SuRo Capital Corp (SSSS) 2013 Q4 法說會逐字稿

Good day ladies and gentlemen and thank you for standing by. Welcome to GSV Capital's fourth-quarter and fiscal-year 2013 earnings conference call. (Operator Instructions) This conference is being recorded today, Thursday, March 13, 2014.

I would now like to turn the conference over to Tricia Ross with Financial Profiles. Please go ahead.

Thank you for joining us on today's call. I am joined today by Michael Moe, GSV's founder and CEO, and Steve Bard, the Company's Chief Financial Officer. Please note that a slide presentation that corresponds to today's prepared remarks by management is available on the Company's website, at www.GSVCAP.com under Investors Events and Presentations. We are also live-tweeting segments of this earnings call via the Twitter handle @gsvcap.

Today's call is being recorded and webcast on www.GSVCAP.com. Replay information is included in our press release that was issued today. This call is the property of GSV Capital Corp., and the unauthorized rebroadcast of this call in any form is strictly prohibited.

I would also like to call your attention to customary disclosure in our press release today regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance, condition, or results and involve a number of risk and uncertainties. Actual results may differ materially from those in the forward-looking statements, as a result of a number of factors including those described from time to time in the Company's filings with the SEC. Management does not undertake to update such forward-looking statements unless required to do so by law. To obtain copies of GSV Capital's latest SEC filings, please visit the website at GSVCAP.com.

Now I would like to turn the call over to Michael Moe. Michael?

Thanks, Tricia, and good afternoon. I'm going to begin today with a review of our portfolio as of December 31, 2013, and recent key developments. Then Steve Bard will provide a brief financial overview and we'll take your questions.

So let's start on slide 3. Net assets totaled $288 million or $14.91 per share on December 31. This is up $1.75 per share from our NAV of $254 million or $13.16 per share at the end of September. This is the third consecutive quarter of increased NAV, driven largely by the appreciation of the assets amongst our top 10 holdings.

Our top 10 investments represented 80.9% of net asset value, up from 64.4% at September 30. And the top three investments -- Twitter, Palantir Technologies, and Dropbox -- represented 53%, just over half of our net asset value, up from one-third at September 30.

Following Twitter's IPO on the New York Stock Exchange in November priced at $26, shares have obviously -- I know everybody is familiar with this -- have traded as high as $75, and it's currently selling at $53.55. Needless to say, the Twitter transaction we're very pleased with.

I think, importantly, though what I would like to highlight is how that investment took place, because I think it's representative and we're certainly aspiring of the outcome that Twitter has been for us, but really how we did I think is illustrative of how we build our positions.

We started with having Twitter as our priority holding that we wanted to acquire shares. We had to get approved by Twitter to be able to buy shares, but ultimately were successful with that.

So we started our initial investment with a relatively small transaction, a few million dollars, which we subsequently had 17 distinct transactions that ultimately resulted in us putting slightly over $30 million in, at price of just over $17 at our weighted cost.

I think again, what we look to do is acquire shares in the leading companies. And as our thesis is confirmed and we're able to obtain shares at prices that we think are attractive, we will continue to build those positions. So you can see the outsize representation of our top names, and really that's our playbook going forward.

As it relates to Twitter, we do believe -- and I think our commitment with owning 1.9 million shares of stock shows this -- but we believe this is truly transformative business that is changing the way that we consume, interact with mobile, media; basically every trend that's going on we think Twitter participates, and many of these trends is on the forefront of.

If you turn to slide 4, the backdrop of the equities capital markets and the IPO market, we continue to be very bullish on equities overall and in particular for leading growth companies. Our reasons for enthusiasm include, one, the persistent demand imbalance for equities.

Just a couple data points to highlight this demand imbalance: over the past 15 years there has been a 60% reduction of the number of publicly traded companies in the public markets, and we've had $3.5 trillion of corporate buybacks during that period of time; at the same point, as we've illustrated before, that a significant reduction in the number of IPOs or supply; and you are starting to see cash inflows into equity mutual funds increase as well. So we think at the end of the day the stock market, like all markets, is a function of supply and demand; that is a very bullish fundamental that we see.

Secondly, we continue to believe the valuations remain attractive and certainly on a relative basis, a P/E basis, at over approximately 15 times; and, more importantly, on a price to cash flow, then free cash flow, markets look undervalued from a historical perspective.

And then compared to bonds, using the earnings yield method, equities look approximately 50% undervalued to bonds, which of course has been the case for some time. But nonetheless we don't see any reason why we're not going to be over -- in the short term to intermediate term, be in a good, constructive environment for growth equities.

