Good afternoon, ladies and gentlemen and welcome to the TriplePoint Venture Growth’s Third Quarter 2018 Earnings Conference Call. [Operator Instructions] This conference call is being recorded and a replay of the call will be available as an audio webcast on the TriplePoint Venture Growth website. I would now like to turn the call over to Andrew Olson, Chief Financial Officer of TriplePoint Venture Growth. Mr. Olson, please go ahead.

Thank you, operator and thank you everyone for joining us today. We are pleased to share with you our results for the third quarter 2018. 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 may make certain statements that relate to future events or the company’s future performance or financial condition, which maybe 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. To obtain copies of our latest SEC filings, please visit the company’s website at tpvg.com. And with that, I will turn it over to Jim.

Thanks, Andrew and good afternoon. Last quarter, I told you we were on a 2018 role, while now we are on a 2018 tariff. We are delivering on the 2018 plans and goals that we set out at the beginning of the year. We are accelerating towards a strong finish to 2018 we have been talking about in all these earnings calls. We are on the path to closing out what we believe will be an exceptional year of performance. Our year-to-date accomplishments already include hitting some new income and originations records. We have also had IPOs or acquisitions at several of our portfolio companies and we raised additional capital for substantial deployment for both year end and 2019 opportunities. The trade winds are all blowing in our direction, favorable venture capital market conditions, the highest originations pipeline we have had since our IPO and a strong rate and billing momentum in signing up new business. Our year-to-date performance continues to demonstrate the return potential of our unique venture lending model. The model has also proven the benefit of and our access to and providing debt financing to successful and innovative high-growth companies backed by our select venture capital leading investors not only here in the U.S., but also in Europe. I am really proud of this quarter’s accomplishments. Here are some of the highlights I would like to share with you. Once again, we hit a new quarterly record for investment income. This is the second consecutive quarter we have achieved the record for quarterly investment income. This brings us to more than $46 million in investment income year-to-date. We also earned record net investment income or NII during the quarter. In fact, we have generated a record total NII for the first three quarters of this year. We…

Thank you, Jim and good afternoon everyone, In Q3, TriplePoint Capital signed approximately $204 million of term sheets reflecting particularly strong market demand and we closed $63 million of debt commitments with 6 companies with 5 new to the portfolio. We ended the quarter with $242 million of unfunded commitments. I will talk more about unfunded commitments in a moment. On a year-to-date basis, we have signed $562 million of term sheets and closed $320 million of debt and equity investments. As you can see, we have significant backlog already going into Q4. With respect to new companies added to the portfolio in the quarter, the first I would like to discuss is Enjoy, which is a provider of the personal e-commerce platform designed to change the way people buy and experience electronic products and gadgets. Enjoy is led by Ron Johnson, the former CEO of JCPenney and former Senior Vice President of Retail Operations at Apple, where he pioneered the concept of the Apple retail store and the Genius Bar. Enjoy has raised more than $80 million of equity capital from Andreessen Horowitz, Kleiner Perkins, Highland Capital Oak Investment Partners and others. Factual is a provider of a location data platform designed to maximize data accuracy, transparency and accessibility. Factual has raised more than $100 million of equity capital from Andreessen Horowitz, Index Ventures, Upfront Ventures and others. Hired is a provider of a marketplace for recruiting software engineers. The company’s platform offers a curated marketplace that matches engineers, product managers, data scientists, web developers and sales professionals with technology companies. Hired has raised more than $130 million of equity capital from Comcast Ventures, Crosslink Capital, Lumia Capital and the Ontario Pension Board and others. Passport Labs is a developer of a parking and transportation management platform designed to…

Thanks, Sajal. I am pleased to report the financial results for the third quarter 2018. As mentioned by Jim and Sajal, we ended the quarter with record investment, NAV appreciation, net investment income in excess of our dividend, positive portfolio company exit activity driving realized gains and a well-positioned balance sheet for future portfolio growth. The robust performance was achieved through measured portfolio fundings coupled with a healthy recycling of our investment portfolio as a result of portfolio company M&A activity. Total investment and other income was up 7% to $17.7 million or $0.82 per share for the third quarter of 2018 compared to $16.6 million or $0.93 per share for the second quarter of 2018. Our investment portfolio generated a weighted average portfolio yield of 19.3%, including prepayments and other activity during the quarter and 14% without. This is compared to the equally exceptional 17.2% and 13.9% in Q2 2018. The increase in total investment income relative to the prior quarter was primarily due to higher prepayment and other income related to portfolio turnover and a increase in recurring portfolio income is mainly due to the cumulative rise in the benchmark interest rates. Net investment income for the quarter was up 14% to $10 million or $0.46 per share compared to $8.8 million or $0.50 per share in the second quarter of 2018. Expenses during the quarter were generally flat relative to the prior quarter at $7.7 million consisting of interest and fee expense of $2.1 million, base management fee of $1.8 billion, income incentive fee of $2.5 billion and administrative and general expenses of $1.2 million. We recognize net realized gains of $900,000 or $0.04 per share in the third quarter of 2018 from disposition of investments in two companies bringing year-to-date net realized gains to $1.7 million…

