トリニティ・キャピタル（TRIN）2026年第3四半期決算説明会：NIIが配当をカバー、NAVは13億ドルに到達

要点

• 総投資収益は前年同期比30%増の9,800万ドルとなりました。純投資所得（NII）は5,000万ドル（1株当たり0.52ドル）に達し、四半期分配金（1株当たり0.51ドル）の103%をカバーしました。
• 純資産総額は前四半期比5%増、前年同期比33%増となる過去最高の13億ドルに達しました。1株当たりNAV（純資産価値）は、主に1株当たり価値の向上を伴うATM（アット・ザ・マーケット）発行により、0.14ドル増加して13.61ドルとなりました。
• プラットフォームの運用資産残高（AUM）は前年同期比31%増の34億ドルに拡大しました。運用ファンドおよびジョイントベンチャーは、四半期NIIに対して1株当たり0.05ドル寄与しました。
• Trinity Capitalの第3四半期における融資実行額（ファンディング）は6億1,400万ドル、新規コミットメント額は8億8,000万ドルとなりました。未実行コミットメント残高は計14億ドルとなりましたが、その91%はデューデリジェンスおよび投資委員会の承認待ちの状態です。
• 信用指標は改善し、非発生（ノンアクルーアル）投資の割合は公正価値ベースでポートフォリオの0.7%に低下しました。元本ベースで第一抵当（ファースト・リアン）のポジションが89%を占め、企業バックローンの加重平均LTV（融資比率）は22%となりました。
• 経営陣は、新規実行パイプラインがTrinity Capitalの歴史上最大規模であると述べ、市場の流動性や競争状況に左右されるものの、2027年のスプレッドは横ばいから上昇傾向を辿ると予想しています。

主要財務データ

事業および業績ハイライト

Trinity Capitalの5つの貸付部門が当四半期中の広範な資金実行を支えました。第3四半期の融資実行額のうち、機器ファイナンスが26%を占め、次いでテック融資が18%、スポンサー・ファイナンスが17%、ヘルスケア・ライフサイエンスが15%、アセットベースト・レンディング（ABL）が14%となりました。残りの10%はオフバランスシートのエンティティに充てられました。

ポートフォリオは24の産業に分散しており、単一の借り手によるエクスポージャーは全体の3%を超えていません。最大のセクターは金融テクノロジー（フィンテック）で、18の借り手にわたりポートフォリオ原価の15%を占めました。AI関連のエクスポージャーはインフラストラクチャーと自動化プラットフォームに分かれており、それぞれポートフォリオ原価の7%未満でした。

ポートフォリオの入れ替えが継続しました。原価ベースの資産の約78%が2025年年初以降に組成されたものであり、2024年以前のヴィンテージ（組成年）は7%未満にとどまりました。回収完了したローンの平均期間（デュレーション）は30ヶ月でした。

運用ファンドおよびジョイントベンチャーは、10億ドル近くの資金調達枠（キャパシティ）を提供しました。SBIC（小規模企業投資会社）ファンドは7,500万ドルを超える出資コミットメントを締め切り、負債対自己資本比率2:1の連邦レバレッジを活用することで、フル稼働時には3億ドル以上のプラットフォームキャパシティを生み出すと経営陣は見込んでいます。

Trinity Capitalは、Capital Southwestとの2つ目のジョイントベンチャーも立ち上げました。この投資ビークルはスポンサー・ファイナンス資産を対象としており、5億ドルの潜在的キャパシティを持ちます。第1号となるCapital Southwestとのジョイントベンチャーは、四半期末時点で14社のポートフォリオ企業にわたり1億3,200万ドルの資産を保有していました。

資本および信用ポジション

同社は8月に満期を迎えた1億2,500万ドルの無担保社債を償還しました。また、四半期最終日には3億5,000万ドルの長期5年シニア無担保社債の発行を発表し、この取引は四半期末後に完了しました。

Trinity CapitalはATMプログラムを通じて、NAVに対して平均32%のプレミアムで5,800万ドルを調達しました。経営陣は、この発行が既存株主の1株当たり価値を高めるものであったと述べました。

信用力は安定を維持しました。公正価値ベースの債券投資の約99.3%は正常に履行されており、5段階評価による平均社内信用格付けは3.1へとわずかに改善しました。非発生（ノンアクルーアル）状態にあるポートフォリオ企業は3社で、小規模な非発生投資2件が回収・処分され、第3四半期中に新たな非発生案件が追加されなかったため減少しました。

