Bryce Rowe: Maybe just a question or two around the joint venture. Can you talk about maybe the type of investment that will go into the joint venture, is it similar to what you would put in your own portfolio? And then what type of kind of equity debt do you expect to, I guess, as a capital structure for that joint venture?
Tom Raterman: Well, first of all, I just want to say, we are delighted to have this joint venture with Cadma. Cadma is run by some Silicon Valley veterans who really know the ecosystem and the venture lending market very well. And then, of course, being part of Apollo, one of the world’s largest alt investment managers that’s quite significant. In terms of the amount that we’re putting in, initially, we’re each putting in $35 million in equity and then we’ve arranged financing to take it up potentially to $200 million or even more. So that’s the initial cap structure that we’re thinking about. And in terms of the focus, it’s really largely what we’re doing. We view this as an opportunity, particularly in a situation where we can’t, won’t go to the equity markets as 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 add a new earnings stream.
Bryce Rowe: And Tom, in terms of kind of helping us think about how that could ramp. I mean like you said, you all will typically underwrite maybe larger deals, dollar value deals. And so it theoretically wouldn’t take but a few to really ramp that thing off. Am I thinking about that the right way?
Tom Raterman: To some extent. I think our view is also to build diversification and Cadma’s view to is to build diversification within the JV. So I think you should 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 I don’t think that’s going to change. So I would view it as steady ramp through the year but keeping diversification in that JV relative to the size as it grows.
Operator: The next question is coming from Eric Zwick of Hovde Group.
Eric Zwick: Maybe to start with a follow-up on kind of Bryce’s question on the JV. Just curious if the partnership with Cadma, and you mentioned kind of relationship with Apollo as well. Does that broaden the kind of sourcing funnel at all or any benefits from that partnership as well?
Tom Raterman: It’s certainly a strategic partnership for us and we expect to see many benefits beyond just one of expanding sources of capital.
Eric Zwick: 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 are there any particular industries that you’re seeing are more active today in the pipeline?
Greg Greifeld: 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 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 technology, life sciences as well as consumer and expect the split to remain consistent throughout this year.
Eric Zwick: And last one from me, just curious about your appetite to use the repurchase authorization kind of in ’24 at all?
Tom Raterman: 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 book and continue to grow the dividend and the other is to repurchase shares. Ultimately, we’d like to get to the point where we can kind of raise equity. So if we get trading closer to NAV we’re — at some point, hopefully, above NAV here, I would expect to see usage under that program to be less significant.
Operator: Our next question will be coming from Mickey Schleien of Ladenberg.
Mickey Schleien: 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?
Tom Raterman: Initially, it’s going to be $70 million in equity, which will be comprised of 50%, so $35 million from each of us and then will grow to at least with that equity base up to $200 million, so another $130 million in debt.
Mickey Schleien: And Tom, what is your target return on invested capital on the JV?
Tom Raterman: So the asset level returns are really going to be the same as what we’re looking at in the core portfolio, they shouldn’t vary significantly, so you just apply the leverage. And we would think that we get very similar return on equity if not a little greater on that because there is more leverage.
Mickey Schleien: And I just want to confirm, Cadma is 100% owned by Apollo. Is that right?
Tom Raterman: That’s a question for Apollo really so, but Cadma is definitely part of Apollo.
Mickey Schleien: And how does Oaktree feel about Runway working with Apollo, given Oaktree and Apollo, obviously are competitors?
Tom Raterman: Oaktree continues to be a very supportive partner and they understand that we’re going to do things to expand our footprint, our access to capital and they embrace it. Obviously, Oaktree is on our Board, and they were fully supportive of the program. And it’s something that we’ve talked about and has had a fairly meaningful gestation period.
Mickey Schleien: And the JV is not going to be competing with any other part of Apollo. Is that correct?
Tom Raterman: That’s our objective, yes.
Mickey Schleien: And how will you allocate deal flow between the BDC and the JV?