Thanks, again Andrew. At this point, we will be happy to take any of your questions. Operator, could you please open the line?

[Operator Instructions] Our first question comes from Ryan Lynch with KBW. Please go ahead, Ryan.

Hey, good afternoon guys and nice quarter posted. First question on the unfunded commitments, if I look at the end of Q2, you guys had unfunded commitments of about $203 million and then in the third quarter, you funded about $53 million, so you guys had closed or had about 25% I guess closing rate from those unfunded commitments. If I look at the end of the third quarter, you guys had unfunded commitments of about $242 million, you have already closed or funded $55 million of new investments in the fourth quarter. So, you guys are having a much higher close rate of over 50% so far. Can you just talk about what is driving the high funding as a percentage of unfunded commitments so far in the fourth quarter?

Sure. Ryan, I will start and then Andrew please jump in. So, I would say kind of they are not actually correlated. So as I mentioned during my of the script. So of the fundings we had in Q3, roughly 70% were from prior quarter’s unfunded commitments and so typically what happens is the fundings in a quarter are not generally from that quarter’s close commitments that are from prior quarter’s close commitments or prior quarter’s unfunded commitments. And so I would say again generally speaking, the fundings for example that we have had in Q4 were not related to the commitments we had in Q4 more related to utilization of the Q3 unfunded commitments if that makes sense. There are some companies which do draw close, but the majority of them do not generally draw close, because of their liquidity positions, the strong liquidity positions.

Right, right. It was just that from the unfunded commitments in Q3, you guys had such strong closing so far in Q4, it was much stronger than in prior quarters. So I was just wondering if there was any reason behind that?

Yes, I think it’s a little bit of timing. So, the fundings in Q3 were I guess slightly low $53 million from our perspective and so it’s more and then we had only a month into Q4 of $55 million, so I would say a fair amount of that was stuff that should have funded in Q3, but it happened here in Q4 and we are busy in expecting a strong Q4.

It just tends to be a timing thing as Sajal said and these companies aren’t anticipating their fundings based on a particular quarter end.

Okay. And then I might have missed this if you have said it, but did you guys give any color I know you did last quarter on – for the fourth quarter quarter-to-date, any sort of color on prepayments or potential prepayment fees, I know you guys gave the funding numbers, but I was wondering what you guys had potentially coming back so far?

Yes. I think we have always said generally we expect one prepaid quarter and to the extent that some of them are related to acquisitions like we had with PillPack and Ring that happened post quarter, we give guidance on it, but there is nothing that we can give guidance on at this time for Q4 other than we as Jim said expect on generally at least one prepay a quarter.

Okay, so nothing unusual then so far. As far as the third quarter, I just wanted to get your kind of thought process on the timing of the equity raised you guys did in the third quarter, you guys obviously had net repayments this quarter, some really nice repayments, drove a lot of fee income and drove really strong earnings quarter in the third quarter no doubt, but with the visibility you guys had into the strong repayments in the third quarter, can you talk about why was the equity raise done in the third quarter given you guys were actually receiving a lot of capital back, what was thought process for raising more during that time period?

Yes, I mean it’s how strong in the demand in our reputation primarily pipeline, Ryan. So as Jim talked about during his section, the pipeline is the biggest it’s ever been since the IPO of TPVG and we are expecting a particularly strong finish for 2018 and that backlog into 2019 as well. And so from our perspective, the bigger goal of growing TPVG based on customer and market demand and so that was our perspective and that was the rationale is our ability to grow and candidly if you look since that event, we have put $100 million of work with the fundings in Q3 and the fundings here in Q4 so far. And we are far from done for the quarter. And so I think it’s long-term sustained growth in our business in pipeline. I think we are on track to close between $200 million to 300 million of term sheets a quarter. And so in order to continue to do that and continue to fund that pipeline, we need more equity capital plus the benefits of the lower asset coverage and the co-investment.

We need to be poised and plan for this demand in the future. You can’t raise capital after the fact.

