TriplePoint Venture Growth BDC Corp (TPVG) Q4 2018 Earnings Conference Call Transcript

TPVG earnings call for the period ending December 31, 2018.

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TriplePoint Venture Growth BDC Corp  (NYSE:TPVG)
Q4 2018 Earnings Conference Call
March 06, 2019, 5:00 p.m. ET

Contents:

Prepared Remarks:

Operator

Good afternoon and welcome to the TriplePoint Venture Growth Fourth Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Andrew Olson, Chief Financial Officer. Please go ahead.

Andrew J. Olson -- Chief Financial Officer

Thank you, operator and thank you everyone for joining us today. We are pleased to share with you our results for the fourth quarter and fiscal year 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 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.

And with that, I'll turn the call over to Jim.

James P. Labe -- Chairman and Chief Executive Officer

Thanks, Andrew, and good afternoon and welcome everybody. Today marks a really special day for us, today is the fifth anniversary of our IPO and the day that we launched TPVG. On this anniversary, I am not only pleased to share our outstanding performance of the past quarter, but also what was a record-setting 2018 and five years of outstanding growth achievements in results for our shareholders behind that.

Before getting to the quarter and what was truly a stellar year, let's talk about the past five. And some of the highlights that we achieved since our IPO through this past December. We made cumulative commitments of more than $1.6 billion, we made cumulative investment fundings of more than $1 billion. We increased our investment portfolio, 3.5 times since the IPO and we paid out $7.08 per share in distributions as of this past December, which provided a cash on cash aggregate return of 47.2%, based on our original $15 per share IPO price.

We're also proud to state that in the period since the IPO we have covered our dividend and that includes paying two special dividends as well in the period. And we believe we're the only venture lending BDC to do so, over that period. These are just some of the highlights during the first five years, with its past year 2018 being a year where we finished with several all-time performance records for the business representing our very best year yet, as we set the following company records. A record in an annual investment income, a record in our annual net investment income, a record in customer fundings, a record in portfolio growth and size, a record in dividends that we paid to our shareholders and a record in earnings per share.

Well, it's great to share these performance records. There is also list of other achievements in 2018, including having a third portfolio company now, to be acquired by Amazon and another portfolio company which debut as one of the biggest tech IPOs of the year. We also increased our available borrowings under our credit facility, we obtain shareholder approval for increased leverage and received our exempted relief from the SEC to commit co-investment across the TriplePoint platform, with a remarkable year.

Let me wrap up these opening remarks by sharing some of the amazing fourth quarter results. As I know Sajal and Andrew will be providing much greater detail, because what I'd really like to talk and focus about is 2019. The fourth quarter once again to use the most repeated word here in my remarks is one of records of them. This included new records in quarterly debt and equity investment commitments, new quarterly records in net investment income, earnings, customer fundings and portfolio growth and a record quarter in dividends that we paid out to our shareholders.

We also ended the quarter with an all-time high in the venture growth originations pipeline, which could translate nicely into new business here in 2019. But the plans are not to rest on these laurels or all these long list of records, but actually to look at the past five years. And this past record setting year is only the beginning of what we plan to accomplish in the years ahead. As a reminder, although TPVG is only five years old today, we're not newcomers at all to venture lending. The senior members of our management team in fact, each have decades of experience and were among the first to develop the investment class, now known as venture lending.

The venture growth segments had TPVG targets is only one portion of the overall business of our sponsor TriplePoint Capital LLC. TriplePoint Capital was founded almost 15 years ago by our senior team and we're a leading global financing provider to venture capital backed companies across all stages of their development. In fact, for the year ended December 31, I should also point out that the TriplePoint platform at the sponsor level signed up one -- sorry signed up more than 1.6 billion of term sheets last year. And based on the publicly available information, this made TriplePoint one of the largest non-bank venture lenders globally last year.

Believe me we really know the venture lending business and all of our business is also what we call 100% direct. All of our business is directly originated, we are in originations machine with many referrals from our select venture capital investors. We don't work with brokers or agents, there aren't any loan participation's, we don't do loan purchases, we don't have club or syndication partners in our loans, we are in control. We don't make secondary purchases of stock in companies that we don't have relationships with either, we don't lend to distress public companies and we don't lend to middle market companies.

