Horizon Technology Finance Corp (HTFC) Bundle
A Brief History of Horizon Technology Finance Corp
Horizon Technology Finance Corp was founded in 2010 and is based in Farmington, Connecticut. The company specializes in providing debt and equity financing to venture capital-backed companies in the technology, life sciences, and other innovation sectors. As of 2023, Horizon has established itself as a notable player in the business development company (BDC) space, focusing on high-growth industries.
In 2012, Horizon Technology Finance Corp completed its initial public offering (IPO), pricing its shares at $10.00. This marked its entry into the public markets, enabling it to raise significant capital to fund its investment activities.
By the end of 2019, Horizon Technology Finance Corp reported total assets of approximately $265 million, with a net asset value (NAV) of about $154 million. This growth reflects the company’s strategic investments and its ability to leverage its financial products effectively.
In 2020, amid the COVID-19 pandemic, Horizon Technology Finance Corp adapted its investment strategy, focusing on companies that demonstrated resilience and rapid growth despite economic challenges. The company continued to expand its portfolio, reporting $58 million in investment commitments during the second quarter of the year alone.
As of the fourth quarter of 2021, the company had a diversified investment portfolio, consisting of 64% in technology and 36% in life sciences. The total investment portfolio was valued at approximately $305 million.
| Year | Total Assets ($ Million) | Net Asset Value ($ Million) | Investment Commitments ($ Million) |
|---|---|---|---|
| 2019 | 265 | 154 | N/A |
| 2020 | N/A | N/A | 58 |
| 2021 | N/A | N/A | N/A |
| 2023 | N/A | N/A | N/A |
In 2022, Horizon declared a dividend of $0.10 per share on a quarterly basis, reflecting its commitment to returning value to shareholders. The company maintained a consistent dividend policy, underscoring its financial stability and profitability.
As of the end of 2023, Horizon Technology Finance Corp had a market capitalization of approximately $150 million. Its stock price fluctuates around $6.25 per share, with a price-to-earnings (P/E) ratio of approximately 12.5. The company's overall returns have remained competitive within the sector, with an annualized return on equity (ROE) of roughly 8.5%.
Looking ahead, Horizon aims to further diversify its investment portfolio while targeting high-growth sectors. The continued expansion and adaptation to market changes remain pivotal for its sustained success in the rapidly evolving landscape of technology financing.
A Who Owns Horizon Technology Finance Corp
As of the most recent data available in October 2023, Horizon Technology Finance Corp (NASDAQ: HRZN) operates primarily in the business development company (BDC) sector, focusing on providing debt financing to venture capital-backed companies in the technology, life sciences, and sustainable and renewable industries. Understanding the ownership structure of Horizon is key to grasping its market dynamics.
The major shareholders consist of institutional investors, individual stakeholders, and company insiders. According to recent filings, the top institutional holders include:
| Institution | Shares Held | Percentage Ownership |
|---|---|---|
| Renaissance Technologies LLC | 450,000 | 8.5% |
| BlackRock Inc. | 320,000 | 6.0% |
| Invesco Ltd. | 290,000 | 5.5% |
| Wellington Management Group LLP | 250,000 | 4.7% |
| John Hancock Investment Management | 200,000 | 3.8% |
Additionally, insider ownership plays a significant role in corporate governance at Horizon Technology Finance Corp. The company's leadership, including executive officers and board members, holds a notable percentage of shares:
| Name | Position | Shares Held | Percentage Ownership |
|---|---|---|---|
| Robert K. Pomeroy, Jr. | President & CEO | 150,000 | 2.8% |
| Michael J. B. Brown | Chief Financial Officer | 100,000 | 1.9% |
| Mary Ann T. Hennessey | Chairman | 80,000 | 1.5% |
| James N. K. Towey | Board Member | 70,000 | 1.3% |
As of the latest reports, Horizon Technology Finance Corp has a market capitalization of approximately $180 million and a total asset value nearing $410 million. This combination of institutional and insider ownership reflects a diversified investment strategy and aligns management incentives with shareholder interests.
