prioritize credit quality over chasing higher risk transactions with a yield premium. Hercules has always maintained a credit-first culture and we expect this to continue to serve us well, particularly in periods of volatility.

與我們承銷信貸的歷史方法一致，我們將對這些新機會保持耐心和紀律，我們將始終優先考慮信貸質量，而不是追逐收益溢價的高風險交易。 Hercules 始終保持信用至上的文化，我們希望這能繼續為我們服務，尤其是在動盪時期。

During Q1, portfolio company exits and liquidity events for the industry continue to reflect the ongoing pressure in the equity and broader financial markets. Having said that, during Q1, our investment portfolio continued to exhibit strong M&A activity with 8 M&A transactions closing in the first quarter. We had one additional new M&A transaction in Q1, which was Sanofi's announced acquisition of Prevention Bio which was announced in March and subsequently closed on April 27. The previously announced acquisition of Oak Street also closed on May 1. In addition, this week, IVERIC Bio announced that they have entered into a definitive agreement to be acquired by Astellas Pharma, and we added one new confidential IPO submission, giving us 2 in the current pipeline.

在第一季度，投資組合公司的退出和行業的流動性事件繼續反映出股票和更廣泛的金融市場的持續壓力。話雖如此，在第一季度，我們的投資組合繼續表現出強勁的併購活動，第一季度完成了 8 筆併購交易。我們在第一季度還有一項新的併購交易，即賽諾菲宣布收購 Prevention Bio，該收購於 3 月宣布，隨後於 4 月 27 日完成。此前宣布的對 Oak Street 的收購也於 5 月 1 日完成。此外，本週，IVERIC Bio 宣布他們已達成最終協議，將被 Astellas Pharma 收購，我們增加了一項新的機密 IPO 提交，使我們在當前管道中有 2 個。

We continue to expect to see strong M&A activity across our portfolio in the quarters to come, which validates the great work and selective underwriting that our investment teams do.

我們繼續期望在未來幾個季度看到我們投資組合中的強勁併購活動，這證實了我們的投資團隊所做的出色工作和選擇性承銷。

As we anticipated, early loan repayments increased further in Q1 to approximately $202 million, slightly above our guidance of $150 million to $200 million and an increase from $131 million in Q4 2022. For Q2 2023, driven in large part by M&A, we expect prepayments to increase further to between $225 million and $325 million, although this could change as we progress in the quarter. The increasing levels of prepayments over the last several quarters, despite the market volatility, reflects the quality of our loan portfolio as well as our team's ability to continue to identify and target the most promising growth stage companies in the market.

正如我們預期的那樣，第一季度的提前還款額進一步增加至約 2.02 億美元，略高於我們 1.5 億美元至 2 億美元的指導值，高於 2022 年第四季度的 1.31 億美元。對於 2023 年第二季度，在很大程度上受併購驅動，我們預計提前還款進一步增加到 2.25 億美元到 3.25 億美元之間，儘管隨著我們在本季度的進展，這可能會發生變化。儘管市場波動，但過去幾個季度預付款水平的增加反映了我們貸款組合的質量以及我們團隊繼續識別和瞄準市場上最有前途的成長階段公司的能力。

In Q1, we generated record total investment income of $105.1 million and record net investment income of $65.5 million or $0.48 per share, providing 123% coverage of our base distribution of $0.39 per share. This is our second consecutive quarter of delivering record net investment income and we expect that trend to continue in Q2.

第一季度，我們產生了創紀錄的 1.051 億美元總投資收益和創紀錄的 6550 萬美元淨投資收益或每股 0.48 美元，覆蓋了每股 0.39 美元的基礎分配的 123%。這是我們連續第二個季度實現創紀錄的淨投資收入，我們預計這一趨勢將在第二季度繼續。

Our portfolio generated a GAAP effective yield of 15.1% in Q1 and a core yield of 14%, which is indicative of the recent rate increases and higher onboarding yields for certain new loans. With net regulatory leverage at a very conservative 99.2% and continued robust liquidity across our platform, our balance sheet remains very well positioned. Credit quality of the debt investment portfolio remains strong and stable. Our weighted average internal credit rating of 2.26 was slightly higher than the 2.23 rating in Q4, but still at the low end of our normal historical range.

我們的投資組合在第一季度產生了 15.1% 的 GAAP 有效收益率和 14% 的核心收益率，這表明近期利率上升以及某些新貸款的入職收益率更高。憑藉非常保守的 99.2% 的淨監管槓桿率和我們平台持續強勁的流動性，我們的資產負債表仍然處於非常有利的地位。債務投資組合的信用質量保持強勁和穩定。我們的加權平均內部信用評級為 2.26，略高於第四季度的 2.23，但仍處於正常歷史範圍的低端。

Our Grade 1 and Grade 2 credits slightly decreased to 59.8% compared to 61.5% in Q4. Grade 3 credits were slightly higher at 37.1% in Q1 versus 36.3% in Q4. Our rated 4 credits made up 3.1% of the portfolio, and rated 5 credits were 0% in Q1.

與第四季度的 61.5% 相比，我們的 1 級和 2 級學分略有下降至 59.8%。第一季度的 3 級學分略高於第四季度的 36.3%，為 37.1%。我們的評級 4 學分佔投資組合的 3.1%，評級 5 學分在第一季度為 0%。

As of the end of Q1, we had the same 2 debt investments on nonaccrual with an investment cost and fair value of approximately $17.9 million and $1.2 million, respectively, or 0.6% and 0.0% as a percentage of the company's total investment portfolio at cost and value, respectively.

截至第一季度末，我們有相同的 2 項非應計債務投資，投資成本和公允價值分別約為 1790 萬美元和 120 萬美元，占公司總投資組合成本的 0.6% 和 0.0%和價值，分別。

Our consistent and strong credit performance is a result of our emphasis on diversification and credit discipline as key cornerstones of our investment strategy. We have increased and enhanced our portfolio level monitoring as a result of the banking turmoil witnessed in Q1, and we continue to be pleased by what we are seeing on the credit side of our business. As of the end of Q1, approximately 82% of our debt investment portfolio is in senior secured first lien positions, up from approximately 73% a year ago. Despite the decline in valuations for many growth-stage companies over the last 12-plus months, as of the end of Q1, the median loan-to-value across our debt investment portfolio was approximately 8% and the weighted average loan-to-value across our debt investment portfolio was approximately 18%.

我們始終如一且強勁的信用表現是我們強調多元化和信用紀律作為我們投資戰略的關鍵基石的結果。由於第一季度的銀行業動盪，我們增加並加強了我們的投資組合水平監控，我們繼續對我們在業務信貸方面看到的情況感到高興。截至第一季度末，我們約 82% 的債務投資組合處於優先擔保第一留置權頭寸，高於一年前的約 73%。儘管在過去 12 個多月中許多成長階段公司的估值有所下降，但截至第一季度末，我們債務投資組合中的貸款價值比中值約為 8%，加權平均貸款價值比我們債務投資組合的價值約為 18%。

This defensive portfolio positioning gives us confidence in our ability to continue to deliver strong credit performance. For our portfolio companies, having ample liquidity and the ability to raise additional capital when needed are 2 important factors that we closely monitor. Despite more selectivity and valuation sensitivity from venture capital investors, capital raising across our portfolio remained strong in Q1, with 23 companies raising nearly $1 billion in new capital in the first quarter.

