Hercules Capital Inc (HTGC) 2023 Q2 法說會逐字稿

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

美好的一天，感謝您的支持。歡迎參加 Hercules Capital 2023 年第二季度收益電話會議。 （操作員指示）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第一位發言者，投資者關係董事總經理 Michael Hara。邁克爾，請發言。

Thank you, Stacy. Good afternoon, everyone, and welcome to Hercules conference call for the second quarter of 2023. With us on the call today from Hercules are Scott Bluestein, CEO and Chief Investment Officer; and Seth Meyer, CFO.

謝謝你，史黛西。大家下午好，歡迎參加 Hercules 2023 年第二季度電話會議。今天與我們一起參加 Hercules 電話會議的是 Hercules 首席執行官兼首席投資官 Scott Bluestein；和首席財務官塞思·邁耶 (Seth Meyer)。

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 call.

Hercules 的財務業績於今天收盤後發布，可從 Investor.htgc.com 的 Hercules 投資者關係部分獲取。電話會議後至少 30 天內，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. 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.

在本次電話會議中，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對未來業績的保證，不應作為做出任何投資決策的依據。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有所不同，包括但不限於我們在 10-K 表格年度報告和 SEC 公開的其他文件中確定的風險網站。本次電話會議期間做出的任何前瞻性陳述僅截至今天為止，Hercules 不承擔將來更新任何此類陳述的義務。

And with that, I will turn the call over to Scott.

這樣，我會將電話轉給斯科特。

Thank you, Michael, and thank you all for joining the Hercules Capital Q2 2023 Earnings Call. Our best-in-class venture and growth stage lending platform continued to deliver record earnings and operating performance in Q2, while maintaining the historical strong credit standards that we have come to expect. Our record Q2 results were highlighted by many of the key themes that we have discussed over the last few quarters. M&A exit activity in our portfolio remained robust, which drove increased prepayments. Capital raising across our portfolio accelerated, doubling from the strong activity that we saw in Q1. Rising rates combined with higher onboarding yields and an increased weighted average portfolio balance drove total investment income, core investment income and net investment income to record levels. Credit remains strong and stable. Deal activity, combined with pipeline activity continue to show increasing quality and quantity. As a result, we continue to be very optimistic about our positioning relative to others in the asset class and our ability to capture further market share over the coming quarters.

謝謝邁克爾，也感謝大家參加 Hercules Capital 2023 年第二季度收益電話會議。我們一流的風險投資和成長階段貸款平台在第二季度繼續創造創紀錄的收益和經營業績，同時保持我們所期望的歷史上強勁的信貸標準。我們在過去幾個季度討論的許多關鍵主題凸顯了我們創紀錄的第二季度業績。我們投資組合中的併購退出活動依然強勁，這推動了預付款的增加。我們投資組合的融資加速，比第一季度的強勁活動翻了一番。利率上升、初始收益率上升以及加權平均投資組合餘額增加，推動總投資收益、核心投資收益和淨投資收益達到創紀錄水平。信貸依然強勁、穩定。交易活動以及管道活動繼續顯示質量和數量不斷增加。因此，我們仍然對我們相對於該資產類別中其他公司的定位以及我們在未來幾個季度獲得更多市場份額的能力非常樂觀。

Our differentiated business model that is predicated on diversification, fundamental credit underwriting and long-standing relationships with over 1,000 venture capital and private equity investors has continued to serve us well and allows us to outperform in a variety of macro environments.

我們的差異化業務模式以多元化、基本信用承銷以及與1,000 多家風險資本和私募股權投資者的長期關係為基礎，繼續為我們提供良好服務，並使我們能夠在各種宏觀環境中表現出色。

During the second half of 2023, our focus will remain on prudent underwriting asset and liability diversification, maintaining an abundance of liquidity and an unwavering commitment to the venture and growth stage ecosystem that we service. Our decision in Q2 to once again raise our quarterly base distribution to our shareholders is reflective of our strong outlook for the business over the coming quarters.

2023年下半年，我們的重點仍將是審慎的承保資產和負債多元化，保持充足的流動性以及對我們所服務的風險和成長期生態系統的堅定承諾。我們在第二季度決定再次提高對股東的季度基本分配，這反映了我們對未來幾個季度業務的強勁前景。

Let me recap some of the key highlights of our performance for Q2. In Q2, we generated record total investment income of $116.2 million, up 61% year-over-year and record net investment income of $75.7 million, up over 88% year-over-year or $0.53 per share and providing 132% coverage of our newly increased base distribution of $0.40 per share. This is our third consecutive quarter of delivering record net investment income. We also generated record return on equity in Q2 of over 20% for the first time in our long operating history.

讓我回顧一下我們第二季度業績的一些主要亮點。第二季度，我們創造了創紀錄的總投資收益1.162 億美元，同比增長61%；淨投資收益創紀錄地達到7570 萬美元，同比增長超過88%，即每股增長0.53 美元，並為我們提供了132% 的投資覆蓋率。新增加的基本分配為每股 0.40 美元。這是我們連續第三個季度創造創紀錄的淨投資收入。第二季度我們的股本回報率也創下了超過 20% 的紀錄，這在我們的長期經營歷史上還是第一次。

Our portfolio generated a GAAP effective yield of 16% in Q2 and a core yield of 14.1%, which is indicative of the recent rate increases and higher onboarding yields for certain new loans. With net regulatory leverage at a very conservative 86.4% and continued robust liquidity across our platform, our balance sheet remains very well positioned. As the market environment for new deals in our asset class continues to improve over the coming quarters, we believe that having a strong and diversified balance sheet with maximum liquidity will be a key differentiator for our platform and best positions Hercules to capitalize on the market opportunity that we believe is in front of us.

我們的投資組合第二季度的 GAAP 有效收益率為 16%，核心收益率為 14.1%，這表明近期利率上調以及某些新貸款的初始收益率較高。由於淨監管槓桿率為非常保守的 86.4%，加上我們平台上持續強勁的流動性，我們的資產負債表仍然處於非常有利的位置。隨著我們資產類別新交易的市場環境在未來幾個季度持續改善，我們相信擁有強大、多元化的資產負債表和最大的流動性將成為我們平台的關鍵差異化因素，也是Hercules 抓住市場機會的最佳位置我們相信就在我們面前。

The focus for our origination efforts in Q2 was on diversification, with an emphasis on later stage and scaled opportunities. Our Q2 originations activity was once again driven by both our life sciences and technology teams, delivering healthy funding performance during the quarter. Our funding activity demonstrated balance between our 2 core verticals, which we believe helps drive consistent outperformance relative to our peer group.