当四半期には750万ドルの純実現損失が含まれましたが、440万ドルの純未実現評価益により一部相殺されました。

経営陣の見通し

経営陣は、現在のパイプラインが同社史上最大規模であると述べました。機器ファイナンスは、AIインフラ関連の動向を含む国内の設備・製造需要に支えられ、相対的に堅調な推移が続くと予想されています。

2027年について、経営陣は融資流動性がより制約されるにつれて、スプレッドが横ばいから上昇すると予想しています。なお、これは経営陣の見解であり、数値化された業績見通し（ガイダンス）ではありません。

同社は、運用ファンドが時間とともに収益へより大きく貢献するようになると予想しています。経営陣は、新規ビークルが立ち上げられず既存ファンドが均等に拡大する場合、登録投資顧問業者（RIA）への四半期あたり約200万ドルの費用配分が短期的には妥当なランレートになると示唆しました。

新しいCapital Southwestスポンサー・ファイナンス・ジョイントベンチャーについて、経営陣はレバレッジを約1:1から2:1に向けて引き上げる方針です。ベースとなる回転信用枠の現在の前貸比率はおよそ60%から70%となっています。

リスクと注視すべきポイント

• 未実行コミットメント14億ドルのうち91%は、継続的なデューデリジェンスと投資委員会の承認を条件としています。したがって、将来の資金実行が保証されているわけではありません。
• 手数料収入は、新規実行手数料、エージェント手数料、繰上返済手数料、エグジット手数料から恩恵を受けました。これらの項目は取引依存型であり、新規実行や返済の状況に応じて変動する可能性があります。
• 経営陣は、返済額は四半期ごとに当然変動するものであり、第3四半期の高い返済水準が継続的なトレンドであるとは見なしていないと説明しました。
• 多くの信用枠には下限（フロア）はあるが上限（キャップ）がないため、金利上昇は足元の収益を増加させる可能性があります。ただし、借換（リファイナンス）や返済の加速を招く可能性もあります。
• 経営陣は、追加資本を投入する前に、データセンターの建設やGPUの導入に影響を与える規制および政治的不確実性を評価しています。
• ソフトウェア分野の引受では、借り手が防衛可能なプロダクト、確立された顧客基盤、深く統合されたシステムを有しているかどうかも含め、AIによるディスラプション（市場混乱）の可能性を勘案しています。

アナリストQ&Aの要点

スポンサー・ファイナンスJV： Capital Southwestとの新しい投資ビークルは、Trinityが組成したスポンサー・ファイナンス取引に共同投資します。対象となる借り手は一般的に、成熟しEBITDAがプラスのローワーミドルマーケット企業であり、特に統合型ソフトウェア事業者や一部のサービス企業が中心となります。

新規実行の内訳： 未実行コミットメントはパイプラインの状況を示す指標となります。約3分の1がヘルスケア・ライフサイエンス関連、約4分の1が機器ファイナンス、約20%がテック融資で、残りをアセットベースト・レンディングとスポンサー・ファイナンスが占めています。

手数料収入： 機器ファイナンスでは通常、2%〜3%のクロージングおよびストラクチャリング手数料が発生します。第3四半期は新規実行手数料やエージェント手数料に加え、テック融資やライフサイエンスにおける繰上返済手数料も寄与しました。

ATM発行： 経営陣は、第3四半期におけるATM発行のペースが鈍化した理由として、返済額およびシンジケーションの増加を挙げました。同社は、発行がNIIまたはNAVの向上につながり、かつ資金調達ニーズに合致する場合に、引き続き同プログラムを活用する計画です。

営業レバレッジ： 経営陣はプラットフォームの拡大に伴い費用が増加すると予想していますが、収益は時間の経過とともにそれを上回るペースで増加すると述べています。信用引受およびポートフォリオ管理のコストは共同投資ビークル間で共有される一方、ビークル固有の会計・管理費用は各ビークルが負担します。

決算説明会全文文字起こし

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, everyone. My name is Bo, and I will be your conference operator today. At this time, I would like to welcome everyone to Trinity Capital's Third Quarter 2026 Earnings Conference Call, which is being held on November 4, 2026. [Operator Instructions]

It is now my pleasure to turn the call over to Trinity Capital's Head of Investor Relations, Mr. Ben Malcolmson. Please go ahead, sir.