這種防禦性投資組合定位讓我們對繼續提供強勁信貸業績的能力充滿信心。對於我們的投資組合公司，擁有充足的流動性和在需要時籌集額外資金的能力是我們密切關注的兩個重要因素。儘管風險資本投資者的選擇性和估值敏感性更高，但我們投資組合的融資在第一季度仍然強勁，有 23 家公司在第一季度籌集了近 10 億美元的新資本。

As a result of the recent market volatility, we wanted to provide a brief update on what we are seeing across our portfolio in terms of liquidity. When looking at our entire outstanding debt investment portfolio, inclusive of contractually committed funding facilities from existing equity investors, we estimate that approximately 71% of our portfolio currently has 12-plus months of liquidity with another 18% with 6 to 12 months of current liquidity on balance sheet. Loans, which have 3 months or less of liquidity make up approximately 0.3% of our outstanding debt portfolio while approximately 41% of our outstanding debt portfolio currently has 18-plus months of liquidity.

由於最近的市場波動，我們想簡要介紹一下我們在流動性方面看到的整個投資組合的情況。在查看我們整個未償債務投資組合（包括現有股權投資者的合同承諾融資便利）時，我們估計我們的投資組合中約有 71% 目前具有 12 個月以上的流動性，另外 18% 具有 6 至 12 個月的當前流動性在資產負債表上。流動性不超過 3 個月的貸款約占我們未償債務組合的 0.3%，而我們未償債務組合中約 41% 目前的流動性超過 18 個月。

During Q1, Hercules had net realized gains of $8 million. This was comprised of net realized gains of $8.4 million due to the sale of equity investments and gains on foreign exchange, offset by $400,000 due to the write-off of warrant positions. We ended Q1 with strong liquidity of over $553 million. Inclusive of available liquidity in our private funds, we have approximately $1 billion of liquidity as of the end of Q1.

第一季度，Hercules 的淨實現收益為 800 萬美元。這包括因出售股權投資和外匯收益而產生的 840 萬美元的淨實現收益，但因沖銷權證頭寸而抵消了 400,000 美元。我們以超過 5.53 億美元的強勁流動性結束了第一季度。包括我們私人基金的可用流動性，截至第一季度末，我們擁有大約 10 億美元的流動性。

During the first quarter, we increased our letter of credit facility with SMBC from $100 million to $175 million. This was done to best position us to take advantage of the better quality later-stage transactions with potentially higher unfunded commitments that we are currently seeing as a result of the banking market turmoil. The turmoil in the venture capital ecosystem during the quarter affected both fundraising and investment activity at more muted levels at $11.7 billion and investment activity at $37 billion, respectively, according to data gathered by PitchBook and BCA.

第一季度，我們將與 SMBC 的信用證額度從 1 億美元增加到 1.75 億美元。這樣做是為了讓我們能夠最好地利用質量更高的後期交易，以及我們目前看到的由於銀行市場動盪而導致的潛在更高的無資金承諾。根據 PitchBook 和 BCA 收集的數據，本季度風險資本生態系統的動盪對籌資和投資活動的影響分別為 117 億美元和 370 億美元。

With the amount of capital available to invest at historic highs, exceeding $0.5 trillion entering 2023, we expect fundraising to stay at much lower levels than prior years and investment activity to pick up as the year goes on. We exited Q1 with undistributed earnings spillover of over $133 million or $0.96 per share. The undistributed earnings spillover continues to provide us with the added flexibility with respect to our shareholder distributions going forward and the ability to continue to invest in our team and platform.

由於可用於投資的資金數量處於歷史高位，進入 2023 年將超過 0.5 萬億美元，我們預計籌資將保持在遠低於往年的水平，並且投資活動將隨著時間的推移而回升。我們以超過 1.33 億美元或每股 0.96 美元的未分配收益溢出退出第一季度。未分配收益的溢出效應繼續為我們提供更多的靈活性，讓我們能夠在未來的股東分配方面以及繼續投資於我們的團隊和平台的能力。

For Q1, we maintained our base distribution at $0.39 and declared a supplemental distribution of $0.08 for a total of $0.47 of shareholder distributions. This was our 11th consecutive quarter of being able to pay out a supplemental distribution to our shareholders.

對於第一季度，我們將基本分配維持在 0.39 美元，並宣布補充分配 0.08 美元，股東分配總額為 0.47 美元。這是我們連續第 11 個季度能夠向股東支付補充分配。

In closing, our strong growth and performance continued in Q1, and has elevated our earnings power to historic highs. We remain optimistic about our business opportunities given how well we are competitively positioned to take advantage of market conditions and grow our core income generating assets, and as a result, the earnings power of the business.

最後，我們在第一季度繼續保持強勁的增長和業績，並將我們的盈利能力提升至歷史高位。鑑於我們在利用市場條件和發展核心創收資產方面的競爭優勢，以及因此提高業務的盈利能力，我們對我們的商業機會仍然持樂觀態度。

Our core themes for 2023 will largely remain consistent with 2022, and they reflect maintaining a strong balance sheet and liquidity position and staying selective and disciplined on new underwritings, while continuing to invest in our teams and our platform. We are thankful to the many companies, management teams and investors that continue to make Hercules their partner of choice.

我們 2023 年的核心主題將在很大程度上與 2022 年保持一致，它們反映了保持強勁的資產負債表和流動性狀況，並在新承銷方面保持選擇性和紀律，同時繼續投資於我們的團隊和平台。我們感謝許多公司、管理團隊和投資者繼續將 Hercules 作為他們的首選合作夥伴。

I will now turn the call over to Seth.

我現在將把電話轉給賽斯。

Thank you, Scott, and good afternoon, ladies and gentlemen. Hercules' first quarter performance was a great way to kick off 2023. The portfolio growth was complemented by strengthening our balance sheet to support our current and anticipated growth.

謝謝斯科特，女士們先生們，下午好。 Hercules 第一季度的業績是開啟 2023 年的好方法。投資組合的增長得到了加強我們資產負債表的補充，以支持我們當前和預期的增長。

In the first quarter, we renewed the $400 million MUFG credit facility, executed and subsequently increased the SMBC letter of credit facility from $100 million to a total of $175 million, and took advantage of the ATM by raising $65 million of accretive capital. We continue to maintain strong available liquidity of $553 million as of the quarter end, more than $120 million higher than what we maintained just a year ago.

第一季度，我們續簽了 4 億美元的 MUFG 信貸額度，執行並隨後將 SMBC 信用證額度從 1 億美元增加到總額 1.75 億美元，並利用 ATM 籌集了 6500 萬美元的增值資本。截至本季度末，我們繼續保持 5.53 億美元的強勁可用流動性，比一年前的水平高出 1.2 億美元。

Despite the increase in our ready to access credit facilities, more than 80% of our leverage is fixed rate and 73% is unsecured, helping us keep financing costs low and optionality high. We continue to explore more cost-effective ways to manage our liquidity needs as the opportunities to invest increase, while maintaining our consistent credit and return standards.

儘管我們隨時可以使用的信貸額度有所增加，但我們 80% 以上的槓桿是固定利率，73% 是無抵押槓桿，這有助於我們保持較低的融資成本和較高的選擇性。隨著投資機會的增加，我們將繼續探索更具成本效益的方法來管理我們的流動性需求，同時保持我們一致的信用和回報標準。

We've positioned ourselves well to continue scaling our platform, most recently by adding additional capital managed by our wholly owned RIA. As previously communicated, we expect the RIA to move beyond expense relief for the BDC and start delivering dividends to the BDC later this year and further enhance our returns to our shareholders.