We believe these direct originations provides us with a true edge in the marketplace. While we are proud of TPVG's performance over the past five years, again, we think of it is only the beginning. We're excited to build upon this past success in the years to come. And as I mentioned we are entering 2019 at TPVG with the largest originations pipeline in history. That's important because our portfolio is driven by originations pipeline among other factors, which in turn helps drive earnings growth. While this market demand is strong and the deal flow continues to increase, I also want 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. We will selectively invest in companies with innovated technologies and services backed by these select venture capital investors. So let me wrap up. We see great growth opportunities here in 2019, both in the venture capital equity and the venture lending market. We plan to continue to capitalize on these opportunities in a significant way, given the strength and reputation of the TriplePoint global platform and the quality of the venture growth stage companies we are seeing in the pipeline.

We'll continue to work with our select leading group of venture capital investors and these are firms that have sponsored some of the biggest tech in life science successes during the past few decades, and drive the high quality of our portfolio companies. While we are moving forward into 2019 with this abundance of investment opportunities and strong outlook, rest assured, as I always say, we will continue to focus on what we call the four Rs that have always been the foundation of our business; reputation, relationships, references and returns.

I'll now turn the call over to Sajal.

Sajal K. Srivastava -- Chief Investment Officer and President

Thank you, Jim, and good afternoon everyone. In Q4, we signed a record $323 million of term sheets at TriplePoint Capital and closed a $190 million of debt commitments with 12 companies. For the year TriplePoint Capital signed a record $885 million of term sheets and we closed $508 million of debt commitments with 28 companies.

During the fourth quarter, we added eight new companies to the portfolio bringing our total additions for the year to 21. New customers in the quarter included Clutter an on-demand storage company that allows customer store and achieve their stuff without actually leaving their house. Clutter has raised $100 million of capital from Sequoia Capital, Atomico, Google and others. We're pleased to report that here in Q1, Clutter announced to raise $200 million from the SoftBank vision front. Lovepop is a maker of 3D popup greeting cards for all locations.

Lovepop has raised more than $22 million from investors including Highland Capital and Kevin O'Leary from the Shark Tank. Qubole delivers a self-service platform for big data analytics built on Amazon, Microsoft, Google and Oracle Cloud. Qubole has raised more than $75 million from light speed Venture Partners, Norwest Venture Partners, CRV, IVP and others. Quip designs and delivers oral care products, advice and services. Quip has raised more than $60 million from investors including Sherpa Capital.

Health IQ is an insurance company rewarding those with healthy lifestyles with lower rates using its proprietary data and carrier relationships. Health IQ has raised more than $80 million from Andreessen Horowitz, Foundation Capital, Ribbit Capital, CRV and others. Homelife is a leading marketplace for finding real estate professionals, that helps homeowners sell homes faster and for more money. Homelife has raised more than $50 million from investors including Menlo Ventures and Crosslink Capital. Sonder is a tech-driven hospitality company offering spaces built for travel and life in cities around the world. Sonder has raised more than $135 million of capital from Greylock Partners, Spark Capital and others.

Capsule is a healthcare technology company, rebuilding the pharmacy from the inside out. Capsule has raised more than $70 million from investors including Thrive Capital. During Q4, we funded a record $120 million of debt investments to 11 companies and acquired warrants valued at $2 million in 12 companies. The new debt investments funded during the quarter had a weighted average portfolio yield of 14.2%. For the year, we funded a record $265 million to 27 companies. We are particularly proud to have grown the investment portfolio to its largest level ever of $433 million with 57 companies as compared to $372 million with 42 companies at the end of 2017.

We continue to see the strong level of demand so far in 2019, having closed $131 million of new commitments and funded $74 million of investment so far. We had $26 million of principal prepayments during Q4, which contributed an additional 4% to our core portfolio yield of 14% for the quarter, bringing total portfolio to an impressive but not record-setting 18%.

Moving on to credit quality, as of December 31, the weighted average internal credit rating of the debt investment portfolio was a record-best 1.87 as compared to 2.09 as at Q3. As a reminder, under our rating system loans are rated from one to five, with one being the strongest credit rating and new loans are generally rated 2 upon closing. During the fourth quarter, on a net basis there were two more companies in Category 1 versus last quarter representing $83 million of net additional principal balance, and there were five more companies in Category 2 versus last quarter, representing $21 million of net additional principal balance.

With regards to Category 3, one portfolio company totaling $34 million of principal balance was upgraded from three to two, and one portfolio company totaling $20 million of principal balance was downgraded from two to three. Finally one portfolio company totaling $3 million of principal balance was downgraded from four to five. As Jim mentioned, our press release was a rather long list of successes. I would briefly like to talk about a few of them as well as some additional ones, not in the release.

