Christian Munafo 00:04
Welcome everyone, and thanks for joining us for today's webinar. I'm Christian Munafo, the Chief Investment Officer at SP Investments Management, or “SPIM,” which is the advisor to the SharesPost 100 Fund, and I'm joined by Kevin Moss, Chief Operating Officer at SPIM.
Kevin Moss 00:22
Hi, everybody. Thanks so much for joining us today, especially given what's going on out there. We really appreciate you joining us on this webinar.
Yeah, absolutely. As noted in the past, our objective is to get in front of you every quarter to provide what we believe are relevant updates, whether we have a lot to talk about or not, since the last time we spoke, there have clearly been some developments in the markets and for that matter, the entire world that we will address today. Also, if you haven't noticed, we are only using audio for today's webinar as Kevin and I are dialing in from different locations in respect of the active travel restrictions. So for that we apologize in advance for any sound quality issues.
Somewhat related, please note that we are in the process of changing many of our previously scheduled in-person client meetings, to video meetings, and we may need to use this communication format for some time. We realize many of you are facing the same challenges, and again, we appreciate your cooperation. So based on conversations with many of you over the past few months and a lot more frequently over the past few weeks, we pulled together some topics that we believe would be of most interest, the main one is quite obvious. We always encourage you to reach out if there are other topics you'd like us to address in future webinars, or if you have specific questions that you would prefer to address offline. I'm going to kick it over to Kevin to touch on the agenda for today.
Yep. Thanks, Christian. Yeah, just to set the agenda for today, we'll start off by reviewing some of those topics that we've heard are of interest to you, obviously, some of the things that are going on today in the environment, then we'll go over some of the standard fund updates and details. And then we'll close with our thoughts on where we think the market is heading. And I think finally, we will as usual, leave it open to a few questions.
Great, thanks, Kevin. A couple of technical details before we begin. Again, we apologize in advance for any sound issues you may experience today, and potential background noise you may hear. If you're having sound issues, please try to refresh your browser. The bottom thumbnails on your screen will minimize or reopen in the different webcast resources, including the presentation, and if you'd like to ask a question at any point, which we encourage, please use the Q&A box on your console. And we'll be having a brief Q&A session at the end of the presentation. And we understand everyone is quite busy. And we did not want to drag this on too long, so we are going to address some questions at the end. If we do not get to your question, we will certainly follow up with you individually afterwards.
So let's go ahead and get started. Our market perspectives regarding the increased public market volatility, and how this impact to the valuations of late-stage private companies like the ones we own in the SharesPost 100 Fund and the M&A and IPO wave environment, are certainly ones of interest. So we're going to touch on those today. And so some of this is stating the obvious, but due to increased global health and economic concerns regarding this Coronavirus outbreak, which is only further amplified by what we're experiencing in a global oil price war, not to mention political unrest regarding the upcoming U.S. presidential election, we're seeing the VIX trade at levels we haven't seen since the global financial crisis over 10 years ago.
I think that the VIX hit 80 plus on Monday, which is quite remarkable. While it is difficult for us to speculate on the potential significance of a sustained outbreak over the longer term, it's quite clear, I think, to many of us that there has been a variety of health precautions and travel restrictions that can already be felt likely by everyone participating on this webinar today. So you can only assume that there's going to be some impact to small and large public and private companies alike.
That said, let's be clear, this isn't the first time that we have seen an increase in public market volatility, or heightened health and safety concerns. Many of us have lived through a number of these cycles, such as Ebola outbreaks, the S&L crisis, the dot-com bubble, 9/11, the  global financial crisis—and that's by no means to minimize or make light of the current environment that we're living through, as this COVID-19 is clearly a global pandemic that's going to have a substantial impact—but it is an important reminder that our markets and economy have endured periods of sustained heightened volatility before. And it's also encouraging to see that both central banks and governments alike are taking aggressive measures to create various forms of stimulus to help combat the crisis. Also, it's important to note that many of the solutions the world is now turning to for things ranging from business continuity, to supply-chain optimization, to delivery services, life sciences technology, digital health, telehealth, vaccine development—many of these come from the venture asset class, and we're going to talk through some examples within our underlying portfolio later in this webinar that we believe are actually well positioned to potentially thrive in circumstances like this.