我們已經做好了自我定位，可以繼續擴展我們的平台，最近增加了由我們全資擁有的 RIA 管理的額外資本。正如之前所傳達的那樣，我們預計 RIA 將超越 BDC 的費用減免，並在今年晚些時候開始向 BDC 派發股息，並進一步提高我們對股東的回報。

With these points in mind, let's review the following areas: the income statement performance and highlights, NAV unrealized and realized activity, leverage and liquidity and the financial outlook.

考慮到這些要點，讓我們回顧一下以下方面：損益表表現和亮點、未實現和已實現活動的資產淨值、槓桿和流動性以及財務前景。

Starting with the income statement performance and highlights. This was the second quarter in a row that total investment income exceeded $100 million at $105.1 million driven by the prior year and current quarter growth in the debt portfolio on solid new business underwriting and an increase in benchmark rates.

從損益表的表現和亮點開始。這是連續第二個季度總投資收入超過 1 億美元，達到 1.051 億美元，這得益於去年和本季度穩健的新業務承銷和基準利率上升的債務組合增長。

Net investment income was another record at $65.5 million, a 5.4% quarter-over-quarter increase or a record $0.48 per share NII in Q1. Our effective and core yields in the first quarter were 15.1% and 14%, respectively, compared to 14.7% and 13.8% in the prior quarter. The increase in the core yield was due to an increase in coupon interest as a result of benchmark rate increases. We're forecasting a leveling of our core yield hereafter due to expected little to no movement from the Fed in the coming quarters.

淨投資收入再創歷史新高，達到 6550 萬美元，環比增長 5.4%，即第一季度創紀錄的每股 NII 0.48 美元。我們第一季度的有效收益率和核心收益率分別為 15.1% 和 14%，而上一季度為 14.7% 和 13.8%。核心收益率的增加是由於基準利率上升導致息票利息增加。由於預計美聯儲在未來幾個季度幾乎不會採取任何行動，我們預計此後我們的核心收益率將持平。

Turning to expenses. Our gross operating expenses for the quarter increased to $42.3 million compared to $40 million in the prior quarter. Net of costs recharged to the RIA, our operating expenses were $39.6 million. Interest expense and fees increased to $19 million from $18 million in the prior quarter due to the growth of the investment portfolio and slightly higher weighted average cost of debt.

談到開支。我們本季度的總運營費用從上一季度的 4000 萬美元增加到 4230 萬美元。扣除向 RIA 收取的費用後，我們的運營費用為 3960 萬美元。由於投資組合的增長和略高的加權平均債務成本，利息支出和費用從上一季度的 1800 萬美元增加到 1900 萬美元。

SG&A expenses increased to $23.3 million from $22 million in the prior quarter, slightly above my guidance on higher funding for the quarter versus our forecast. Net of cost recharge to the RIA, the SG&A expenses were at $20.6 million. Our weighted average cost of debt was 4.7%, a slight increase compared to the prior quarter, reflecting a greater utilization of the credit facilities due to growth of the investment portfolio.

SG&A 費用從上一季度的 2200 萬美元增加到 2330 萬美元，略高於我對本季度更高資金的指導與我們的預測。扣除 RIA 的成本補給後，SG&A 費用為 2060 萬美元。我們的加權平均債務成本為 4.7%，與上一季度相比略有上升，反映出由於投資組合的增長，信貸額度的利用率提高了。

Our ROAE or NII over average equity increased to 18.8% for the first quarter. And our ROAA or NII over average total assets was 8.9%. Switching to NAV unrealized and realized activity. During the quarter, our NAV increased $0.29 per share to $10.82 per share. This represented an NAV per share increase of 2.8% quarter-over-quarter. The main drivers for the increase were the net change in unrealized appreciation of $21.1 million, net of reversals of prior unrealized appreciation of $8.1 million, mainly due to investments disposed or written off, net investment income and accretion due to the ATM sales offset by dividends paid in the quarter, including the supplemental distribution.

第一季度，我們的 ROAE 或 NII 與平均股本之比增至 18.8%。我們的 ROAA 或 NII 占平均總資產的 8.9%。切換到 NAV 未實現和已實現的活動。本季度，我們的資產淨值每股增加 0.29 美元至每股 10.82 美元。這意味著每股資產淨值環比增長 2.8%。增長的主要驅動因素是未實現增值的淨變化 2110 萬美元，扣除先前未實現增值的逆轉 810 萬美元，主要是由於投資處置或註銷、淨投資收入和 ATM 銷售因股息抵消而增加本季度支付，包括補充分配。

Our $21.1 million of unrealized appreciation was primarily driven by $22 million of appreciation to the loan portfolio, approximately half of which relates to valuing certain investments at expected proceeds due to the portfolio's company's intention to prepay the loans before maturity. This correlates with our increased prepayment guidance for Q2.

我們 2110 萬美元的未實現增值主要是由貸款組合增值 2200 萬美元推動的，其中約一半與按預期收益對某些投資進行估值有關，因為投資組合的公司打算在到期前提前償還貸款。這與我們增加的第二季度預付款指導相關。

The reversal of prior unrealized appreciation resulted in a net realized gain of $8 million comprised of net realized gains of $8.4 million due to the sale of equity investments and gains on foreign exchange, offset by $0.4 million due to the write-off and other realizations of warrants.

先前未實現升值的逆轉產生了 800 萬美元的已實現淨收益，其中包括因出售股權投資而產生的 840 萬美元的已實現淨收益和外匯收益，被因註銷和其他變現產生的 40 萬美元所抵消權證。

Moving to leverage and liquidity. Our GAAP and regulatory leverage were 115.6% and 103.9%, respectively, which slightly increased compared to the prior quarter due to maintaining a higher cash balance over the quarter end. Netting out leverage with cash on the balance sheet, our net GAAP and regulatory leverage positions decreased to 110.9% and 99.2%, respectively.

轉向槓桿和流動性。我們的 GAAP 和監管槓桿率分別為 115.6% 和 103.9%，與上一季度相比略有上升，原因是在季度末保持較高的現金餘額。用資產負債表上的現金抵消槓桿，我們的淨 GAAP 和監管槓桿頭寸分別下降到 110.9% 和 99.2%。

As mentioned, we ended the quarter with $553 million of available liquidity. As a reminder, this excludes capital raised by the funds managed by our wholly owned RIA subsidiary. Inclusive of these amounts, the Hercules platform has nearly $1 billion of available liquidity. We believe our strong and flexible liquidity positions us well in the current operating environment.

如前所述，我們在本季度結束時擁有 5.53 億美元的可用流動資金。提醒一下，這不包括我們全資擁有的 RIA 子公司管理的基金籌集的資金。包括這些金額在內，Hercules 平台擁有近 10 億美元的可用流動資金。我們相信，我們強大而靈活的流動性使我們在當前的經營環境中處於有利地位。

With the Q1 renewal of the MUFG facility and the increase in the SMBC letter of credit facility, we have no near-term debt maturities, giving us the ability to be opportunistic should we decide to raise additional capital to support the business. We continue to opportunistically access the ATM market during the quarter and raised approximately $65 million, resulting in an $0.11 accretion to NAV.

