Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SuRo Capital Corp has actively deployed more capital in the last four months than in any period over the last two years, indicating strong investment activity.
- The company has made significant new investments, including $10 million in Canada and $15 million in CoreWeave, expanding its portfolio into promising sectors like AI infrastructure and productivity software.
- SuRo Capital Corp's top five positions as of the end of the quarter accounted for approximately 51% of the investment portfolio at fair value, suggesting a strong concentration in high-value investments.
- The company has a robust cash position, with $80.4 million in cash and short-term U.S. treasuries available for investment, representing 31% of their gross assets.
- SuRo Capital Corp has successfully exited several investments, including fully liquidating its position in Astora and reducing holdings in Public School, which aligns with its strategy to monetize investments post-lockup period.
Negative Points
- The company experienced a decrease in net asset value (NAV) per share from $7.99 at the end of 2023 to $7.17 at the end of Q1 2024, indicating a potential decline in the value of some investments.
- There was a reported unrealized depreciation of portfolio investments during the quarter, contributing to the decrease in NAV.
- SuRo Capital Corp's investment in AI infrastructure, while promising, also presents high risks associated with the rapidly evolving technology and market.
- The concentration of 51% of the investment portfolio in the top five positions could pose a risk if any of these investments fail to perform as expected.
- Despite active investment, the overall market volatility and potential economic downturns could negatively impact the company's portfolio performance.
Q & A Highlights
Q: Can you provide an overview of SuRo Capital's investment activity in the first quarter of 2024?
A: Allison Green, CFO: In the first quarter, we made a $10 million investment in Liquid Debt Series One Preferred Shares. We also sold our remaining public common shares in Nextdoor and continued to monetize our warrants in Public Square, resulting in a realized gain of approximately $60,000.
Q: What were the key financial results for SuRo Capital in the first quarter of 2024?
A: Allison Green, CFO: We ended the quarter with a net asset value (NAV) per share of $7.17. The decrease in NAV from $7.99 at year-end 2023 to $7.17 was primarily due to unrealized depreciation of our portfolio investments, net investment loss, and net realized losses on RMBS.
Q: How has SuRo Capital managed its cash and liquidity as of the end of the first quarter?
A: Allison Green, CFO: As of March 31, 2024, we had approximately $84.6 million of liquid assets, including $50.8 million in cash, $29.6 million in short-term US Treasuries, and about $4.1 million in unrestricted public securities.
Q: Can you discuss any significant new investments made by SuRo Capital subsequent to the first quarter?
A: Mark Klein, CEO: Post-quarter, we completed significant investments including $10 million in Camden Common Shares and a $15 million investment in CDW Opportunity SPV for CoreWeave's preferred shares.
Q: What is the strategic focus of SuRo Capital's investment portfolio, particularly in relation to AI and technology?
A: Mark Klein, CEO: Our investment strategy is deliberately focused on AI infrastructure and high-growth technology companies. Recent investments in CoreWeave and the business combination involving Alsea Acquisition Corp highlight our commitment to the 'picks and shovels' of the AI universe.
Q: What measures is SuRo Capital taking to enhance shareholder value?
A: Mark Klein, CEO: We are actively managing our public and private investment portfolios and have implemented a modified Dutch auction tender offer to repurchase shares. This is part of our broader strategy to manage our stock's trading discount relative to net asset value and enhance shareholder returns.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
