Annual report [Section 13 and 15(d), not S-K Item 405]

Investments (Tables)

v3.25.4
Investments (Tables)
 12 Months Ended
Dec. 31, 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 years ended December 31, 2025, 2024, and 2023.
(in thousands) For the Year Ended December 31, 2025
Portfolio Company(1)
Type Fair Value as of
December 31, 2025		 Interest & Dividend Income Fee Income Net Change in Unrealized Appreciation (Depreciation) Realized Gain (Loss)
Control Investments
Coronado Aesthetics, LLC Control $ 218  $ —  $ —  $ 149  $ — 
Gibraltar Acquisition LLC(2)
Control 62,218  4,927  169  2,462  — 
Hercules Adviser LLC(3)
Control 43,274  8,200  —  1,084  — 
Tectura Corporation Control 9,341  690  —  (2,316) — 
Total Control Investments $ 115,051  $ 13,817  $ 169  $ 1,379  $ — 
(in thousands)     For the Year Ended December 31, 2024
Portfolio Company(1)
Type Fair Value as of
December 31, 2024		 Interest & Dividend Income Fee Income Net Change in Unrealized Appreciation (Depreciation) Realized Gain (Loss)
Control Investments
Coronado Aesthetics, LLC Control $ 69  $ —  $ —  $ (193) $ — 
Gibraltar Acquisition LLC(2)
Control 59,263  5,301  146  (4,983) — 
Hercules Adviser LLC(3)
Control 42,190  7,410  —  1,477  — 
Tectura Corporation Control 11,657  692  —  140  — 
Total Control Investments $ 113,179  $ 13,403  $ 146  $ (3,559) $ — 
(in thousands)     For the Year Ended December 31, 2023
Portfolio Company(1)
Type Fair Value as of
December 31, 2023		 Interest
Income		 Fee Income Net Change in Unrealized Appreciation (Depreciation) Realized Gain (Loss)
Control Investments
Coronado Aesthetics, LLC Control $ 262  $ —  $ —  $ (57) $ — 
Gibraltar Acquisition LLC(2)
Control 62,512  3,344  95  9,656  — 
Hercules Adviser LLC(3)
Control 40,713  608  —  9,560  — 
Tectura Corporation Control 11,517  690  —  3,475  — 
Total Control Investments $ 115,004  $ 4,642  $ 95  $ 22,634  $ — 
(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 December 31, 2025, December 31, 2024, and December 31, 2023, 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 December 31, 2025 and December 31, 2024:
(in thousands) December 31, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Senior Secured Debt $ 4,209,798  94.2 % $ 3,419,044  93.4 %
Unsecured Debt 69,614  1.6 % 75,557  2.1 %
Preferred Stock 52,735  1.2 % 53,802  1.5 %
Common Stock 86,275  1.9 % 74,855  2.0 %
Warrants 41,162  0.9 % 30,500  0.8 %
Investment Funds & Vehicles 7,063  0.2 % 6,220  0.2 %
Total $ 4,466,647  100.0 % $ 3,659,978  100.0 %
A summary of the Company’s investment portfolio, at value, by geographic location as of December 31, 2025 and December 31, 2024 is shown as follows:
(in thousands) December 31, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
United States $ 4,035,927  90.4 % $ 3,288,737  89.9 %
United Kingdom 118,031  2.7 % 142,183  3.9 %
Netherlands 117,344  2.6 % 59,157  1.6 %
Israel 67,280  1.5 % 88,066  2.4 %
Germany 50,386  1.1 % 49,255  1.3 %
Switzerland 35,504  0.8 % —  0.0 %
Sweden 18,244  0.4 % —  0.0 %
Canada 16,841  0.4 % 16,251  0.4 %
Ireland 4,729  0.1 % 4,649  0.1 %
Singapore 1,827  0.0 % 1,996  0.1 %
Denmark 169  0.0 % 9,284  0.3 %
Other 365  0.0 % 400  0.0 %
Total $ 4,466,647  100.0 % $ 3,659,978  100.0 %
The following table shows the fair value of the Company’s portfolio by industry sector as of December 31, 2025 and December 31, 2024:
(in thousands) December 31, 2025 December 31, 2024
  Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Application Software(1)
$ 1,087,954  24.3 % $ 790,180  21.6 %
Drug Discovery & Development 1,039,712  23.3 % 1,080,390  29.5 %
Healthcare Services, Other 838,508  18.8 % 610,184  16.7 %
System Software(1)
472,144  10.6 % 290,920  7.9 %
Consumer & Business Services 449,631  10.1 % 372,641  10.2 %
Defense Technologies 140,458  3.1 % —  0.0 %
Diversified Financial Services 105,896  2.4 % 113,491  3.1 %
Medical Devices & Equipment 77,257  1.7 % 74,962  2.0 %
Electronics & Computer Hardware 66,992  1.5 % 162,888  4.5 %
Space Technologies 47,816  1.1 % 45,700  1.2 %
Sustainable and Renewable Technology 35,759  0.8 % 27,696  0.8 %
Communications & Networking 26,263  0.6 % 27,700  0.8 %
Information Services 25,889  0.6 % 24,356  0.7 %
Biotechnology Tools 23,164  0.5 % 35,434  1.0 %
Manufacturing Technology 20,190  0.4 % 1,162  0.0 %
Consumer & Business Products 8,810  0.2 % 1,497  0.0 %
Semiconductors 158  0.0 % 704  0.0 %
Media/Content/Info 32  0.0 % 63  0.0 %
Drug Delivery 14  0.0 % 10  0.0 %
Total $ 4,466,647  100.0 % $ 3,659,978  100.0 %
(1)Effective December 31, 2025, the former “Software” category has been separated into “Application Software” and “System Software”. Prior year amounts have been reclassified to conform to the current presentation.
