Quarterly report [Sections 13 or 15(d)]

Investments (Tables)

v3.25.3
Investments (Tables)
 9 Months Ended
Sep. 30, 2025
Schedule of Investments [Abstract]  
Schedule of Investments in and Advances to Affiliates
The following table summarizes the Company’s realized gains and losses and changes in unrealized appreciation and depreciation on control and affiliate investments for the three and nine months ended September 30, 2025 and 2024.
(in thousands) Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025
Portfolio Company(1)
Type Fair Value as of September 30, 2025 Interest & Dividend Income Fee Income Net Change in Unrealized Appreciation (Depreciation) Realized Gain (Loss) Interest & Dividend Income Fee Income Net Change in Unrealized Appreciation (Depreciation) Realized Gain (Loss)
Control Investments
Coronado Aesthetics, LLC Control $ 344  $ —  $ —  $ 31  $ —  $ —  $ —  $ 275  $ — 
Gibraltar Acquisition LLC(2)
Control 60,193  1,123  44  (118) —  3,786  124  386  — 
Hercules Adviser LLC(3)
Control 43,510  2,100  —  (712) —  6,100  —  1,320  — 
Tectura Corporation Control 8,276  174  —  (1,742) —  516  —  (3,381) — 
Total Control Investments $ 112,323  $ 3,397  $ 44  $ (2,541) $ —  $ 10,402  $ 124  $ (1,400) $ — 
(in thousands) Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024
Portfolio Company(1)
Type Fair Value as of September 30, 2024 Interest & Dividend Income Fee Income Net Change in Unrealized Appreciation (Depreciation) Realized Gain (Loss) Interest & Dividend Income Fee Income Net Change in Unrealized Appreciation (Depreciation) Realized Gain (Loss)
Control Investments
Coronado Aesthetics, LLC Control $ 319  $ —  $ —  $ 133  $ —  $ —  $ —  $ 57  $ — 
Gibraltar Acquisition, LLC(2)
Control 57,302  1,359  36  (74) —  3,926  108  (6,365) — 
Hercules Adviser LLC(3)
Control 43,433  1,954  —  705  —  5,457  —  2,720  — 
Tectura Corporation Control 12,043  174  —  509  —  518  —  526  — 
Total Control Investments $ 113,097  $ 3,487  $ 36  $ 1,273  $ —  $ 9,901  $ 108  $ (3,062) $ — 
(1)In accordance with Rules 3-09, 4-08(g), and Rule 10-01(b)(1) of Regulation S-X, (“Rule 3-09”, “Rule 4-08(g)”, and “Rule 10-01(b)(1)”, respectively), the Company must determine if its unconsolidated subsidiaries are considered “significant subsidiaries”. As of September 30, 2025 and September 30, 2024, there were no unconsolidated subsidiaries that are considered “significant subsidiaries”.
(2)Gibraltar Acquisition LLC is a wholly-owned subsidiary, which is the holding company for their wholly-owned affiliated portfolio companies, Gibraltar Business Capital, LLC and Gibraltar Equipment Finance, LLC. The subsidiary has no significant assets or liabilities, other than their equity and debt investments and equity interest in Gibraltar Business Capital, LLC and Gibraltar Equipment Finance, LLC, respectively.
(3)Hercules Adviser LLC is owned by Hercules Capital Management LLC and presented with Hercules Partner Holdings, LLC which are both wholly owned by the Company. Please refer to “Note 1 - Description of Business” for additional disclosure.
Schedule of Investments Portfolio
The following table shows the fair value of the Company’s portfolio of investments by asset class as of September 30, 2025 and December 31, 2024:
(in thousands) September 30, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
Senior Secured Debt $ 4,027,409  93.5 % $ 3,419,044  93.4 %
Unsecured Debt 68,149  1.6 % 75,557  2.1 %
Preferred Stock 51,822  1.2 % 53,802  1.5 %
Common Stock 111,460  2.6 % 74,855  2.0 %
Warrants 40,675  0.9 % 30,500  0.8 %
Investment Funds & Vehicles 6,639  0.2 % 6,220  0.2 %
Total $ 4,306,154  100.0 % $ 3,659,978  100.0 %
A summary of the Company’s investment portfolio, at value, by geographic location as of September 30, 2025 and December 31, 2024 is shown as follows:
(in thousands) September 30, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
United States $ 3,892,061  90.4 % $ 3,288,737  89.9 %
Netherlands 118,026  2.8 % 59,157  1.6 %
United Kingdom 117,032  2.7 % 142,183  3.9 %
Israel 61,553  1.4 % 88,066  2.4 %
Germany 50,419  1.2 % 49,255  1.3 %
Switzerland 34,078  0.8 % —  0.0 %
Canada 16,659  0.4 % 16,251  0.4 %
Denmark 9,536  0.2 % 9,284  0.3 %
Ireland 4,716  0.1 % 4,649  0.1 %
Singapore 1,711  0.0 % 1,996  0.1 %
Other 363  0.0 % 400  0.0 %
Total $ 4,306,154  100.0 % $ 3,659,978  100.0  %
The following table shows the fair value of the Company’s portfolio by industry sector as of September 30, 2025 and December 31, 2024:
(in thousands) September 30, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Software $ 1,519,464  35.3 % $ 1,081,100  29.5 %
Drug Discovery & Development 988,816  23.0 % 1,080,390  29.5 %
Healthcare Services, Other 833,492  19.3 % 610,184  16.7 %
Consumer & Business Services 433,323  10.1 % 372,641  10.2 %
Defense Technologies 140,622  3.3 % —  0.0 %
Diversified Financial Services 104,221  2.4 % 113,491  3.1 %
Medical Devices & Equipment 76,389  1.8 % 74,962  2.0 %
Electronics & Computer Hardware 51,080  1.2 % 162,888  4.5 %
Space Technologies 34,019  0.8 % 45,700  1.2 %
Communications & Networking 27,535  0.6 % 27,700  0.8 %
Information Services 23,988  0.5 % 24,356  0.7 %
Biotechnology Tools 22,326  0.5 % 35,434  1.0 %
Sustainable and Renewable Technology 21,300  0.5 % 27,696  0.8 %
Manufacturing Technology 20,419  0.5 % 1,162  0.0 %
Consumer & Business Products 8,716  0.2 % 1,497  0.0 %
Semiconductors 339  0.0 % 704  0.0 %
Media/Content/Info 93  0.0 % 63  0.0 %
Drug Delivery 12  0.0 % 10  0.0 %
Total $ 4,306,154  100.0 % $ 3,659,978  100.0 %
The following table summarizes information related to our SBICs as of September 30, 2025 and December 31, 2024.
