Q4 2023 Runway Growth Finance Corp Earnings Call
Participants
Quintin Abel; Assistant Vice President, Investor Relations; Runway Growth Finance Corp
Gregory Greifeld; Acting Chief Executive Officer; Runway Growth Finance Corp
Tom Raterman; Acting President, Chief Financial Officer, Chief Operating Officer, Treasurer & Secretary; Runway Growth Finance Corp
Finian O'Shea; Analyst; Wells Fargo Securities, LLC
Melissa Wedel; Analyst; JPMorgan
Bryce Rowe; Analyst; B. Riley Securities
Erik Zwick; Analyst; Hovde Group
Mickey Schleien; Analyst; Ladenburg Thalmann & Co. Inc.
Casey Alexander; Analyst; Compass Point Research & Trading LLC
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.
Quintin Abel
Thank you, operator, and good evening, everyone. And welcome to the runway growth finance conference call for the fourth quarter and fiscal year ended December 31st, 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, rather than Acting President and Chief Financial Officer and Chief Operating Officer rental 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 website at investors dot runway growth.com. We have arranged for a replay of the call at the runway growth finance webpage During this call I want to remind you that we may make forward-looking statements based on current expectations. The 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. Forward-looking statements contained on this call are made as of 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 website.
With that, I will turn the call over to Greg.
Gregory Greifeld
Thanks, Quintin, 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 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.
Turning to investment activity, 2023 was a transitional year as companies and sponsors adjusted to the new normal of higher interest rates, tighter covenants, lower valuations and generally lower amounts of both debt and equity capital. Our actionable pipeline remains strong, but few deals met our underwriting criteria as companies held unrealistic expectations, particularly in the first half of 2023. As a reminder, we aspire to help the best companies access non-dilutive capital to fuel growth. We are not a lender of last resort to help fix a troubled situation or give management teams one last chance to swing for the fences. We believe our operating results speak to our focus on preserving industry-leading credit quality while safeguarding our shareholders. I remain proud of the team's diligence in evaluating influx of deals we've been presented while remaining selective in the pursuit of only the highest quality late-stage companies who have demonstrated a clear path to sustainable profitability. To that end, we executed eight investments in new and existing portfolio companies in Q4, three of which were new positions for the BDC. Amid the dynamic market environment, our team remains focused on mitigating risk and supporting our existing portfolio companies in 2023, our strategy was to allow meaningful repayments to occur to reduce our leverage and increase our access to dry powder. Our low leverage ratio and ample dry powder gives us the ability to focus on opportunities that meet our high credit bar without having to worry about the terms and restrictions from R-LA.
To summarize, we maintained highly selective due diligence processes and credit selection criteria in Q4, positioning us to originate attractive investments in the year ahead. We will continue to prioritize credit quality and manage our balance sheet defensively. In addition, to investment activity.
I'd like to mention two other achievements. First, we increased liquidity for our shareholders through a secondary offering in the fourth quarter, which Tom will provide additional color on in a moment.
Second, subsequent to quarter end, we were pleased to announce our joint venture with Kadmon Capital Partners, a credit financing platform for the venture ecosystem that was established in 2023 by Apollo runway Capital One LLC is an equal partnership between runway and Canada with financing capacity of up to $200 million. The joint venture will focus on financing, private and sponsor-backed late and growth stage companies. We're thrilled to enter this partnership and look forward to updating you as appropriate in future quarters.
Turning now to a recap of the 2023 operating environment. 2023 was a dynamic year in which we experienced a US regional banking crisis and the collapse of Silicon Valley Bank, which significantly impacted the venture marketplace. This period of financial stress, coupled with high inflation led to cautious bank lending standards, prolonged higher for longer rates, fluctuating equity markets and declining valuations, all of which have contributed to a challenging environment for deal-making across all stages. During this time, we took decisive action to protect our high-quality portfolio of first lien loans through constant communication with management teams and the disciplined evaluation of our portfolio throughout the year. Further, as we sought to apply disciplined portfolio management and preserve credit quality, we began to see some green shoots in 2023. According to recent PitchBook data, U.S. late-stage venture equity deal value was approximately $80 billion for fiscal 2023, down from record levels in 2021 and 2022, but still above 2020 and the years preceding further U.S. late-stage venture equity represented 47% of total deal value and 29% of total deal count marking the strongest annual figures we've seen historically. This is a continuation of the dynamic we've observed in recent quarters, higher volumes of late stage deals, but at smaller values with borrowers seeking capital.