A year ago, our top five obligors represented 57% of our total portfolio. As of Q4 2018, we've been fully or partially prepaid on four of those Top 5 positions, grown our total portfolio and taking advantage of our exempted relief order to co-invest across our larger platform, such that our Top 5 represented only 44% of our total portfolio at year-end.

And here in Q1 2019 as a result of prepayments and continued investment activity so far, the Top 5 represent around 30%. We're really proud of the $1.71 NII per share for the year which was materially in excess of our $1.44 of distributions per share and enabled us to pay our shareholders a $0.10 special dividend in December. We met consensus estimates for Q1 and then big consensus for Q2, Q3, Q4 and fiscal 2018.

We're even more proud of our $1.78 of net increase and net assets per share which enabled us to increase our net asset value by $0.25 from Q4 2017, even after paying that $0.10 special dividend per share. Our core portfolio yield without the benefit of prepays increased from 13.6% at the beginning of the year and remained at 14% in both Q3 and Q4. 14 of our portfolio companies raised equity rounds in 2018, four of our portfolio companies were acquired and went public. So far in Q1, four portfolio companies have raised rounds and two have announced acquisitions.

As Jim mentioned, Amazon has purchased three of our portfolio companies Ring, PillPack and Eero, and SoftBank has invested equity in three of our companies, Clutter, Cohesity and View. Finally, as I previously mentioned, we raised $94 million in equity, in an equity offering in August. As our investors have seen since that offering we have closed $384 million of commitments and funded almost $220 million of investments. Before I hand the call off to Andrew, I thought it would be helpful to share some of our strategic goals and objectives we have for TPVG here in 2019.

As Jim mentioned, the industry leading position of our platform and the hard work of our team has resulted in significant direct deal flow from our select VCs and strong demand for venture growth stage lending for high quality companies, which reflects the natural progression of these VCs and their portfolio companies following continued strong equity investment activity. And there are thoughtfulness on how to optimize their capital structures with both debt and equity.

There has been no change in what we've been doing, how we structure our price or deals or deal quality. If anything, we continue to raise the bar in terms of what qualifies as a TriplePoint worthy customer and investment. Volatility in the public markets only helps drive more demand for debt as venture capital backed companies recognize they may need more capital until the IPO or M&A invent, and we serve as a less dilutive and complementary source of capital.

As we look to 2019, we have a clear near-term path to continue to grow and scale TPVG. Our expectation this year for portfolio growth is -- quarterly portfolio fundings to be in the $75 million to $150 million range on a growth basis, up from our target in prior years at $50 million to $100 million per quarter. So on a full year basis, we see at least $300 million of gross fundings, but really we expect to be somewhere between $400 and $600 million of gross fundings, given we had $294 million of unfunded commitments as of Q4.

As a reminder, fundings typically occur in the last month of the quarter and don't contribute meaningfully from an income perspective until the next quarter. We expect that core yield profile of our portfolio will be stable and will continue to be leading in the industry in the 13% to 14% range, again prior to the impact of prepays. With regards to prepays they continue to be a regular part of the business. Looking back we had at least one prepay every single quarter over the past two years, and 10 in the past 12 quarters, in fact, we've already had two here in 2019.

We expect to see that pattern of one-on average per quarter in 2019 and along with our expected originations and increased leverage is something our Board is taking into consideration as we consider possible increases in our dividend policy on a go-forward basis. Given our strong outlook for portfolio growth, we are grateful to our shareholders for approving a lower asset coverage requirement which will enable us to take advantage of using leverage to serve as the primary source of funding portfolio growth for us here in 2019, plus we intend to continue to take advantage of our exempted relief order which we received in 2018 as well, to co-invest with other entities in the TriplePoint platform and further diversify as we scale.

With that, let me say that as we look ahead, we are particularly excited for what 2019 has in store for us and our shareholders. We will continue to be highly disciplined and expect to grow our portfolio in a manner that is accretive to our stockholders and provides them with an attractive yield on their investment. The trust you have placed in us, motivates this team to remain aligned, focused and enthusiastic.

I'll now turn the call over to Andrew to highlight some of the key financial metrics achieved during the quarter and fiscal year.

Andrew J. Olson -- Chief Financial Officer

Thank you, Sajal. Yeah, as mentioned by Jim and Sajal, 2018 was an exceptional year. Before we get into the quarterly figures, I thought I would highlight some of the many milestones reached for the fiscal year 2018. We ended the year with a record total investment income of $64.6 million, record net investment income of $36.6 million, record net investment income per share of $1.71, record net change in net assets per share of $1.78, record ending portfolio investments of $433 million. And in addition we have earned our distributions for the second consecutive year with net investment income and we paid $1.54 per share. Even with that, our quarterly results were equally impressive.

