Triplepoint Venture Growth BDC Corp (TPVG) 2019 Q1 法說會逐字稿

Good day, and welcome to the TriplePoint Venture Growth First Quarter 2019 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Christopher Gastelu, Interim Chief Financial Officer. Please go ahead.

Thank you, Shawn, and thank you, everyone, for joining us today. We are pleased to share with you our results for the first quarter of 2019. Here with me are Jim Labe, Chief Executive Officer and Chairman of the Board; and Sajal Srivastava, President and Chief Investment Officer.

Before I turn the call over to Jim, I would like to direct your attention to the customary Safe Harbor disclosure in our press release regarding forward-looking statements and remind you that during this call, we will make certain statements that relate to future events or the company's future performance or financial condition, which may be considered forward-looking statements under federal securities law.

We ask that you refer to our most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. We do not undertake any obligation to update our forward-looking statements or projections, unless required by law. Investors are cautioned not to place undue reliance on any forward-looking statements made during the call which reflect management's opinions only as of today. To obtain copies of our latest SEC filings, please visit the company's website at tpvg.com.

Now I'll turn it over to Jim.

Thanks, Chris, and good afternoon, everybody. It's been less than two months since our last earnings call, which was a special day as it marked the fifth anniversary since our IPO and a period of outstanding growth, achievements and results for our shareholders. These included all-time performance records last year, setting records for investment income, net investment income, investment fundings, portfolio growth, earnings per share and a record dividend payout to shareholders.

Picking up where we left off last quarter, I'm pleased to report that the strong finish of 2018 is carried over and continues here into 2019 and we're off on one great start to this year. Not only did we have a strong first quarter of originations funding and portfolio growth that translated once again into another strong quarter of earnings, but the quarter also positioned us well for the remainder of 2019.

We had several notable achievements last quarter. Our portfolio reached the highest level since our IPO. We had a 71% increase in the dollar amount of new signed term sheets at venture growth stage companies during the first quarter of 2019, compared with the first quarter of 2018, an all-time high. We also had a 66% increase in new debt in equity financing commitments over the comparable period.

We continue to diversify our portfolio and to generate attractive portfolio yields during the quarter. Our top five investments now represent 37% of our portfolio, and our weighted average portfolio yield on our debt investments for the first quarter was 16.5%. So as you can see from our yield we are not sacrificing price as we increase our volumes. We also continue to have positive events in our portfolio with a number of companies raising new rounds of capital or being acquired. Sajal will provide more specifics on those events.

As we look ahead at our market, the demand for venture lending and venture growth stage companies continues to be brisk. This is evidenced by just looking at our pipeline. Our ability to generate and source field flow continues at an unabated pace. This is reinforced with 2018 being another strong year for VC fund raising with almost $54 billion in capital raised and $132 billion invested in nearly 9,500 companies.

Our select VCs are also getting larger, having raised almost $80 billion alone since 2010 and actively investing this capital. On top of that, it also seems M&A and IPO activity at venture-backed companies is on the rise and picking up.

I'd like to take a short pause and answer some questions which periodically come up. So how do you deliver these attractive returns? What makes this such a special story? How are you differentiated as a venture lending firm? And what are the ingredients for your success?

Simply put, we have a unique model. This includes an underlying emphasis and belief on something that I usually save for the end of my prepared remarks, but I'd like to cover those now. It's what we call the four R's. The first three are reputation, references and relationships. And as we say, if you're doing those first three, right, then you get the fourth, which is returns.

I can't overemphasize reputation and its importance in the venture capital community and venture ecosystem. It's at the very heart of our business. Relationships is another important one, particularly with our group of select leading venture capital investors. In some cases, these relationships go back almost 30 years.

Another major differentiator is what I call selectivity. We are highly selective in terms of the stage of company to which we provide loans. We target only venture growth stage companies, which are in the advanced stages of growth and oftentimes are planning a liquidity event, such as an IPO or an acquisition, often in the 1 to 3 year time frame.

We work only with companies backed by our select group of leading venture capital investors. We focus only on select industry sectors -- technology, life sciences and other high growth industries and we don't lend to companies that are already public or in middle market buyouts. We believe this selectivity makes all the difference between TPVG and other lenders.

Another way we are differentiated is all our business, as I am always saying, is 100% direct. We're an originations machine with many referrals from our select venture capital investors. We don't work with brokers or agents, there are no loan participations, no loan purchases and no club or syndication partners on our loans. We are in control.