And the third point is there remains very strong fundamentals for the leading companies that we focus on. We will make this point later, but if you look at our overall portfolio, revenue growth from 2012 to 2013 was 85%.

When we look at the IPO market, obviously 2013 was the best year in terms of issues and performance since the year 2000. But we have had 42 IPOs to date, which is we think consistent with what we saw last year.

Of the issues that have been priced, 14% have priced above the range; 57% within the range; and 29% below. The average first-day pop has been 17%.

When you look at technology issues -- and we've only had a handful so far this year -- they're actually pricing and performing much better than the overall average, as a generality. So that we have a healthy IPO market for the foreseeable future, that leads us to believe that we will have several of our companies at least who are likely to pursue IPOs within 2014.

One, to you, we expect to be on the road seeing investors in March. And a number of other portfolio companies are certainly evaluating the public market waters.

Please turn to slide 5 for profiles from the newest companies we added to our portfolio during the fourth quarter. The first company I'm going to talk about is Curious. Curious is an online learning marketplace, with its Curious.com as the website, providing a home to short-format video-based interactive lessons that help anyone learn about anything on their own time: everything from how to pick a great bottle of wine, to how to make a blanket, and everything else you can imagine.

The company has enjoyed incredible momentum since it was launched. We see this as a true business with great -- with a true network effects type of business, with significant potential.

In our 4P formula the first P, People: it is a tremendous management team. Justin Kitch is the CEO, who formerly did Homestead, which was sold to Intuit. We were very impressed by that team.

Additionally, consistent with investments we make we look for a strong syndicate of investors. Redpoint was the early investor in Curious, and so we're delighted to join them as an investor in this company.

The second company I'll -- that we -- we actually had a small sub $1 million investment in this company before, so we added a more material position in the fourth quarter, and that is Ozy Media. What Ozy is doing is -- has an online new-media business that's focused on what they call the Change Generation: what's new and what's next.

So what you see in Ozy's website is not about what you read about in The New York Times, but what you're going to read in The New York Times a year from now. Not about Sheryl Sandberg but the next Sheryl Sandberg.

Already -- and the company has just been in existence six months -- they have had Bill Clinton, Tony Blair, Jeb Bush as guest editors for their piece. This is also a business that has involved Laurene Jobs as a publisher, ongoing basis, and an investor in the company as well. In addition to Laurene we have Ron Conway, David Drummond from Google investors in this; and again we see great momentum for Ozy Media.

Third company that we invested in the fourth quarter, a software company, JAMF Holdings, which develops and sells IT management software for enterprises with large Apple product deployments: iPhones, iPads, MacBooks, etc. JAMF's Casper product suite allows IT administrators to deploy, provision, and distribute applications; configure and remotely control devices; update software product devices; enhance security; and allow for disk encryption. As Apple products continue to proliferate and become more prominent in the enterprise, JAMF is extraordinarily well positioned to be the go-to platform for IT administrators operating in this space.

What we found in our due diligence is the reputation that JAMF amongst its customers is extraordinary, with -- and this is evidence by the fact that they've got an over 95% recurring revenue base. We made this investment along with Summit Partners and, again, we are delighted to have the opportunity to participate with JAMF.

Fourth company I will mention is ePals. ePals has created the next generation of technology-enabled education media and also a global community that has over 10 million members -- teachers, parents, students -- in over 200 countries, connecting them, focused on learning. When you look at ePals they also are a next-generation media business and have amongst its properties brands that you probably heard of: Cricket and Cobblestone, which are award-winning and extraordinarily well regarded.

The fifth company we will make mention of is PayNearMe. PayNearMe is a next-generation electronic cash payment platform. It serves the tens of millions of underbanked and unbanked residents of the United States, allowing them to pay auto, rent, utility bills through retail locations. The company currently has relationships with 7-Eleven, Family Dollar, and Ace Hardware stores as they continue to aggressively expand their retail footprint and the breadth of these industries that the payment systems covers.

In the US, there's over $400 billion of currency in circulation, with $1 trillion cash transactions taking place annually. PayNearMe is focused on capitalizing on the velocity of the money of the underbanked and unbanked, which is estimated to be 70 million to 100 million people in the United States alone, allowing them to pay cash for bills or other purchases that would normally require a credit card or bank account information.