The following table summarizes information related to our SBICs as of December 31, 2025 and December 31, 2024.
December 31, 2025 December 31, 2024
Description HC IV SBIC V HC IV SBIC V
Number of investments held 39 28 33 11
Fair value of investments (in millions) $ 404.8 $ 277.6 $ 377.7 $ 155.6
Percentage of fair value of investments based on the Company's total investment portfolio 9.1  % 6.2  % 10.3  % 4.3  %
Tangible assets (in millions) $ 421.2 $ 283.1 $ 382.9 $ 157.8
Percentage of tangible assets based on the Company's total assets 9.2  % 6.2  % 10.0  % 4.1  %
Schedule of Investment Collateral The Company's investments were collateralized as follows as of December 31, 2025 and December 31, 2024:
Percentage of debt investments (at fair value), as of
December 31, 2025 December 31, 2024
Senior Secured First Lien
All assets including intellectual property 72.8 % 67.1 %
All assets with negative pledge on intellectual property 9.5 % 14.2 %
“Last-out” with security interest in all of the assets 7.0 % 9.7 %
Total senior secured first lien position 89.3 % 91.0 %
Second lien 9.1 % 6.8 %
Unsecured 1.6 % 2.2 %
Total debt investments at fair value 100.0 % 100.0 %
Schedule 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 December 31, 2025 and December 31, 2024:
(in thousands) Fair Value
Derivative Instrument Statement Location December 31, 2025 December 31, 2024
Foreign currency forward contract Other assets $ 50  $ 538 
Total $ 50  $ 538 
Schedule of Net Realized and Unrealized Gains and Losses
Net realized and unrealized gains and losses on derivative instruments recorded by the Company during the years ended December 31, 2025 and December 31, 2024 are in the following locations in the Consolidated Statements of Operations:
(in thousands) Year Ended December 31,
Derivative Instrument Statement Location 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 (489) 1,305 
Total $ (2,040) $ 456 
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) Year Ended December 31,
2025 2024 2023
Contractual interest income $ 381,711  $ 355,470  $ 351,883 
Exit fee interest income 50,991  44,448  45,747 
PIK interest income 55,923  51,270  24,670 
Dividend income 8,700  7,900  1,400 
Other investment income(1)
10,562  8,107  10,725 
Total interest and dividend income $ 507,887  $ 467,195  $ 434,425 
Recurring fee income $ 11,853  $ 9,507  $ 8,835 
Fee income - expired commitments 1,990  2,442  1,695 
Accelerated fee income - early repayments 10,763  14,447  15,713 
Total fee income $ 24,606  $ 26,396  $ 26,243 
(1)Other investment income includes OID interest income and interest recorded on other assets.
Schedule of Unamortized Capitalized Fee Income
As of December 31, 2025 and 2024, unamortized capitalized fee income was recorded as follows:
(in millions) As of December 31,
2025 2024
Offset against debt investment cost $ 42.5  $ 36.9 
Deferred obligation contingent on funding or other milestone 9.8  9.1 
Total Unamortized Fee Income $ 52.3  $ 46.0 
Schedule of Loan Exit Fees Receivable
As of December 31, 2025 and 2024, loan exit fees receivable were recorded as follows:
(in millions) As of December 31,
2025 2024
Included within debt investment cost $ 48.6  $ 39.2 
Deferred receivable related to expired commitments 4.5  3.0 
Total Exit Fees Receivable $ 53.1  $ 42.2