We do not believe that anyone can replicate this TriplePoint platform. The track record, the team, the experience, the relationships in. In a word, the brand. The senior members of our management team, and I won't say which ones have relationships going back to the 30 years, have decades of experience and were among the first to develop the investment class known as venture lending.

The venture growth segment that our company targets is only one portion of the overall business of our sponsor TriplePoint Capital. TriplePoint was founded almost 15 years ago by our senior team and is a leading global financing provider to venture capital-backed companies across all stages of their development.

Last year in fact, TriplePoint signed up more than $1.6 billion of term sheets, and based on publicly available information, this made TriplePoint one of the largest non-bank venture lenders globally.

While the market demand is strong and deal flow in 2019 continues to increase, it's also important to emphasize that we are not compromising our underwriting standards, our pricing or investment strategy. We plan to capitalize on this demand while continuing to maintain our time tested and careful investment approach and selectively invest in companies with innovative technologies and services.

In closing, our performance, in particular our industry-leading yield profile, our strong credit quality, the quality of the venture growth stage companies in our pipeline, the activity and progress among our portfolio companies and our forecast for this year of once again achieving earnings in excess of our dividend, speaks for itself.

I'll now turn the call over to Sajal.

Thank you, Jim, and good afternoon, everyone. During the first quarter, we signed $250 million of term sheets at TriplePoint Capital, enclosed $191 million of debt commitments with nine companies and added five new companies to the portfolio at TPVG.

The first was Adjust, which is a leading mobile measurement and fraud prevention company. Adjust provides high-quality analytics, measurement and fraud prevention solutions for mobile marketers world-wide, enabling them to make smarter and faster marketing decisions. Adjust has raised more than $30 million of capital from Highland, Europe and other investors.

Class Pass is a subscription-based market place that let users find and book fitness classes with over 8,500 partners in 49 cities worldwide, Class Pass connects members to a variety of fitness experiences and leverages proprietary technology to dynamically merchandise and surface over 1 million fitness classes for a seamless booking experience. Class Pass has raised over $200 million of capital from General Catalyst, Thrive Capital, Google Ventures and Temasek.

Knotel provides modern business headquarters as a service, giving medium-sized companies a scalable and adaptable office space solution that can grow or shrink on demand based on their needs. Knotel has raised over $160 million of capital from Norwest Venture Partners, Newmark Knight Frank and others.

Outdoor Voices is a clothing company that makes unique women's and men's athletic apparel. The company has raised over $60 million of capital from General Catalyst, Google Ventures and others.

Upgrade is a consumer credit platform that offers access to affordable personal loans and lines of credit with credit monitoring and education tools that help consumers better understand their credit. The company has raised over $120 million of capital from Union Square Ventures, Firstmark, CreditEase and others.

As Jim mentioned, we achieved a record level for our investment portfolio this quarter as a result of funding $89.6 million of debt investments with a 13% weighted average annualized yield to nine companies. To be clear, while our pipeline is quite large, and our investment portfolio is growing, there's been no change to our underwriting approach, which we have built over the 20 years that Jim and I have worked together. Our team continues to be highly selective with the investment opportunities they directly source in the market and our credit process allows only the best to make their way to become a TriplePoint customer.

During Q1 we had $57.6 million of prepays, which contributed to our 16.5% portfolio yield. Without prepayments, our portfolio yield was 13.8%. As a lender, we're always glad to get our capital back. Prepays are one way, and we had a meaningful amount last quarter. But we are also pleased that our portfolio currently generates $2 million to $3 million of natural principle amortization per month.

Moving on to credit quality, the weighted average investment ranking of our debt investment portfolio was 1.95, as compared to 1.87 at the end of the prior quarter. As a reminder, under our rating system, loans are rated from 1 to 5, with 1 being the strongest rating and new loans are initially generated 2.

During the three months ended March 31, 2019, portfolio company credit category changes, excluding fundings and repayments, consisted of the following. One portfolio company with a principal balance of $14.6 million was upgraded from white to clear and two portfolio companies with the combined principal balance of $29.2 million were downgraded from clear to white.

With regards to our outlook on credit, the equity fundraising environment continues to be particularly strong, which provides our portfolio companies access to meaningful amounts of equity capital that supports their debt service and provides a deeper cushion to our credit position and in certain cases results in prepayments of our debt. The improving M&A and IPO environment is also a very positive indicator for the outlook on credit quality.

