Financial Data and Key Metrics Changes - Total investment income for Q2 2025 was $35.1 million, a decrease from $35.4 million in Q2 2024 [19] - Net investment income was $13.9 million, down from $15.6 million in the same period last year [19] - The debt portfolio generated a dollar-weighted average annualized yield of 15.4%, holding flat quarter over quarter and increasing from 15.1% year-over-year [19] - Total operating expenses increased to $21.2 million from $19.8 million in Q2 2024 [20] - Net realized loss on investments was $1.5 million compared to a net realized gain of $6.1 million in Q2 2024 [20] - Net assets decreased to $498.9 million from $503.3 million at the end of Q2 2024 [21] - NAV per share increased by 1.3% to $13.66 from $13.48 at the end of Q2 2024 [21] Business Line Data and Key Metrics Changes - The company executed three investments in new and existing portfolio companies totaling $37.8 million in funded loans during Q2 2025 [8][11] - Significant investments included a $40 million commitment in Auto Books and a $20 million commitment in Swing Education [9][10] - The weighted average portfolio risk rating remained stable at 2.33, indicating consistent credit quality [13] Market Data and Key Metrics Changes - The venture debt market is experiencing a fundamental shift, with companies focusing on demonstrating growth to attract investment [15] - AI deals represented 64% of 2025 deal value and count, indicating a concentration of fundraising momentum in this sector [17] - The company noted a cautious outlook for M&A activity in its target sectors for the remainder of the year [15] Company Strategy and Development Direction - The company aims to optimize its portfolio through diversification of investment size and expanding financing solutions [7] - It is leveraging its integration within the BC Partners platform to enhance origination channels and financing options [6] - The focus remains on high-quality late and growth-stage companies within technology, healthcare, and select consumer sectors [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate economic uncertainties and maintain shareholder value [6] - The outlook for 2026 appears brighter than for 2025, with expectations of increased pipeline activity [67] - Management emphasized the importance of portfolio optimization and diversification in the current market environment [68] Other Important Information - The company has a stock repurchase program approved for $25 million, with 815,408 shares repurchased during Q2 2025 [24] - Total available liquidity was reported at $297 million, including unrestricted cash and cash equivalents [22] - The company has $164.9 million in unfunded commitments, with $135.5 million allocated for debt financing [23] Q&A Session Summary Question: Non-accruals and their impact on total investment income - Management explained that PIK (payment-in-kind) is used for both offensive and defensive reasons, helping to manage cash flow issues and win transactions [29][30] Question: Share repurchase program strategy - The company uses a structured plan based on stock price relative to NAV, being more aggressive when the discount to NAV is higher [31] Question: Refinancing costs and their impact - Approximately $0.04 per share was attributed to increased interest expense, with a portion being one-time costs related to refinancing [35] Question: Unfunded commitments and drawdown expectations - Historically, about 50% of unused commitments expire without use, but performance at or above plan can reduce the likelihood of drawdowns [36] Question: Update on CADMA JV - The CADMA JV is ramping up, with expectations for additional transactions by year-end [56] Question: Market reaction to new products - All new products rolled out have been well received, with structured second lien and revolver products being highlighted [58] Question: M&A activity in the venture market - Management noted that companies are focusing on organic growth rather than M&A, which is seen as a positive trend [62]

Financial Data and Key Metrics Changes - The company generated net investment income (NII) of $0.27 per share, unchanged from the previous quarter but down from $0.38 per share in the same quarter last year [27] - The net asset value (NAV) decreased to $7.57 per share from $8.43 at the end of the previous quarter and $9.64 a year ago, primarily due to fair value adjustments and distributions [28] - Investment income for the first quarter was $25 million, a slight decrease from $26 million in the prior year period, attributed to lower interest and fee income [25] Business Line Data and Key Metrics Changes - The total investment portfolio at the end of the first quarter stood at $690 million, with debt investments in 53 companies valued at $644 million and equity investments in 110 companies valued at $46 million [27] - New originations totaled $102 million, offset by $11 million in scheduled principal payments and $68 million in prepayments [27] - The debt portfolio yield was 15%, slightly down from 15.6% in the same quarter last year, while onboarding yields were 13%, up from 12.6% in the previous quarter [25][12] Market Data and Key Metrics Changes - Approximately $92 billion was invested in VC-backed companies in the first quarter, a 19% increase from the previous quarter, driven largely by significant AI deals [18] - The S&P Biotech Select Industry Index is down 14% year-over-year, indicating cooling investor sentiment in the life sciences market [19] - The exit market for VC-backed tech and life science companies remains nearly shut due to macroeconomic uncertainties, impacting the overall venture capital ecosystem [20] Company Strategy and Development Direction - The company aims to grow its portfolio while maintaining a focus on high-quality, well-sponsored tech and life science companies [20] - The management remains selective in originating loans due to the current macro environment, with a commitment to optimizing returns from stressed investments [16] - The partnership with Monroe Capital is expected to provide additional capital and scale, enhancing the company's ability to navigate current market challenges [9] Management's