To be clear, we're not trying to conflate health issues or the loss of life with strong financial returns. But the fact is, that our fund provides access to some exceptional private companies that are having a global impact, even through this pandemic. And furthermore, and I know we've touched on this in the past, private assets tend to involve far less volatility, primarily due to fair market valuation standards, which compares to publicly traded assets, which are essentially priced every second.
And that's not to imply that private assets themselves are immune to the same risks that face publicly traded assets, but rather that the implicit valuation frameworks that are utilized often result in private assets having relatively low correlation to public market [price] swings. And this is, fairly well known and addressed by all sorts of investors and viewed by many as a kind of portfolio construction advantage.
So, what does this all mean for late-stage private companies? First, let's point out that dry powder levels within the venture asset class are at record levels, on an absolute basis. And we expect that the capital will continue to be deployed, albeit probably at a slower pace and perhaps with more stringent terms and requirements that the investors ask for, than we've seen in some years. Second, we believe companies have been prepping for a potential pullback, well before this outbreak, and also Sequoia Capital's article, which many of you may have read, as many VCs have been instructing their management teams to focus on more sustainable revenue growth, lowering their burn rates and trying to accelerate their paths to profitability, following debacles like we've seen over the past year, including examples like WeWork. So a lot of companies have already been preparing pre-Coronavirus to get their balance sheets and cash flow in order.
Dry powder refers to cash (or cash-like) reserves kept on hand by a company, venture capital firm or individual to cover future obligations, purchase assets or make acquisitions.
Burn rate is the rate at which a new company is spending its venture capital to finance overhead before generating positive cash flow from operations.
WeWork is not a Fund holding.
In terms of valuations, we don't expect there to be a material impact in the near term. If there is a sustained period of increased volatility, then you may see a lag effect. But again, the impact is unlikely to reach the magnitude of public market gyrations that we're all seeing on a day-to-day, minute-to-minute basis. And it's important to keep in mind that when you look at the fair market valuation frameworks, that public comparable marks and inputs are just one of several different variables that are utilized and part of the ASC 820 fair market valuation standards.
The Financial Accounting Standards Board ASC 820 provides a fair value framework for valuing investments in plan financial statements, discusses acceptable valuation techniques and inputs to valuation techniques, establishes a fair value hierarchy that prioritizes the inputs, and requires extensive financial statement disclosures about the valuation of plan investments.
And so the most meaningful input, as we've discussed in the past, is typically the last round of financing. So there's a number of different inputs that are utilized. The public comparables is one of them. And so as a result, it's not as simple as assuming that a private fund’s portfolio is going to decline in parallel with public markets, and in fact, I think we've shown in the past that our portfolio's value has actually moved in a positive direction during public market corrections. Again, that's not to say the portfolio is immune, but the valuation framework that private market assets follow, just basically does not have that second-to-second mark-to-market value that you see in public markets.
That said, for the foreseeable future, we may potentially see, and we would expect to see, less up-round financings and more protective provisions as investors gain more negotiating leverage during these cycles. We are still seeing up rounds being closed as we speak, but it's safe to assume that, by and large, we are going to see less of those. And again, we talked about this, I think, in the past few webinars we had in the third and fourth quarter, that we had already been seeing signs of a valuation softening dynamic happening.
Up-round financing refers to a round of financing in which a company's worth increased since its prior valuation.
Valuation softening refers to the general trend in company values lowering that has been occurring.