Alongside our existing investment portfolio, we have a large backlog that provides great visibility into potential near-term portfolio growth over the next few quarters. At the end of Q1, our unfunded commitments totaled roughly $380 million to 24 companies of which $102 million is dependent upon the companies reaching milestones before the capital becomes available to them. $218.7 million of our unfunded commitments will expire during 2019. $131 million will expire during 2020. And $30 million will expire in 2021, if not drawn prior to expiration.

We have more than sufficient capacity to meet our expected funding obligations and continued growth, not only through our cash on hand, the natural principle amortization our portfolio generates, and our warehouse facility, but also with prepays and our ability to lever up the business. With regards to leverage, we were under 0.4 times on a net basis at the end of the quarter and will look to upsizing our warehouse facility first and then issuing layers of long-term debt, likely on an overnight basis, to free up our capacity and then repeat.

Generally speaking however, companies typically draw on their unfunded commitments shortly prior to expiration unless a specific use case arises sooner. Interestingly, in the past 15 months, 16 of our portfolio companies have raised the total of $3.3 billion of equity capital and have $175 million of unfunded commitment with us. In our experience, companies that are overfunded with equity don't draw on their debt lines before they expire and in fact, some have informed us of their intent not to draw any further and others we expect will prepay us as well.

In closing, I'm pleased to say that we are on track with the game plan we articulated to investors for 2019. So far in Q2, we've signed $95 million of term sheets at TPC, closed $17 million of debt commitments, and funded $40 million of investments with no prepayments as of yet. While our pipeline and portfolio growth are particularly strong, we are also very proud of our credit quality and excited by the potential for near-term gains from our warrant and equity portfolio. We are heads down and working hard to make 2019 an even better year than 2018.

I'll now turn the call over to Chris to highlight some of the key financial metrics achieved during the quarter.

Thank you, Sajal. As mentioned by Jim and Sajal, Q1 was an exceptional start to the year and another strong quarter for TPVG. Q1 total investment and other income was $17.5 million or $0.40 per share compared to $12.6 million or $0.34 per share for the same quarter of 2018. Our investment portfolio generated a weighted average portfolio yield of 16.5% during the quarter including prepayments and other activity and 13.8% without. This is compared to 14% and 13.6% in Q1 2018.

The increase in total investment income and yield relative to the prior year was primarily due to portfolio growth and higher prepayment and other income related to portfolio turnover. The increase in recurring portfolio income is due to both portfolio growth and the favorable impact of the rise in benchmark interest rates.

Expenses during the quarter were $7.6 million consisting of interest and fee expense of $2.2 million, base management fee of $1.8 million, income incentive fee of $2.5 million and administrative and general expenses of $1.1 million.

Net investment income for the first quarter was up 67% to $9.9 million or $0.40 per share compared to $5.9 million or $0.34 per share in the first quarter of 2018.

We had nominal net realized losses in the first quarter due to foreign exchange effects and had net unrealized gains during the quarter of $1.2 million or $0.05 per share consisting of mark to market activity on the investment portfolio. The mark to market increase was primarily due to price appreciation in our publicly traded equity holdings in Farfetch Limited and was somewhat offset by reversals in unrealized gains associated with loans that had been marked up due to pending acquisitions or anticipated prepayments.

Net increase in net assets for the quarter was $11.1 million or $0.45 per share compared to $7.9 million or $0.45 per share in the prior year.

During the quarter, we generated an average -- return on average equity of 13.3% and return on average assets of 9.6% on an annualized basis. This compares to an ROE and ROA of 13.6% and 10.2% respectively for the year ago quarter.

Now turning to the balance sheet. We funded $92 million of debt and equity investments to 10 companies during the quarter and had four companies repay outstanding obligations prior to maturity in the amount of $57.6 million, one company repaid its outstanding obligation at maturity in the amount of $5 million and principal amortization on the remaining debt portfolio of approximately $8 million. All told, we ended the quarter with long-term investments of $457.7 million at fair value.

At quarter end, we held 152 investments in 60 companies with a cost of $458.2 million and fair value of $457.7 million. The company's debt portfolio at quarter end had a cost of $435.4 million and fair value of $424.4 million. At quarter end, approximately 69% of our debt investments had floating rates.