Q4 total investment and other income was $17.8 million or $0.72 per share compared to $11.1 million or $0.64 per share for the same quarter of 2017. Our investment portfolio generated a weighted average portfolio yield of 18% during the quarter, including prepayments and other activity and 14% without. This is compared to 13.6% and 13.4% -- 13.5% in Q4 2017, respectively. The increase in total investment income and yield relative to the prior year was primarily due to portfolio growth at higher prepayment and other income related to portfolio turnover. In addition, the increase in recurring portfolio income is mainly due to the cumulative rise in benchmark interest rates.

Expenses during the quarter were $7.6 million consisting of interest and fee expense of $1.9 million, base management fee of $1.7 million, income incentive fee of $2.6 million and administrative and general expenses of $1.4 million. Net investment income for the fourth quarter was up nearly 99% to $10.2 million or $0.41 per share compared to $5.1 million or $0.30 per share in the fourth quarter of 2017.

We recognized net realized losses of $17,000 or $0.00 per share in the fourth quarter of 2018 from foreign exchange activity and had net change in unrealized depreciation during the quarter of approximately $900,000 or $0.04 per share, consisting of mark-to-market activity on the investment portfolio. The mark-to-market depreciation was primarily concentrated in our public warrant investments, specifically our investment in Farfetch Limited, a publicly traded (inaudible) with a cost basis of 169,000 which depreciated approximately $1.6 million during the period. But since that period -- since the end of the quarter that position has nearly appreciated $1.8 million here in 2019. That increase in net assets for the quarter was $9.3 million or $0.38 per share compared to $3.9 million or $0.22 per share in the prior year.

During the quarter, we generated a return on average equity of a 11% and a return on average assets of 8.6%, on an annual basis. And generated an ROAE and ROAA of 13.4% and 8.9% for the fiscal year December 31, 2018 respectively.

Now turning to the balance sheet, we funded $119.8 million of debt and equity investments to 11 companies during the quarter and had one company repay its outstanding obligations prior to maturity in the amount of $26.4 million. We also had one company repay its outstanding obligation cap maturity in the amount of $5 million and had principal amortization on the remaining portfolio of $7.3 million.

Also, we ended the quarter with long-term investment of $433.4 million or up 16.5% from the prior year. At quarter end, we held 144 investments with 57 companies with a cost of $435 million and a fair value of approximately $433 million. The company's debt portfolio ended the quarter with a cost of $414 million of which 59% of the debt investments carried floating rates.

Our unfunded commitments totaled $294 million to 20 companies, of which $87.5 million is dependent upon the companies reaching milestones. And of those commitments $183 million will expire in 2019, and $111 will expire in 2020, if not drawn prior to expiration. We ended the quarter with total liquidity of $197 million, consisting of cash of $10 million and $187 million of undrawn availability under our revolving credit facility.

Total outstanding borrowings as of quarter-end were up -- were approximately $96 million consisting of $75 billion of long-term fixed-rate notes, $23 million -- drawn under our revolving credit facility, which put us at a leverage ratio of 0.29x. Below our target range -- but given -- but gives us ample headroom to expand the portfolio without accessing additional capital in the short-run.

We ended the quarter with net assets of $335 million or $13.50 per share, this is up $0.25 from $13.25 per share in the prior year. During the fourth quarter we distributed $0.46 per share, consisting of our $0.36 quarterly dividend and a $0.10 special dividend. For the year, we distributed $1.54 per share of income and ended with projected spillover income of $4.6 million or $0.19 per share.

With that, I'm pleased to announce that for the first quarter of 2019, our Board of Directors declared a distribution of $0.36 per share payable on March 29th to stockholders of record as of March 20th. This marks the 20th consecutive quarter, we have increased or maintained our quarterly distribution rate.

Now with that, I'll turn the call back over to Jim.

James P. Labe -- Chairman and Chief Executive Officer

Thanks, Andrew. Before I open up the call for questions, we announced today that Andrew will be leaving the Company on March 22, to pursue other opportunities. We wish him well and I'd like to take a minute to thank you Andrew for your health and contributions during the short period you were here, and we're very pleased to announce that Chris Gastelu will become our Interim CFO as of that date, while we conduct our search for a permanent CFO.