Ben Malcolmson

Thank you, and welcome to Trinity Capital's Third Quarter 2026 Earnings Conference Call. Speaking on today's call are Kyle Brown, Chief Executive Officer; Sarah Stanton, General Counsel and Chief Compliance Officer; Michael Testa, Chief Financial Officer; and Gerry Harder, Chief Operating Officer. Also joining us for the Q&A portion of the call is Ron Kundich, Chief Credit Officer.

Earlier today, we released our third quarter 2026 financial results, which are available on our website at ir.trinitycapital.com. As a reminder, certain statements on this call may be considered forward-looking under federal securities laws. For a full discussion of the risks and uncertainties related to these statements, please refer to our most recent SEC filings.

With that, allow me to turn the call over to Trinity Capital's CEO, Kyle Brown.

Kyle Brown

Thanks, Ben. Trinity Capital had a strong quarter across the board, and TRIN's stock year-to-date total return of 31% remains first in BDC space as of the end of Q3. We believe 3 key aspects are driving that: a diversified lending enterprise with 5 verticals spread across 24 industries, a growing managed funds platform which generated $0.05 per share of NII benefit in Q3, and an internally managed structure that keeps our interests aligned with our investors.

Let's start off with some shareholder-friendly news for Q3. As of September 30, TRIN's total shareholder return is the best in the BDC space over the past 1, 3 and 5 years. From our IPO in 2021 to the end of Q3, TRIN's stock has produced a total return of 177%, outperforming the S&P 500's 119% and the S&P BDC Index's 61% over the same time period. We're paying a $0.17 monthly dividend through the end of Q4, and TRIN shareholders have now been the recipients of consistent distribution for 7 consecutive years.

Looking forward, we have warrant positions in 128 portfolio companies, which have the potential to provide incremental upside to our shareholders. Here are some highlights from TRIN's performance during the third quarter. Net investment income increased to $0.52 per share, exceeded our $0.51 distribution during the quarter, driven in part by our best-in-class ROAE of 15.5%. Our credit remains strong, with nonaccruals improving to 0.7% of the portfolio at fair market value.

Our net asset value grew 5% quarter-over-quarter and 33% year-over-year to a record $1.3 billion. Also, NAV per share increased 1% from $13.47 to $13.61 quarter-over-quarter. It was a quarter defined by outperformance across NAV, originations and credit quality. Platform AUM increased to $3.4 billion, up 31% year-over-year, as we continue to grow thoughtfully and strategically. We funded $614 million in Q3, and our pipeline is thriving, with $880 million of new commitments in Q3 and $1.4 billion in total unfunded commitments as of September 30. As a point of emphasis, 91% of our unfunded commitments remain subject to ongoing diligence and investment committee approval, with just 9% unconditional, a structure that preserves underwriting discipline for future deployments.

Our originations activity is only possible because of our strong underwriting culture. Both leading and lagging indicators of credit are positive, including sub-1% nonaccruals, improved watch list movement and best-in-class PIK of 1%. Driven by an experienced team and proprietary pipeline, our consistency in originations and underwriting reflect a strong performance across Trinity's 5 lending verticals: tech lending, equipment finance, health care and life sciences, sponsor finance and ABL. Our 5 verticals provide meaningful diversification while keeping us directly within our core competencies.

Each vertical is staffed by world-class originators, underwriters and portfolio managers, creating a scalable model that drives results without sacrificing focus. For example, our tech lending vertical is one of the top most 2 active players in the venture debt space, while our equipment finance unit has deployed more than $1.7 billion in its history and currently has a portfolio approaching $600 million. And as a direct lender, we originate our own deals, we're the agent on almost all deals, and have immaterial overlap with other BDCs, giving our investors access to a genuinely differentiated portfolio.

Our goal since day 1 hasn't changed: outearn the dividend, grow the business and do it the right way. That means owning our own pipeline, underwriting our own deals to our standards and making decisions as one aligned team. That alignment starts with structure. As an internally managed BDC, there's no external manager collecting fees. Our employees, management and Board, we all own the same shares. We operate like shareholders because we are shareholders. Insiders own approximately 5% of TRIN shares as of the end of Q3. So our commitment to consistent dividends and long-term value creation is more than just a talking point. It's a reality. And the fees generated through our managed funds flow back to the public BDC, creating incremental income that benefits shareholders directly rather than flowing to a third party.