We ended the quarter with total liquidity of $171 million consisting of cash of $42 million and $129 million of undrawn availability under our revolving credit facility subject to normal borrowing base and other restrictions. Total outstanding borrowings as of quarter end were approximately $156 million consisting of $75 million of long-term fixed rate notes and $81 million drawn under our credit facility. This put us at a leverage ratio of 0.46 or approximately 0.36 adjusting for excess cash, which is below our target range, but gives us ample headroom to expand the portfolio without additional capital.

We ended the quarter with net assets of $337 million or $13.59 per share. This is up $0.25 from $13.34 a year ago.

During the first quarter, we distributed $0.36 per share consisting of our regular quarterly dividend. At December 31, 2018, we had estimated spillover income of approximately $4.6 million or $0.18 per share.

With that, I am pleased to announce that for the second quarter of 2019, our Board of Directors declared a distribution of $0.36 per share, payable on June 14 to stockholders of record as of May 31. This marks the 21st consecutive quarter we have increased or maintained our quarterly distribution rate.

I'll now turn the call back over to Jim.

Thanks again, Chris. At this point, we'll be happy to take your questions. Operator, could you please open the line?

(Operator Instructions) Our first question comes from Finian O'Shea with Wells Fargo Securities. Please go ahead.

I'll start with Sajal. I appreciate the color on your unfundeds and portfolio company [inaudible]. A question on I think you mentioned a piece specific form of term debt that would be perhaps an ultimate fallback plan. Can you kind of give us more color on what you meant with the type of term debt you would issue if all of the other buckets of liquidity didn't come through?

It's not that we'd look to long-term debt as a substitute. I think the way we view it is we use our warehouse revolver to meet the needs of unfunded commitments when and if they come in. And then as we get up to higher utilization on our warehouse, then we issue long-term debt to take out the warehouse and replenish it. So then we then use that to kind of scale back up as the fundings come in.

Sure, very well. And a question you guys talked about, both Sajal and Jim talked about underwriting standard as you grow. Just one thing that stood out a little bit to me at least, and correct me if I'm wrong, but some of these companies you mentioned, I think one had just $60 million raised so far, one just $30 million raised so far. Seems like a little bit lower, the numbers you usually throw out are say $200 million. So could you give us a little context, understanding that it's just one quarter, but are these maybe a little earlier stage or are they self funding in some way? Any color there?

I would say I think it's a testament to the capital efficiency of our portfolio of companies and how great at work they are. I'll use one example, so the company -- one company, and this is in the public domain, company called the Just. It's disclosed in the public domain, it's raised $30 million of equity capital. It's actually profitable. So we provided I think maybe $28 million loan to a profitable EBTIDA positive company. Yields are north of 13%, so we're very proud of their capital efficiency. And I think again, it's a testament to the strong VC relationships that we have where we're getting referrals to these really high-quality capital efficient companies. And I'd say, again there's no specific trend I think. It's industry specific and I think the ones that may have raised less equity capital generally have been more capital efficient, but it's not in any way of us going downstream or early stage. We're sticking to the venture growth metric and if anything, it's just we're cherry picking and setting the bar even higher for the quality of companies we work with.

Our next question comes from Casey Alexander with Compass Point. Please go ahead.

In your mention of subsequent events, you didn't mention whether or not you had had any repayments thus far in the second quarter. Have you had any repayments in the second quarter?

No repayments. That should have been in the ER -- or it is in the earnings release. Yes. No repayments as -- or prepayments, sorry.

I'm not sure I have anything else. I think that'll do it for now. Thank you.

Our next question comes from Ryan Lynch with KBW. Please go ahead.

I wanted to follow back up on the question regarding on new funded commitments. So to look at that balance of about $380 million, that's quite a bit larger from the last quarter, which can be a good thing as you guys are looking to grow your portfolio and have a lot of capital to deploy. But I'm just wondering, that is a large number, it's about 70% of your portfolio. It's about 130% of your equity base, so it's a very large number and I'm just wondering how do you guys think about that as you guys are taking on new unfunded commitments. Do you guys try to manage that at some sort of absolute level, some sort of percentage of your portfolio equity base? Just any thoughts on that would be helpful.

We're absolutely managing our funding capacity. I think we referenced that kind of how we operated with regards to short-term debt, long-term debt, plus we have the benefit. Because as you can appreciate, Ryan, these are short-term amortizing loans. We get our principle back and we get natural amortization plus prepays. So we're absolutely on top of managing that. I think we also want to take advantage of the lower asset coverage ability and to lever up to business. And so I would say we're active at work managing them. I think we have the challenge, as we talked about earlier in the prepared remarks, of the overfunding of equity. I think I mentioned $3.3 billion has been raised by 16 of our portfolio companies in the past 15 months that have -- there's probably under $200 million of unfunded commitment with us.