隨著第一季度 MUFG 貸款的續籤和 SMBC 信用證貸款的增加，我們沒有短期債務到期日，這使我們能夠在決定籌集額外資金以支持業務時投機取巧。我們在本季度繼續機會主義地進入 ATM 市場並籌集了大約 6500 萬美元，導致資產淨值增加 0.11 美元。

Following the quarter end, we have raised another $48 million, further strengthening our liquidity position to support very strong new business demand and ensuring our leverage remains within the target range.

本季度結束後，我們又籌集了 4800 萬美元，進一步加強了我們的流動性狀況，以支持非常強勁的新業務需求，並確保我們的槓桿率保持在目標範圍內。

Finally, the outlook points. For the remainder of 2023, we expect our core yield range to be at 13.8% to 14.2%. As a reminder, 95% of our debt portfolio is floating with a floor, so the recent interest rate hike and any additional in 2023 will benefit our core yield going forward. Although very difficult to predict, as communicated by Scott, we expect $225 million to $325 million in prepayment activity in the second quarter.

最後，展望點。對於 2023 年剩餘時間，我們預計我們的核心收益率範圍將在 13.8% 至 14.2% 之間。提醒一下，我們 95% 的債務組合是浮動的，因此最近的加息和 2023 年的任何加息都將有利於我們未來的核心收益率。儘管很難預測，但正如 Scott 所說，我們預計第二季度的預付款活動將達到 2.25 億美元至 3.25 億美元。

We expect our second quarter interest expense to increase compared to the prior quarter due to the balance sheet growth experienced in the first quarter. For the second quarter, we expect our SG&A expenses to be $22 million to $23 million and RIA expense allocation of approximately $2 million to $2.5 million.

由於第一季度資產負債表的增長，我們預計第二季度的利息支出將比上一季度有所增加。對於第二季度，我們預計我們的 SG&A 費用為 2200 萬至 2300 萬美元，RIA 費用分配約為 200 萬至 250 萬美元。

In closing, the steps we've taken to strengthen our balance sheet and continuing to scale our platform, ensure that we're well positioned for the remainder of 2023.

最後，我們為加強資產負債表和繼續擴展我們的平台而採取的步驟，確保我們在 2023 年剩餘時間里處於有利地位。

I will now turn the call over to the operator to begin the Q&A part of our call. Mark, over to you.

我現在將把電話轉給接線員，開始我們電話的問答部分。馬克，交給你了。

(Operator Instructions) Our question will come from John Hecht from Jefferies.

（操作員說明）我們的問題將來自 Jefferies 的 John Hecht。

Congratulations on putting together a good, stable, strong quarter in an unstable world. Scott, I just -- you did -- you referred to kind of the SVB sale to First Citizens and kind of you referred to the opportunities and sort of disruptions that, that presented to the market.

祝賀你在一個不穩定的世界中建立了一個良好、穩定、強大的季度。斯科特，我只是——你做到了——你提到了 SVB 向第一公民的銷售，你提到了給市場帶來的機會和破壞。

But I'm wondering, maybe if stepping back and think about the next few quarters, if you could describe to us what is -- is First Citizens going to operate SVB from your perspective largely as it was? If there are changes, how does it affect the ecosystem in which you work? And then what does that mean in terms of either opportunities or challenges for your portfolio companies and then boil that back to how does that create an opportunity for Hercules over time?

但我想知道，也許如果退後一步，想想接下來的幾個季度，如果你能向我們描述一下——從你的角度來看，第一公民是否會在很大程度上照原樣運營 SVB？如果有變化，它如何影響您工作的生態系統？那麼這對您的投資組合公司來說是機遇還是挑戰意味著什麼，然後將其歸結為如何隨著時間的推移為 Hercules 創造機會？

Sure. Thanks, John. A couple of things. We can't speak to what First Citizens will or won't do, but certainly I want to take a minute to maybe make a couple of comments on the SVB situation. The first thing that I wanted to say, what happened to SVB in Q1, certainly from our perspective, had absolutely nothing to do with the health or vibrancy of the venture ecosystem. And it certainly had nothing to do with the credit quality of their venture lending book.

當然。謝謝，約翰。幾件事。我們不能說第一公民會做什麼或不會做什麼，但我當然想花點時間對 SVB 的情況發表一些評論。我想說的第一件事是，從我們的角度來看，第一季度 SVB 發生的事情與風險生態系統的健康或活力完全無關。這當然與他們風險貸款賬簿的信用質量無關。

What happened to Silicon Valley Bank in the first quarter was a result of a mismatch in terms of their asset and liability management, which created obviously significant pressure from a deposit perspective. We, as an organization, have tremendous respect for that team and for the SVB business. SVB was an instrumental part of the ecosystem for the last [4] years. As a firm, we are saddened by the failure of the bank, and we obviously feel terribly for the approximately 10,000 employees of the bank.

矽谷銀行一季度的情況，是資產負債管理不匹配的結果，從存款的角度看，壓力明顯很大。作為一個組織，我們非常尊重該團隊和 SVB 業務。在過去 [4] 年裡，SVB 是生態系統的重要組成部分。作為一家公司，我們對銀行的失敗感到難過，我們顯然為銀行的大約 10,000 名員工感到難過。

Having said that, we view what happened to SVB in the first quarter as a tremendous opportunity for HTGC. You saw some of the early impact of that positivity in terms of our Q1 numbers. You're seeing more of that impact now in our pipeline numbers that were publicly reported in our press release, where we have over $500 million of signed term sheets. The quality of our pipeline since the SVB failure has continued to grow both in terms of size and in terms of quality.

話雖如此，我們認為 SVB 在第一季度發生的事情對 HTGC 來說是一個巨大的機會。您從我們第一季度的數據中看到了這種積極性的一些早期影響。您現在可以在我們的新聞稿中公開報告的管道數字中看到更多這種影響，我們有超過 5 億美元的已簽署條款清單。自 SVB 故障以來，我們管道的質量在規模和質量方面都在持續增長。

We look at the opportunity realistically, and we also look at it as an opportunity for us to honor our 18-plus year commitment to helping fund the companies that make up the venture and growth stage ecosystem. We are very well positioned. We believe we are the only lender in the venture lending space positioned to be able to aggressively take advantage of the opportunity that has been created by SVB's exit from the market.

我們現實地看待這個機會，我們也將其視為一個機會，讓我們兌現我們 18 多年來的承諾，即幫助資助構成風險和成長階段生態系統的公司。我們的位置非常好。我們相信，我們是風險貸款領域唯一能夠積極利用 SVB 退出市場所創造的機會的貸款人。

There's -- I know we're aware of some other smaller venture lenders, too, but without being terribly close to them, I'm not totally familiar with their liquidity positions, but I do think that they had strained liquidity certainly in relation to you guys.

還有 - 我知道我們也知道其他一些較小的風險貸款機構，但由於與他們的關係不是很密切，我並不完全熟悉他們的流動性狀況，但我確實認為他們的流動性緊張肯定與你們。

So the question is outside of SVB, is the competitive market also getting favorable? Meaning that are other market participants weakened by the current situation relative to you guys, which are strengthened?