In terms of the exit environment, it is quite possible that both M&A and IPOs are going to be postponed, at the very least renegotiated. Now, for private companies that were relying upon near-term liquidity due to things like investor fatigue or the need for a public market currency, this can clearly have negative implications. For companies with stronger operating models, healthy balance sheets, and more patient investors, the likely impact would be that the exit gets delayed, and the investors have just a greater willingness to stay private for longer until the opportune time arises to optimize liquidity.
So we'll present some data on the following slide momentarily, which shows that there's already been a softening in the exit environment over the past few quarters even before the Corona outbreak was even reported. We'd also point out that, based on historical data, what we know is that a combination of a softening valuation environment and exit environment often lead to better pricing opportunities for investors to buy private assets as sellers of these assets tend to become less price sensitive, particularly for illiquid assets. And assets that perhaps we previously could not get comfortable with due to seller pricing expectations, or because the existing investors would not allow new investors to get on the cap table, those now become available.
A capitalization table (or cap table) is a list of all the securities a company has issued (including include stock, convertible notes, warrants, and equity grants) and who owns them.
And for that reason, some of the best performing vintages for the private asset class, including venture, happen to fall in years during and immediately following when there has been a correction and increased market volatility. Now, again, we don't want to conflate the loss of life with financial returns, but those of us that have been through cycles during periods of increased uncertainty and volatility, we understand that these tend to be attractive times to invest. And this Fund had an experience like this several years ago, where we picked up some really strong companies that ended up being very strong exits during that period of time. So what we're basically saying is that markets like this are very good entry points for our Fund and for a lot of private strategies to pick up portfolio companies at great prices.
Profits not guaranteed.
Moving on to the next slide, and I believe we covered this when we spoke back in mid-December, so not a lot has changed. But Q4 2019, M&A volume was down about 50%, which is a big number, compared to the fourth quarter of 2018. And we haven't seen levels like this in several years. For the full year of 2019 M&A volume was down roughly 35% from the prior year. And you can also see IPO activity ended up being down to the lowest levels we've seen in years. So again, it's important to point out that this data is pre-Coronavirus outbreak, so it's reasonable to assume that these trends may continue into 2020.
But when you factor in, from a buy-side standpoint, the softening valuation environment potentially, with a slowdown in the exit environment, you're often left with a significant buy-side opportunity, which is exactly what we're seeing. So with that, I'm going to turn it over to Kevin for a Fund-level update, and he'll also discuss how some of these market-related trends in valuations and exits are evident in our portfolio as well.
Thanks, Christian. For the benefit of those who are joining us for the first time, usually we just give a quick overview of exactly what the SharesPost 100 Fund does do. We always like to think that it's a fairly simple story. We are trying to build a diversified portfolio of late-stage venture companies. We're really trying to provide access to an asset class to as many investors as possible, both accredited and non-accredited. And we do this by structuring it through a ‘40 Act product, in this case, a closed-end interval fund.
And we're really trying to get liquidity to an asset class that has very little liquidity traditionally. And so what this does is for financial advisors, it provides the ability to rebalance portfolios for it to be able to give certain clients some liquidity in times when they really need it. And I think finally, this is being managed by an experienced group of portfolio managers with both experience in financial services as well as venture over a period of 20 plus years.
And so, just to touch on quickly, and we presented this last webinar, but we wanted to just quickly touch on what happened last year. It was a quiet year in terms of NAV, given what happened within our portfolio—we only had five exits and we had seven company financings. But we did add 16 new companies last year and deployed $74 million in capital. So we were extremely busy last year. I'm just touching on what Christian referenced a little while ago in that we didn't move up in NAV necessarily much last year because of what was happening within the portfolio. And we are constantly talking about the fact that we're [the Fund] not correlated with public markets and that's what you're seeing right now. We're not necessarily going to go down even in a period of as great of financial distress as we are having right now, we're not necessarily going to go down either, which we have shown.