Plus with the $240 million of unfunded commitments, I mean the good news is that’s near-term visibility on where that equity capital is going to be deployed. Plus as we said that generally 50% to 70% of that actually gets utilized again is quick near term growth potential for us.

Okay, it makes sense. And then just one final one, Jim, I think you mentioned in your prepared comments that as far as fundings and commitments right going to the market today that you guys are seeing no downward pressure on terms for the deals you’re doing are really – even maybe pricing. Can you just maybe explain that a little bit more, I mean, it’s a pretty note, definitely a competitive environment in the middle market, I know there is lot of VC lenders out there as well. Can you just explain why you guys are not seeing really pressure on pricing in terms?

Yes. It’s a completely different market in my understanding of the middle market. There aren’t agents, brokers, syndications, clubbing, multiple bids. This is a very specialized market. And what really prevails in terms of selection is not price, its reputation, references, relationships, track record, experienced team. This is a very specialized business, it’s high barriers for others, the due diligence, the understanding of these companies working with only the top select venture investors and having the reputation and long-standing relationships with them count. We haven't seen any change on the competitive landscape. As we always talk every quarter about some venture lender this or that, but no change at all. And again for TriplePoint, this is not about price, it’s not how we ever have marketed and when there is some competition, we’re winning at a premium.

Yes. I would only add I think it’s a testament to our team and the quality and the hard work of differentiating of really meeting the needs. I mean, we provide a very bespoke financing product. We take the time as a lender to really understand our portfolio companies’ needs and structure a very unique financing for that, and I think they're willing to pay us a premium for it.

Okay. That makes sense. I – those are all the questions for me. I appreciate the time this afternoon.

Great. Thanks, Ryan.

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

Yes. Good afternoon. I guess after seven questions I think you probably got most of mine. Can you indulge me by detailing for me each of the prepays during the quarter, as well as the $5 million loan that matured, who they were and how much each one was please?

Yes. So, we had Rent The Runway I think was our largest prepayment during the quarter. That one I think was about $45 million in total in terms of principal. In addition, we had $20 million to BlueVine, which we paid during the quarter and that was just not their entire outstanding obligation.

They closed an equity around during –

Yes. So, it was just a portion of their total outstanding. We had PillPack, which had funded and closed during the – had funded and prepaid during the quarter, part of it was just to get them through to the acquisition and that was $25 million, and then RetailNext was $8 million.

RetailNext, didn’t that – that was $8 million?

Correct.

And that one just went on the books, didn't it?

I think it was two quarters ago that was funded, I don't recall exactly the funding date.

And what was the $5 million loan that matured and was paid off?

It was WorldRemit.

WorldRemit. And do you have any loans maturing in this quarter?

I don't recall –

We have another WorldRemit loan that was returned.

Yes. nothing of meaningful size.

Okay. Alright. That's all my questions. Thank you.

Thanks, Casey.

Our next question comes from Fin O'Shea with Wells Fargo. Please go ahead, Fin.

Hi guys, thanks for taking my question. Just looking at the new investments this quarter, there are six new names. Can you kind of describe the degree of co-investment across platform now that you have obviously co-exemptive relief, and then I can kind of tack Part B to that question on as well. Is there given there's a bit of a lag in payment and funding, are we seeing this impact yet, and would that be holding back new fundings at this time still?

Sure, Fin, this is Sajal, I’ll start, and was glad to catch up with you out West when you came to visit us early in the quarter. So, for the fundings in the quarter, I think as I said earlier that roughly 70% were from existing prior unfunded commitment. And so none of the fundings in the quarter were co-investment or had co-investments associated with them because we only got that late in Q1. So, you wouldn't necessarily quickly see the impact of that. We probably expect that potentially in Q4 and future quarters. So, I’d say no impact from co-invest likely in the future. I would think we would spin it a little differently. Again we view that as actually a benefit to TPVG given the – again we’re seeing strong demand, we’re seeing the opportunity and it’s actually to one of the strengths of our platform is that customers, some customers, the more robust ones do want larger financing. And so having co-investment allows us to take advantage and allocate across the platform and address portfolio diversification and concentration of which again as I mentioned we rotated out three of our top five. So, we only expect the co-investment to benefit TPVG on a go-forward basis, not hurt it from a fundings perspective.

Yes. It is sort of what I was getting and I was sort of – should we expect a stronger level of fundings given a more seasoned and diverse eventually commitment-based versus the more lumpy sole TPVG one previously?

Fair point, yes, correct, and I’ll come back. Yes, absolutely.