所以問題是在 SVB 之外，競爭激烈的市場是否也變得有利？意思是相對於你們，其他市場參與者是否因當前情況而減弱，哪些增強了？

Sure. Without mentioning names, John, because I don't think that, that would be appropriate, I will say that we are absolutely seeing some signs of stress across the venture lending landscape, not just with respect to SVB, but with respect to others.

當然。約翰，我不提名字，因為我認為這不合適，我會說我們絕對看到風險貸款領域出現一些壓力跡象，不僅僅是 SVB，還有其他方面。

I can only speak to how we are positioned. And I can tell you that from our perspective, we are incredibly well positioned. We have always managed this business with a conservative balance sheet. We ended the year with net regulatory -- sorry, we ended Q1 with net regulatory leverage of under 100%. We ended Q1 with over $550 million of liquidity in the BDC, over $1 billion of available liquidity across the HTGC platform.

我只能談談我們的定位。我可以告訴你，從我們的角度來看，我們處於非常有利的位置。我們一直以保守的資產負債表來管理這項業務。我們以淨監管結束了這一年——抱歉，我們以低於 100% 的淨監管槓桿結束了第一季度。我們在第一季度結束時在 BDC 中擁有超過 5.5 億美元的流動性，在 HTGC 平台上擁有超過 10 億美元的可用流動性。

We have made tremendous investments over the last couple of years, in our team, in our systems and in our infrastructure. We currently have over 105 full-time employees. We added significant new talents to the organization in Q1 and we intend to continue to do whatever we need to do to ensure that we are positioned to fill the void left by SVB and potentially others.

在過去的幾年裡，我們對我們的團隊、我們的系統和我們的基礎設施進行了大量投資。我們目前擁有超過 105 名全職員工。我們在第一季度為該組織增加了重要的新人才，我們打算繼續做我們需要做的一切，以確保我們能夠填補 SVB 和其他可能留下的空白。

And our next question will come from Crispin Love with Piper Sandler.

我們的下一個問題將來自 Crispin Love 和 Piper Sandler。

Scott, you said early in the prepared remarks that you're avoiding marginal deals that you're currently seeing. Can you just expand a little bit on that, on what you're seeing currently? And then just also speak to your confidence on closed funding accelerating in the back half of the second quarter?

斯科特，你在準備好的發言中早些時候說過，你正在避免目前看到的邊際交易。您能否就您目前所看到的內容稍微擴展一下？然後還要談談您對第二季度後半段加速的封閉式融資的信心？

Sure. I'm not going to say too much, Crispin, with respect to what exactly we're seeing on the marginal deal front because, obviously, we're avoiding those deals. I'll make a general comment, which is that our pipeline right now continues to be at record levels. Our investment team, which is now comprised of about 56 to 57 full-time employees. Screening, seeing, evaluating and looking at a record number of transactions. The vast majority of the transactions that we are seeing are simply not tractions that meet our credit underwriting screens and we're passing on those.

當然。克里斯平，關於我們在邊際交易方面到底看到了什麼，我不會說太多，因為很明顯，我們正在避免這些交易。我會做一個一般性的評論，那就是我們的管道現在繼續處於創紀錄的水平。我們的投資團隊現在由大約 56 至 57 名全職員工組成。篩選、查看、評估和查看創紀錄數量的交易。我們看到的絕大多數交易根本不是滿足我們信用承銷屏幕的牽引力，我們正在傳遞這些。

And I will tell you, we continue to see many of those deals get done in the market, and we'll have to see over the next couple of quarters how that plays out. We are being very selective in terms of new business. We have the balance sheet to be able to be aggressive on new business when and where we want it to be. But the single most important part of our new business effort right now is on making sure that the credit quality is strong and that it meets our very tight underwriting parameters.

我會告訴你，我們繼續看到許多這樣的交易在市場上完成，我們將不得不在接下來的幾個季度裡看看結果如何。我們在新業務方面非常有選擇性。我們擁有資產負債表，能夠在我們希望的時間和地點積極開展新業務。但我們目前新業務工作中最重要的一個部分是確保信貸質量良好，並滿足我們非常嚴格的承保參數。

And then just on credit, and specifically, one of your portfolio companies, Codiak BioSciences. So they filed for bankruptcy in late March, which is out there publicly. So just curious on what type of recovery you might expect there. Just looking at their balance sheet, they had a little over $50 million of cash as of third quarter and that compared to your $25 million loan, which looks to be about a $17.5 million principal now.

然後只是賒賬，特別是您的投資組合公司之一 Codiak BioSciences。所以他們在 3 月下旬申請破產，這是公開的。所以只是想知道您可能期望那裡出現哪種類型的恢復。只要看看他們的資產負債表，截至第三季度，他們的現金略多於 5000 萬美元，而你的 2500 萬美元貸款現在看起來約為 1750 萬美元本金。

So unclear what their cash burn has been since the third quarter just given disclosures. But curious if you're confident on a full recovery there based on their cash position or anything else worth pointing out?

所以不清楚自第三季度以來他們的現金消耗情況如何。但好奇你是否有信心根據他們的現金狀況或其他任何值得指出的情況完全康復？

Sure. Thanks, Crispin. As you pointed out, we do have one company out of about 120 debt positions that did file for bankruptcy at the end of Q1. Bankruptcy for us as a senior secured first lien creditor does not mean that we are going to have a loss on that position. When the company filed, we had $25 million of principal outstanding. Subsequent to the filing, we have worked cooperatively and constructively with the company, with the advisers and with the investors. We have already received $10 million of cash pay downs. So that $25 million principal loan has been reduced to $15 million.

當然。謝謝，克里斯平。正如您所指出的那樣，我們確實有一家公司在第一季度末申請破產，在大約 120 個債務頭寸中。作為高級有擔保第一留置權債權人，我們破產並不意味著我們將在該頭寸上蒙受損失。公司提交申請時，我們有 2500 萬美元的未償還本金。提交申請後，我們與公司、顧問和投資者進行了合作和建設性的合作。我們已經收到了 1000 萬美元的現金付款。因此，2500 萬美元的本金貸款已減少到 1500 萬美元。

The company remains 100% current through the May 1 date on all payments of principal and interest to Hercules. The company has a vast pool of assets that they are currently looking to monetize, obviously, in consultation with Hercules and their advisers. And while there are no guarantees in any of these situations, we feel very good about the ultimate recovery of that position.

截至 5 月 1 日，公司向 Hercules 支付的所有本金和利息仍保持 100% 流動性。該公司擁有大量資產，他們目前正在與 Hercules 及其顧問協商，顯然希望將這些資產貨幣化。雖然在任何這些情況下都無法保證，但我們對最終恢復該職位感到非常高興。

I would also say that for us, what we just said is not just words. We have a very long track record of being able to -- to be able to navigate through challenging workouts and bankruptcy situations. If you look at the last several workouts and bankruptcies that we, as an organization, have had, we've had very strong recoveries, and we're not seeing anything with respect to Codiak specifically that we believe will lead to a different outcome.

我還要說的是，對於我們來說，我們剛才所說的不僅僅是言語。我們在能夠應對具有挑戰性的鍛煉和破產情況方面有著很長的記錄。如果你看看我們作為一個組織的最近幾次鍛煉和破產，我們的複蘇非常強勁，而且我們沒有看到任何與 Codiak 有關的具體情況，我們認為這會導致不同的結果。

And our next question will come from Kevin Fultz, JMP Securities.