Again, a business that has extraordinary network effects. What we think is very compelling here is this network is very difficult to build; but now that they've got the flywheel running, it really is a business that we see high barriers to entry with huge growth. Again, there's an extraordinarily high-quality investor group along with us, which includes Khosla Ventures, True Ventures, and August Capital.

Last investment that we made in the quarter and again I think has huge, huge potential is a Big Data company, Knewton, which is creating an adaptive learning platform and aspires to be the API for education, with -- millions of pieces of digital educational content will run through the Knewton engine to create the Knewton knowledge graph. This graph will further identify billions of connections among learners, learning styles, content, instructional methods; and it will personalize a learning pathway on almost any subject for any user.

Effectively what Knewton's platform is doing is taking all the world's books, structured and unstructured educational content, putting it on this platform. With every single click it is getting smarter and more personalized, more individualized for every learner on the platform. Huge network effect opportunity and an extraordinary investor group that we are part of, including Founders, Bessemer, Pearson -- the world's largest education publisher -- and then most recently Atomico, which made their investment along with us. And if you don't know Atomico, that is the Skype people.

Now I would like to turn to slide 6 for the portfolio mix across the five growth themes that we are invested in as of December 31. You can see from the slide social mobile consists of 34.6% of our invested capital; cloud computing and Big Data is 20.6%; internet commerce is 8%; sustainability is 9.6%; and education technology is 27.1%.

A core tenet of our investment strategy is identification of game-changing companies and the intersection of megatrends across growth sectors. Based on a portfolio of 49 companies that we fit this profile across the five themes, we estimate the average growth rate, as I mentioned earlier, of 85% from calendar 2012 to 2013.

At the beginning of 2013, we said that every quarter going forward we're going to highlight a key area of our investment portfolio, one of our key themes, to keep you apprised of how these companies are changing the playing field and making headlines. During our first-quarter call I spoke about education technology; for the second quarter we spoke about social mobile. For the third quarter, since our earnings call was just days after the Twitter IPO, I spoke in detail about our Twitter investment and the forces driving Twitter's exceptional growth and potential.

Today I'm going to talk about sustainability theme and discuss some of the leaders that are delivering open-ended growth potential in this category. We think it's important to showcase how value is being created in our portfolio by companies, giving some color how the companies look at the time of our investment and what they have achieved to date.

I will start with Solexel on page -- on slide 7. Solexel is a solar power company that is our seventh largest investment and represents 3.8% of our portfolio. Solexel is backed by Kleiner Perkins and SunPower, amongst others, and has raised $170 million to date.

Contrary to the current fashion, we are very bullish on green technology in general, and in particular the $80 billion solar industry. We think is a classic situation where investors got very, very excited about the potential of this emerging industry, had lots of capital, and when things didn't happen as quick as people expected they fled the industry. But in its wake, this $80 billion industry has grown up and, importantly, the fundamentals have developed in a way that we think positions Solexel as being a truly disruptive business, truly disruptive company in this marketplace.

Solexel is developing high-efficiency, low-cost crystalline silicon solar cells. What their innovative manufacturing product and process do is design -- minimize the use of expensive materials while provide industry-leading performance. Essentially what that means is they're the lowest cost but the highest quality.

And so if you know about the solar industry, typically you either compete on price or you compete on quality. What we're so excited about here is we've got both and, hence, you can see why SunPower has made a strategic investment.

Low material usage allows Solexel to manufacture solar modules at substantially reduced cost, bringing solar-based electricity on a near-term path to true grid parity. Solexel has proven its core technology to pilot scale, and we're looking forward this year into the scale in the marketplace. Again, we think this is a very big idea and very big potential opportunity.

Once again, we look at the management team, we look at the product and the potential. Mike Wingert, the CEO is in our estimation one of the most impressive CEOs certainly within the sustainability space.

If we look at slide 8, we have got Bloom Energy. Bloom Energy produces fuel cells that are designed to deliver clean, reliable, and cost-effective electricity at the customer site.

You may have noticed there is quite a bit of activity, positive action, in the fuel-cell world this week. We think that Bloom Energy truly is a business that is one-of-a-kind though in this market, that is starting to get quite a bit of attention.

Data centers at large corporate campuses will become earlier adopters of this technology in efforts to reduce their carbon footprint and dependency on the electral grid. Customers include Google, eBay, Coca-Cola, Walmart, among other Fortune 500 companies.

And if you look at the investors here, again, Kleiner Perkins, and John Doerr, NEA are on the forefront.

To conclude my comments about sustainability and green technology theme, it's become very clear in today's marketplace that companies can't just grow or just be green. They have got to do both.