We would hope for those companies to utilize our debt. The challenge is when really good things happen, the enlarged equity raises our acquisitions if those go unutilized. So we're actually thoughtful, mindful and very on top of them.

As you mentioned in your prepared comments, no prepayments this quarter, which is a good thing as you guys are trying to grow your portfolio. But obviously in the past prepayment fees had been a nice driver of a really high effective yield in the portfolio. As I look at your slide back on page 27, and as you guys look at the visibility into Q2, should we expect that effective yield of 16.5% to maybe come closer down to the core yield of 13.8% as prepayments that have slowed so far this quarter? Or does that look like that may potentially ramp up further down the line?

All these things are always hard to predict. But let's say this. In general, we expect, and have always given guidance of one to two prepayments per quarter and it's going to be part of our activity and part of our yields. But we always can't get down to specific crystal ball vision next 30 to 60 days necessarily. But I would say in general, there would be a decrease if there's not a lot of prepayment.

So I would say we focus on the core portfolio, which Ryan, yes, will be from the coupon and OID and end of terms in that 13% to 14% bucket. And then the impact of prepays, I think as we've talked about before, it's really a function of how seasoned those loans that prepay are and to the extent that they're more seasoned then there's a lower impact to the portfolio yield from the prepay. And to the extent that there's no prepay, then obviously there's no impact or benefit and the portfolio yields will stay between that 13% to 14%. But as Jim said, we continue to believe one to two a quarter is what our expectations are.

And then one last one. There have been several high profile tech IPOs in 2019. It looks like the pipeline is pretty strong for those to continue throughout the year. I'm just wondering how do those high profile tech IPOs -- do they affect your guys' business at all?

No, remember we're dealing with the VCs and the VCs make their investments 3 to 10 years -- or actually it's longer, 6 to 10 years before an alternate exit event happens. And so I would say the IPO and the M&A -- or the IPO market in particular does not impact early stage or venture growth stage VCs because they're building multi-billion dollar businesses over time and they don't look to flip them quickly. I think that's more of what impacts that momentum, late-stage private equity or tourist equity capital that comes in that at times competes with our debt.

And I would only add, as we've been saying earlier too, even on the yield aspect. So the business is about our core business and the warrants, when they come in that's great and we've always said that's gravy. But that's kind of an add to the overall business model. And for sure, with our venture growth portfolio companies, they have their eyes set on what's happening in overall public markets. And those can be helpful as they think about their liquidity timing and their events. But our business is not based on whatever is happening in the public markets here and there. But without a doubt, there's been some recent venture-backed activity and a number in the pipeline and that could be seen as a positive as some of our companies think about it.

Yes, it causes other companies to accelerate growth to the extent that they see the IPO window opening and they've -- so causing them to accelerate growth, causes them to spend more money, which causes a need to raise more capital. And the beauty of debt is we don't set valuations and so we're definitely expecting to see continued demand for debt as companies think about going public and wanting to top off their capital bases with some incremental capital.

Our next question comes from Christopher Nolan with Ladenburg Thalmann. Please go ahead.

Are you still continuing to guide for $75 million to $150 million in quarterly portfolio growth in 2019?

For quarterly portfolio fundings, correct, yes.

Offset by prepayments?

Repayments, correct.

And then on the topic of repayments, looking at your disclosures, the all-in yield on the portfolio on the quarter was 16.5%. Last quarter was 18%, but this quarter prepayments actually went up. And so I think -- I would think the debt portfolio yield will go up because prepayment fees would drive it up higher unless I'm missing --

It's a function of how seasoned the loans are as well. So the more seasoned, the more of the end of term payment that you've already accrued to income. So the lower of a boost that you'll have from the prepay.

Final question, Sajal, is given that the venture market is so robust and these guys are raising equity, which seems to be at a pretty robust pace, how does that affect the terms and conditions that a venture debt lender like yourselves can demand? I mean does it put you guys in the more defensive position in terms of being able to ask for terms and conditions [inaudible].