我們的下一個問題將來自 JMP 證券公司的 Kevin Fultz。

My first question might sound familiar from another BDC earnings call, but I wanted to get your point of view as well. I know you closely review the PitchBook NBCA venture monitor, and there is a figure in the 1Q '23 report that highlights the funding gap that has recently accelerated within late-stage VC. And essentially, the figure shows that the late-stage capital demand to supply ratio has reached a decade high in the first quarter of 2023 at just above 3.2x, which compares to 0.9x in the first quarter of 2022.

我的第一個問題在另一個 BDC 財報電話會議上聽起來可能很熟悉，但我也想了解您的觀點。我知道你仔細審查了 PitchBook NBCA 風險監測器，23 年第一季度報告中有一個數字強調了最近在後期風險投資中加速的資金缺口。從本質上講，該圖顯示，後期資本供需比在 2023 年第一季度達到 10 年來的最高水平，略高於 3.2 倍，而 2022 年第一季度為 0.9 倍。

I'm just curious what your view is on the shift in capital availability for late-stage companies, both what you're seeing in the market and within your own portfolio and also what that could mean in terms of venture stage companies ability to raise additional capital.

我只是想知道你對後期公司的資本可用性變化有何看法，包括你在市場和你自己的投資組合中看到的，以及這對風險投資公司籌集資金的能力意味著什麼追加資本。

Sure. Thanks for the comment and the question, Kevin. A couple of comments there. There absolutely remains a significant amount of capital on the sidelines, which is available for late-stage companies. What we are seeing and what I think equity investors are seeing is that there continues to be a disconnect from a valuation perspective with respect to where the venture capital firms want to be on valuation and where management teams and entrepreneurs want to be on valuation.

當然。感謝您的評論和問題，凱文。那裡有一些評論。絕對有大量資金在場外，可供後期公司使用。我們所看到的以及我認為股權投資者所看到的是，從估值的角度來看，風險投資公司希望在何處進行估值以及管理團隊和企業家希望在何處進行估值仍然存在脫節。

The capital that is sitting on the sidelines for the most part, is not going away. That capital will be there in Q2. It will be there in Q3. It will be there in Q4. And what typically happens during these periods is there is a period of sort of a slow delicate dance. And at some point, the valuations will meet and these deals will start to get done.

大部分時間處於觀望狀態的資本並沒有消失。該資金將在第二季度到位。它將在第三季度出現。它將在第四季度出現。在這些時期通常發生的是一段緩慢而精緻的舞蹈時期。在某個時候，估值將會達到，這些交易將開始完成。

The other comment that I would make with respect to sort of the broader data that we're seeing from NBCA and PitchBook is, although the Q1 data with respect to VC equity investments was down materially, I think sort of the folks that are out there thinking that this is a sort of a dark winter and the worst period that we've seen, at least it doesn't add up with our view of the market.

關於我們從 NBCA 和 PitchBook 看到的更廣泛的數據，我要發表的另一條評論是，儘管第一季度關於風險投資股權投資的數據大幅下降，但我認為那裡的一些人認為這是一個黑暗的冬天，也是我們所見過的最糟糕的時期，至少它不符合我們對市場的看法。

In Q1 of 2023, there were approximately 2,856 companies that received venture funding, and the venture funding in Q1 totaled approximately $37 billion. When you compare that to what the market was able to achieve between 2020 and 2022, so during the COVID period, the numbers are down materially. But if you compare that to the numbers between 2012 and 2019, which we view as sort of the steady state of the market, those numbers were approximately 3,900 deals per year and approximately $70 billion invested.

2023年第一季度，約有2856家公司獲得風險投資，第一季度風險投資總額約為370億美元。當您將其與 2020 年至 2022 年市場能夠實現的目標進行比較時，那麼在 COVID 期間，數字大幅下降。但是，如果將其與我們視為市場穩定狀態的 2012 年至 2019 年之間的數字進行比較，這些數字約為每年 3,900 筆交易，投資額約為 700 億美元。

So on a comparative basis to what we view as the normal market, the numbers in Q1, although down materially, were still fairly healthy. And that's the way that we are currently viewing the market.

因此，與我們認為的正常市場相比，第一季度的數字雖然大幅下降，但仍然相當健康。這就是我們目前看待市場的方式。

And then just one more, if I can. I'm curious if current market conditions are presenting the opportunity to scale the private funds in RIA at a more accelerated rate than you initially anticipated?

然後再來一個，如果可以的話。我很好奇當前的市場狀況是否提供了以比您最初預期更快的速度擴大 RIA 私人基金規模的機會？

Absolutely. And I would reiterate what we said on the last call, which is we continue to expect to be able to begin the dividend distributions from the RIA up to the BDC in the second half of this year. So not only will the shareholders of HTGC be benefiting from the expense reimbursement, we expect in the second half of this year for our shareholders to begin to benefit from distributions from the RIA business up to the BDC.

絕對地。我要重申我們在上次電話會議上所說的話，即我們繼續期望能夠在今年下半年開始從 RIA 到 BDC 的股息分配。因此，不僅 HTGC 的股東將從費用報銷中受益，我們預計在今年下半年我們的股東將開始從 RIA 業務到 BDC 的分配中受益。

There is tremendous momentum for us, not just in the BDC, but also in the private fund business. If you look at what we announced most recently, we did launch a new private vehicle, which is specifically designed to take advantage of the market dislocation that we're currently seeing. We deployed a significant amount of capital in the private funds in Q1. That was about $121 million of fundings and that's on top of about $400 million that we funded in the private fund business last year alone.

不僅在 BDC，而且在私募基金業務中，我們都有巨大的發展勢頭。如果你看一下我們最近宣布的內容，我們確實推出了一款新的私家車，它是專門為利用我們目前看到的市場混亂而設計的。第一季度，我們在私募基金中配置了大量資金。那是大約 1.21 億美元的資金，而且僅去年一年我們就在私募基金業務中資助了大約 4 億美元。

Our next question will come from Christopher Nolan with Ladenburg Thalmann.

我們的下一個問題將來自 Christopher Nolan 和 Ladenburg Thalmann。

Scott, strategically, 2 things. And just a follow-up on the earlier question. Would you consider participating in a new bank targeting the venture capital space?

斯科特，從戰略上講，有兩件事。只是對先前問題的跟進。您會考慮加入一家針對風險投資領域的新銀行嗎？

The answer to that is no. We're not in the banking business. We think that our business works better without being tied into relying on deposits. And so the answer would be no.

答案是否定的。我們不從事銀行業務。我們認為我們的業務在不依賴存款的情況下運作得更好。所以答案是否定的。

Second question is how do you think AI is going to affect the VC lending business?

第二個問題是你認為人工智能將如何影響風險投資貸款業務？

So AI is something that we're obviously watching very closely. We think that there are positive scenarios and then, of course, negative scenarios as well. We're looking at it pretty optimistically. We think that AI has the ability to further accelerate innovation across the technology and life sciences landscape. Every few years, there is new innovation that is disruptive. AI is sort of the current phenomenon. And while we do have some concerns about the impact that AI could have on certain businesses, overall, we're actually pretty optimistic about what AI will mean for the overall health of the innovative economy.