As we look at it, the greatest investment opportunity is where there's a problem; the bigger the problem, the greater the opportunity. We think, the global marketplace that we're in, finding ways to be both -- to grow and be green is a fundamental issue with huge potential for companies that offer innovative solutions to this marketplace.

With that, I appreciate your attention. I'm going to turn the call over to Steve Bard for the financial review. Steve?

Thank you Michael. I will pick things up on slide 9 with our financial highlights. As Michael indicated, our net assets as of December 31 were $288 million. That includes $7.2 million of cash.

Our net asset value per share was $14.91 as of the end of the year. This represents an increase of $33.7 million or $1.75 per share over September 30 NAV.

Now, let's take a look at the attribution of that increase in NAV for the year ended 12/31. First, net operating expenses were $22 million or $1.14 per share. As a reminder, our operating expenses include things like management fees, costs incurred under our administration agreement, directors' fees, legal and audit fees, insurance, investor relation fees, and also expenses associated with our credit and our debt facilities.

This quarter that figure also included an accrual for incentive fees of $10.5 million or $0.54 per share. That is something that is -- the incentive fee would be payable to the manager if the portfolio was liquidated on the last day of the year, and it's a requirement under GAAP. The accrued incentive fee is primarily attributable to the unrealized appreciation that we saw in holdings such as Control4, Facebook, Twitter, and Palantir.

The second component of NAV is net realized loss on investments of $21.7 million or $1.12 per share. This figure included losses realized in AltEgo, Starfish, Serious, Top Hat, and Kno.

The third component of net asset value is the net change in unrealized appreciation, which was $87.4 million. The same holdings that generated the accrued incentive fee were behind that unrealized appreciation. And again those were Control4, Facebook, Twitter, and Palantir.

The final component I would like to address is net aggregate deferred tax liability of $8.3 million. As you may be aware, GSV Capital filed an application with the SEC on December 3 to be treated as a regulated investment company, or a RIC, for 2013. While we have not yet received the official word from the SEC, upon receipt of the approval we would be reversing $7.2 million of that deferred tax liability when we file our subsequent 10-Q.

So when you combine all of the above -- the net operating expenses, the net realized losses, unrealized appreciation, and the deferred tax liability -- GSV's NAV, again, is $14.91 per share as of 12/31. I would like to thank you for your attention, and now I will turn the call back over to the operator to start the Q&A. Operator?

(Operator Instructions) Jeff Houston, Barrington Research.

Hey, guys, thanks for taking my questions. The first question is -- I'll ask one question and then jump back in the queue. Just curious if you exited any positions in the fourth quarter; and have you exited any positions so far in the first quarter? Thanks.

Yes, I think every -- the positions we exited in the fourth quarter were reflected in the [portfolio]. We didn't completely exit any position.

With our public position, I think what we have said pretty consistently is philosophically we will look for the earliest appropriate time to find liquidity, generally speaking. We are making a calculation of what we think the fair value is and where the stock is. But once the lockup period is over, after six months we're going to be evaluating that very closely to what we think is the way to optimize returns for shareholders.

So you see that about half of our Facebook position we did liquidate in the second half of 2013, not because we don't think Facebook is an amazing company. Along with Twitter, we think those are two powerful growth companies as there is in the world. But we just know that people can buy public stocks on their own. So we look for -- as the valuations approach what we think is fair value, we look to exit or monetize those positions.

So the first -- we haven't announced anything, Jeff, in terms of what we did, what we have done in the first quarter. But I think it's safe to assume that as we see prices in the public portfolio appreciate, they get to be in places where -- they start to approach places where we'll liquidate some or eventually all of the position.

So I know that is not as specific as I'd like. I just don't want -- and we'll get back to everybody; we just want to make sure that we're not -- I'm saying everything that is completely correct and appropriate, and so I just don't want to misspeak.

Right. This is Steve Bard. I just echo Michael's remarks and reiterate that, Jeff, when you see the 10-K there will be a subsequent events section which will articulate the buys and sells that we have made since the end of the year, through the date of the filing. So that will be something you will be able to see.

Christopher Nolan, MLV & Co.

Hey, guys. Quick question on the accrued incentive fee, can you give a little more detail on that, how that was calculated?

Sure; this is Steve. I am happy to field that. Again, I will reiterate that that is something that is required under GAAP.

For those that aren't familiar with the incentives fee calculation, it is actually fairly complicated. There are two components to it; it is a bifurcated calculation.