In terms of performance, the stock has shown a year-to-date return of 12%, outperforming the average return in the BDC sector, which has been around 8% for the same period. The company's dividend yield stands at 9.6%, which is considered attractive in the current investment landscape.
Overall, the ownership structure of Horizon Technology Finance Corp is indicative of significant institutional interest combined with active management participation, which may enhance its strategic direction and overall market performance.
Horizon Technology Finance Corp Mission Statement
Horizon Technology Finance Corp (NASDAQ: HRZN) focuses on providing capital to emerging growth companies in the technology, life sciences, and other innovation sectors. The company’s mission is to deliver flexible financing solutions that enable these businesses to grow and succeed. Through a combination of debt and equity investments, Horizon supports innovation while seeking attractive risk-adjusted returns for its shareholders.
As of September 30, 2023, Horizon reported a total investment portfolio of approximately $408 million, focusing on a diversified range of technology-enabled enterprises. The company's investment strategy is centered around providing secured debt financing, primarily in the form of loans, which allows it to manage risk while achieving competitive yields.
Horizon aims to maintain a conservative dividend payout while ensuring growth through strategic investments. As of Q3 2023, the company achieved a net investment income (NII) of $9.9 million, translating to a per-share NII of $0.37. This reflects a year-over-year increase of 15% compared to the same quarter in the previous year.
In terms of risk management, Horizon employs a rigorous due diligence process, assessing potential investments' cash flow generation capabilities and capital structure. The company has a diversified portfolio composed of over 50 portfolio companies, with no single investment exceeding 10% of the total portfolio value as of the latest reporting period.
| Metric | Q3 2023 | Q3 2022 | Year-over-Year Change |
|---|---|---|---|
| Total Investment Portfolio | $408 million | $364 million | 12.1% |
| Net Investment Income | $9.9 million | $8.6 million | 15.1% |
| NII per Share | $0.37 | $0.32 | 15.6% |
| Dividends Declared | $0.10 per share | $0.09 per share | 11.1% |
| Number of Portfolio Companies | 50+ | 45+ | 11.1% |
The company's focus on emerging sectors like technology and life sciences is supported by significant market trends. The global venture capital investment in technology startups reached over $300 billion in 2022, indicating robust growth potential. Horizon's strategy aligns with this trend, positioning them to capitalize on the increasing demand for innovative solutions.
Moreover, as a Business Development Company (BDC), Horizon is obligated to distribute at least 90% of its taxable income as dividends, a mandate that reinforces its commitment to returning value to shareholders while cultivating a sustainable growth trajectory.
As of the latest financial disclosures, Horizon maintains a strong balance sheet with total assets of approximately $440 million and a debt-to-equity ratio of 0.67, reflecting prudent leverage and financial stability.
Horizon Technology Finance Corp's mission encapsulates not only a commitment to financing innovation but also a disciplined approach to investment management aimed at generating sustainable returns for its investors. This mission is underpinned by substantial financial data, showcasing its ongoing strength in a competitive market.
How Horizon Technology Finance Corp Works
Horizon Technology Finance Corp is a business development company (BDC) that focuses on providing financing solutions to venture capital-backed companies in the technology, life sciences, and other innovative sectors. Established in 2010, the company has diversified its investment portfolio and offers both debt and equity financing options.
The company primarily invests in secured debt, focusing on companies that are typically in the growth stage. As of the third quarter of 2023, Horizon had approximately $352 million in total assets. This reflects the company’s strategic approach to creating a robust portfolio that can withstand market fluctuations.
As per the financial report from Q2 2023, the company reported a net investment income of $5.1 million, translating to a net investment income per share of $0.43. The investment income supports its ability to pay dividends, which for July 2023 was $0.10 per share.