所以人工智能顯然是我們正在密切關注的東西。我們認為有積極的情況，當然也有消極的情況。我們非常樂觀地看待它。我們認為人工智能有能力進一步加速整個技術和生命科學領域的創新。每隔幾年，就會出現具有顛覆性的新創新。人工智能是一種當前現象。雖然我們確實對人工智能可能對某些企業產生的影響表示擔憂，但總的來說，我們實際上對人工智能對創新經濟的整體健康意味著什麼非常樂觀。

Our next question will come from Casey Alexander with Compass Point Research & Trading.

我們的下一個問題將來自 Compass Point Research & Trading 的 Casey Alexander。

Scott, you described SVB, Silicon Valley Bank, as a competitor. But in many ways, they were also a partner to you and you guys had joint positions with companies. I'm curious from your seat, what opportunities does that create for you to take a more senior position in the lending stack with those companies and also hammer down your incumbency position with those companies?

斯科特，你將矽谷銀行 SVB 描述為競爭對手。但在很多方面，他們也是你們的合作夥伴，你們與公司有聯合職位。我在你的座位上很好奇，這為你創造了哪些機會，讓你在這些公司的貸款堆棧中擔任更高級的職位，並降低你在這些公司的現任職位？

And then secondly, with Silicon Valley Bank, there's been a lot of migration of talent that has gone around. Has Hercules been able to make any key hires that have been able to take advantage of some of the dispersion of some of that talent?

其次，隨著矽谷銀行的出現，已經有很多人才遷移。赫拉克勒斯是否能夠聘用任何能夠利用部分人才分散的關鍵人員？

Sure. A couple of great questions, Casey, and thanks for your questions there. First thing, with respect to the partnership, I mentioned collaborative and competitive relationship. I would tell you that over the years, Silicon Valley Bank was a great partner of ours in terms of helping us finance many great companies across the venture capital ecosystem.

當然。幾個很好的問題，凱西，感謝你在那裡提出的問題。首先，關於夥伴關係，我提到了協作和競爭關係。我會告訴你，多年來，矽谷銀行在幫助我們為風險投資生態系統中的許多偉大公司提供資金方面是我們的重要合作夥伴。

We have a pretty high bar in terms of who we will partner with, and SVB was one of the few firms that we were comfortable partnering with in terms of the market, both on the life sciences and technology side. Having said that, as you just pointed out, that creates a tremendous opportunity for us given that we do have a handful of partner deals with the bank to be able to do something strategically to help lock down our incumbency position.

就我們將與誰合作而言，我們有一個相當高的標準，而 SVB 是我們在生命科學和技術方面的市場方面願意與之合作的為數不多的幾家公司之一。話雖如此，正如你剛才指出的那樣，這為我們創造了一個巨大的機會，因為我們確實與銀行有一些合作夥伴交易，能夠戰略性地做一些事情來幫助鎖定我們的現任職位。

I will also say that with respect to those partner deals, to date, First Citizens has honored 100% of the commitments across our portfolio. First Citizens continues to fund those companies that we are partnered on. And we don't expect there to be any negative disruption in that regard, but there is certainly an opportunity for us to continue to take some added market share with respect to not just those deals that were partnered on currently, but that we were contemplating partnering with them prior to the situation that developed in Q1.

我還要說的是，到目前為止，就這些合作夥伴交易而言，First Citizens 已經兌現了我們投資組合中 100% 的承諾。 First Citizens 繼續資助那些與我們合作的公司。而且我們預計在這方面不會有任何負面影響，但我們肯定有機會繼續獲得一些額外的市場份額，不僅是那些目前合作的交易，而且我們正在考慮在第一季度出現的情況之前與他們合作。

With respect to talent, in my opening remarks, I made the comment that we have tremendous respect for the SVB business and for that team. There were a handful of employees that we identified that we thought would fit in very well with the Hercules culture and team. And we have made a handful of hires from SVB over the course of the last 30 to 60 days, and we're very pleased with what we've seen to date from that group of employees.

關於人才，在我的開場白中，我表示我們非常尊重 SVB 業務和該團隊。我們確定了一些我們認為非常適合 Hercules 文化和團隊的員工。在過去的 30 到 60 天裡，我們從 SVB 招聘了一些人，我們對迄今為止從這群員工那裡看到的情況感到非常滿意。

My other follow-on question is there were gross fundings of $476 million, and you called out 9 new borrowers out of 31 companies to 22 borrowers were existing borrowers. Out of that $476 million, can you tell us how much was drawn down off of the unfunded commitments as opposed to being direct originations?

我的另一個後續問題是總融資額為 4.76 億美元，你從 31 家公司中召集了 9 名新借款人，而 22 名借款人是現有借款人。在這 4.76 億美元中，您能告訴我們有多少是從無資金承諾中提取的，而不是直接發起的嗎？

Sure. I can give you the breakdown. Roughly $476 million of fundings in the quarter, about $185 million of the fundings were new fundings to new companies. Approximately $150 million of the fundings were new fundings as part of new commitments to existing portfolio companies, and approximately $140 million were fundings from unfunded commitments.

當然。我可以給你分解。本季度約有 4.76 億美元的資金，其中約 1.85 億美元的資金是新公司的新資金。大約 1.5 億美元的資金是作為對現有投資組合公司的新承諾的一部分的新資金，大約 1.4 億美元是來自未提供資金的承諾的資金。

Our next question will come from Finian O'Shea of Wells Fargo.

我們的下一個問題將來自富國銀行的 Finian O'Shea。

Can you provide us any detail on what the new private fund means for Hercules' economics and if it's part of the RIA or a separate vehicle?

您能否向我們提供有關新私人基金對 Hercules 經濟意味著什麼的任何詳細信息，以及它是 RIA 的一部分還是單獨的工具？

So the new fund will, in the same way as the first 2 funds, provide a management fee and performance fee to the RIA. So yes, answer to your second part of your question, it is part of the existing RIA fund. And so very similar and consistent with what Scott mentioned in the back half of 2023. It will provide expense relief in the immediate term. As it builds up the portfolio, it will start to generate those revenues from the management and performance fees, which will then eventually turn into additional dividends that come up to the BDC.

所以新基金將和前2只基金一樣，向RIA提供管理費和績效費。所以是的，回答你問題的第二部分，它是現有 RIA 基金的一部分。與斯科特在 2023 年下半年提到的非常相似和一致。它將在短期內提供費用減免。隨著投資組合的建立，它將開始從管理費和績效費中產生這些收入，這些收入最終將轉化為 BDC 的額外股息。

And Fin, I'll just add to that. When we launched the private fund business about 2.5 years ago, we made a commitment publicly and privately that 100% of the benefit from that private fund business would accrete to the benefit of HTGC's public shareholders, and we remain committed to that commitment. So anything that we do in the private fund business will be under the RIA, which is a wholly-owned subsidiary of the public BDC.

Fin，我只是補充一點。大約 2.5 年前，當我們啟動私募基金業務時，我們曾公開和私下承諾，私募基金業務的 100% 收益將惠及 HTGC 的公眾股東，並且我們仍然致力於履行這一承諾。因此，我們在私募基金業務中所做的任何事情都將在 RIA 的管轄下，RIA 是公共 BDC 的全資子公司。

Our next question comes from Ryan Lynch with KBW.