Christian referenced the valuation mechanics behind private equity, we have in real time, as a point of reference, opened up 38 files just the other day, which I think was a record for us. And we did go down a little bit. But this really did take into consideration our public valuation input. And so this does not necessarily mean that because the market's falling 10, 15, 20% that we're going to do the same. In many cases, it's the exact opposite. The public comp valuation point is just one input. On the other side, there are other valuation inputs, in some cases, positive things are happening with our portfolio companies that are making these companies go in the opposite direction.
So that's what happened in 2019. So far, what we've seen this year is really three things that are really affecting the NAV. We've had one exit, which is One Medical, and that's a fairly timely situation there. One Medical is a company, it's a medical facility that you can walk into and see your doctor, but also, it's powered by technology. You have an app on your phone where you don't have to leave your home. You can actually talk to your doctor through your app, tell them what your symptoms are, you can actually FaceTime your doctor, you can fill prescriptions over your phone. And so One Medical has done really well for us. It's our first exit for the year in terms of an IPO. And we're sitting on, even with this big downturn in the market, we're still sitting on a little over 2X in this company. We are in lockup. And so we're hoping once we've come off, lockup, we will be selling this company still at a nice gain for the position.
2X refers to an investment providing returns at two times the amount invested. In percentages, it would be a 100% return.
A lockup period is a contract that states there is a period after a company goes public when the major shareholders are not allowed to sell their shares.
The other two things that have happened so far this year for us—and Christian was referencing this earlier in terms of what helps move the portfolio as it relates to valuation inputs—we've had two rounds of financing. One was Udemy, also a tiny company, which we're going to talk about real quickly. They raised $50 million at a $2 billion valuation. This is a company, which is a global online marketplace for learning and teaching. And then we also have SpaceX that just raised a round, as they do every year, typically they do two rounds of financing. This is was their first one, and we usually expect them to do another round during summertime, this was also an up round at a $36 billion valuation. And this company, as you can imagine, is extremely well capitalized.
So here's our current portfolio holdings. We'd like to think that these companies that we invest in (and we're in touch with them on a daily basis) they're backed by some of the best VCs. They have very strong balance sheets. Again, Christian pointed out that they were already preparing—not necessarily for the Coronavirus or a period of this serious financial distress—but last year, we saw a lot of companies that didn't react well in the public markets, such as Lyft and Uber, because they were “growth at any cost,” they were running massive losses.
The Fund does not currently hold Lyft or Uber.
And so many of these companies have already retooled themselves, shored up their balance sheet, raised capital, unfortunately, have let some people go. But really just trying to decrease the cash burn. And we saw that with companies like SoFi (they've let some people go, they also hired people in the right areas), Lime Scooters, 23andMe, so a lot of these companies are doing the right things as we're heading into this crisis. But I just wanted to point out some of the companies that are actually doing well in an environment like this.
So I already mentioned Udemy, this is an online, it's an ed-tech company. This is the kind of company that companies and individuals can use to reskill themselves, and you can do it from anywhere. You can do it at home, you can do it in an office, wherever it may be, but in our environment that we are today, this is really going to benefit a company like Udemy. Udacity is another company that does the exact same thing. These are two of the leaders in the space. So both of these companies are going to really benefit from what's happening, unfortunately given what's going on, but still the fact that they do what they do, they're going to be benefiting in an environment like this.
Another company, which is really going to be highlighted in environment like this is Nextdoor. Some of you may use Nextdoor. It's an online social media platform. It's really helping neighbors and counties connect, but especially now during a period of crisis. And it gives them the ability to offer services to each other, to help each other, offering to buy groceries for those in isolation, provide updates on which stores have inventory, walking your neighbor's dog—just being able to communicate with each other. This is what a company like Nextdoor is doing, and it's not just a domestic business, it is an international company. So this company in particular is really getting highlighted in an environment like this.