What we're building is a platform with unique diversification, growing scale and a managed funds business that's delivering meaningful income above our loans. This architecture is the product of a consistent strategic decisions made quarter-over-quarter, year after year. Q3 proved once again that the model is working. Our pipeline is active, underwriting discipline is strong, and our capitalization strategy has been constructed to grow earnings power over time. Trinity is built for now and for what's next.

From here, General Counsel, Sarah Stanton, who spearheads our corporate development efforts, will walk through updates on our managed funds platform. Sarah?

Sarah Stanton

Thank you, Kyle. Our managed funds and joint ventures continue to scale meaningfully, with nearly $1 billion of capacity across these strategies. The managed funds platform contributed $0.05 per share of NII benefit in Q3, enhancing returns for TRIN beyond the income generated by our BDC portfolio. We'd like to highlight 2 recent developments in our managed funds platform.

First, our SBIC fund has now closed more than $75 million in equity commitments and is already being deployed. At a 2:1 debt-to-equity ratio with low-cost leverage from the federal government, the SBIC fund is expected to create more than $300 million of incremental platform capacity at full scale. Meanwhile, we recently closed a second JV with Capital Southwest. This latest JV serves as a co-investment vehicle for deals in our sponsor finance vertical and has a potential total capacity of $500 million. We believe this new joint venture provides an optimal capitalization strategy for these assets and is consistent with our previously discussed plans to use our managed funds platform to maximize capital efficiency for each of our 5 verticals.

This new JV is in addition to the first joint venture we announced with Capital Southwest earlier this year, which, as of the end of Q3, comprises $132 million of assets and 14 portfolio companies. A co-investment vehicle focusing on first-out senior secured loans in the lower middle market, this strategic partnership has allowed us to diversify into a complementary segment of the lower middle market with a proven partner while minimizing risk and providing stable income for our investors.

As a reminder, it features 50-50 decision-making. We are encouraged by our growing partnership with a highly respected firm like Capital Southwest. The managed funds platform is doing exactly what it was designed to do: generate incremental returns beyond our interest income, increase our originations capacity and widen our pool of available capital, all without diluting shareholders. The foundation is in place, and we expect this platform to become an increasingly meaningful contributor to earnings over time.

With that, I'll pass it off to CFO, Michael Testa, for a closer look at our financial results. Michael?

Michael Testa

Thanks, Sarah. Our financial performance remained steady and strong in Q3. We generated $98 million in total investment income, a 30% year-over-year increase, and $50 million in net investment income or $0.52 per share, representing 103% coverage of our quarterly distribution. Total net assets grew 5% to a record $1.3 billion, up 33% year-over-year. NAV per share increased $0.14 to $13.61, driven primarily by accretive ATM issuances.

On the capital markets front, we continue to strengthen our balance sheet. We repaid $125 million of unsecured notes that matured in August. And on the last day of the quarter, we announced our second investment-grade public bond offering of $350 million of long 5-year senior unsecured notes, which closed post quarter end. The offering extends our maturity profile, increases our liquidity. We also raised $58 million through our equity ATM at an average 32% premium to NAV, which is directly accretive to our existing shareholders. Net leverage was 1.17x at quarter end, consistent with our target range, and total platform liquidity stands at $847 million.

And lastly, a few other metrics worth highlighting. Estimated undistributed taxable income stands at approximately $67 million or $0.69 per share, equivalent to more than 4 months of distributions. Our 15.5% return on average equity and 15.2% effective portfolio yield are among the highest in the BDC sector, and PIK remains immaterial at 1% of income. As we finish out the year and look towards 2027, we're confident in the earnings power of the platform and our ability to generate an industry-leading return on equity.

And now our COO, Gerry Harder, will walk you through our portfolio performance from here. Gerry?

Gerald Harder

Thank you, Michael. Portfolio quality stayed strong in Q3, with 99.3% of debt investments at fair value performing, and our average internal credit rating improving slightly to 3.1 on our 1 to 5 scale. The number of companies on nonaccrual decreased to 3, with realizations of 2 small nonaccruals and no additional credits added to nonaccrual within the quarter. First lien coverage remained strong, with 89% of total principal secured by first position liens on enterprise value, equipment or both. For enterprise-backed loans, the weighted average loan-to-value was 22%.