Against the backdrop of a challenging fundraising environment, we believe the opportunity for runway growth value proposition is clear. Companies are continuing to seek minimally dilutive capital to extend runway and supplement equity as that market remains challenged. And with this heightened demand in 2023, we raised the bar on our rigorous and selective investment criteria. We believe our borrowers are among the highest quality in the late-stage venture ecosystem. This is demonstrated by their ability to raise capital runway. Portfolio companies raised approximately $450 million in equity or other junior capital relative to our $1 billion loan portfolio. And we continue to deploy prudent underwriting standards that prioritize quality over quantity.
In sum, the market was turbulent in 2023. But our proactive strategy and distinctive portfolio architecture enabled us to deliver value to both our portfolio company management teams and shareholders. Tom will dive deeper into our financial performance. But I want to close with an overview of our outlook for 2024, which is consistent with previous quarters. Companies completed equity funding rounds in 2021 and 2022 at historically high valuations, which provided 24 to 36 months of runway. These companies will soon need to go to market to raise additional capital and we believe we are well positioned to take advantage of these opportunities. Increasingly, management teams turned to runway because we are more than just a lender. We offer strategic counsel, financial expertise and an operational network that we believe drives optimal results for our borrowers and shareholders. Our team continues to see a robust pipeline of opportunities despite the challenging market and deal activity our pipeline of qualified actionable deals grew relative to 2022. This demonstrates our increased discipline and tighter credit box in the first quarter of this year, which tends to be our slowest. Seasonally, we have issued multiple term sheets with new borrowers. 2024 is already off to a fast start between our newly formed joint venture with Kadmon and transaction activity. We look forward to sharing more in May. With that, I'll turn it over to Tom.
Tom Raterman
Thanks, Greg, and good evening, everyone. Reflecting on 2023, we are proud of runways performance amidst a challenging operating environment for our portfolio companies and fundraising environment across the venture landscape, we completed eight investments in the fourth quarter, representing 154.6 million in funded loans. Our weighted average portfolio risk rating increased to 2.39 in the fourth quarter from 2.24 in the third quarter of 2023 for portfolio companies moved from category to category three during the quarter. Our rating system is based on a scale of one to five where one represents the most favorable credit rating. Our portfolio continues to be concentrated in first-lien senior secured loans focused on the latest stage, highest quality companies in the venture debt market with 99% of our portfolio with a weighted average risk rating of three or better. We're focused on maintaining a high bar for evaluating investments. In line with previous quarters, we calculated the loan to value for loans that were in our portfolio at the end of the third quarter. In the current quarter, we found that our dollar weighted loan to value ratio slightly increased from 24.7% in Q3 to 27.8% in Q4. Our total investment portfolio had a fair value of approximately $1.03 billion, excluding treasury bills flat from $1.01 billion in the third quarter of 2023, but a decrease of 9% from $1.13 billion for the comparable prior year period. As of December 31st, 2023 runway had net assets of $547.1 million, decreasing from $570.5 million at the end of third quarter of 2023. Nab per share was $13.50 at the end of Q4 compared to $14.8 at the end of the third quarter of 2023. Included in our Q4 2023 investor presentation is a detailed map routes. The decline in ASP is primarily a result of an unrealized loss of $7.7 million on our CareCloud preferred stock holdings, which we are electing to hold as we see an opportunity for equity upside in the future as well as the realized loss of $17 million on our debt investment in pivot three, $6.4 million of which was reflected as an unrealized loss in our Q three 2023 financials. As a reminder, our loan portfolio is comprised of 100% floating rate assets. All loans are currently earning interest at or above agreed upon interest rate floors, which generally reflect the base rate plus the credit spreads set at the time of closing or signing the term sheets. In the fourth quarter, we received $63.4 million in principal repayments, a decrease from $126.8 million in the third quarter of 2023. This is driven primarily by our credit first approach to investing that prioritizes the highest quality late-stage companies, which are ideal candidates for refinancing or acquisitions in most markets. Bye elevated prepayments for the quarter and year are an indicator of the strength in our approach to underwriting health of the overall portfolio. We expect additional prepayment activity throughout 2024 with activity building more significantly in the second half of this year. Further prepayment activity provides runway with liquidity to deploy in a manner that is fully accretive. We generated total investment income of $39.2 million and net investment income of 18.3 million in the fourth quarter of 2023 compared to 43.8 million and 22 million in the third quarter 2023, our debt portfolio generated a dollar-weighted average annualized yield of 16.9% for the fourth quarter of 2023 as compared to 18.3% for the third quarter of 2023 and 15.5% for the comparable period last year. We attribute the spike in the yield in the third quarter of 2023 to an acceleration in prepayments.