Chris has been serving as a consultant to TPVG since 2014. And prior to his own consulting business, he was the Managing Director at UBS in New York City in Financial Services and Specialty Finance. At this point, we'll be happy to take your questions.

Operator, could you please open up the line.


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Questions and Answers:

Operator

We will now begin the question-and-answer session. (Operator Instructions) Our first question will come from Fin O'Shea of Wells Fargo. Please go ahead.

Finian O'Shea -- Wells Fargo Securities -- Analyst

Hi guys, thanks for taking the question. Just to start with couple of housekeeping items. Actually, first I want to congratulate Mr. Olson for moving on, it's been a pleasure working with you, sorry about that. Looking at -- Sajal, you mentioned some of the deals this quarter were platformwide allocated, can you give us a little more color there on a vertical sense? If deals were all evenly allocated or some in the early late-stage strategies, for example. And then sort of if you can quantify given its low rates of leverage what TriplePoint the BDC received on this quarter's origination.

Sajal K. Srivastava -- Chief Investment Officer and President

Yeah, sure. Let me start with an answer if you want to jump in. So Fin to be clear, all of the co-investment activity that was completed in on a go-forward basis are all in our venture growth type strategy, so TPVG is only lending to venture growth stage companies. I think the interesting dynamic as we're seeing even more robust and even higher quality companies with significant scale be it revenues, hundreds of millions of dollars of revenue, billions of dollars of enterprise value, looking for larger transactions. And so with our -- our exempted relief order we're allowed -- or we're able to diversify these larger lumpier loans, pursued with our TPVG investing and then our private funds investing alongside in the same strip, same transaction, same terms. And so I believe we had two transactions in Q4 and I don't think we've reported yet how many here in Q1.

Finian O'Shea -- Wells Fargo Securities -- Analyst

Alright. Okay, thanks. I know you mentioned there, I actually wanted to ask as a follow-on with some of the -- the more famous unicorns (ph) reaching their sort of liquidity IPO chapter, what can you tell us about, remind us of your typical enterprise value issuer in terms of the proposition you offer at TriplePoint, and if that is changing, if that is guiding up given the dynamics of the market in your platforms growth?

Sajal K. Srivastava -- Chief Investment Officer and President

Yeah. Again, no change as anything I would and please Jim jump in. Fin, I think the beauty is we have such deep and trusted relationships with our select group of leading VC funds, and so they look to us as partners and problem solvers, although they're not problem. And so, as they look to preparing their kind of the best of the best for their exit events and having sufficient runway, they -- number of these companies either lever up and then raise big rounds or raise big rounds and then lever up. I'll use one example, is Clutter which is again the storage company we closed in Q4, we entered into a debt commitment with them in Q4, they drew on our facility and then here in Q1 they raised $200 million from SoftBank.

So I think the use of proceeds is still the same, we're working with companies that are trying to achieve amazing things, they are going for the touchdown and they're using combination of debt and equity to achieve that, and they're not going to lead market volatility stop them from achieving their goals. They're not dependent on IPO or M&A, they want to conquer the world and they're using us in equity capital to do it. From an LTV perspective, I think it's been relatively flat, Andrew you tell me, I mean, our 8%, 9% right?

Andrew J. Olson -- Chief Financial Officer

Yeah, its ramp remain relatively consistent across the life of TriplePoint Venture Growth and we ended the quarter -- ended the year with about 9% of LTV on the portfolio.

Finian O'Shea -- Wells Fargo Securities -- Analyst

Okay, thanks guys. That's all for me. Thanks for taking my questions again, congratulations Andrew.

Andrew J. Olson -- Chief Financial Officer

Fin you didn't mention the Celtics ramping the Warriors, so thank you.

Finian O'Shea -- Wells Fargo Securities -- Analyst

I was going to say, you guys are the Celtics of BDC.

Andrew J. Olson -- Chief Financial Officer

Thank you.

Operator

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

Ryan Lynch -- Keefe, Bruyette, & Woods -- Analyst

Hey, good afternoon. First Sajal, I wanted to talk about sort of our funding -- quarterly funding guidance you gave $75 million to $100 million, that's a pretty substantial increase over historically where you guys were kind of in the $50 million to $100 million range. Can you just talk about what's driving your confidence in your ability to increase fundings meaningfully as well as also maintain good portfolio diversification, which you talked about earlier in the call of reducing those Top 5 investments substantially?