Okay, very well. And then sort of high-level for VC fundraising, which has obviously continued to be very robust. You guys are – take the position and this is very helpful in terms of demand for your capital despite being a bit of a competitor to equity. Is there a bit of a lag in terms of or if so how much of a lag in terms of VC fundraising and demand for late-stage growth in the context of late-stage to VC obviously fundraising?

Yes, maybe I’ll start and then Jim you can jump in. So Fin as we look to VC fundraising, we think that's a barometer for the long-term outlook for our business because typically when these funds raise new funds, those funds have investment period between two to five years. And so that shows great, I think Sequoia just raised $8 billion, and so that's not $8 billion, I got to all invest today that’s $8 billion theoretically over the next two to five years, and so that's what gives us given the record level of fundraising really strong confidence in terms of the long-term outlook for our business as a whole. Now as we look to your question of more near-term indicators of our outlook, we would say the rate of VC investment activity and so that’s them actually deploying that capital that not only that they’ve just raised, but prior capital that they have raised as well. And so that's an important indicator for near-term portfolio opportunities for us, right. Those companies that have now just raised equity capital represents venture growth stage lending opportunities for us in the next six to 12 months assuming those are later our growth stage companies. And to the extent those are early stage companies as part of the TriplePoint Capital fund system and lifespan approach, we would expect those companies to turn into grow up across the chasm, move along our football field, and approach the red zone into the four years.

I can’t add too much that other than just a reminder that we are very highly selectively focused in terms of venture capital funds, backing our portfolio companies and it’s a relatively as a select set of what we consider the top venture capital investors. There is no lack of fundraising, no lack of money they’re putting to work and you see we had an all-time high for originations. So, the demand is strong among the companies being backed by this Group. And to your competitive versus equity comment, we really see ourselves as do our investors, who bring us in these fields more as a supplement to earn enhancement to the equity cover – to the equity dollars.

Thank you for that color and congratulations on the quarter, guys.

Thanks Fin.

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

Hey guys. Has any of the trade tensions with China sort of affected the space that you guys operated at all and that’s sort of our team question, but it seems…

Yes, Chris, that’s a very interesting question. We have not seen it from a customer perspective in the sense that our portfolio companies are missing out on selling to international companies. What we have seen are some companies unable to raise equity capital from Chinese investors and so because of CFIUS and other limitations and so the good or bad is that there are other – these companies attract global investors and so to the extent that they can raise it from Chinese strategics, they can raise it from other global or international strategics. So we have not seen a material impact other than again some companies that were interested in partnerships with Chinese investors were unable to do so.

And then Jim as a follow-up turning to the balance sheet, I mean, obviously you raised all the equity capital kudos above NAV, paid down the revolver. What were you thinking in terms of growth in the balance sheet for the fourth quarter into the first half of ‘19 are you looking to use the revolver for most of that or raise debt, I mean just give us little guidance if you have any?

Yes, I am obviously going to turn the balance over to Andrew who is going to be our organizer and manager of that, but at the end of the day we do have this strong demand. We are going to be working on continue and diversify the portfolio, use capital wisely, but also put it to work in some real what we think is going to be good growing numbers in portfolio here heading into 2019.

Yes, I will just touch on it quickly. I think overall our strategy is we will continue to deploy the capital that’s on balance sheet, use the credit facilities, but we would look to probably lever up the balance sheet in 2019 as opposed to tapped equity markets.

And then obviously prepayments, we do expect the continued pace of at least on a quarter and so when that capital comes back we would expect to deploy that into funding new investment as well.

Got it. Final question, in terms of dividend on a reported basis, you guys are covering the dividend quite handily on a cash basis I assume you guys are doing that as well, congratulations. But you are so under-levered right now and you are covering the dividend, I mean going forward as you start to lever up and the earnings go up, what’s your thinking on the dividend will be a supplemental or just increase the base?

Yes. I mean, I think overall these are conversations where we have with our board ultimately. They are the ones who determine the dividend rate and the distribution timing, but overall, yes very good, it’s good to have those conversations, those are things that were engaged with our board members and I don’t think there is a conclusion yet, but a good problem for us to have.

Okay, thanks for taking my question guys.

Thanks, Chris.

This concludes this afternoon’s question-and-answer session. I will turn the call over to Jim Labe for some closing remarks.

I will close again by expressing my appreciation to all of you for your continued interest and support in TriplePoint Venture Growth. Today I guess I should also say happy Halloween to everyone and thank you all again for participating. We will talk to you soon.

This concludes today’s call. You may now disconnect.