Our portfolio spans 24 industries, and no single borrower exceeds 3% of total exposure. Our largest sector concentration, financial technology, represents 15% of our total portfolio at cost and is spread across 18 borrowers. Regarding our AI exposure, it is diversified across both infrastructure and automation platforms, with each classification comprising less than 7% of our portfolio at cost.

Q3 included $7.5 million of net realized losses, partially offset by $4.4 million of net unrealized appreciation. Asset valuations are set by our internal valuations team, corroborated by independent third-party valuation firms, reviewed by our auditors and approved by our Board of Directors, a multilayered process designed to give investors confidence in the marks on our balance sheet.

Overall, we're encouraged by our portfolio turnover, as our loan book continues to refresh in a beneficial way. 78% of the portfolio at cost has been originated since the start of 2025, with pre-2024 vintages now below 7%. And the average duration of our realized loans currently stands at 30 months. Q3 fundings broke down across our 5 verticals as follows: 26% to equipment finance, 18% to tech lending, 17% to sponsor finance, 15% to health care and life sciences and 14% to asset-based lending, with the remaining 10% invested in off-balance sheet entities. At 89% first lien and 22% loan-to-value, the portfolio is built to hold up across cycles, which supports our dividend and NAV stability as we close out 2026 and look toward 2027.

With that, we'll open the line for questions. Operator, please go ahead.

Operator

[Operator Instructions] We'll go first this morning to Mickey Schleien with Clear Street.

質疑応答

Mickey Schleien

I wanted to start with a question about the new JV with Capital Southwest, Desert Star. Could you expand on the type of investments you're putting in that JV versus CapTrin?

Sarah Stanton

Mickey, this is Sarah. Thanks for the question. Yes, happy to expand on that. So the first JV that we closed with Capital Southwest, that is -- that relates to first-out senior secured loans that primarily Capital Southwest is originating. So that kind of was a strategic and risk-mitigated way for us to expand our reach into a segment of the lower middle market that we were not currently active in.

Our latest joint venture with Capital Southwest relates to deals in our sponsor finance vertical. So those are our kind of more mature EBITDA-positive borrowers. And the real purpose of launching that joint venture is really just to get a better cost of capital for those assets. We have a credit facility for that entity that is really optimized for those types of credits, which are, again, more mature, very creditworthy borrowers.

Mickey Schleien

Are those borrowers concentrated in any particular sectors?

Kyle Brown

Those are primarily going to be lower middle market, fully kind of integrated software companies. We'll see some service-oriented as well. But the focus for us are going to be kind of the more mature software companies, senior secured facilities.

Mickey Schleien

And so when you underwrite those, given everything that's been discussed about AI over the last few quarters and your target of the lower middle market, how do you approach underwriting for those companies? I mean, they clearly need to have some sort of very meaningful competitive advantage for you to even consider them, I would assume. But what else are you looking for in those issuers before you dive in?

Kyle Brown

Yes. I mean, we launched that business with all these things in mind. We don't carry some long legacy portfolio of software deals from 5, 10 years ago. These are all -- these are mostly kind of newly established facilities with that underwriting in mind, meaning what AI tools have they either developed, are developing, what's the road map, what traction have they had selling those products? And so that goes into our underwriting.

And what we have been looking for are really mature software companies that are highly integrated within an organization that are not easy to rip out or can't rip out, who are selling and using these tools already. And so our portfolio was really built with that whole concept in mind, meaning there are going to be winners and losers. Let's identify who the winners are. And let's use this kind of period of volatility here to get in and really lock down some great credits.

Gerald Harder

One more note on the JV is that's also co-investing, right? So these are investments, Desert Star. I mean, these are assets originated by TRIN. Portions are held on the TRIN balance sheet, but also syndicated to Desert Star.

Mickey Schleien

Understand. And just one follow-up question. From our -- from the analyst chair, it's hard to forecast the allocated expenses to the RIA, which they more than doubled to $2 million, but platform AUM clearly didn't double. It grew from $3.2 billion to $3.4 billion. How should we think about the trend in the allocation of expenses to the RIA over the coming quarter as these managed fund businesses and joint ventures continue to grow?

Michael Testa

Yes, it should be actually pro rata based on the size and growth of the managed funds business. So this quarter, we did launch the Desert Star JV. There was a seed portfolio that we syndicated down there, $130 million. So that in and of itself grew the managed fund platform in a onetime launch. Overall, like syndications, we -- those vehicles that are co-investing, it's anywhere from 15% to 20% to 30% of our deals that are funded in the quarter are going to be syndicated to those vehicles.