Moving to our expenses for the fourth quarter, total operating expenses were $20.9 million, down 4% from $20.7 million for the third quarter of 2020 runway recorded a net unrealized loss on investments of $5.9 million in the fourth quarter compared to a net unrealized loss of $7.2 million in the third quarter of 2023. We also had a net realized loss of $17.2 million compared to no realized loss in the prior quarter. The fourth quarter unrealized loss on investments was predominantly due to the loss of $7.7 million resulting from decreases in the fair value of our preferred equity position in cash. We remain confident that our highly selective investment process and diligent monitoring of portfolio companies support our track record of maintaining low levels of nonaccruals, coupled with generally healthy credit performance as of December 31st, 2023, we had no loans on nonaccrual status. Subsequent to quarter end, we placed our loan to mingle healthcare on nonaccrual status, representing an outstanding principal balance of $4.3 million at a fair market value of $3.8 million. The loan comprised 0.37% of the total fair value of the investment portfolio, excluding treasury bills as of December 31st, 2020, sorry, in the fourth quarter of 2023, our leverage ratio and asset coverage were 0.95 and 2.05 times respectively, compared to 0.79 and 2.27 times at the end of third quarter of 2020. All investments in the fourth quarter were funded with leverage as part of our strategy to generate non-dilutive portfolio.
Turning to our liquidity. At December 31st, 2023, our total available liquidity was $281 million, including unrestricted cash and cash equivalents. And we had borrowing capacity of $278 million as compared to $312 million and 297 million, respectively.
On September 30th, 20, we were pleased with the completion of a secondary offering of approximately 3.7 million shares of common stock owned by Oaktree in November 2023. It's important to note that Oaktree has been a great partner to runway since 2016, and this is just part of the natural investment life cycle. Ultimately, we view this as a positive for the liquidity of our stock. And over the long term, we expect a larger public float to attract high-quality investors that understand the runway value proposition. At quarter end, we had unfunded loan commitments to portfolio companies of $201.5 million, the majority of which were subject to specific performance milestones. $42 million of these commitments are currently eligible to be funded. During the quarter, we experienced two prepayments totaling $63.4 million and scheduled amortization of $0.3 million for the prepayments included a full principal repayment of our senior secured term loan to Bureau biotech for $40 million and a partial principal repayment of our senior secured term loan to Bravo for $23.4 million.
Yes.
As mentioned on our third quarter earnings call, our Board of Directors approved a stock repurchase program, giving us the ability to acquire up to 25 million of run runways common stock. To date, the Company has not repurchased any shares under the stock repurchase program, which expires on November first, 2024 separately during Q4 through its long-term incentive plan management, the external adviser purchased 39,473 shares of the company.
Finally, on February first, 2024, our Board declared a regular distribution for the first quarter of $0.4 per share as well as a supplemental dividend of $0.07 per share payable with the regular debits Looking ahead, we expect the venture market to remain challenged as ongoing uncertainty surrounding fiscal policy weighs on the US economic trajectory. While the macro environment will continue to impact our portfolio companies. We remain focused on delivering superior credit performance and preserving capital to maximize risk-adjusted returns for our share.
With that, operator, please open the line for questions.
Question and Answer Session
Operator
(Operator Instructions) Finian O'Shea, Wells Fargo.
Finian O'Shea
Hey, everyone. Good afternoon. Just a question on sort of a higher level on the investment style and nonaccruals. So you've always described this strategy as growth that you're lending to more more so profitable companies that are transitioning or pivoting into something, but which makes them unprofitable, but that there's a core business with franchise value that mostly covers you. So in the sort of cases that are going wrong, can you touch on, is it more related to the new venture or the core business and that sort of falls off from from your underwriting? Thank you.
