PALO ALTO, Calif.--(BUSINESS WIRE)--
Capital, Inc. (NYSE: HTGC) ("Hercules" or the "Company"), today
announced that it has filed preliminary proxy materials with the
Securities and Exchange Commission for a special meeting of shareholders
to seek approval for a proposed advisory agreement with Hamilton
Advisers LLC ("Hamilton"). Hamilton has been organized by Manuel A.
Henriquez, Hercules' Chairman, Chief Executive Officer, President and
co-founder to act as the external adviser of Hercules.
"We intend for all of our existing management and personnel of Hercules
to join Hamilton, so shareholders of Hercules will continue to be served
by the same team that has made Hercules the leading provider of
specialty finance to venture growth, pre-IPO and M&A stage companies,"
said Mr. Henriquez. "Because of the continuity of our team, we do not
expect Hercules' distribution rate or investment performance to be
adversely impacted by externalization."
Henriquez added, "We believe that in addition to providing continuity of
investment management, transforming Hercules into an externally managed
fund will provide important strategic advantages to Hercules and we have
structured the proposed external advisory relationship with Hamilton to
align the interests of the Hercules shareholders with those of the
advisor in a unique way. In addition to offering the opportunity for
future third party expenses to be spread over a broader universe of
investment vehicles, the proposed base management fee will decrease as
the size of Hercules increases. Importantly, the incentive fee is also
tiered so that the rate at which the advisor would be compensated begins
at less than the 20% commonly used and does not achieve that effective
level until Hercules' performance reaches an annual return of 22.5%. The
proposed fee structure is described in detail in the preliminary proxy
materials filed today."
Henriquez concluded, "We are seeking to pursue externalization for
strategic reasons. While internal management has served our shareholders
well in the past, we believe that the changing competitive environment
makes externalization important. It will enable us to offer a greater
variety of solutions to financial sponsors to the benefit of Hercules."
If the advisory agreement is approved by shareholders at the special
meeting on June 29, 2017, Hercules will become externally managed—the
form of management structure used by substantially all business
development companies and registered investment companies. Hercules'
Board of Directors, including its independent directors, approved the
advisory agreement with Hamilton and recommended that shareholders
approve it for a number of reasons, including:
Hercules' external adviser, Hamilton, will have the ability to broaden
the size and categories of assets under its future management, which
would make its family of investment vehicles a more attractive
destination for sponsors seeking a variety of financial solutions,
potentially increasing the number of transactions available to
if it expands its assets under management, Hamilton will be able to
increase the breadth and depth of its investment management team,
making these increased resources available to Hercules at no
Hamilton will be able to be more flexible in its compensation
structure than Hercules because of regulatory restrictions applicable
to internally managed business development companies—so Hamilton can
be better armed to attract and retain talent to the benefit of
if Hamilton is successful in expanding its family of investment
vehicles and its assets under management, the portion of expenses
borne by Hercules will decline, although, initially, there is likely
to be a modest increase in these expenses;
Hercules and Hamilton have agreed on an incentive fee structure
intended to better align their interests than the flat base and flat
incentive fee structure typical of business development companies;
the ability for Hercules to maintain a more diversified portfolio of
non-eligible portfolio company assets and reduce concentration risk;
the fact that all of these potential advantages could be attained
without losing the benefits that shareholders have realized under
Hercules' current management team.
This communication may be deemed solicitation material in respect of
the proposals set forth in the Company's preliminary proxy statement on
Schedule 14A, which was filed with the Securities and Exchange
Commission ("SEC") on May 3, 2017 (the "transactions"). In
connection with the transactions, the Company has filed, and intends to
file, relevant materials with the SEC. Promptly after filing its
definitive proxy statement with the SEC, the Company will mail the
definitive proxy statement and a proxy card to each stockholder entitled
to vote at the stockholder meeting relating to such matters. STOCKHOLDERS
OF THE COMPANY ARE URGED TO READ THESE MATERIALS (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO), AND ANY OTHER RELEVANT DOCUMENTS
THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE,
BECAUSE THESE MATERIALS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
COMPANY AND THE MATTERS DESCRIBED IN THIS REPORT. The preliminary proxy
statement, the definitive proxy statement and other relevant materials
(when they become available), and any other documents filed by the
Company with the SEC, may be obtained free of charge at the SEC's
at the Company's website (http://www.htgc.com),
or by writing to Hercules Capital, Inc. c/o Melanie Grace, Secretary,
400 Hamilton Avenue, Suite 310, Palo Alto, California 94301 (telephone
The Company and its directors and officers may be deemed to be
participants in the solicitation of proxies from the Company's
stockholders with respect to the transactions. Information about the
Company's directors and officers, as well as the identity of other
potential participants, and their respective direct or indirect
interests in such matters, by security holdings or otherwise, are set
forth in the preliminary proxy statement and will be set forth in the
other materials to be filed with SEC.
About Hercules Capital, Inc.
Hercules Capital, Inc. (NYSE: HTGC) ("Hercules") is the leading and
largest specialty finance company focused on providing senior secured
venture growth loans to high-growth, innovative venture capital-backed
companies in a broad variety of technology, life sciences and
sustainable and renewable technology industries. Since inception
(December 2003), Hercules has committed more than $6.7 billion to over
375 companies and is the lender of choice for entrepreneurs and venture
capital firms seeking growth capital financing. Companies interested in
learning more about financing opportunities should contact email@example.com,
or call 650.289.3060.
Hercules' common stock trades on the New York Stock Exchange under the
ticker symbol "HTGC." In addition, Hercules has one outstanding bond
issuance of 6.25% Unsecured Notes due July 2024 (NYSE: HTGX).
This press release may contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. You
should understand that under Section 27A(b)(2)(B) of the Securities Act
of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange
Act of 1934, as amended, or the Exchange Act, the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995 do
not apply to forward-looking statements made in periodic reports we file
under the Exchange Act.
The information disclosed in this press release is made as of the date
hereof and reflects Hercules most current assessment of its historical
financial performance. Actual financial results filed with the SEC may
differ from those contained herein due to timing delays between the date
of this release and confirmation of final audit results. These
forward-looking statements are not guarantees 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, without limitation, the risks, uncertainties,
including the uncertainties surrounding the current market volatility,
and other factors the Company identifies from time to time in its
filings with the SEC. Although Hercules believes that the assumptions on
which these forward-looking statements are based are reasonable, any of
those assumptions could prove to be inaccurate and, as a result, the
forward-looking statements based on those assumptions also could be
incorrect. You should not place undue reliance on these forward-looking
statements. The forward-looking statements contained in this release are
made as of the date hereof, and Hercules assumes no obligation to update
the forward-looking statements for subsequent events.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170503006716/en/
Hercules Capital, Inc.
Michael Hara, 650-433-5578 HT-HN
Relations and Corporate Communications
Source: Hercules Capital, Inc.
News Provided by Acquire Media