The first calculation is we take 20% of realized gains on an investment-by-investment basis, then we apply a hurdle. There is an 8% hurdle.

We take either that calculation, the lesser of that, or 20% of cumulative realized capital gains after netting out cumulative realized losses and unrealized appreciation. In this case and in most cases, that second calculation results in the lower number; and so that is the one that we apply to arrive at the $10.5 million accrued incentive fee for 12/31.

Again, that is completely based on unrealized gains under the hypothetical assumption that you liquidated the portfolio on the last day of the year. And that is something we need to do under GAAP.

Ed Woo, Ascendiant Capital.

I had a question. First of all, congratulations on the Twitter investment. That is definitely a really good home run for you guys.

But going on to my question I just want to ask -- you mentioned that the IPO market is very strong. What about the market for private company valuation? Do you see valuations getting out of control? Or are there still a lot opportunities out there for you guys?

Thanks, Ed. In terms of the private market valuations, it's really -- what we're seeing, and you're seeing that reflected I think in some of the investments we are making, is that in the names -- and again, we want to invest in the very best, fastest growing private companies in the world. But we also want to pay a price where we think we can create substantial returns.

So I think with what we see in the small handful, maybe a couple handful of names, the valuations have been at places that we have trouble making the math work. But once you get beyond those names, what we found is opportunities in businesses that we think represent tremendous both risk-return and where we can really get excited about what we think the IRR we can generate from our investment.

So, what does that mean for our profile? But it is interesting, because I think it is a definite piece that we are seeing and we are focused on. So when you get in that ZIP Code of, let's call it the $100 million market cap, the $500 million, I think there is an amazing number of opportunities.

But as you start to approach that $1 billion club, with the new financings that are beyond that, you start to see an acceleration of value -- valuation. So those are ones that we've been careful about. But yet I think generally speaking we think it's a good market for us.

We're seeing great innovative businesses. We're getting access to incredible opportunities. But we're being careful in terms of the names that we are focused on and what we put in the portfolio.

Jon Hickman, Ladenburg Thalmann.

Thanks for taking my question. Can you talk a little bit about -- I don't quite understand this change in -- you're now a RIC instead of a business development company? Is that --

No -- I will let Steve handle it. No, I think what is -- basically, we are a business development company. But we filed for RIC status, which is different than a C-corp.

Again, it's a process that we think is relatively straightforward; we just haven't received the notice from the SEC that we qualify. So until we qualify, until we get notified that we qualified, we reflect it as we don't, and that is where you get that $7 million that we have earmarked that we would.

We fully expect that this is going to happen. But as it hasn't happened yet we thought it was the most appropriate way to reflect it. Steve, anything you'd add to that?

Sure. No. I think, Michael, you hit it on the head. I guess I would just add that it's -- I'd reiterate it's always been our intent to be treated as RIC. In the years since our IPO we have been treated as a C-corp. That has not been an issue, because we have been generating net operating losses and there has been no tax impact on investors; there haven't been gains to distribute.

On December 3, 2013, we applied to the SEC to qualify as a RIC for the year that we just wrapped up. Again, as Michael said we are waiting for approval; we do expect to get that; and we remain optimistic that we will ultimately get that exemption before we have to file our tax return for the 2013 fiscal year.

And if and when that happens, we will reverse $7.2 million of the $8.3 million deferred tax liability. Thanks, Jon. Good question.

Jeff Houston, Barrington Research.

Hey, guys, thanks for letting me jump back in here. Since GSV Capital is structured as a business development company, I believe it must have 70% of net asset values in qualified assets; otherwise there are some restrictions.

Could you update us on what that mix was at the end of December, and any restrictions and how that affects your thoughts for new investments?

I'm going to let Steve; why don't you have the very specific data in terms of where things are at, at the end of December.

But let me first just say what is that philosophically and what does that really mean. Basically under BDC, 70% of the assets have to be, quote-unquote, good assets; up to 30% can be bad asset.

What is a bad asset? A bad asset is something that doesn't -- is not consistent what with the description of BDC investments are under the BDC provision.

For example, a bad asset would be a private company that happened to be located outside of the United States. We could invest theoretically in a public company if its -- with a market value over $250 million, and that would be a bad asset.

What happens, though, you can make an investment in a company and it'd be a good asset. But because of company going public in its market value it can turn into a bad asset.

So for example, Twitter investment -- which we made, obviously, when it was private, so it was 100% a good asset investment -- now that it's public with $35 billion market value, it turns into a bad asset.