Then you also have news delivery type companies like Dataminr. Dataminr actually first detected the outbreak of Coronavirus within the public social media posts, on December 30th, which was seven days before the United States government actually even announced it. So companies like Dataminr have really shown their strength in times like this. They've also predicted other types of news and announced other types of measures in the past that have alerted us to crisis, and so companies like Dataminr are going to be very highlighted and are doing really well in this type of environment.
And then of course, we have to look at the big data companies. Companies like Metabiota, Palantir, 23andMe, these are our big data companies that deal with information and on a large scale, and enable companies to make important and informative decisions. Metabiota also offered earlier accurate analysis about the Coronavirus, predicting it would reach South Korea, Japan and Taiwan. I mean, this is something that's right in their wheelhouse. They predict epidemic diseases like this.
And Palantir is just highlighting the fact that it's a big data company and it provides robust data management infrastructure for critical foundation for more advanced applications that are really critical in times of quickly changing dynamics like we're seeing today. So, really highlighting companies like that. We recently added a company called Trax, which I'm going to hand over to Christian, because he really worked on this deal, but also we want to highlight that company in a time like this.
Sure. Thanks, Kevin. Yeah, that's really helpful. I hope it's informative for everyone. Yeah, I mean, Trax is a company that we just closed on, as Kevin said, last week, so it's quite new. This is a global technology company, which operates over 20 subsidiaries across more than 50 countries and their products essentially provide powerful tools to the consumer-packaged goods manufacturers and retailers, that essentially allows there to be autonomous visibility collected, measured and analyzed to inform both the manufacturers and retailers on what's really happening on the physical shelf space within a store.
And so, just to say it differently, their technology really optimizes in-store execution, shelf space strategy, store management, things like that. And their customers include some of the largest manufacturers and retailers in the world and you can just imagine how the current environment makes Trax technology solutions all the more valuable as many of you are probably experiencing, like I have, retailers facing a run on their stores with little product left, while their manufacturers and supply chains are struggling to gather adequate data to make more products and make them available where needed in a timely manner. And so really excited to add this to the portfolio.
We bought it at a very attractive discount on a secondary basis in connection with a cap table cleanup exercise. The company is positioning itself for a potential IPO, we shall see, over the next year or so—obviously need the markets to cooperate with that. But this is a very large business. We're also going to likely participate in a small primary financing that they're also executing now to facilitate some small tuck-in acquisition. So again, just another example of the types of companies that we're gaining access to, as well as at highly attractive prices. So with that-
A cap table clean up exercise implies that a company assesses the composition of investors/shareholders and tries to provide liquidity to ones that are motivated to sell in the near term (for various reasons) vs. supporting the company over the longer term.
A tuck-in acquisition involves a larger company completely absorbing another, usually smaller, company and completely integrating it into the acquirer's platform.
Yeah, I was just going to end, Christian with—that's not to say, as we've touched on before, that we're not going to see challenges with some of our companies. But again, these companies that we invested in, and we did the due diligence, we really did look for companies that are backed by some of the best VCs, that have strong balance sheets that can weather these kinds of storms. And as we've shown in the past, which we just mentioned, back in 2016, back in 2018, where we had 15% or more pullbacks, our NAV actually held up very strongly and, in some cases, went up.
And I think it’s important to add that and we'll touch on that a little bit when we're talking about the looking forward in terms of how we're managing the portfolio. Just with regards to the portfolio analysis, and again, this is a slide that I think we first introduced during the last webinar. So again, mid-December, so not much has changed. But we now have 90 companies that have been invested in since inception, of which 39, or just over 40%, have already been realized. And 45 companies, or about half of that amount, were added over the last three years.
And so again, as we said in December, what this essentially implies is that this is a fairly young portfolio with what we believe to be significant growth potential from the current marks. And again, we are not saying that all of these companies are immune to the economic pressures that we are now facing. But we believe that we invested in these companies at very good prices and with strong syndicates, as Kevin said, and overall, we're very excited about the future trajectory that they have.
