RWAY - Runway Growth Finance Corp. (RWAY) Q4 2023 Earnings Call Transcript

2024-03-07 20:50:21 ET

Runway Growth Finance Corp. (RWAY)

Q4 2023 Results Conference Call

March 07, 2024 05:00 PM ET

Company Participants

Quinlan Abel - Assistant Vice President, Investor Relations

Greg Greifeld - Acting CEO, Managing Director, Deputy CIO, Head of Credit

Tom Raterman - Acting President and CFO and Chief Operating Officer

Conference Call Participants

Finian O'Shea - Wells Fargo

Melissa Wedel - JP Morgan

Bryce Rowe - B. Riley

Eric Zwick - Hovde Group

Mickey Schleien - Ladenburg Thalmann

Casey Alexander - Compass Point

Presentation

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Runway Growth Finance Fourth Quarter and Fiscal Year Ended 2023 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Quinlan Abel, Assistant Vice President, Investor Relations. Please go ahead.

Quinlan Abel

Thank you, operator. Good evening, everyone. And welcome to the Runway Growth Finance Conference Call for the fourth quarter and fiscal year ended December 31, 2023. Joining us on the call today from Runway Growth Finance are Greg Greifeld, Acting Chief Executive Officer of Runway Growth Finance and Deputy Chief Investment Officer and Head of Credit of Runway Growth Capital; and Tom Raterman, Acting President and Chief Financial Officer and Chief Operating Officer. Runway Growth Finance's fourth quarter and fiscal year ended 2023 financial results were released just after today's market close and can be accessed from Runway Growth Finance's Investor Relations Web site at investors.runwaygrowth.com. We have arranged for a replay of the call at the Runway Growth Finance web page. During this call, I want to remind you that we may make forward-looking statements based on current expectations. These statements on this call that are not purely historical are forward-looking statements. These forward-looking statements are not a guarantee of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements, including and without limitation, market conditions caused by uncertainties surrounding rising interest rates, changing economic conditions and other factors we identified in our filings with the SEC. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions can prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions can be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained on this call are made as of the date hereof and Runway Growth Finance assumes no obligation to update the forward-looking statements or subsequent events. To obtain copies of SEC related filings, please visit our Web site. With that, I will turn the call over to Greg.

Greg Greifeld

Thanks, Quinlan, and thanks, everyone, for joining us this evening to discuss our fourth quarter results. Today, I'll touch on 2023 highlights, provide an overview of the operating environment, discuss our key takeaways from the fourth quarter, 2023 as a whole and share our outlook for the year ahead. In 2023, Runway took a measured approach, which delivered on our strategy and set the stage for us to take advantage of more favorable market conditions in 2024. Throughout 2023, Runway generated strong risk adjusted returns, preserved leading credit quality and reduced our leverage to free up dry powder for new deals in a more lender friendly market in 2024 while also supporting existing portfolio companies. Since the fourth quarter of 2022, Runway has expanded its return on equity by 33 basis points to 13.1% and annualized dividend yield by 186 basis points to 15.1%. These strong returns are underpinned by what we believe to be the least risky portfolio in the venture debt space with 99% senior secured first lien loans. Runway remains committed to driving shareholder value, which is enforced by our strong and consistent base dividend and ongoing supplemental distributions....

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