我們在第二季度的創始工作的重點是多元化，重點是後期階段和規模化機會。我們的第二季度發起活動再次由我們的生命科學和技術團隊推動，在本季度實現了健康的融資業績。我們的融資活動證明了我們的兩個核心垂直領域之間的平衡，我們相信這有助於推動我們相對於同行的持續卓越表現。

We funded debt capital to 19 different companies in Q2, of which 6 were new borrower relationships. Consistent with what we saw in Q1, we were again able to expand our funding relationship with numerous portfolio companies that continued to show strength and achieve performance milestones during the second quarter. In addition, the strong level of fundings to existing companies also helped to lower our available unfunded commitments to $381 million, which was markedly down from $562 million in Q1. Approximately 50% of our available unfunded commitments will expire by the end of the year, driving higher expected follow-on fundings in the second half of 2023.

第二季度，我們向 19 家不同的公司提供了債務資本，其中 6 家是新的借款人關係。與我們在第一季度看到的情況一致，我們再次能夠擴大與眾多投資組合公司的融資關係，這些公司在第二季度繼續展現實力並實現業績里程碑。此外，對現有公司的強勁資金支持也有助於將我們可用的無資金承諾減少至 3.81 億美元，顯著低於第一季度的 5.62 億美元。我們大約 50% 的可用無資金承諾將在今年年底到期，從而推動 2023 年下半年預期後續資金的增加。

As we guided to on our Q1 earnings call, our funding activity in Q2 was back-end weighted towards the end of the quarter with over $300 million of our quarterly fundings coming in the month of June. Although Q3 is typically a seasonally slow quarter across the venture and growth stage lending markets, we expect our origination activity in Q3 to be robust. Operating at scale, being able to consistently deliver for our borrowers and their equity holders despite market conditions and not having to worry about being constrained by high leverage or low liquidity, is driving a strong start to Q3 for our business. Since the close of Q2 and as of August 2, 2023, our deal team has already closed $209.6 million of new commitments and funded $142.9 million. We have pending commitments of an additional $305.5 million in signed nonbinding term sheets. We continue to expect deal quality to remain high and continue to get better as the year plays out.

正如我們在第一季度財報電話會議上所指出的那樣，我們第二季度的融資活動在季度末進行了後端加權，其中超過 3 億美元的季度資金來自 6 月份。儘管第三季度在風險投資和成長期貸款市場上通常是季節性放緩的季度，但我們預計第三季度的發起活動將強勁。規模化運營，無論市場狀況如何，都能始終如一地為我們的借款人及其股東提供服務，並且不必擔心受到高槓桿或低流動性的限制，正在推動我們的業務在第三季度取得強勁的開局。自第二季度結束以來，截至 2023 年 8 月 2 日，我們的交易團隊已完成 2.096 億美元的新承諾並融資 1.429 億美元。我們在已簽署的不具約束力的條款清單中還有待額外承諾 3.055 億美元。我們仍然預計交易質量將保持較高水平，並隨著今年的結束而繼續變得更好。

Although portfolio company exits and liquidity events for the industry continue to be slow, activity across our portfolio continues to be strong. After having 8 M&A transactions closed in Q1 across our portfolio, we had another 2 M&A transactions closed in Q2, and we had another 1 closed shortly after the end of Q2. In addition, we have 2 additional M&A events that have been recently announced that have not yet closed. And in July, our portfolio company, enGene, announced a business combination agreement with Forbian acquisition to go public. We now have 3 portfolio companies in the pipeline looking to go public. Our portfolio activity continues to validate the great work and selective underwriting that our investment teams do.

儘管投資組合公司的退出和行業的流動性事件仍然緩慢，但我們投資組合的活動仍然強勁。在我們的投資組合在第一季度完成了 8 筆併購交易之後，我們在第二季度又完成了 2 筆併購交易，並且在第二季度結束後不久又完成了 1 筆併購交易。此外，我們最近宣布的另外 2 項併購活動尚未結束。 7 月，我們的投資組合公司 enGene 宣布與 Forbian 收購達成業務合併協議並上市。目前，我們有 3 家投資組合公司正在尋求上市。我們的投資組合活動繼續驗證我們的投資團隊所做的出色工作和選擇性承保。

As we anticipated, early loan repayments increased further in Q2 to approximately $297 million, within our guidance of $225 million to $325 million and an increase from $202 million in Q1 2023. For Q3 2023, we expect prepayments to remain healthy but to decrease to $175 million to $250 million, although this could change as we progress in the quarter. The higher 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，第二季度的提前貸款償還額進一步增加至約2.97 億美元，在我們指導的2.25 億美元至3.25 億美元的範圍內，比2023 年第一季度的2.02 億美元有所增加。對於2023 年第三季度，我們預計預付款將保持健康，但將減少至175 美元100 萬至 2.5 億美元，儘管隨著本季度的進展，這一情況可能會發生變化。儘管市場波動，但過去幾個季度的預付款水平仍較高，這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。

Credit quality of the debt investment portfolio remains strong and stable. Our weighted average internal credit rating of 2.24 improved from the 2.26 rating in Q1, and remains at the lower end of our normal historical range. Our Grade 1 and 2 credits remained relatively flat at 59.4% compared to 59.8% in Q1. Grade 3 credits were slightly higher at 38.3% in Q2 versus 37.1% in Q1. Our rated 4 credits decreased slightly to 2.3% and rated 5 credits were once again 0% in Q2. As of the end of Q2, we had 1 debt investment on nonaccrual with an investment cost and fair value of approximately $13.3 million and $0 million, respectively, or 0.4% and 0.0%, as a percentage of the company's total investment portfolio at cost and value, respectively. As of our most recent reporting, 100% of our debt portfolio companies are current on contractual payments to Hercules.

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 2.24，較第一季度的 2.26 有所提高，仍處於正常歷史範圍的下限。我們的 1 級和 2 級學分保持相對平穩，為 59.4%，而第一季度為 59.8%。第二季度 3 級學分略高於第一季度的 37.1%，為 38.3%。第二季度，我們的評級 4 學分略有下降至 2.3%，評級 5 學分再次為 0%。截至第二季度末，我們有1 筆非應計債務投資，投資成本和公允價值分別約為1,330 萬美元和000 萬美元，占公司按成本和成本計算的總投資組合的百分比為0.4% 和0.0 %。值，分別。截至我們最近的報告，我們 100% 的債務投資組合公司均按合同向 Hercules 付款。

Despite increased selectivity and valuation sensitivity from venture capital investors, capital raising across our portfolio remained strong in Q2, with 21 companies raising nearly $1.9 billion in new capital in Q2. This was up over 100% from Q1 and was the strongest quarter of new capital raising in our portfolio over the last 1.5 years.