So we talked about, we have 45 companies that we're invested in over the last three years. We also have about 16 investments that are over three years old. And so in what I would call a normal environment, we would expect that a number of those companies would have been well positioned for liquidity in 2020. Of course, we have to assume that depending on how this evolves with the Coronavirus pandemic and the ancillary impact it's going to have, that those exits may get delayed until the exit environment recovers. Kevin, why don't I turn it back to you quickly for the cash deployment.
Yeah, and we mentioned this earlier, and in the last webinar as well, but cash deployment: $74 million last year, so more than the previous three years combined, which goes back to Christian's point that this is a very young portfolio. We continue to deploy capital even now. And also, as Christian mentioned, these are times where we are really evaluating the opportunities in front of us because we're seeing some great deals, given the fear that's out there right now. We're seeing some companies that are trading at really nice discounts to the last trading prices as well as the last round, as well as companies that we've had trouble getting into, because they're really good companies and they're tough to get into. So I think that the opportunity, and the pipeline ahead of us is really interesting, and, unfortunately, usually comes in a time of financial distress like we're seeing right now.
Yeah, well said. So looking forward, to summarize, we're going to continue to actively monitor the existing portfolio, we are reaching out to as many GPs and management teams as we can. Obviously, a lot of them are quite busy at the moment. But we're really trying to get an understanding as to what companies may require triaging, what companies are potentially looking to raise more capital so we can look at our own internal cash management projections, which companies maybe pulling exit-type strategies, so we are in active process of monitoring the existing portfolio.
And believe it or not, we also have some companies where there are active buyers right now on the secondary market at prices well above where we have bought in. And so we're also trying to explore, from a portfolio construction standpoint, whether or not it might be the right time in the coming weeks or months to look at potentially monetizing some positions and locking in strong returns. So very much focused on what's going on in the portfolio.
In terms of how we invest in this type of market, you can expect that we're going to continue being disciplined during this period. We're going to seek out these price dislocations that we've mentioned now multiple times, in high-quality assets and trying to find the highest quality securities in those assets that are being sold by motivated sellers. And I think we gave you a few examples today, which we hope are helpful on how we're already actively executing on that. Our pipeline is very busy at the moment, and some of the prices we're seeing are extremely attractive. We do believe that this environment allows a more reasonable access point to get into companies.
And again, we're going to continue to focus on a robust diligence process—Kevin touched on this before—understanding the business models, the customer bases, trying to understand where the negative implications could be, getting access to the balance sheet and cash flow visibility to make sure that we can assess the burn rates and make sure companies are well capitalized to [help] endure a protracted down cycle.
Our due diligence process does not guarantee success.
And so again, all of this is part of our normal strategy, so it's hard to say that we're doing anything different. I think we're certainly being more focused on certain aspects of this, but we're really trying to now be highly selective in an environment where we have a surge in our pipeline with very attractive opportunities at really interesting prices. And again, I guess we will just try to close this by saying, we are absolutely keeping an eye on the portfolio. The portfolio is not immune to what may happen over a longer period of time. We do have a number of companies that we can already point to that are going to, we believe, potentially thrive in this market.
And we think the bigger implication will be that companies that were planning to raise, will not raise at these significant up rounds we've seen in the past and companies that were planning to exit may have a protracted time to exit until things settle down. So Kevin, would you like to add anything to that before we move on?
Yeah, I would add one thing, we've talked about capital deployment. And I know we’re going to answer some questions, I saw one question come in real quick. But we've also continued to see inflows into the Fund, even on days like today. We raised a record amount of capital last year, close to $85 million. We're still averaging somewhere between $100,000 to $200,000 a day in inflows. So even in times like this, while it certainly has come off a little bit, we're still seeing capital and funds flow into the Fund.