Horizon typically invests in companies that have solid revenue growth, an experienced management team, and significant venture backing. The target industries include:
- Technology
- Healthcare
- Life Sciences
- Fintech
In terms of capital structure, Horizon raises funds through a combination of public and private offerings. As of September 2023, the company’s leverage ratio was reported at approximately 1.01x, which is well within the limits for BDCs and allows for additional growth in its investment portfolio.
The following table illustrates some key financial metrics for Horizon Technology Finance Corp as of Q3 2023:
| Metric | Value |
|---|---|
| Total Assets | $352 million |
| Net Investment Income (Q2 2023) | $5.1 million |
| Net Investment Income per Share | $0.43 |
| Dividend per Share (July 2023) | $0.10 |
| Leverage Ratio | 1.01x |
| Investment Portfolio Size | $299 million |
Horizon employs a thorough due diligence process before entering deals, assessing not only the financial health of potential portfolio companies but also their market potential and competitive landscape. The firm's investment strategy leans heavily on securing preferred equity positions and convertible debt, allowing for an upside if the investment grows significantly.
As of mid-2023, Horizon's investment portfolio comprised various companies, with significant stakes in firms such as EverCommerce and Procore Technologies. The company's focus on venture-backed firms allows it to benefit from potential growth trajectories in emerging sectors.
Market trends show that venture capital investments in technology sectors remain robust, highlighting a strong outlook for Horizon's target market. For the first half of 2023, venture capital funding in the tech sector amounted to approximately $75 billion, underscoring the demand for the financing solutions Horizon provides.
Horizon Technology Finance Corp continues to leverage its alignment with venture capitalists to optimize its investment strategies. The firm’s positioning within high-growth sectors combined with its disciplined investment approach positions it well for future growth and stability.
How Horizon Technology Finance Corp Makes Money
Horizon Technology Finance Corporation primarily generates revenue through its investment activities, specifically in the technology, life sciences, and other innovation-based sectors. The company operates primarily as a business development company (BDC), focusing on providing secured loans and debt financing. As of the third quarter of 2023, Horizon has a portfolio valued at approximately $440 million, which includes investments in various growth-stage companies.
In Q3 2023, Horizon reported total investment income of $16.2 million, which represented a 12% increase from the prior quarter. A significant portion of their income comes from interest payments on loans held in their investment portfolio, which accounted for about 90% of total revenue.
| Financial Metric | Q3 2023 Value | Q2 2023 Value | Year-over-Year Change |
|---|---|---|---|
| Total Investment Income | $16.2 million | $14.5 million | +12% |
| Net Investment Income | $9.8 million | $8.5 million | +15% |
| Earnings Per Share (EPS) | $0.41 | $0.35 | +17% |
| Portfolio Value | $440 million | $400 million | +10% |
| Dividends Paid | $0.30 per share | $0.28 per share | +7% |
The company also derives revenue from its equity investments, which, while less consistent, can contribute to capital gains. In the third quarter, Horizon generated an additional $2 million from exit transactions related to these equity investments. The ability to identify and invest in high-growth potential companies ensures that Horizon remains competitive in the marketplace.
Horizon Technology Finance Corp maintains a conservative capital structure, with a debt-to-equity ratio of approximately 0.6 as of Q3 2023. This balance allows the company to leverage its capital while managing risk exposure effectively. The strategic focus on technology and life sciences sectors has led to a diversified portfolio, mitigating the risks associated with sector-specific downturns.
Furthermore, the company has established credit facilities up to $175 million with various financial institutions, enhancing its liquidity and ability to fund additional investments. In total, Horizon has committed to over $100 million in new investments in 2023, underscoring its active management approach in identifying lucrative opportunities.
Overall, Horizon Technology Finance Corp's revenue model, driven by secured loans, equity positions, and careful portfolio management, contributes significantly to its financial stability and growth potential within the evolving technology landscape.
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