儘管風險資本投資者的選擇性和估值敏感性有所提高，但我們投資組合的融資在第二季度仍然強勁，有 21 家公司在第二季度籌集了近 19 億美元的新資本。這比第一季度增長了 100% 以上，是過去 1.5 年來我們投資組合中新融資最強勁的季度。

During Q2, Hercules had net realized gains of $0.2 million. This was comprised of net realized gains of $6 million due to the sale of equity and warrant investments and gains on foreign exchange, offset by approximately $5.8 million due to the loss on 2 smaller debt investments. Through Q2, we have generated $8.2 million of realized gains year-to-date. Our net asset value per share in Q2 was $10.96, an increase of 1.3% from Q1 2023. This was our fourth consecutive quarter of reporting an increased net asset value per share.

第二季度，Hercules 實現的淨收益為 20 萬美元。其中包括因出售股權和認股權証投資而實現的淨收益 600 萬美元以及外匯收益，並被 2 項規模較小的債務投資的損失所抵消的約 580 萬美元所抵消。截至第二季度，我們今年迄今已實現 820 萬美元的已實現收益。我們第二季度的每股淨資產值為 10.96 美元，比 2023 年第一季度增長 1.3%。這是我們連續第四個季度報告每股資產淨值增加。

We ended Q2 with strong liquidity of over $670 million. Inclusive of available liquidity in our private funds, we have approximately $1 billion of liquidity as of the end of Q2. Venture capital ecosystem fundraising and investment activity continue to stay at muted levels relative to the historical highs that we witnessed in 2021 and 2022, with fundraising activity at $33 billion and investment activity at $86 billion for the first half of 2023, respectively, according to data gathered by PitchBook and VCA.

第二季度結束時，我們的流動性強勁，超過 6.7 億美元。包括私募基金的可用流動性在內，截至第二季度末，我們的流動性約為 10 億美元。數據顯示，與2021 年和2022 年見證的歷史高位相比，風險投資生態系統的籌款和投資活動繼續保持在較低水平，2023 年上半年籌款活動為330 億美元，投資活動為860 億美元由 PitchBook 和 VCA 收集。

In terms of VC investment activity, Q2 was slightly lower than Q1, with $40 billion of investments relative to the $46 billion that was invested in Q1. This pace puts the industry on track to meet or exceed pre-pandemic VC equity investment levels for 2023. We expect fundraising to stay at much lower levels than prior years and investment activity to continue to pick up as the year goes on.

就風險投資活動而言，第二季度略低於第一季度，投資額為 400 億美元，而第一季度的投資額為 460 億美元。這一步伐使該行業有望在 2023 年達到或超過大流行前的風險投資股權投資水平。我們預計融資將保持在遠低於往年的水平，而投資活動將隨著時間的推移繼續回升。

With our record operating performance year-to-date, we exited Q2 with increased undistributed earnings spillover of over $148 million or $1.02 per ending shares outstanding. For Q2, we increased our base distribution to $0.40 and declared a supplemental distribution of $0.08 for a total of $0.48 of shareholder distribution. This represents the third base distribution increase in the last 12 months and is the 12th consecutive quarter of being able to pay out a supplemental distribution to our shareholders.

憑藉今年迄今為止創紀錄的經營業績，第二季度結束時，我們的未分配盈利溢出增加超過 1.48 億美元，即每股已發行股票 1.02 美元。對於第二季度，我們將基本分配增加到 0.40 美元，並宣布補充分配 0.08 美元，股東分配總額為 0.48 美元。這是過去 12 個月內第三次基礎分配增加，也是連續第 12 個季度能夠向股東支付補充分配。

In closing, our scale, institutionalized lending platform and our ability to capitalize on a rapidly changing competitive environment continues to drive our business forward and our operating performance to record levels. In Q2, for the first time in our long operating history, Hercules delivered over $100 million of quarterly core income, which excludes the benefit of prepayment fees, or fee accelerations from early repayments. This is another significant milestone for our business.

最後，我們的規模、制度化貸款平台以及我們利用快速變化的競爭環境的能力繼續推動我們的業務向前發展，並將我們的經營業績推向創紀錄的水平。第二季度，Hercules 在我們長期的運營歷史上首次實現了超過 1 億美元的季度核心收入，其中不包括預付款費用或提前還款帶來的費用加速的收益。這是我們業務的另一個重要里程碑。

Our success is attributable to the tremendous dedication, efforts and capabilities of our 100-plus employees and the trust that our venture capital and private equity partners place with us every day. We remain optimistic about our business opportunities, given how well we are positioned to take advantage of market conditions and grow our core income generating assets, and as a result, the earnings power of the business. We are thankful to the many companies, management teams and investors that continue to make Hercules their partner of choice.

我們的成功歸功於 100 多名員工的巨大奉獻、努力和能力，以及風險投資和私募股權合作夥伴每天對我們的信任。鑑於我們能夠很好地利用市場條件並發展我們的核心創收資產，從而提高業務的盈利能力，我們對我們的商業機會保持樂觀。我們感謝眾多公司、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塞斯。

Thank you, Scott, and good afternoon, ladies and gentlemen. I'll now add some emphasis to some of the points that Scott has made. Q2 marked another quarter of solid execution, record financial performance and conservative balance sheet management for Hercules Capital. We are continuing to see the benefits from operating with a healthy spread between our lending and borrowing rates and a strong balance sheet with no near-term material maturities. In Q2, we had record investment -- total investment income of $116 million, record net investment income of $75.7 million, record net investment income per share of $0.53 per share and a record return on equity of more than 20%.

謝謝斯科特，女士們先生們下午好。現在我將強調斯科特提出的一些觀點。第二季度標誌著 Hercules Capital 又一個執行力紮實、財務業績創紀錄、資產負債表管理保守的季度。我們繼續看到貸款和借款利率之間保持健康的利差以及穩健的資產負債表且沒有近期重大到期的情況所帶來的好處。第二季度，我們的投資創歷史新高——總投資收益為1.16 億美元，淨投資收益為創紀錄的7570 萬美元，每股淨投資收益為創紀錄的0.53 美元，股本回報率創紀錄超過20 %。

The investments that we've made in our platform and the scale at which we are now operating are helping to drive our record financial performance. Our strong and defensive balance sheet positions us incredibly well to be able to take advantage of the attractive market opportunity for new investments that our team believes will continue to get better over the coming quarters. 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 then finally, the financial outlook.

我們對平台的投資以及我們目前的運營規模正在幫助推動我們創紀錄的財務業績。我們強大且具有防禦性的資產負債表使我們能夠利用有吸引力的市場機會進行新投資，我們的團隊相信這些新投資將在未來幾個季度繼續變得更好。考慮到這些要點，讓我們回顧一下以下幾個方面：損益表表現和亮點、資產淨值、未實現和已實現的活動、槓桿和流動性，最後是財務前景。

Turning to income statement performance and highlights. This was the third quarter in a row that total investment income exceeded $100 million at $116.2 million, driven by the prior quarter growth in the debt portfolio on solid new business underwriting and an increase in benchmark rates. It was also the first quarter that core income, a non-GAAP measure, exceeded $100 million at $102.5 million. Core investment income excludes the benefit of income recognized as a result of loan prepayments. This is a true testament to the size of the portfolio now managed by the team.

