67 WALL STREET, New York - June 26, 2012 - The Wall Street Transcript has just published its Business Development Companies Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Decreased Bank Loan Competition - Low Corporate Credit Default Rate - Consistent BDC Dividend Yield - Middle-Market Consolidation Activity
Companies include: New Mountain Finance (NMFC); American Capital (ACAS); Apollo Investment Corporation (AINV); Ares Capital (ARCC); CIT (CIT); Comerica (CMA); Fidus (FDUS); GE (GE); Golub Capital (GBDC); Hercules (HTGC); Horizon Technology Finance Corporation (HRZN); KeyCorp (KEY); MCGC (MCGC); PennantPark (PNNT); Triangle Capital (TCAP).
In the following brief excerpt from the Business Development Companies Report, expert analysts discuss the outlook for the sector and for investors.
Christopher M. Mathieu is Senior Vice President, Chief Financial Officer and Treasurer of Horizon Technology Finance Corporation. He is an original member of the team that founded the adviser in May 2003 and its CFO since inception. Mr. Mathieu has been involved in the accounting, finance and venture debt industries for more than 22 years. From July 2000 to May 2003, Mr. Mathieu was Vice President, Life Sciences, of GATX Ventures, Inc., and the primary Business Development Officer for the life science sector.
From September 1996 to July 2000, he was Vice President, Life Sciences, of Transamerica Business Credit Corporation's technology finance division, where, in addition to codeveloping and implementing the business plan used to form the division, he was the primary Business Development Officer responsible for the life science sector. From March 1993 to September 1996, Mr. Mathieu was a Vice President, Finance, at Financing for Science International, Inc. Previously, he was a Manager with the financial services group of KPMG working with public and private banks and commercial finance companies. Mr. Mathieu graduated with honors from Western New England College with a bachelor's degree in accounting and is a Certified Public Accountant, chartered in the state of Connecticut.
TWST: Would you please give a brief overview of Horizon Technology Finance Corporation, as well as your responsibilities there?
Mr. Mathieu: Horizon is one of the leading venture lenders in the market. We provide secured loans to venture capital and private-equity-backed companies in a variety of markets, primarily technology, life science, health care information and services and clean tech.These are loans which provide these companies with less dilutive capital, enhancing their shareholder value over the long term. The venture loans that we provide are a standard tool in the toolbox of the investors and the management teams of the companies that we finance.We've been at this for quite awhile. The team here at Horizon has actually been together for more than 20 years, and so we have a long track record of providing financing solutions in the form of venture debt. I'm the CFO of the company and have served in this capacity since its founding in 2008.
TWST: Please tell us about the Horizon Technology portfolio and its unique components. How has the portfolio emphasis changed over the past 12 months?
Mr. Mathieu: The real focus at Horizon is to provide important growth capital to a broad range of companies that are in the various stages of development. They can include early-stage, expansion-stage or later-stage companies. These companies are focused on new technologies in the market. We look at our product, which is either first- or second-lien, senior-secured term loans, and in some cases, revolving loans, to help them extend their runway along their development curve. A lot of times we'll provide financing after the A round, up through and including companies that are public. Our existing portfolio is actually a strong source of repeat business for us.We also have solid relationships with members of the venture capital community, which often leads to referrals for new transactions. The kind of companies that we provide financing to are those that you haven't heard of yet. They are the young Google or Amazon - two companies that we have financed in the past. But for a lot of the companies that we finance, you may not even recognize them in the future because they will have been acquired by larger companies, like Cisco, IBM, Johnson & Johnson, Pfizer or Shire, for example, before they become household names themselves.
TWST: What distinguishes Horizon's model from those of others?
Mr. Mathieu: We look at ourselves a little bit differently as a BDC. A lot of the BDCs in the market are focused on middle-market companies. These are companies that have revenue and/or positive EBITDA. We focus on a different part of the market - companies that are venture capital and private equity backed.It's a much different playing field for venture lenders than middle-market BDCs. We don't do highly syndicated transactions. We are a direct originator, so all of the companies that we've invested in, we know the management team, we know their investors, we talk to these companies on regular basis as a direct origination shop. A lot of the companies that we finance are ramping their revenue and are really looking to grow their business as pre-middle-market companies.
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
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