Gregory Greifeld
Yes, this is Greg. Thanks for the question. And you know, specifically this quarter, we now have the one name on nonaccrual Mingo health, as Tom spoke about on the call. That is a position that has been in our portfolio for quite some time. It is a smaller portfolio to a smaller company, which was in line with our strategy as we were originally building the book and this one has had some bumps along the road, as you can imagine, not only in terms of regulatory headwinds dealing with COVID, but also some just operational issues. We do believe that there is material value here in excess of what we are owed. The situation is very fluid right now, but we are working with them to make sure that we get the right, security and this company for it for them to maximize the value.
Finian O'Shea
Okay. Thank you. Very helpful. And then also on your we're seeing a lot of them view broadly on Challenger ventures, this, can you talk about the?
Yes. The sort of high-level backdrop is there is there sort of a headwind on VC fundraising? Looks we are finally working its way through and step in impacting companies that way or just more of what we're seeing here is more one of the lower or the OC products?
Gregory Greifeld
Yes, I think there definitely are overall segment headwinds in terms of funds having less dry powder than they might have anticipated, having to take longer to raise that next fund than they may have anticipated. And as we said in our prepared remarks, 2023 really was a transitional year as the funds and the companies realize that new normal have less plentiful and smaller dollar amounts available for them, which has led to a lot of internal work and making sure that our cost structures have been changed to meet the new normal in terms of actual available to liquidity as well as making sure that they're engaging in R & D and other look-forward projects that they actually will have the ability to fund through to fruition. So in Long and short, there definitely are some market headwinds in terms of capital having been less available. However, on the whole, we think that that leads companies to be stronger, having to face this end, it ramped down their their burn, Austin for me.
Operator
Melissa Wedel, JPMorgan.
Melissa Wedel
Thanks for taking my questions today. And I wanted to start with pivot three in particular. I know this one has been on nonaccrual for a while or had been on nonaccrual for a while, but even on a quarter ago, I think you had said that market like 65% about that cost. Trying to understand how that So quickly on round up to a full write-down in the fourth quarter?
Gregory Greifeld
Yes. So I'm speaking specifically about that name. As we had mentioned, we are exploring an IP monetization strategy with them, which we believe still has viability, and we believe still has the chance for success. However, just looking at the timeframe and to potential additional capital required, we realize that we had less confidence in that capital being raised in the near term, we've been clear from the beginning that we're not in the business of funding risk capital for IP litigation. We're in the business of recovering capital. So just feedback around the timeframe, not the viability of that has led us to revisit the mark as we have transitioned through a credit bid away from the loan.
Melissa Wedel
Okay. And I also wanted to trying to reconcile some of the comments that you're making about expecting elevated prepayment activity, particularly in the back half of 24, but also noting that, you know, there were a lot of investments that weren't sort of meeting your thresholds to make it into the portfolio. Should we be thinking about 2024 as a flat to maybe deleveraging year for the portfolio?
Tom Raterman
Sure. So I think thanks for the question, Melissa. Nice to hear from you. As we think about the pattern and we look forward the pattern of prepayments and when we look forward, we have a sense as to what will come. The team for this year, really for us is sticking to our knitting, not changing the state standards, focusing on the portfolio that we have in place. There's obviously a significant number of deals in the pipeline that we could do. We always ask should we do them at. So I think in terms of the portfolio at it, we'd like it to be a flat, at least flat, if not slightly up. We'd like to see our leverage. We're over slightly over one by the end of the year, but we're not going to compromise our credit standards in this environment to get better.
Gregory Greifeld
Yes. The only thing I would add to that completely agree to add another ATM beyond sticking to our knitting, we really view the portfolio as a marathon, not a sprint. Our view is to end goal is to have liquidity and access to capital to make loans the best loans to the best companies as the market has the availability for it.
Melissa Wedel
Thank you.
Operator
Bryce Rowe, B. Riley.
Bryce Rowe
Thanks so much, and good afternoon. I wanted to maybe start around the unrealized depreciation in the quarter beyond what you saw from CareCloud?
