TriplePoint Venture Growth BDC – Investigating Claims
Have you suffered investment losses in TriplePoint Venture Growth Capital BDC? If so, the securities attorneys at the White Law Group may be able to help you by filing a FINRA arbitration claim against your brokerage firm.
TriplePoint Venture Growth BDC a “global financing provider” that invests in venture capital-backed companies, has seen a huge dip in its Net Asset Value, from $14.01 at the end of 2021 to $11.88 at fourth quarter of 2022.
TriplePoint Venture Growth BDC Corp is a closed-end, non-diversified management investment company. Its investment objective is to maximize its total return to stockholders primarily in the form of current income and, to a lesser extent, capital appreciation. The company filed a form D in 2017 to raise capital from investors. The total offering amount was purportedly in excess of $22 million.
According to reports, TriplePoint is allegedly bogged down with high fees, and a poor loan book that includes portfolio company bankruptcies and in-the-red startups. TriplePoint reportedly charges investors 1.75% of the fund’s average adjusted gross assets and 20% of net investment income above an 8% hurdle rate.
At least two of the companies in TriplePoint’s loan book have reportedly required a write-down after they declared bankruptcy, according to SEC filings. Telehealth provider The Pill Club, declared bankruptcy on April 18, 2023, following an $18 million settlement in February with the state of California over alleged insurance fraud charges. TriplePoint reportedly carries its $20 million loan to The Pill Club at $19.9 million, according to SEC filings.
Last December Medly Health, an online pharmacy, filed for chapter 11 reportedly causing TriplePoint to take a full ~$34 million write-down last quarter.
According to at least one analyst, TriplePoint is invested in no less than ten portfolio companies that appear to be struggling with TriplePoint loans totaling over $170 million, including the following: VanMoof Global, an electric bike manufacturer, RenoRun a construction tech company, Capsule, a digital pharmacy, and several on-demand grocery delivery companies.
Risks of Investing in Business Development Companies (BDCs)
BDCs were created by the U.S. Congress to stimulate investments in privately owned American companies that may have limited access to debt and equity capital. BDCs offer retail investors access to private debt, an asset class that typically has only been available to high-net-worth and institutional investors. By investing in a BDC, individuals can pool their capital to invest in private American companies. For more information on non-traded BDCs, please see: BDCs – the good, the bad, and the UGLY
BDCs invest in small and medium-sized companies that are developing and may be financially distressed. Many are private companies that don’t make public disclosures, and the shares of the companies do not regularly trade on a national securities exchange.
BDCs often use more leverage or debt than other types of funds to purchase their investments which can increase your return but can also increase your losses. It can also increase risk and can make the price of BDC shares more volatile. Further, it can be more expensive for BDCs to borrow to invest if interest rates go up. Higher interest rates can also reduce BDCs’ profits.
Broker Due Diligence
Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor considering that investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income. Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.
Potential Lawsuits to Recover Investment Losses
If you are concerned about your investment in TriplePoint Venture Growth BDC, the White Law Group may be able to help you. For a free consultation with a securities attorney, please call 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses. For more information, please visit our website, www.whitesecuritieslaw.com.
Tags: BDCs, Business Development Companies, current investigation, Mely health, the pill club, TriplePoint Venture Growth Capital BDC, venture capital bdc Last modified: May 10, 2023