HRZN - TriplePoint Venture Growth: Yield Not Worth The Risk

2024-06-01 07:00:00 ET

Summary

• Triple Point Venture Growth is a risky BDC with declining financials and tight dividend coverage.
• Other BDCs like Capital Southwest, Hercules Capital, and Blackstone Secured Lending have outperformed well and offer higher quality investments with attractive yields.
• TPVG's latest earnings showed a decline in net investment income and portfolio size, but did manage to show signs of positivity with new investment commitments and decreasing leverage.
• Additionally, their consistent NAV erosion over the past two years and increasing non-accruals make them a sell.

Introduction

As you probably know, BDCs have long been considered risky investments as a result of their business models and higher yields. For me they are perfect investment vehicles, as income is my main focus in retirement. However, not all BDCs are created equal, and every investment comes with some sort of risk. Moreover, with the current high interest rate environment placing downward pressures on many businesses, some BDCs with lower credit quality have seen their portfolios negatively impacted....

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