Sajal K. Srivastava -- Chief Investment Officer and President

Yeah, so, first, Ryan, big question, so I'll start off with the guidance we gave is $75 to $150. So even higher at the top end and so I'd say it's multiple factors. I think one is just the significant backlog that we have in the form of existing unfunded commitments. And the fact that again on average our customers drop between 50% and 75% of that unfunded commitment, generally within 6 to 12 months from when we enter into it, plus more importantly is, we're seeing higher utilization at the time of close. I believe on the customers we closed in Q4, 50% of them actually drew at close.

And so, again, no change in our underwriting methodologies. These companies had cash again I'll use the example of Clutter which we'll capitalize using our capital. And then, raising it big months to round the financing. So I'd say it's backlog, it's -- our customers using our capital. It's also overall just demand for debt is particularly strong. And so, we're seeing strong -- I mean, as Jim said in his prepared remarks, the pipeline is the strongest it's ever been at this time of the year. So unprecedented levels from high quality companies back our VCs. So we continue to feel confident that the demand from really great awesome companies that we have visibility on today will enable us to hit these portfolio growth targets that we have for the year.

James P. Labe -- Chairman and Chief Executive Officer

And not just jump too much into the fray here and agree with all the prior comments, I would just add that, you know definitely our reputation references and relationships starting to continue to tailwind (ph) and get around. We have significant deal flow from the select folks we've been running with long-standing profitable relationships for quite a while. And this is strong demand and this record amounts of equity $1 billion fund among our select investors, good activity, we have a good name, good reputation, a good business and it's driving this. And in fact, quite frankly, we're increasing the bar for some of the -- the quality. So although we're going to raise -- and see record fundings in record business. We're anticipating here in 2019, I want to emphasize, we're not changing any of our practices and the diversification is great because of the exemptive relief. So we're accomplishing a lot of things at once, but there is continued great depth supplemental that we're doing...

Andrew J. Olson -- Chief Financial Officer

And I would only add Ryan we're not whale hunting, so as we look to the beauty of our sponsor in our origination capability, there is no doubt we're seeing strong demand across the Board all stages all sectors, but in particular in venture growth, it's not that we're getting calls from 5 or 10 companies looking for $50 million to $100 million debt facilities. The beauty is that TriplePoint Capital global platform is the only platform that can digest those kinds of transactions. And so, and the benefit to our public shareholders is that we can now allocate an appropriate risk diversified transaction to TPVG entering to that transaction with that customer allocate to TPVG and our various private tools of capital to close those transactions.

Ryan Lynch -- Keefe, Bruyette, & Woods -- Analyst

Okay, that's helpful color. And then next I wanted to talk about Slide 28 with the portfolio yield, as well as some of the prepayments that you had. Obviously you guys have seen a big jump in the effective portfolio yield over the last several quarters, including the most recent quarter. I know you said, you expect maybe, I think you had two prepayments in the first quarter of '19 expect at least one per quarter going forward. Can you just talk, is there anything different that you guys are doing as far structuring or types of investments you guys are looking for? That's kind of driven this big increase in prepayment that we've seen over the last several quarters and looks like you guys expect going forward in 2019.

And then part two maybe of the question is given your anticipation of at least one prepayment per quarter going forward with some meaningful prepayments in the last several quarters, you guys have had a effective yield of 17% to 18%. Is it reasonable to expect a yield in that level going forward.

Sajal K. Srivastava -- Chief Investment Officer and President

So I'll take a first step and feel free to add in. But our guidance is always been consistently we anticipate on average one to two prepayments per quarter. The portfolio is growing, so obviously there is going to be as we grow more growth in that kind of activity. But as a lender recall, we don't mind, we actually like getting prepayment, it sales (ph) we're doing something right with these companies when they get acquired, when they go public. But also we have the income that it contribute as well as the yield contributions and I think on a continued basis, we want to see that continued to...

James P. Labe -- Chairman and Chief Executive Officer

Yeah, and just to parse through a little bit further, because we look to the prepayment activity Ryan, over the last, let's say, one to two years. I think the beauty of our prepayment activity is the primary reasons for the prepays, -- then the customers have been acquired right, so the touchdown that we've talked about, right? And so, you can't do anything more, the company got acquired and went public. And so to have a meaningful percentage of prepays due to that, we put that up on the wind column. I think the second largest reason for prepay has been raising monster rounds of equity financing, where these companies have potentially overfunded themselves with equity, it sitting in a bank, earning negative interest or no interest.