Comments on Operating Environment and Future Outlook - Management expressed guarded optimism for the year despite recent macroeconomic headwinds, including tariff-related uncertainties impacting recovery from stressed assets [5] - The company anticipates that as the macro environment normalizes, it will be positioned to grow its portfolio and increase NII to cover distributions over time [16] - Management highlighted the importance of maintaining a strong liquidity position, with $126 million in available liquidity as of March 31 [23] Other Important Information - The company declared regular monthly distributions of $0.11 per share through September 2025, supported by undistributed spillover income of $1 per share [27] - The advisor has agreed to waive a portion of its quarterly income incentive fees if NII falls below declared distributions [7] - The company is actively managing its portfolio to optimize returns and mitigate risks associated with stressed investments [15] Q&A Session Summary Question: How is the company managing spillover earnings in the current uncertain environment? - Management indicated that they plan to continue growing distributions through 2025 and will manage spillover earnings quarterly, reviewing them in discussions with the board [32][34] Question: What is the quality of deals currently being pursued? - Management noted a higher bar for selecting transactions, focusing on companies performing well operationally and backed by quality VCs, while being selective due to the current market conditions [36][38] Question: Is there a plan to raise leverage ratios to grow the portfolio? - The target leverage ratio is around 1.2x to 1.3x, with the current ratio at 1.29x, indicating a cautious approach to leverage [42][43] Question: How does the company plan to address the high dividend payout relative to debt yields? - Management stated that they review equity needs and funding pipelines quarterly, considering the balance between dividends and investment returns [47][48] Question: What is the impact of tariffs on the portfolio? - Management indicated that while there is some uncertainty due to tariffs, most portfolio companies have planned for potential impacts, and the overall effect has been more about market volatility than specific tariff issues [65][66] Question: What resources are available from the recent Monroe partnership? - The partnership is expected to provide support in stabilizing and growing the business, with ongoing collaboration to enhance operational effectiveness [68][69]

Financial Data and Key Metrics Changes - For Q4 2024, total investment income was $33.8 million and net investment income was $14.6 million, compared to $36.7 million and $15.9 million in Q3 2024 [10][34] - The weighted average portfolio risk rating decreased to 2.33% in Q4 2024 from 2.48% in Q3 2024 [27] - The dollar-weighted loan-to-value ratio decreased from 29.3% to 26.6% [31] - Net assets increased to $514.9 million from $507.4 million in Q3 2024, with NAV per share rising to $13.79, up 3% from $13.39 [32] - Total operating expenses decreased to $19.2 million from $20.8 million in Q3 2024 [35] Business Line Data and Key Metrics Changes - The company executed two investments in new companies and five in existing companies, totaling $154 million in funded loans [16][27] - The loan portfolio is comprised of 97% floating rate assets, with all loans earning interest at or above agreed-upon interest rate floors [33] Market Data and Key Metrics Changes - Venture debt deal value increased to over $53 billion in 2024, up from approximately $27 billion in 2023, driven by multibillion-dollar deals in the AI sector [23] - The company noted that the venture debt space is experiencing growth, which is expected to continue [22] Company Strategy and Development Direction - The company aims to grow originations in loan sizes of $30 million to $150 million, with an ideal allocation to the BDC remaining at $20 million to $45 million [13] - The acquisition of Runway Growth Capital by BC Partners Credit is expected to enhance deal flow and diversify the portfolio [11][12] - The company maintains a credit-first investment philosophy and focuses on high-growth sectors such as technology, healthcare, and consumer products [15][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's performance and the ability of borrowers to operate effectively against the macro backdrop [17] - The company anticipates that the focus on high-growth sectors and senior secured loans will provide additional security for the portfolio [22] Other Important Information - The company declared aggregate distributions of $0.36 per share for Q1 2025, including a base dividend of $0.33 and a supplemental dividend of $0.03 [40] - The company extended its credit facility with KeyBank by three years, enhancing availability and lending verticals [38] Q&A Session Summary Question: Expectations for new originations in the first quarter - Management acknowledged that originations are typically back-ended and indicated potential for additional originations before the quarter ends [44] Question: Percentage of loan book trading at interest rate floors - Management stated that the majority of loans are at or above their interest rate floors [46] Question: Impact of Fed cuts on yield - Management noted that a significant portion of the yield decline was due to lower interest rates and fewer prepayment accelerations [50] Question: Discussion on dividend and capital allocation - Management emphasized the importance of a stable dividend and indicated a preference for building NAV while maintaining consistent dividends [56][57] Question: Broader origination opportunities post-BC Partners acquisition - Management expressed excitement about the expanded funnel of opportunities and the ability to underwrite different structures [62][66] Question: Share repurchase plans - Management confirmed discussions on share repurchases but emphasized the need to assess which option creates better returns [78] Question: Current state of the venture market - Management noted slower exit activity and M&A, but anticipated an uptick in new fundings and M&A in the coming quarters [81]