Mickey Schleien

So is $2 million a decent run rate assumption for the next few quarters?

Michael Testa

Yes. To the extent that there's no new vehicles. We're obviously continuously focusing on capital raising in the private and the managed funds businesses. But to the extent that those are just continue to scale evenly. Periodically, you'll see those -- that pro rata allocation be consistent.

Operator

We'll go next now to Paul Johnson with KBW.

Paul Johnson

Yes. I was just -- I had a few questions. In terms of like repayment activity this quarter, higher level of repayments, I just ask, was that surprising or expected by you guys? And is there anything, I guess, that you would see on your radar for that to potentially kind of elevate it into next year?

Kyle Brown

Paul, it's Kyle. We -- those repayments are consistent, but they ebb and flow. And so we saw a little bit more last quarter. I don't believe that's any kind of trend that we can point to going forward. It's going to continue to ebb and flow. It'll be consistent every quarter. We saw a little bit more in life science and tech, but it'll just continue to be steady as it's always been. No trends to point to.

Paul Johnson

Got it. And my next question is more of a higher-level question. But as the origination funnel has expanded quite a bit over the years and the lending verticals have evolved as well, I mean, you now have conceivably kind of an overlaying, like, allocation decision on top of just kind of the individual credit reviews within your business, with all the vehicles managed underneath the adviser and conceivably just a higher volume of deals, I would think that you would have to review. So I guess I'm wondering how has or how would you expect the investment committee or anything with the review process, I guess, to change over time to reflect that?

Kyle Brown

Yes. I mean, it's actually a little more simple than it sounds, but we've got 5 different businesses that all operate independent of one another. They're executing on an annual operating plan, meaning October of last year and November of last year, we sat down, we said, what are we going to achieve in 2026? And how much are we going to deploy and when, over what period of time? And those various teams are just executing exactly to that plan. And for the last 3 years, we've actually hit that plan pretty much right on the head or exceeded it.

And so allocation to capital is really decided a year in advance. So everything we're doing right now, the dollars we're deploying and the capital that we're raising, both on and off balance sheet, it's all per plan. And I would tell you that internally, we already have 2027 figured out. And we have a plan for '28 and '29. And maybe some of that is going to be -- we're going to continue to iterate on it. But we are creating goals, and we have a vision for the future, and then we just execute on the plan, and we build a system around it, and we let that system carry the burden, and we execute.

And so that's -- I mean, that's what we have been doing for years now. It isn't going to change going forward. We've created multiple layers of personnel and very senior personnel within each vertical from an underwriting perspective and portfolio management perspective, so that has to go through many filters before it gets to the eventual investment committee. And so we have those buy boxes set. We have those underwriting standards and principles set. All the work is done and then presented to the investment committee in a very clear, concise and consistent manner. So we're good at building plans and executing them. That's just what we're going to keep doing.

Operator

We'll go next now to Erik Zwick with Lucid Capital Markets.

Erik Zwick

Maybe just a quick follow-up on the kind of the pipeline since we are just discussing that. In terms of -- you had 2 really strong quarters in a row of production. So just curious where the pipeline stands today versus, say, 90 days ago? And what does the mix look like from a verticals perspective?

Kyle Brown

We continue to see -- thanks, Erik. This is Kyle. The pipeline has continued to build. We have, I would tell you, the largest pipeline that we've had in our history right now. And we're executing on those term sheets. We continue to push on pricing. We continue to see more and more equipment and manufacturing here domestically. That's -- and with some of the AI boom going on, I just -- I continue to see equipment being a bit of an outlier.

But as you can see last quarter, it was pretty distributed amongst the verticals. And I guess I'd go back to the previous comment, which is each of our verticals has an annual operating plan that they're executing to. And they have an allocation of capital to go out and deploy capital and execute on that plan, and that's what they're doing. So that's how we think about it. There's going to continue to be some outperform on the equipment side, but more or less, we're just executing on that plan, which is starting to look more and more diversified across the verticals.

Gerald Harder

I would say also you can get a glimpse of that from the unfunded commitments, which we always remind our investors, we -- these are subject to our investment committee approval 9/10 of the time, right? But about 1/3 of that is within health care and life sciences, about 1/4 of it in equipment and about 20% in tech lending, with ABL and sponsor making up the rest. So that's kind of a good proxy for the pipeline because those are deals that we've already won term sheets and these are subsequent tranches.