轉向損益表的表現和亮點。這是連續第三個季度總投資收入超過 1 億美元，達到 1.162 億美元，這主要得益於上一季度穩健的新業務承保債務組合的增長以及基準利率的上升。這也是核心收入（非公認會計準則衡量標準）首次突破 1 億美元，達到 1.025 億美元。核心投資收入不包括因提前償還貸款而確認的收入收益。這真實地證明了該團隊目前管理的投資組合的規模。

Net investment income was another record at $75.7 million of 15.6% quarter-over-quarter increase or a record $0.53 per share in Q2. NII margin has now been above 60% for 3 quarters in a row. Our effective and core yields in the second quarter were 16% and 14.1%, respectively, compared to 15.1% and 14% 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 continue to forecast a leveling of core yield hereafter due to minimal movement from the Fed in the coming quarters after the most recent rate increase.

第二季度淨投資收益再創新高，達到 7570 萬美元，環比增長 15.6%，每股收益創紀錄的 0.53 美元。 NII 利潤率現已連續 3 個季度保持在 60% 以上。第二季度我們的有效收益率和核心收益率分別為 16% 和 14.1%，而上一季度為 15.1% 和 14%。核心收益率的增加是由於基準利率上調導致票面利息增加。我們繼續預測核心收益率將持平，因為美聯儲在最近一次加息後未來幾個季度的變動很小。

Turning to expenses. Our gross operating expenses for the quarter increased to $42.9 million compared to $42.3 million in the prior quarter. Net of costs recharged to the RIA, our operating expenses were $40.5 million. Interest expense and fees increased modestly to $19.6 million from $19 million in the prior quarter, due to the growth of the investment portfolio in the first half of the year and slightly higher weighted average cost of debt. Strong funding activity to start Q3 will likely continue these trends.

轉向開支。我們本季度的總運營支出從上一季度的 4230 萬美元增至 4290 萬美元。扣除向 RIA 充值的成本後，我們的運營費用為 4050 萬美元。由於上半年投資組合的增長以及加權平均債務成本略有上升，利息支出和費用從上一季度的 1900 萬美元小幅增長至 1960 萬美元。第三季度開始的強勁融資活動可能會延續這些​​趨勢。

SG&A expenses remained flat at $23.3 million, slightly above my guidance of $23 million. Net of cost recharge to the RIA, the SG&A expenses were $20.9 million. Our weighted average cost of debt was a mere 4.8%, a tiny increase compared to the prior quarter, reflecting greater utilization of the credit facilities due to growth of the investment portfolio in the first half of the year. Our ROAE or NII over average equity increased to 20.8% for the first quarter and our ROAA or NII over average total assets was 10%.

SG&A 支出保持不變，為 2330 萬美元，略高於我的指導值 2300 萬美元。扣除 RIA 充值費用後，SG&A 費用為 2,090 萬美元。我們的加權平均債務成本僅為 4.8%，與上一季度相比略有上升，反映出上半年投資組合增長導致信貸額度利用率提高。第一季度，我們的 ROAE 或 NII 超過平均股本增至 20.8%，ROAA 或 NII 超過平均總資產為 10%。

Switching to NAV unrealized and realized activity. During the quarter, our NAV increased for the fourth consecutive quarter by $0.14 per share to $10.96 per share. This represents an NAV per share increase of 1.3% quarter-over-quarter. The main drivers for the increase were the net change in unrealized appreciation of $18.9 million, net of reversal of prior unrealized depreciation of $8.4 million, mainly due to investment disposals that disposed of or written off. Net investment income and accretion due to ATM sales, offset by dividends paid in the quarter, including the supplemental distribution and the dilution from stock compensation.

切換到資產淨值未實現和已實現的活動。本季度，我們的資產淨值連續第四個季度增長，每股增長 0.14 美元，達到每股 10.96 美元。這意味著每股資產淨值環比增長 1.3%。增長的主要驅動因素是未實現升值淨變化 1,890 萬美元，扣除先前未實現折舊 840 萬美元的轉回，主要是由於處置或註銷的投資處置。淨投資收入和 ATM 銷售帶來的增值被本季度支付的股息所抵消，包括補充分配和股票薪酬稀釋。

Our $18.9 million of unrealized depreciation was primarily driven by $16 million of appreciation to the public equity and warrant portfolio, an additional $8.8 million of unrealized depreciation was related to the loan portfolio. The reversal of prior unrealized depreciation resulted in a net realized gain of $200,000 comprised of net realized gains of $6 million due to the sale of equity and warrant investments and gains on foreign exchange, offset by $5.8 million due to the loss on 2 debt investments.

我們 1890 萬美元的未實現折舊主要是由公共股權和認股權証投資組合升值 1600 萬美元推動的，另外 880 萬美元的未實現折舊與貸款投資組合有關。先前未實現折舊的轉回導致實現淨收益200,000 美元，其中包括因出售股權和認股權証投資而實現的淨收益600 萬美元以及外匯收益，並被2 項債務投資損失導致的580 萬美元所抵消。

Moving to leverage and liquidity. Our GAAP and regulatory leverage were 101.3% and 90.3%, respectively, which decreased compared to the prior quarter due to maintaining a more normal cash balance over the quarter end and reduction of the credit facility borrowings based on the high prepayments collected in the quarter. Netting out leverage with cash on the balance sheet, our net GAAP and regulatory leverage decreased to 97.4% and 86.4%, respectively. We ended the quarter with $671 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 over $1 billion of available liquidity. The strong liquidity positions us very well to support our existing portfolio companies and of course, new opportunities.

轉向槓桿和流動性。我們的GAAP 槓桿率和監管槓桿率分別為101.3% 和90.3%，與上一季度相比有所下降，原因是季末現金餘額保持在正常水平，並且基於本季度收取的高額預付款項而減少了信貸便利借款。用資產負債表上的現金扣除槓桿後，我們的淨 GAAP 和監管槓桿率分別下降至 97.4% 和 86.4%。本季度結束時，我們的可用流動資金為 6.71 億美元。需要提醒的是，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 平台擁有超過 10 億美元的可用流動性。強大的流動性使我們能夠很好地支持我們現有的投資組合公司，當然還有新的機會。

We continue to have no near-term debt maturities, giving us the ability to be opportunistic should we decide to raise additional capital to support the business growth that we anticipate. In Q2, we opportunistically accessed the ATM market and raised $65 million, resulting in a $0.07 per share accretion to NAV.