I think, Greg, you mentioned maybe it was Tom, you mentioned four companies that went from an internal rating of two to three and assume that there might have been some fair value mark associated with that. Can you can you maybe talk about some of that being fair value mark process in the quarter again away from CareCloud and I guess the reversal of the unrealized depreciation that you already had on pivot?
Tom Raterman
Sure. Thanks, Bryce. That was by far the two largest components were CareCloud and pivot three, there was also a marked change in the equity portfolio. That was roughly a million dollars on our warrant position and in ARIA and the rest are we're really nothing significant, frankly, even in the names that went from two to three, I would say as a whole, we probably adjusted our discount rates up just a bit, which had that impact. But there was nothing that was really monumental or alarming. It was just kind of natural drift outside those three that we talked about adding the equity piece in area.
Bryce Rowe
Okay. That's helpful, Tom. And maybe maybe just a question or two around around the joint venture on the the can you talk about maybe the type of investment that will go into the joint venture, is it similar to what you would what you would put in your own portfolio? And then what type of kind of the equity, what do you expect now to, I guess, as a capital structure for that joint venture?
Tom Raterman
Sure. Well, first of all, we are delighted to have this joint venture with Cadmus at Cadmus is run by some Silicon Valley veterans who really know the ecosystem in the venture lending of market very well. And then, of course, being part of Apollo, the one of the world's largest wealth investment managers. That said, let's equate to quite significant in terms of the amount that we're putting in initially were each putting in 35 million in equity. And then we've arranged financing to take it up potentially to 200,000 or even more. So that's the initial cap structure that we're thinking about.
In terms of the focus, it's really largely what we're doing. We view this as an opportunity, particularly in a situation where how we we can't won't go to the equity markets is an opportunity to continue for us to stay in the market with those late stage companies where the deals tend to be larger, diversify the portfolio through that JV through our interest in the JV and and added new earnings stream Craig and Tom, in terms of kind of helping us think about how that could ramp means, can we use like like you said you all will typically underwrite maybe larger deals some dollar dollar value deals and so theoretically wouldn't take, but a few to really ramp that same argument. Am I thinking about that the right way to some extent, I think our view is also to build diversification and camera's view to is to build diversification within the JV. So I think you should think at a think of it as an equity ramp through the balance of this year. We don't intend to sell any loans from our book into that joint venture at this point. And again, I don't think that's going to change. So I would view it as a steady ramp through the year, but keeping diversification in that JV relative to the size as it grows.
Bryce Rowe
Okay. That's great. Appreciate the answers.
Tom Raterman
Sure thing.
Operator
(Operator Instructions) Erik Zwick, Hovde Group.
Erik Zwick
Good afternoon. Maybe to start with a follow-up on kind of Brian's question on the JV. Just curious if the partnership with Pat, you mentioned the kind of relationship with Apollo as well. Does that broaden the kind of sourcing funnel? Are there any benefits from that partnership as well.
Gregory Greifeld
It's certainly a strategic partnership for us, and we'd expect to see many benefits beyond just one of expanding sources of capital.
Erik Zwick
Thanks. And then just with regard to the current pipeline. Can you provide any color in terms of the mix as it kind of pertains to new investments versus add-ons and new? Are there any particular industries that you're seeing are more active today in the pipeline?
Gregory Greifeld
Yes, I'd say the pipeline is definitely weighted more towards new investments. We always are mining the portfolio to see opportunities to give more money to the best companies outside of our already scheduled at delayed draws.
In terms of sector, I think we're seeing a lot of opportunity across the gamut of the three legs of our investing universe of technology, life sciences as well as consumer and expect the split to remain consistent throughout this year.
Erik Zwick
Thanks, Greg. And last one for me. Just curious about your appetite to use the repurchase authorization, what kind of in 24 at all?
Gregory Greifeld
I think that's really a function of where the stock trades. I mean there are two ways to return capital to shareholders. One is to build the build the book and continue to grow the dividend and the other is to repurchase shares. You know, ultimately, we'd like to get to the point where we can kind of raise equity. So if we get trading at closer to 2.5 or at some point, hopefully above NAB here, I would expect to see usage of that under that program to be less significant.
Erik Zwick
Appreciate the thoughts on. Thanks for taking my questions.