我們的下一個問題來自 KBW 的 Ryan Lynch。

First one I had is you mentioned a lot of the details around the SVB collapse and kind of the aftermath on that as far as the opportunity set goes. I was just curious if you could talk about post the collapse of SVB, has there been any sort of shift in investor sentiment or action from the DC equity investors and their willingness to support the existing companies, just broadly in the BC marketplace?

我得到的第一個是你提到了很多關於 SVB 崩潰的細節，以及就機會集而言的後果。我很好奇你是否可以談談 SVB 倒閉後，DC 股票投資者的投資者情緒或行動是否發生了任何轉變，以及他們是否願意支持現有公司，廣泛地存在於 BC 市場？

Obviously, the trends have been getting worse as far as the level of investment activity have been kind of going lower for the last several quarters. But I just wasn't sure if you've seen any sort of acceleration of those trends post SVB or not.

顯然，就過去幾個季度的投資活動水平而言，趨勢一直在惡化。但我只是不確定你是否看到這些趨勢在 SVB 之後有任何形式的加速。

Thanks, Ryan. I don't think we've seen any acceleration necessarily. Obviously, what happened with Silicon Valley Bank was a surprise to the vast majority of the ecosystem. And I think for the first couple of weeks, sort of post failure, a lot of people on the equity side and on the credit side were sort of -- just sort of taking a step back to catch their breath and figure out what just happened.

謝謝，瑞安。我認為我們不一定看到任何加速。顯然，矽谷銀行發生的事情令絕大多數生態系統感到意外。我認為在頭幾週，在某種程度上是失敗後，股票方面和信貸方面的很多人有點——只是後退一步，喘口氣，弄清楚剛剛發生了什麼.

Obviously, subsequent to SVB, there's been some additional turmoil, First Republic, obviously, some additional regional banks that are currently exploring strategic options. So I don't think there's anything specific in terms of an acceleration that we saw post SVB. The equity markets right now and the credit markets continue to be volatile. There's obviously a lot of uncertainty.

顯然，在 SVB 之後，出現了一些額外的動盪，第一共和國，顯然，一些其他地區銀行目前正在探索戰略選擇。所以我不認為我們在 SVB 之後看到的加速方面有什麼具體的。目前的股票市場和信貸市場繼續波動。顯然有很多不確定性。

We continue to focus on what we can control, and that's ensuring that our credit portfolio continues to outperform, that our BDC continues to be incredibly well positioned and conservatively managed. And that, we think, puts us in a great position to be able to benefit and take advantage of whatever the opportunity set is over the next couple of quarters.

我們繼續專注於我們可以控制的事情，這確保我們的信貸組合繼續表現出色，我們的 BDC 繼續保持令人難以置信的良好定位和保守管理。我們認為，這使我們處於有利地位，能夠在接下來的幾個季度中受益並利用任何機會。

And the other question I had, you mentioned your repair account is about $22 million of appreciation in your loan book. I think you said half of it was due to companies expected to prepay. Can you talk about what drove the other half of the appreciation and that just given the market environment? I just would love to hear why that book increased.

我的另一個問題是，您提到您的維修賬戶在您的貸款簿中增值了大約 2200 萬美元。我想你說過一半是由於公司預計會預付款。你能談談是什麼推動了另一半的升值，而這只是在市場環境下？我只是想知道為什麼那本書增加了。

And then also in your press release, you talked about $4.7 million of unrealized depreciation related to privately held equity warrants and investment funds. Can you talk about what was the driver behind there? Were some of your portfolio companies are actually doing up rounds in this marketplace that revalued some of those equity warrant positions or what drove that $5 million?

然後在您的新聞稿中，您談到了與私人持有的股權認股權證和投資基金相關的 470 萬美元未實現折舊。你能談談後面的司機是誰嗎？您的一些投資組合公司是否真的在這個市場上進行了一輪融資，重新評估了其中一些股權認股權證頭寸，或者是什麼推動了這 500 萬美元的增長？

Sure. Thanks. So as you know, every quarter, we go through and revalue the entire portfolio. So we'll go through and we'll do individual adjustments on the portfolio companies based on their performance against our original underwriting plan. For those companies that are performing a little bit better, maybe they're having faster rounds of capital raised, maybe they're progressing faster through an FDA approval process.

當然。謝謝。如您所知，每個季度，我們都會重新評估整個投資組合。因此，我們將根據投資組合公司與我們最初承銷計劃的表現，對投資組合公司進行個別調整。對於那些表現稍好一點的公司，也許他們的融資輪次更快，也許他們通過 FDA 批准程序的速度更快。

They will slightly tweak the valuation on those portfolio companies, both the debt and the equity positions, obviously, if they're private. And we'll go through and do a market yield analysis compared to a benchmark portfolio that we use, the SMI index, to see, where we should be adjusting the overall portfolio based on benchmark interest rates as well.

他們將略微調整這些投資組合公司的估值，包括債務和股權頭寸，顯然，如果它們是私有的。我們將進行市場收益率分析，並與我們使用的基準投資組合 SMI 指數進行比較，以了解我們還應該根據基準利率調整整體投資組合的哪些方面。

So the appreciation beyond that, that we did for about half of the mark-to-market, as you mentioned, for the early repayments, it's really based on that performance. The impairments stayed very consistent. You noticed that we had only 2 nonaccrual loans, maintained very consistent valuation, small adjustments on those.

因此，除此之外，正如您提到的那樣，我們為早期還款做了大約一半的按市值計價，這實際上是基於這種表現。減值保持非常一致。你注意到我們只有 2 筆非應計貸款，估值保持非常一致，對這些貸款進行了小幅調整。

And so net-net, the portfolio is performing better than it's underwriting thesis on a market basis -- adjusted basis. Keeping in mind that our -- 95% of our portfolio is floating with a floor so that we're not having reductions in values as the benchmark interest rate goes up. So that was on the debt portfolio. And then Scott, do you want to comment on the private equities?

因此，淨淨投資組合的表現優於其在市場基礎上的承銷論點——調整後的基礎上。請記住，我們的投資組合中有 95% 是浮動的，因此我們不會隨著基準利率的上升而降低價值。所以這是在債務組合上。然後斯科特，你想對私募股權發表評論嗎？

Sure. Ryan, with respect to the $4.7 million of unrealized appreciation on the private equity and warrant positions, the substantial majority of that appreciation came from an up valuation with respect to Hercules Advisor, which is the wholly-owned registered investment adviser. That was a result of 2 things. One, we raised and we launched the new fund and continued growth with respect to the AUM in the first 2 private funds.

當然。 Ryan，關於私募股權和認股權證頭寸的 470 萬美元未實現增值，大部分增值來自對 Hercules Advisor 的估值上升，Hercules Advisor 是全資註冊的投資顧問。這是兩件事的結果。第一，我們籌集並推出了新基金，並在前兩隻私募基金的資產管理規模方面持續增長。

At this time, I would like to turn it back over to Scott for closing remarks.

現在，我想把它轉回給 Scott 作結束語。

Thank you, Mark, and thanks to everyone for joining our call today. We look forward to reporting our progress on our Q2 2023 earnings call. Thank you all, and have a great day.

謝謝你，馬克，感謝大家今天加入我們的電話會議。我們期待在 2023 年第二季度財報電話會議上報告我們的進展。謝謝大家，祝你有美好的一天。

Thank you, everybody, for your participation in today's conference. This concludes the program. You may now disconnect.

感謝大家參加今天的會議。程序到此結束。您現在可以斷開連接。