我們仍然沒有短期債務到期，這使我們能夠在決定籌集額外資本以支持我們預期的業務增長時抓住機會。在第二季度，我們趁機進入 ATM 市場並籌集了 6500 萬美元，導致每股資產淨值增加 0.07 美元。

On 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, approximately 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 $175 million to $250 million in prepayment activity for the third quarter. We expect our third quarter interest expense to remain stable compared to the prior quarter. For the third quarter, we expect SG&A expenses of $23 million to $24 million and RIA expense allocation of approximately $2.5 million.

展望未來，我們預計 2023 年剩餘時間的核心收益率範圍為 13.8% 至 14.2%。提醒一下，我們大約 95% 的債務投資組合是有下限浮動的。因此，最近的加息以及 2023 年的任何額外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，我們預計第三季度的預付款活動將達到 1.75 億至 2.5 億美元。我們預計第三季度利息支出與上一季度相比將保持穩定。對於第三季度，我們預計 SG&A 費用為 2300 萬至 2400 萬美元，RIA 費用分配約為 250 萬美元。

In closing, our balance sheet remains strong to support our existing portfolio as well as opportunistically invest in the best opportunities. I will now turn the call over to Stacy to begin the Q&A portion of the call. Stacy, over to you.

最後，我們的資產負債表仍然強勁，可以支持我們現有的投資組合，並伺機投資最佳機會。我現在將把電話轉給史黛西，開始電話的問答部分。史黛西，交給你了。

(Operator Instructions) Our first call is from John Hecht with Jefferies.

（操作員說明）我們的第一個電話是來自 Jefferies 的 John Hecht。

Congratulations on a great quarter, making our lives easier here. Maybe Scott, the first question is, obviously, that's changed in the world since the U.S. reported and 1 of the major financing entities in your market SVB, had issues that it was obviously sold to the First Citizens. So I'm just wondering, can you describe any -- are you seeing any kind of changes in the overall framework of the industry that are worth noting?

恭喜您度過了一個美好的季度，讓我們的生活變得更加輕鬆。也許斯科特，第一個問題是，顯然，自從美國報導以來，世界已經發生了變化，並且你們市場中的一個主要融資實體 SVB 出現了明顯被出售給第一公民的問題。所以我只是想知道，您能否描述一下行業整體框架中是否有任何值得注意的變化？

Yes. So I think, John, in addition to what we talked about on our last call, which was post the SVB failure, I think we've seen sort of a little bit of normalization across the market. First Citizens, I think, has done a great job at stabilizing that business. We've seen them in the market on a handful of deals. We're actually working with them on a number of deals as well. Outside of First Citizens, there are some commercial banks that have pulled back from the venture lending ecosystem, which I think is a net benefit for our business.

是的。所以我認為，約翰，除了我們在上次電話會議（SVB 失敗後）中討論的內容之外，我認為我們已經看到整個市場出現了一定程度的正常化。我認為，First Citizens 在穩定該業務方面做得很好。我們在市場上的一些交易中看到了它們。實際上我們也在與他們合作進行一些交易。除了 First Citizens 之外，還有一些商業銀行已經退出風險貸款生態系統，我認為這對我們的業務來說是淨收益。

On the nonbank side, I think the 2 key themes that we're certainly seeing in the market is that a lot of our competitors are hamstrung by either high leverage or low liquidity and that really puts them in a position where they're having to operate deal by deal, whereas we're sitting here with low leverage and abundance of liquidity, and it allows our team to be consistently in the market essentially going after any and all of the deals that we think fit our tight underwriting and pricing parameters.

在非銀行方面，我認為我們在市場上肯定看到的兩個關鍵主題是，我們的許多競爭對手都受到高槓桿率或低流動性的阻礙，這確實使他們處於不得不這樣做的境地。逐筆進行交易，而我們的槓桿率較低，流動性充足，這使得我們的團隊能夠始終如一地在市場上追逐我們認為符合我們嚴格的承銷和定價參數的任何和所有交易。

And then, I mean, like, it sounds like it's obviously moving net-net favorable to you guys from a competitive perspective. But anything like either venture capitalist behaviors changing in terms of their -- either the way they process funding? Or is that pretty stable?

然後，我的意思是，從競爭的角度來看，這聽起來顯然對你們有利。但是，風險投資家的行為是否會改變他們處理融資的方式？或者說這相當穩定？

Yes. So look, I think the VC ecosystem continues to be somewhat volatile and in flux. But I would caveat that by saying when we look at the year-to-date data, we've now had 2 consecutive quarters where U.S. venture capital investors have invested $40 billion or more of equity capital. And that gets us to roughly the $86 billion that we mentioned through the first half of the year. That is down materially from what we were seeing on a quarterly basis throughout the pandemic. So if you look at the 2021 numbers and the 2022 numbers, we see investors were averaging almost $80 billion to $90 billion per quarter. That $40 billion, while down from the pandemic levels is still up from where it was on a pre-pandemic basis.

是的。因此，我認為風險投資生態系統仍然有些不穩定且不斷變化。但我要警告的是，當我們查看今年迄今為止的數據時，我們已經連續兩個季度美國風險資本投資者投資了 400 億美元或更多的股本。這使我們達到了我們提到的今年上半年的大約 860 億美元。這與我們在整個大流行期間按季度看到的情況相比大幅下降。因此，如果您查看 2021 年和 2022 年的數據，我們會發現投資者平均每季度投資近 800 億至 900 億美元。這 400 億美元雖然低於大流行期間的水平，但仍高於大流行前的水平。

So when we look at what we've seen year-to-date, it's down, but it's still healthy and it's still robust. What we have noticed, and we think this is a positive, the venture capital investors are being much more selective in terms of the companies that they are investing to. So if you look at it on a numbers basis, approximately 17,000, 18,000 individual investments were done by the VC firms in 2021, 2022. That's down to about 6,000 year-to-date. So we're seeing less deals get done and we're seeing much more of a focus on valuation. But we would be of the view that the venture capital ecosystem continues to be healthy, continues to be robust and that it's actually on pace to exceed pre-pandemic levels.

因此，當我們看看今年迄今所看到的情況時，它有所下降，但仍然健康且強勁。我們注意到，並且我們認為這是積極的一面，風險資本投資者在選擇投資的公司時變得更加挑剔。因此，如果從數字上看，風投公司在 2021 年和 2022 年進行了大約 17,000 項、18,000 項個人投資。今年迄今為止，這一數字已降至 6,000 項左右。因此，我們看到完成的交易越來越少，而且我們看到更多的注意力集中在估值上。但我們認為，風險投資生態系統仍然健康、強勁，而且實際上正在超過大流行前的水平。

That's helpful. And then final question is, I mean, you talked about obviously, spreads have been pretty healthy, and I think that's just a reflection of maybe your opportunity and market leadership. But like what about other things like warrant coverage and things like that, anything worth note there in terms of changing trends when it comes to the deal structures?