We've got a 14%, 15% something percent loan, we use that analogy in prior calls at half-time, so they pay us off, we get nice prepayment acceleration, we go sit on the bench and wait to be called back in late Q3 -- early Q4 of the proverbial football game where they need us to come back and then it's actually been only a few actually less than a handful of scenarios, where we've been refinanced by other lenders. And so and usually those have been scenarios our companies where we opted not to continue the relationship and so -- so I'd say that's generally how the prepays have broken out, no change in how we structure, no change in terms of the profile of companies that we lend to.

We do not lend to distress companies that are bridge financing out of cash that were short-term financing partners -- that's not the relationship we have. Now with regards to the yield profile, again, as you saw, I mean our yields at the core portfolio have been 13% to 14%, regardless of the impact of prepays that regardless of the impact of prime, it's been relatively consistent. Now we can't control who prepays and when they prepay. But as you know, the more mature the loan is, the less of it an impact it has from a yield perspective because you've already recognized the majority of that in the term payment which -- and potentially other fees, which may cause that income acceleration.

And so I'd say, again, we can't guarantee that with every prepay that's going to cause portfolio yield to bump north of 14%, because to the extent it's a more robust loan prepaying. It's not going to have so much impact, but at the end of the day, still leading the charge and from the asset class from a yield perspective.

Ryan Lynch -- Keefe, Bruyette, & Woods -- Analyst

Great. Well, that's definitely a helpful color. Those are all my questions. I appreciate the time and congrats on a really nice quarter.

James P. Labe -- Chairman and Chief Executive Officer

Thank you.

Operator

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

Christopher Nolan -- Ladenburg Thalmann -- Analyst

Hey guys, and Andrew congratulations, and wish you the best.

Andrew J. Olson -- Chief Financial Officer

Thank you, Chris.

Christopher Nolan -- Ladenburg Thalmann -- Analyst

Sajal, the $75 million to $150 million in guidance that you provided, on back of the envelop it indicates to me that if you achieve that full year regulatory debt to equity ratio be north of two times. And what's the priority here to grow the portfolio or to not dilute shareholders on the NAV per share basis?

Sajal K. Srivastava -- Chief Investment Officer and President

Yeah, I think right now, I mean in order us to -- for us to even get to the one to one ratio, we could fund potentially $240 million of incremental debt to fund loans, we have incremental debt. And so we look at it as we've kind of given the guidance previously, as we reduced our asset coverage ratio to provide us the headroom. We don't expect to over lever the business, but we want to put it adequate leverage point where we're generating the right amount of risk return to our investors. And so we think over the short run using debt to fund the growth is the right approach.

James P. Labe -- Chairman and Chief Executive Officer

Plus the reality of prepays, right? So, this is again, given here in the first quarter, we've had was the $56 million of prepays. So the beauty Chris, it's redeploying that capital. So again, from our perspective, we think that looking to leverage as the primary source of funding the portfolio growth this year as well as redeploying the capital from the prepays that we've already had and expect to have.

Christopher Nolan -- Ladenburg Thalmann -- Analyst

Yeah, and I understand that. But my point is, what's the reasonable leverage level of leverage because by my calculation, if you achieved $300 million in incremental portfolio growth, your regulatory debt to equity is $1.18 and is that a reasonable level of leverage?

James P. Labe -- Chairman and Chief Executive Officer

Are you including prepayments in that?

Christopher Nolan -- Ladenburg Thalmann -- Analyst

No, I'm just sort of back the envelope just assuming the portfolio grows $75 million per quarter?

Andrew J. Olson -- Chief Financial Officer

Yeah, right now we -- right now we have under $100 million of leverage on net assets of $335 million. So we have quite a bit of room just even get to get up to that one-to-one debt to equity ratio. So we think we're with the prepay and with what we anticipate to fund -- we wouldn't expect us to push it above that. But what we think that, one-to-one, is a reasonable bumper, it might be periods where we were slightly above that, but we wouldn't see -- we wouldn't anticipate any period for...

James P. Labe -- Chairman and Chief Executive Officer

Yeah, that's great -- maybe to get your third question Chris. Right, in the guidance that we gave when we got shareholder approval on our expectation for targeted leverage, right. We don't -- we don't need to lever the business up more than one-to-one, given the return profile of our assets. But having said that, we did say that during periods where our portfolio growth in between capital raises to optimize when we raise equity. We would expect to go north of one-to-one to take advantage of that and building portfolio and then waiting for prepays and for the capital markets to cooperate.