September 30, 2025 December 31, 2024
Description HC IV SBIC V HC IV SBIC V
Number of investments held 40 23 33 11 
Fair value of investments (in millions) $ 411.3 $ 272.5 $ 377.7 $ 155.6 
Percentage of fair value of investments based on the Company's total investment portfolio 9.6  % 6.3  % 10.3  % 4.3  %
Tangible assets (in millions) $ 416.3 $ 276.3 $ 382.9 $ 157.8 
Percentage of tangible assets based on the Company's total assets 9.4  % 6.3  % 10.0  % 4.1  %
Schedule of Investment Collateral The Company's investments were collateralized as follows as of September 30, 2025 and December 31, 2024:
Percentage of debt investments (at fair value), as of
September 30, 2025 December 31, 2024
Senior Secured First Lien
All assets including intellectual property 72.4  % 67.1  %
All assets with negative pledge on intellectual property 10.4  % 14.2  %
“Last-out” with security interest in all of the assets 7.6  % 9.7  %
Total senior secured first lien position 90.4  % 91.0  %
Second lien 7.9  % 6.8  %
Unsecured 1.7  % 2.2  %
Total debt investments at fair value 100.0  % 100.0  %
Summary of Fair Value and Location of the Company's Derivative Instruments The following is a summary of the fair value and location of the Company’s derivative instruments in the Consolidated Statements of Assets and Liabilities held as of September 30, 2025 and December 31, 2024:
(in thousands) Fair Value
Derivative Instrument Statement Location September 30, 2025 December 31, 2024
Foreign currency forward contract Other assets $ 86  $ 538 
Total $ 86  $ 538 
Summary of Net Realized and Unrealized Gains and Losses
Net realized and unrealized gains and losses on derivative instruments recorded by the Company during the three and nine months ended September 30, 2025 and 2024 are in the following locations in the Consolidated Statements of Operations:
(in thousands)   Three Months Ended September 30, Nine Months Ended September 30,
Derivative Instrument Statement Location 2025 2024 2025 2024
Foreign currency forward contract Net realized gain (loss) - Non-control / Non-affiliate investments $ —  $ —  $ (1,551) $ (849)
Foreign currency forward contract Net change in unrealized appreciation (depreciation) - Non-control / Non-affiliate investments 593  (1,356) (452) (402)
  Total $ 593  $ (1,356) $ (2,003) $ (1,251)
Schedule of Investment Interest Income and Fee Income
The Company’s investment portfolio generates interest, fee, and dividend income. The composition of the Company’s interest income and fee income is as follows:
(in thousands) Three Months Ended September 30, Nine Months Ended September 30,
  2025 2024 2025 2024
Contractual interest income $ 97,533  $ 90,288  $ 280,771  $ 268,441 
Exit fee interest income 14,246  12,047  39,264  34,519 
PIK interest income 14,475  12,706  41,583  37,870 
Dividend income 2,100  2,100  6,600  5,800 
Other investment income(1)
2,803  1,909  8,082  5,728 
Total interest and dividend income $ 131,157  $ 119,050  $ 376,300  $ 352,358 
Recurring fee income $ 2,945  $ 2,423  $ 8,379  $ 7,081 
Fee income - expired commitments 454  413  1,486  1,790 
Accelerated fee income - early repayments 3,537  3,362  8,898  10,578 
Total fee income $ 6,936  $ 6,198  $ 18,763  $ 19,449 
(1)Other investment income includes OID interest income and interest recorded on other assets.
Schedule of Unamortized Capitalized Fee Income
As of September 30, 2025 and December 31, 2024, unamortized capitalized fee income was recorded as follows:
(in millions) September 30,
2025		 December 31,
2024
Offset against debt investment cost $ 41.6  $ 36.9 
Deferred obligation contingent on funding or other milestone 11.2  9.1 
Total Unamortized Fee Income $ 52.8  $ 46.0 
Schedule of Loan Exit Fees Receivable
As of September 30, 2025 and December 31, 2024, loan exit fees receivable were recorded as follows:
(in millions) September 30,
2025		 December 31,
2024
Included within debt investment cost $ 42.8  $ 39.2 
Deferred receivable related to expired commitments 3.6  3.0 
Total Exit Fees Receivable $ 46.4  $ 42.2