Very important point. Yeah, absolutely. So that concludes the main portion of our presentation today. So we are going to move into the Q&A session. Again, we've seen a number of questions come through. We're trying to be thoughtful about everyone's time. And so I think we'll take a stab at a few of these and we'll come back to those of you separately, who we were not able to address today.
First question: what is the comparison between private markets in developing economies versus the U.S. markets? It's a good question, particularly in the current landscape. And I'd be happy to get more substantive into the details of this offline. But I think the key differentiators are that developing economies tend to have far less opportunities for companies to raise capital (and sophisticated capital, at that), often less robust legal systems, which can create contract, employment, and governance issues. But perhaps most importantly, I guess I would say that we tend to see less optionality when it comes to exits and liquidity in developing economies.
So meaning that, if you have a high-performing company, a high-performing private company, that in a developing economy, you're more likely to see them looking outside of their borders for strategic M&A and they're more likely to list on foreign exchanges, as their domestic markets, it's just a simple fact, tend to have less financial liquidity. And that's why we often see companies globally, they may be headquartered outside of the U.S., but you see many companies look to essentially list on U.S. exchanges. So I hope that was helpful. Again, happy to get more substantive in that offline. Next question, Kevin, I'll read it out, and maybe you can take a stab at this one. How do we as advisors and planners get notified on any changes to the Fund?
Yeah, sure. So for one, we want to make sure that anybody who's in the Fund is on our distribution list so that they can get periodic updates. We do send out updates on portfolio companies. We also will of course have these quarterly webinars. We make quarterly filings to the SEC, we are ‘40 Act fund, so we have required filings. And that shows, within those filings, our portfolio holdings, the cost basis, the fair market value. We give a lot more information in our portfolio than you're going to find in any other private fund or venture fund, which is private, to outside investors.
So these are a lot of ways to get updates in the Fund. Obviously, we also post an annual report on the Fund, which is public. And of course, we're in constant contact with our shareholders, to the extent that anybody wants to have a one-on-one with myself or Christian, or the portfolio management team, we definitely want to make ourselves available to that as well.
Thanks, Kevin. I guess I’ll address one more question I see that came in. And a couple of questions that I think seem to involve potential concerns around leverage, so that's related. I think one question was a tag-on to the example I gave earlier, where you have a company that gets sold in June for $200 million, and now that same acquirer, less than a year later, is looking to flip it for $80 million—do we have companies like that in our portfolio? I think the reason we have to be reminded of the specific example is the “L word”: it’s leverage.
So you have a buyer that had significant leverage it was using, not just to operate its business operations, but also to execute acquisition strategies. And as we like to say: leverage works until it doesn't. The companies that we invest in, in our portfolio, do not have leverage by and large. You may have a couple of companies here and there that have some credit facilities in place. But that is not a significant issue for the types of portfolios that we're building for our clients in the private markets. And then a tag-on, I think, to that, was: does the portfolio have any leverage? Again, no. This portfolio does not have leverage. So I hope that addresses that question.
So I tried to flip through the disclaimers quickly. So I hope everyone read those. And I guess just in closing, we want to thank all of you for your time and for your continued support. As Kevin said, it was really encouraging that even during these volatile times that we continue to see inflows into the Fund. I think that's just a sign of people understanding that the strategy that we're executing here is a very unique one.
We understand this is a challenging time for everyone and there's nothing more important than your health and safety. But we really hope that you walked away from this webinar more informed and hopefully more excited about the portfolio that we sit on today, as well as the potential opportunities that we now have to transact on that we believe are going to generate strong performance in the months and years ahead. So with that, Kevin, I'm going to turn it over to you for a final word before we wrap things up.
Yeah, I think you said it well Christian. And I also, of course, want to thank our shareholders for their support. We've had some shareholders that have been with us from really the very beginning. And so I want to say be safe. I want to say thank you. And if you have any follow up questions, please feel free to reach out directly to us. Have a great rest of the week. Thanks very much, everybody.