這很有幫助。最後一個問題是，我的意思是，您顯然談到了，利差非常健康，我認為這可能反映了您的機會和市場領導力。但是，就像權證覆蓋範圍之類的其他事情一樣，在交易結構的變化趨勢方面有什麼值得注意的地方嗎？

In terms of pricing, we're focused on increased yields that can come through a variety of different triggers that we have. It can come from coupon. It can come from facility fee. It can come from warrants. That can come from end of term fees. So outside of just the general emphasis on higher onboarding yields, nothing specific that I can mention. And then on the structuring side, what I would tell you is that we're playing a long game here, and we continue to run this business with an emphasis on how do we continue to outperform over the long term. And so our deals continue to be very tightly structured. Our deals continue to be underwritten by what I believe is the best team in the business, and we view that, that is something that will serve us incredibly well going forward.

在定價方面，我們專注於通過我們擁有的各種不同的觸發因素來提高產量。它可以來自優惠券。它可以來自設施費。它可以來自認股權證。這可能來自學期末費用。因此，除了普遍強調更高的入職收益率之外，我沒有什麼具體可以提及的。然後在結構方面，我要告訴你的是，我們正在打一場持久戰，我們將繼續經營這項業務，重點是我們如何繼續長期表現出色。因此，我們的交易結構仍然非常緊湊。我們的交易繼續由我認為是業內最好的團隊承保，我們認為，這將為我們的未來帶來難以置信的好處。

Our next question comes from Crispin Love with Piper Sandler.

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

Just following up on the question on the market and SVB. Scott, you made some comments earlier in the call about the potential for market share gains, just given SVBs exit. To what level do you think you've already begun to benefit from SVBs [absence] by increasing share in the last 4 or 5 months? And do you think the runway here will actually accelerate over the next few quarters and be available for kind of years ahead? Just curious if there's just any way for you to size the opportunities in front of you just given the changes in the competitive landscape?

只是跟進市場和 SVB 的問題。斯科特，您在電話會議早些時候就SVB退出後市場份額增長的潛力發表了一些評論。您認為通過過去 4 或 5 個月增加份額，您已經開始從 SVB [缺席] 中受益到什麼程度？您認為這裡的跑道實際上會在接下來的幾個季度加速並在未來幾年內可用嗎？只是好奇，考慮到競爭格局的變化，您是否有任何方法可以衡量您面前的機會？

Yes. Thanks, Crispin. It's actually a great question. We do think that over the last 3 or 4 months, we have begun to benefit from what happened with Silicon Valley Bank in March of this year. But it is our strong view that the opportunity is going to continue to get better over the coming quarters and over the coming years. Silicon Valley Bank was the largest player in the space over the last 40 years. Obviously, they were acquired, but that team -- that business will not be the same as it once was. They're still in their new current sort of inclination, a very formidable player, and we're certainly rooting for them to continue to do very well in the market.

是的。謝謝，克里斯平。這實際上是一個很好的問題。我們確實認為，在過去的三四個月裡，我們已經開始從今年三月份矽谷銀行發生的事情中受益。但我們強烈認為，在未來幾個季度和未來幾年裡，機會將繼續變得更好。矽谷銀行是過去 40 年來該領域最大的參與者。顯然，他們被收購了，但是那個團隊——那個業務將不再像以前那樣了。他們仍然處於當前的新傾向，是一個非常強大的參與者，我們當然支持他們繼續在市場上表現出色。

But we believe that over the next several quarters, we're going to continue to see a positive impact on the Hercules business tied to what happened in March of this year. These conversations that our deal teams have with these companies don't turn into transactions in a week or 2 weeks or 3 weeks. Those conversations start in April and in May, and they'll turn into deals, some in Q2, more in Q3, more in Q4. And so we're very optimistic that, that opportunity set continues to rise over the next several quarters.

但我們相信，在接下來的幾個季度中，我們將繼續看到與今年 3 月份發生的事情相關的對 Hercules 業務的積極影響。我們的交易團隊與這些公司的對話不會在一周、兩週或三週內轉化為交易。這些對話從四月和五月開始，它們將轉化為交易，一些在第二季度，更多在第三季度，更多在第四季度。因此，我們非常樂觀地認為，這一機會在未來幾個季度將繼續增加。

Scott, very helpful color there. And then just 1 on credit quality. I'm just curious if you can give any update on your credit outlook just your results. Nonaccruals actually decreased in the quarter where others in the market are seeing credit issues. Do you expect any normalization in credit over the near to intermediate term? And are you just -- are you seeing any stress in your portfolio companies as we sit here today, just because the results that you put up so far just say otherwise.

斯科特，那裡的顏色非常有幫助。然後信用質量只有 1。我只是好奇您是否可以僅提供您的信用前景的最新結果。本季度的非應計費用實際上有所下降，而市場上的其他人都看到了信貸問題。您預計中短期內信貸會正常化嗎？當我們今天坐在這裡時，您是否看到您的投資組合公司面臨任何壓力，僅僅因為您迄今為止提出的結果表明事實並非如此。

Yes. So look, I think our team has always led the industry in terms of credit performance, and that's something that we pride ourselves on. This business was started in 2004 with an emphasis and a focus on both relationships and credit underwriting. And that fundamental focus on credit underwriting is something that we've continued to expand upon and enhance over the course of the last 18, 19 years. When you have a $3-plus billion portfolio and 120 debt positions, of course, there's going to be a handful of credits on a quarterly basis that are in some type of -- I don't even want to call it distressed, but some type of performance issues. Right now we have 0 Grade 5 credits and we have $67 million of Grade 4 credits. And I think that really speaks to the health and quality of the overall portfolio.

是的。所以看，我認為我們的團隊在信用表現方面一直領先於行業，這是我們引以為傲的事情。該業務始於 2004 年，重點關注關係和信用承銷。在過去 18、19 年裡，我們不斷擴展和加強對信用承保的根本關注。當然，當你擁有超過 3 億美元的投資組合和 120 個債務頭寸時，每個季度都會有少量信貸處於某種類型——我什至不想稱其為不良貸款，但有些性能問題的類型。現在我們有 0 個 5 級學分，我們有 6700 萬美元的 4 級學分。我認為這確實說明了整體投資組合的健康和質量。

Things can change on a quarterly basis. We're not seeing anything Q3 quarter-to-date that tells us that there's going to be a material change either way. You mentioned that our nonaccruals actually improved on a quarterly basis. Right now, we have 1 legacy loan on nonaccrual. That represents 0% of our portfolio from a fair value perspective. We did have the 1 loan, which was to Codiak Biosciences that filed for bankruptcy at the very end of Q1 and was marked down in -- sorry, and was marked down at the end of Q1. We are close to the finish line in terms of that workout. And what I can tell you is, to date, we have already received 100% of our fair value mark in Q1 and we've recovered approximately 97% of that original principal amount in cash. And I think that's an example of the great work that not only our investment team, but that our credit team does in managing our portfolio.