Christopher Nolan -- Ladenburg Thalmann -- Analyst

Sure. Okay, thank you for taking my questions.

Operator

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

Casey Alexander -- Compass Point -- Analyst

Yeah, good afternoon. Can you tell us what the loan or loans where the prepaid in the fourth quarter that created that amount of extra income?

Andrew J. Olson -- Chief Financial Officer

Yeah, there was one loan which was a prepay that one that repaid a maturity, the prepayment was the primary driver with income and that was View, which is an existing portfolio company, they partially prepaid there -- their position with us, they still have existing debt positions with us or equipment loans that will continue on.

Casey Alexander -- Compass Point -- Analyst

Did they complete the investment with SouthBank?

James P. Labe -- Chairman and Chief Executive Officer

I don't know, View is publicly announced what has -- but we know a significant amount of capital has been funded.

Casey Alexander -- Compass Point -- Analyst

Okay. I may be wrong but you're unfunded commitments I'm pretty sure that's a record level also. How much of your guidance of funding $75 million to $150 million per quarter is driven by the high level of unfunded commitments that you have right now?

Sajal K. Srivastava -- Chief Investment Officer and President

Casey, I think it's a combination of unfunded commitments plus it's pipeline is, I think we had $130 million of deals closed so far this quarter, another $100 million of signed term sheets. So I don't think it's relying on the --although it's pipe or it's backlog with the unfunded commitments. It's also a function of the robustness of the pipeline, the deals that we won, the deals that we're bidding and actually as Andrew has pointed out, it's actually another record -- as a percentage of the portfolio. But again, I think it's -- the challenge with the unfunded commitments or existing portfolio companies when companies raise large amounts of equity they may have an unfunded commitments, but we may sit and that may expire unutilized or remaining available amount may expire undrawn, so you can't rely solely on the unfunded commitments to be the source portfolio growth.

Casey Alexander -- Compass Point -- Analyst

Okay. Could you review for me again. You guys did give what up to -- up to the date the first quarter fundings and the first quarter repayments were?

Andrew J. Olson -- Chief Financial Officer

Yeah. The first quarter fundings were $73.8 million and repayments to-date -- early principal repayments to day were $56 million.

Casey Alexander -- Compass Point -- Analyst

$56 million, OK. So, you're already in the bottom end of your fundings guidance for the quarter with still three weeks to go?

James P. Labe -- Chairman and Chief Executive Officer

Yeah.

Casey Alexander -- Compass Point -- Analyst

Okay. Alright. So I just check, see if I have anything else. I'll say the rest of my questions for offline. Thank you very much.

James P. Labe -- Chairman and Chief Executive Officer

Thanks, Casey.

Operator

Our next question is a follow-up from Ryan Lynch of KBW. Please go ahead.

Ryan Lynch -- Keefe, Bruyette, & Woods -- Analyst

Hey guys, just one follow-up on trying to get a sense as we kind of talked about the prepayments, it depends on kind of where the life cycle, they are, that would kind of drives the DOID (ph) in potential prepayment fees. You guys had $56 million of early prepay -- or repayments in Q1, can you yield these give us a sense or if you can quantify, how, where in the life cycle, are those prepayments and what should we expect from a prepayment or accelerated OID standpoint from the those prepayments that have already occurred in Q1?

Sajal K. Srivastava -- Chief Investment Officer and President

Yeah, I don't think we specifically ever disclosed the amount but we would typically expect 1% to 2% of the total loan value to be accelerated income.

Casey Alexander -- Compass Point -- Analyst

Okay. Alright. Thank you.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Jim Labe for any closing remarks.

James P. Labe -- Chairman and Chief Executive Officer

Thanks, operator. I'll close again by expressing my appreciation to all of you for your continued interest and we can't tell we're really, really happy here in our very fifth year anniversary of this day to talk about all these records, not just for the quarter, not just for the year, but also for the entire left five-year period. So thank you again for your support, I hope you share our excitement here as we go forward with TriplePoint Venture Growth. Thanks and we'll speak to you all again soon.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Duration: 52 minutes

Call participants:

Andrew J. Olson -- Chief Financial Officer

James P. Labe -- Chairman and Chief Executive Officer

Sajal K. Srivastava -- Chief Investment Officer and President

Finian O'Shea -- Wells Fargo Securities -- Analyst

Ryan Lynch -- Keefe, Bruyette, & Woods -- Analyst

Christopher Nolan -- Ladenburg Thalmann -- Analyst

Casey Alexander -- Compass Point -- Analyst

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