I mean I think we're proud of the fact if you look, I think every quarter since IPO except one our portfolio has been above 13% without the benefit of prepays. And every quarter last year we were in the high 13s, low 14s. So without, again, prepay. So I think we feel really good about -- or we hold the line. So I would say unlike probably less experienced venture lenders, we know the appropriate balance between risk and return and so we hold the line on structures, credit quality. I mean as I mentioned, we lent to a profitable company this quarter and charged them north of 13%. So again, I think we're keeping standards pretty high.

We're not looking to lend to profitable companies, keep that in mind. It was a great sponsor relationship that we have, but yes. I think we're keeping our standards this same no change and no change to pricing or structure either.

Our next question comes from George Bahamondes with Deutsche Bank. Please go ahead.

It seems like things are going relatively well, right? Capital raising is still at a really solid pace from a VC perspective. Continuing to source deals doesn't seem to be difficult. Credit qualities continue to improve. If you think about your biggest challenge, it seems to me like converting the unfunded to funded and growing a portfolio seems to be maybe the biggest challenge for KPVG. How would you think about that on year end? How would you maybe think about your biggest challenge? I think that's to figure my perspective. I wanted to get your thoughts there.

George, I wouldn't say the challenge is necessarily unfunded commitments. I think there's this natural balance with, I don't want to say -- scale and the fact that we have a rapidly amortizing short-term loan portfolio. And so we're managing the fact that yes, we have line of sight and visibility to grow meaningfully, but we also know that we're going to have prepayments, we're getting principle back. And so we want to be mindful in terms of how we raise capital and the impact to our dividend and things of that nature.

So I would say I call it a challenge. I'd say that's what our investors pay us to do. The great news is we have a fantastic track record over the last five years for TPVG of being thoughtful in the line with our shareholders. But I think, yes, it's great when those are the things that we're managing to rather than credit challenges or trying to source deal flow. I mean those are things that our platform is doing a fantastic job that are naturally coming to us.

And the only thing I would add is there's lots and lots of opportunities here. We have a record pipeline and I wouldn't necessarily say it's a strong challenge, but as Sajal says, we want to keep our heads down and stick to our knitting and intelligently look through our entire pipeline and grow intelligently.

And again, credit was always our focus, so keeping credit quality strong, being proactive is always priority number one.

(Operator Instructions) Our next question is a follow-up from Casey Alexander with Compass Point. Please go ahead.

I have two follow-up questions. One, have you noticed any change in the competitive environment? Have things become more competitive or have things opened up a little bit? I know some teams have been lifted out of banks and things like that. Have you noticed any change there?

Casey, I don't want to sound like a broken record or jaded or having done this too long, but it's a very good question and it's a question that seems to come up every month sometimes. It's not every quarter among folks, and a good one asked.

But again, with our reputation, our track record and our relationships, and our focus on selectivity and working with just this narrowly defined group of select venture capital investors, in our category we have not seen any kind of competitive change. There's always a call or two have you heard about this or that in trend. And it takes a lot more than money and a business card to be in the venture lending business and there's a long track record of folks that don't understand the business and newbies that think they know the business.

But it's that focus at the end of the day, at least for us, which has been a proven formula success and we see no change to that, nor do we see any kind of competitive developments that we're losing or need to lose sleep. The focus includes not just the investors obviously, it's the technology, it's our pricing strategy and our credit thoughts.

Secondly, we have seen a far more robust IPO market, but I can only think of maybe a couple of companies since the beginning of 2018 that you guys have had come public. And you guys are arguably investing in venture growth companies that are -- should be at the door of going public. Have you noticed an increase in the potential for your portfolio companies to enter the public markets? It would seem to me that the door would be more open to them now than it may have ever been.

So there's no doubt that I think more entrepreneurs are thinking about the IPO as a viable form of exit and liquidity. I say that the good or the bad, we've had the portfolio is that some large income businesses have made offers too good to refuse or turn down by our entrepreneurs and their investors such that they opted to sell rather than go public. But I do think there is another class of -- within the portfolio in particular, of entrepreneurs whose goals are to run publicly traded companies and are comfortable with the fun aspects of being publicly traded. And so we definitely expect to see an increase within the portfolio of publicly traded companies in the near-term.

At this time there are no further questions. This will conclude our question and answer session. I would like to turn the conference back over to Jim Labe for any closing remarks.

I'll close again by expressing my appreciation to all of you for your continued interest and your support in TriplePoint Venture Growth. Thanks and we look forward to your participation and speaking with you all again here as 2019 continues to unfold.

The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.