事情可能每季度都會發生變化。從第三季度至今，我們沒有看到任何跡象表明無論哪種方式都會發生重大變化。您提到我們的非應計費用實際上按季度有所改善。目前，我們有 1 筆非應計遺留貸款。從公允價值的角度來看，這占我們投資組合的 0%。我們確實有第一筆貸款，是給 Codiak Biosciences 的，該公司在第一季度末申請破產，並在 - 抱歉，在第一季度末被標記。就鍛煉而言，我們已經接近終點線。我可以告訴你的是，迄今為止，我們已經在第一季度收到了 100% 的公允價值標記，並且我們已經以現金形式收回了約 97% 的原始本金。我認為這不僅是我們的投資團隊，而且是我們的信貸團隊在管理我們的投資組合方面所做的出色工作的一個例子。

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

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

I'm going to try not to ask the same question or the same question in a different way, but there seems to be a lot of interest around it. If I understand your comments, a lot of your deal activity during the quarter came from your unfunded commitments, but you're characterizing the deal quality as high and likely to get better. So what's the catalyst that will get new deal activity going as opposed to just drawing out of the unfunded commitments?

我會盡量不問同樣的問題，或者以不同的方式問同樣的問題，但似乎對此有很多興趣。如果我理解您的評論，您在本季度的許多交易活動都來自您無資金的承諾，但您認為交易質量很高並且可能會變得更好。那麼，與僅僅提取無資金承諾相比，推動新交易活動開展的催化劑是什麼？

Yes. So Casey, to be clear, 30% of our fundings in the quarter were from unfunded commitments, 70% of our fundings in the quarter came from new commitments. And so I would characterize the funding activity a little bit differently than how you characterized it in the question. We think we've seen very healthy new deal volume. If you look at the companies that we were -- the new companies that we were able to add in Q1 and the new companies that we would -- that we have added in Q2, which are now in the SOI, we think these are some of the best quality debt transactions that we've seen over the last 10 years. These are later-stage mature scale businesses. We are very pleased by the quality and the quantity that we're seeing. And when you look at our Q3 quarter-to-date activity, we have already closed over $200 million of new commitments and we have over $300 million of commitments that are signed and in the closing process.

是的。凱西，要明確的是，我們本季度 30% 的資金來自無資金承諾，我們本季度 70% 的資金來自新承諾。因此，我對融資活動的描述與您在問題中的描述略有不同。我們認為我們已經看到了非常健康的新交易量。如果你看看我們在第一季度能夠添加的新公司以及我們在第二季度添加的新公司，這些公司現在都在 SOI 中，我們認為這些是一些過去10 年來我們見過的最優質的債務交易。這些都是後期成熟規模的業務。我們對所看到的質量和數量感到非常滿意。當您查看我們第三季度迄今為止的活動時，我們已經完成了超過 2 億美元的新承諾，並且我們還有超過 3 億美元的承諾已簽署並正在結束過程中。

Great. In reference to the comments relative to Silicon Valley Bank and them being out of the market, having that sort of signpost that everybody used to run around, would you say that you've somewhat embedded a permanent higher cost of capital for venture debt borrowers because of that lack of dominant competitor in the space?

偉大的。參考有關矽谷銀行的評論以及他們退出市場，擁有每個人過去都四處奔走的那種路標，你是否會說你在某種程度上為風險債務借款人嵌入了永久性的更高的資本成本，因為該領域缺乏主導競爭對手？

So 2 things. One, I want to be clear. We did not say that Silicon Valley Bank is out of the market. I actually specifically referenced that I think First Citizens has done a really nice job post acquisition. They're in the market. We're seeing them on deals. They've announced several transactions. We're actually working with them on a handful of transactions. So they are certainly not out of the market. That business has fundamentally changed with what happened to Silicon Valley Bank in its legacy form in March of this year.

所以有兩件事。一，我想明確一點。我們並沒有說矽谷銀行退出市場。事實上，我特別提到，我認為 First Citizens 在收購後做得非常好。他們在市場上。我們在交易中看到了他們。他們已經宣布了幾筆交易。我們實際上正在與他們合作進行一些交易。所以他們肯定沒有退出市場。今年 3 月，矽谷銀行的遺留業務發生了根本性的變化。

With respect to the second part of the question, we believe the answer is absolutely yes. Historically, SVB was able to essentially drive the market down from a yield perspective, and we think that has permanently changed.

對於問題的第二部分，我們認為答案是肯定的。從歷史上看，SVB 能夠從收益率的角度基本上推動市場下跌，我們認為這種情況已經永久改變。

Great. That's quite helpful. Lastly, given where the leverage ratio is and you've got tremendous capacity, would it be likely that over the next few quarters, we might see the ATM return to the levels that the company used to do of 1 million or 2 million shares a quarter from what has recently been a more elevated level?

偉大的。這很有幫助。最後，考慮到槓桿率在哪裡，並且您擁有巨大的容量，在接下來的幾個季度中，我們是否可能會看到 ATM 恢復到該公司過去 100 萬或 200 萬股的水平與最近較高水平相比有四分之一的差距？

I think it's tough to say, Casey. I think we were pretty clear in our public remarks. We are very focused on maintaining a pristine balance sheet with an abundance of liquidity. The concept that I think a lot of BDCs are struggling with is being forced to manage their business deal to deal. You spike your leverage ratio, you have to raise equity to bring it down, you're not in the market consistently, you can't bid on the bigger deals. We want to make sure that our team in conversations with companies and investors has the ability and has a balance sheet behind them that is pristine, that is incredibly liquid and gives us the best opportunity to continue to take market share. So I think that's something that we'll just continue to evaluate on a continuous basis based on what we're seeing in terms of pipeline and on the quality and quantity of new deals.

我認為這很難說，凱西。我認為我們的公開言論已經說得很清楚了。我們非常注重保持原始的資產負債表和充足的流動性。我認為許多 BDC 都在努力解決的問題是被迫管理他們的業務交易。你提高了槓桿率，你必須提高股本才能降低杠桿率，你不能持續參與市場，你無法競標更大的交易。我們希望確保我們的團隊在與公司和投資者對話時有能力並擁有原始的資產負債表，流動性極強，為我們提供了繼續佔據市場份額的最佳機會。因此，我認為我們將根據我們在渠道以及新交易的質量和數量方面看到的情況，繼續持續評估這一點。

Our next question comes from Christopher Nolan with Ladenburg Thalmann & Company.