Gregory Greifeld
I think thank you.
Operator
Mickey Schleien, Ladenburg.
Mickey Schleien
I guess good afternoon, everyone, and not to beat a dead horse, but I have a few more questions on the JV. First, Tom, could you repeat what you said was the debt to equity target for the JV?
Sure.
Tom Raterman
So and Mickey, thanks for disclosing that today. At the initially, it's going to be $70 million in equity, which will be comprised of 50 50%, so 35 million from each of us. And then that will grow to at least with that equity base up to 200 million, so another 130 million in debt.
Mickey Schleien
I understand. And Tom, what is your target return on invested capital on the JV.
Tom Raterman
And so the asset-level returns are really going to be the same as what we're looking at in the core portfolio, the variation very significantly. So you just apply the leverage. And we would think that we get a very similar return on equity, if not a little greater on that because I understand there's more leverage and I just wanted to confirm, Kevin was 100% owned by Apollo.
Was that right?
That's a question for Apollo, really.
So but deck you gave Cadmus is definitely part of Apollo and how does Oaktree feel about runway working with Apollo, given Oaktree and Apollo, obviously, your competitors and Oaktree's continues to be a very supportive partner, and they understand that we're going to do things too expand our footprint, our access to capital and they embrace it, obviously Oaktree's on our board and they were fully supportive of the program, and it's something that we've talked we've talked about and has had a fairly meaningful gestation period.
Mickey Schleien
I understand and the JV is not going to be competing with any other part of Apollo.
Tom Raterman
Correct. And that's our objective here.
Mickey Schleien
Okay. And how will you allocate deal flow between the BDC and the JV?
Tom Raterman
So our goal in the BDC is really to increase our diversification in the portfolio. There are certain limitations under our lending agreements that the where it drops out. So there's a series of limitations deals over a certain dollar amount. We lose that in our borrowing base, of course, for the KeyBank revolver, to the extent we hit concentrations and in various industries or maturities, things like that. But those The JV will pick those up first and allow us to maximize the availability under our revolver and effectively utilize our leverage there. So that that's really the the focus on the allocation is making sure that we're using our leverage effectively and using the assets effectively to gain leverage.
Mickey Schleien
I understand. And just lastly, last quarter, you gave us a little bit of an update on David's expectation for David's frankly, return to day-to-day involvement with the company. Anything you can say on that at this time?
Tom Raterman
Yes, really no change. We expect, David, to be back later this year. I know he's certainly appreciates all the well wishes he has received, and Greg and I speak with David quite quite frequently.
Mickey Schleien
Okay. Thanks for that. Those are all my questions.
Gregory Greifeld
Appreciate it.
Operator
(Operator Instructions) Casey Alexander, Compass.
Casey Alexander
Yes, sorry, I missed quite a bit of this call because I had another conference call that started at four 45. So I apologize for that. I do want to confirm that that if I read the release correctly in the fourth quarter, you did not repurchase any shares.
Gregory Greifeld
That's correct.
Casey Alexander
And I am curious why after the Oaktree offering in November when the stock was quite weak, how come you chose not to repurchase some shares in that window of wealth unit?
Gregory Greifeld
Casey, we looked at how the stock traded, we looked at the opportunities for us to deploy capital and the stock really moved back in our opinion, into a trading range where we felt it could stand on its own and decided to reserve that dry powder that either in the program itself or the dry powder from our balance sheet for a period where there was a greater need.
Casey Alexander
Okay. All right. Well, I'll get the rest of this from the transcript. I'm sorry, I got here late and I don't want to ask you to repeat anything that you've already said.
Tom Raterman
Casey, we're glad to have you.
Gregory Greifeld
Glad to have you, Casey.
Operator
Thank you. And at this time, there are no more questions in the queue. I would like to turn the call back over to Greg Greifeld for closing remarks. Please go ahead, sir.
Gregory Greifeld
Thank you, operator. We see immense opportunity for growth in the year ahead and believe we are well positioned to provide essential support for high-quality, late-stage companies that are faced with a variety of nuanced funding challenges.
Thank you all for joining us today. We look forward to updating you on our first-quarter 2024 financial results in May.
Operator
This concludes today's conference call. Thank you for participating. You may all disconnect.