What basically happens is we can't make any investments in, quote-unquote, bad asset companies. So we couldn't invest in Spotify today, for example, or Siena Lending, which is another international private company. By the way, the lending club of China, which we think is pretty cool; I mean, it's a very, very exciting business doing very, very well.

But we couldn't make an investment in those companies today until our bad asset provision -- the number of bad assets we have in the portfolio goes below 30%. And Twitter by itself carries us -- go ahead Steve, give the very specific (multiple speakers)

Michael, summarize things very succinctly, yes: the bottom line is we can have up to 30% bad assets in the portfolio. Again, a bad asset is a non-US company or a public company.

In the case of Twitter it was private when we made the investment, and we've had a nice problem, because we've got a triple on our hands and it now represents 35.7% of the portfolio. So just Twitter alone puts us in the domain of having more than 30% bad assets.

But we got there organically. As long as we didn't buy our way into that problem, it's not a BDC issue. We are not running afoul of BDC issues.

But as Michael said, we can't compound the problem by buying more non-US interests or making additional investments in companies that are already public.

From a practical standpoint it doesn't -- it's not limiting; it hasn't prevented us from making an investment that we wanted to make. But it's something that will evolve and get -- so we do have that -- we will that flexibility in the future when we get that to the right proportion.

Christopher Nolan, MLV & Co.

Thanks for taking my follow-up. Back of the envelope, it seems like you have an 18% discount on the value of your Twitter position, based on year-end stock price of Twitter. Going forward, how should we look at it in terms of the discount that you guys provide shares which have a lockup?

I will let Steve again give the -- we have had very precise ways that we go through with our comments. But generally speaking, the way that that works is you start with a bigger discount. We're almost going to have a six-month lockup. You start with six months, you are going to have a bigger discount because you can't sell those shares for six months.

So there is going to be a bigger discount. And as that six months whittles down, that discount should go away to ultimately, once the lockup is removed, the discount would almost certainly be removed.

There is a formula based on that discount which is -- again, it's very -- it's quite a process that ultimately we go through with our auditors to get what is an appropriate place to value that discount at. So you're right; I think in Twitter's case I think it was exactly 18% is the discount that the formula came up with as the appropriate one to market at.

And Steve, if you have anything that you want to add to that.

Just the formula -- for the nerds in the crowd, the formula is Black-Scholes. We are looking, we are trying to assess the prospective volatility of returns of the stock.

So as Michael said, we're typically locked up for six months. As we approach that six-month lockup, the discount for lack of marketability is going to decline from, say, anywhere -- it could start out between 15% and 25%. It will ultimately decline to zero when the lockup expires.

But we use Black-Scholes, and we also compare that to the cost to completely hedge the position by buying puts that mature at the same time as the lockup expires. But no; good back-of-the-envelope. And yes, that is exactly the case with Twitter.

You'll also see a little bit of a discount for lack of marketability for Control4 which -- but that is out of lockup now. (technical difficulty)

Jon Hickman, Ladenburg Thalmann.

Could you comment on where the $11 million loss (technical difficulty) the quarter and also talk about the public filing for 2U?

Sorry, Jon. You asked us about the $11 million? You broke up; what was the first part of the question?

Yes, the NAV realized lost in the fourth quarter, the $11 million loss.

Yes (multiple speakers)

Yes. That was back to -- the biggest chunk of that was Kno. Kno was one of our investments and throughout -- that is the biggest contributor to the loss during the quarter.

As it relates to 2U, I am on the board so I probably, out of abundance of caution, I really can't comment too much. Other than the fact that they have put their numbers in the market; they basically indicated that they expect to be on the road. And I think it's likely that they will be in the market in March.

Thank you, and I would like to turn the call back over to management for any closing remarks. Please go ahead.

Yes, in closing and once again we want to thank everybody for your interest in GSV Capital. I do believe that we've got an outstanding portfolio of some of the best private companies in the world. We also have a team that is working very, very hard every day to find the next, what we call the stars of tomorrow, and to create great returns for shareholders.

So we're looking forward to speaking in three months and giving you an update in terms of our progress. But we are very, very excited about what we see, our opportunity, and what we've got in the portfolio. So thank you very much. Have a great rest of the afternoon.

Thank you. Ladies and gentleman, this does conclude our conference for today. If you would like to listen to a replay of today's call, please dial 303-590-3030, or 1-800-406-7325 with access code 4672630. Thank you for your participation. You may now disconnect.