Now, prepayment activity actually got cut in half this quarter from about $300 million to about $150 million. And so it was interesting that, that correlation didn’t stand. I’m not sure if historically that’s been a good correlation or not, but I naturally would have thought that would have occurred. So why didn’t that happen? And are those things normally correlated or not?
Seth Meyer: Sure. Thanks Ryan. I’ll take the second part first. So there actually is not typically correlation between those two items for us. The vast majority of our prepayments historically come from either M&A exits or traditional re-financings when the companies are able to secure cheaper, more bank like facilities. Very rarely will one of our portfolio companies go out and raise an equity round and then use the proceeds to retire the debt. And so there historically has not been correlation. So I really wouldn’t look into that too much. On the first point a couple of comments; number one, Q3 was our strongest quarter in terms of Portfolio Company fundraising in the last 18 months as I mentioned in the remarks. It was up slightly from Q2.
In Q2 we had 21 companies raise $1.9 billion. In Q3 we had 23 companies raise $2 billion. The biggest driver this quarter was actually continued outperformance on the life sciences side. We had several fairly large public biotech companies achieve very meaningful milestones during the quarter, and they used those milestones to go out and raise additional financing. It wasn’t just public biotech that drove that number. If you kind of think about it in terms of public versus private mix of the 23 companies that raised capital in the quarter, twelve were private, eleven were public. So a nice mix between public and private, but definitely some of the bigger ones that helped drive that $2 billion were on the public biotech life sciences side.
Ryan Lynch: Okay. That’s really helpful detail and background on that. That’s all for me today. I appreciate the time.
Seth Meyer: Thanks Ryan.
Operator: And thank you. [Operator Instructions] And our next question comes from Finian O’Shea with Wells Fargo. Your line is now open.
Finian O’Shea: Hey, everyone. Good afternoon, Scott, first high level question. I think at times not very often but opportunistically Hercules would invest in equity in the past and seeing how you feel that opportunity is today and what your appetite for it might be?
Scott Bluestein: Sure. Thanks, Finn. Right now we’re focused on credit. We’re focused on underwriting and allocating our capital to new investment opportunities that we think generate the best risk adjusted returns for our investors. And the vast majority of those opportunities we believe right now will come on the secured credit side. We have and we will continue to opportunistically invest in equity. Over the course of Q3, we did make a couple of equity investments in some of our portfolio companies by exercising the RTI, which gives us the right to invest in subsequent rounds of financing. We still think valuations have some room to go down further. And so we’re certainly not allocating any significant amount of capital to equity at the current time. And we’re going to remain focused on credit underwriting over the near term, yes.
Finian O’Shea: Awesome. Thank you. And just a, a follow up, are you able to remind us on the RIA, AUM and maybe what you targeted or hope or expect for 2024 fundraising?
Scott Bluestein: Sure. We continue to be very excited about the private platform that we have underneath the RIA. We do not disclose separate AUM numbers for the private funds, but we do disclose an aggregate number, which is a little bit over $4 billion in our press release. And that’s obviously inclusive of the public and private fund business. You can back into the private fund business AUM by just subtracting what the AUM is in the public BDC from a growth perspective. Right now we still have significant liquidity in the private funds to put to work. We’re very excited about the investment opportunities that we think will be in front of us over the next several quarters. And fundraising for next year is, TBD in terms of when we’ll go back to market, but we continue to believe that private fund business will be a key driver of returns for our public company investors.