我們的下一個問題來自拉登堡塔爾曼公司的克里斯托弗·諾蘭。

Casey just asked my question. Scott, a quick question. Are you -- because of your dominant position in the market, are you seeing that you have an advantage in terms and conditions and you're able to negotiate better prepayment fees and things like that.

凱西剛剛問了我的問題。斯科特，一個簡單的問題。由於您在市場中的主導地位，您是否認為自己在條款和條件方面具有優勢，並且能夠協商更好的預付款費用等。

I don't think it allows us to necessarily negotiate better prepayment fees. I think it allows us to win better quality deals. We don't have to chase some of the tougher deals that we've seen get done in the market. I mentioned on this call that our pipeline continues to be incredibly strong and robust. I would also mention that and I've said this before, we track the number of deals that get done in the market that we ended up passing on, and that continues to be at a very high level. So I think having a dominant position in the market allows us to essentially pick and choose the deals that we really want to do versus being forced to do some of the smaller tougher deals that we're seeing getting done in the market.

我認為這不一定能讓我們協商出更好的預付款費用。我認為這使我們能夠贏得更優質的交易。我們不必追逐市場上完成的一些更艱難的交易。我在這次電話會議上提到，我們的管道仍然非常強大和穩健。我還要提到這一點，我之前已經說過，我們跟踪市場上完成的交易數量，但我們最終放棄了這一點，並且該數量仍然處於非常高的水平。因此，我認為，在市場上佔據主導地位使我們能夠從本質上挑选和選擇我們真正想做的交易，而不是被迫做一些我們在市場上看到的規模較小、難度更大的交易。

And my follow-up question is, given all the turmoil and venture debt and venture capital, are you guys rethinking in terms of how you are allocating your resources by industry so less life science, more technology or...

我的後續問題是，考慮到所有的動盪以及風險債務和風險資本，你們是否正在重新思考如何按行業分配資源，從而減少生命科學，更多技術或......

Yes. I think the key for us really is on diversification. Right now, we're managing our book at roughly 50-50. So approximately 50% of our asset base is invested in technology companies. Approximately 50% of our companies -- of our debt positions are in life sciences companies. We will toggle that percentage on a quarterly basis depending on what our view of the macro environment is. Right now, we're managing the book at roughly 50-50, and that's what we intend to maintain certainly through the next quarter or so.

是的。我認為我們的關鍵確實在於多元化。目前，我們的圖書數量大約為 50-50。因此，我們大約 50% 的資產基礎投資於科技公司。我們大約 50% 的公司——我們的債務頭寸是在生命科學公司。我們將根據我們對宏觀環境的看法，每季度調整該百分比。目前，我們將這本書的數量控制在大約 50-50 之間，這也是我們打算在下個季度左右維持的狀態。

Our next question comes from Paul Johnson with KBW.

我們的下一個問題來自 KBW 的 Paul Johnson。

All good ones already passed. And just a few for me, I guess. But -- so I guess your prepayments this quarter were a little bit, I think, higher than maybe just a little bit higher than we were expecting. But -- and so I guess, sort of counter to some of the other venture BDCs have reported, just kind of wondering what's going on there with activity and why prepayments have been a little bit higher than you expect in this environment?

所有的美好都已經過去了。我想，對我來說，只有一些。但是 - 所以我想你們本季度的預付款比我們預期的要高一點。但是——所以我想，這與其他一些風險投資 BDC 的報告相反，只是想知道那裡的活動發生了什麼，以及為什麼預付款比您在這種環境下的預期要高一些？

Thanks, Paul. Two things. First, our prepayments were in line with our public guidance. Our public guidance for Q2 was $225 million to $325 million. We ended up at about $297 million, so certainly within our public guidance. And in terms of what's different and why other venture lenders are reporting different things, all I can tell you is I think it speaks to the quality of our portfolio. Year-to-date, we've already had 11 closed M&A events, that's driving a significant spike in M&A across our portfolio, which obviously leads to prepayments. And I think we'll continue to have relatively higher prepayments relative to others in the space because of the quality of our portfolio.

謝謝，保羅。兩件事情。首先，我們的預付款符合我們的公開指導。我們對第二季度的公共指導為 2.25 億至 3.25 億美元。我們最終的收入約為 2.97 億美元，因此肯定在我們的公共指導範圍內。至於不同之處以及為什麼其他風險貸款人報告不同的事情，我只能告訴你，我認為這說明了我們投資組合的質量。今年迄今為止，我們已經完成了 11 起併購活動，這推動了我們投資組合中併購活動的大幅增長，這顯然會導致提前付款。我認為，由於我們投資組合的質量，相對於該領域的其他公司，我們將繼續擁有相對較高的預付款。

That makes sense. And then on the call you mentioned emphasizing diversification this quarter. I'm just curious if you guys are finding any sort of particular attracted -- more particularly attractive value in any specific kind of stage of growth? Are you seeing better opportunities and expansion stage type of companies versus established versus pretty much the best market you've seen in years and it's all good.

這就說得通了。然後在電話會議上您提到本季度強調多元化。我只是好奇你們是否在任何特定的成長階段發現了任何特別吸引的——更特別有吸引力的價值？與已建立的公司相比，您是否看到了更好的機會和擴張階段類型的公司與您多年來見過的幾乎最好的市場，這一切都很好。

I think it's a really strong market, Paul. But we're not going to comment publicly on areas or industries or sectors or stages that we're focused on. Obviously, that's something that we'll talk about after we finished the quarter. But there are certainly parts of the market and certain stages that we are much more focused on now. We're just not going to talk about that publicly.

我認為這是一個非常強勁的市場，保羅。但我們不會公開評論我們關注的領域、行業、部門或階段。顯然，這是我們在本季度結束後討論的事情。但肯定有一些市場和某些階段是我們現在更關注的。我們只是不會公開談論這一點。

Congratulations on a good quarter.

祝賀您度過了一個美好的季度。

I'm showing no further questions at this time. I would now like to turn the conference back over to Scott for closing remarks.

我目前沒有提出任何進一步的問題。現在我想將會議轉回斯科特進行閉幕致辭。

Thank you, Stacy, and thanks to everyone for joining our call today. As a final note, we will be participating in the KBW Midtown March on September 28, in New York. If you are interested in attending this event, please contact KBW directly or Michael Hara. We look forward to reporting our progress on our Q3 2023 earnings call. Thank you, and have a great day.

謝謝你，史黛西，也感謝大家今天加入我們的電話會議。最後一點，我們將參加 9 月 28 日在紐約舉行的 KBW Midtown 遊行。如果您有興趣參加本次活動，請直接聯繫KBW或Michael Hara。我們期待在 2023 年第三季度財報電話會議上報告我們的進展。謝謝您，祝您有美好的一天。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。