Erik Zwick

That's very helpful. Next question, maybe for Michael. Just looking at the income statement, there was a noticeable quarter-over-quarter increase in the non-control, non-affiliate fee income line. I guess anything in particular that drove that number higher? And is that a kind of onetime increase or nonrecurring? Or we expect some of that strength to continue?

Michael Testa

Yes. I mean, I think this quarter, you saw fee income increase. I think there hasn't been a whole lot of change between noncontrol and affiliate in our portfolio. But this quarter, we did see the spike of fee income, a combination of prepayment exit fees as well as origination fees, agent fees that we get that are somewhat transactional based.

Erik Zwick

Okay. And I guess were those kind of transaction fees more on new kind of origination activity or repayments? Just trying to figure out, I guess, you're obviously originating more, so you may see more of those on the front end. So just trying to understand here how much of the increase we saw is sustainable in future quarters?

Michael Testa

Yes. I mean, a lot of this is driven from our equipment financing vertical. So we get anywhere from 2% to 3% closing structuring fees on those assets. So if you have a portfolio that continues to grow and has more origination activity, you'll see the benefit there. This quarter, again, like Kyle mentioned, prepayment fees came through. Those were split between tech and life sciences, but it's been elevated. Those continue to -- we saw that last quarter. We saw that the previous quarter. So we continue to see that. As these companies are healthy, they're meeting their milestones. It's a combination of M&A activity, refinancing us out with cheaper debts, but continue to grow.

Erik Zwick

And last one for me. Just looking at the pace of ATM share issuance in 3Q, it was lower than it had been in the past, maybe 4 or 5 quarters. Any particular reason that it was lower in 3Q? And what should we kind of expect for your desire to kind of utilize the ATM going forward?

Michael Testa

Yes. I mean, we love the ATM program. It's an efficient optimal way of raising capital when just in time. As we see deployments in the pipeline grow, we're able to manage the ATM program effectively to meet those funding requirements. But we had higher repayments and higher syndications, so you're able to manage the amount of equity -- new equity we raise. At the end of day, we're constantly looking at raising capital if it's accretive to net investment income or on a NAV basis.

Operator

We'll go next now to Jason Stewart with Compass Point.

Jason Stewart

You guys have been pretty thoughtful about your approach to the infrastructure, equipment, GPU compute finance space. Wondering if you could share some high-level thoughts on the election impact and maybe any change in the near-term landscape to that business and how you're positioned vis-a-vis that change?

Kyle Brown

Yes. I mean, I think first and foremost, when you remove some uncertainty, that typically helps or hurts markets, but at least that clarity gives investors the ability to make decisions based on what they think they know, right? So I'd say, first and foremost, that's probably a good thing because we at least have an understanding as to where different politicians sit on the topic. The business that we've done to date, assuming it is more difficult to get data centers up and going and GPUs deployed, will just simply benefit, I think, from some of that volatility.

So if I'm taking kind of the optimistic standpoints, what we've done so far is now a little bit more valuable than it was before. And if it is more difficult to get GPUs online in data centers across the country, that cost of those units is going to go up. And so I think for what we've done already, it means it's a positive impact to us. What we do going forward, I think we'll do what we always do, which is sit back, make sure we understand the playing field, understand the new risks, see if it's changed and then start to step into the opportunity if it makes sense to. So I think that's how I see it.

Jason Stewart

Yes. It strikes me as creative financing solutions will still be a necessary part of the puzzle.

Operator

We'll go next now to Chris Muller with Citizens Capital Markets.

Christopher Muller

So I guess looking at your 5 verticals and the prospects for higher rates, is there a particular area that you guys expect to outperform in a rising rate environment that you might lean in on a little more if the forward curve is realized?

Kyle Brown

Yes. I mean, it's a great question. I think we're already leaning into that kind of lower middle market space. We have been now for a couple years, with a lot of private credit moving upstream, focusing on middle and upper middle markets. Higher rates mean better returns there. But I would say that all of them are really going to benefit. I mean, we provide this analysis to shareholders, which really shows pretty limited impact to TRIN on rates going down.

But with rates going up, that really increases our income because our facilities, the majority of them, they have floors, which is great if rates are going down, but they don't have ceilings. And so that can drive new payoffs, right, like we saw before when rates went up, which can increase fee income or that can just create more and higher current income as well. So I think we set the portfolio up to do really well in a rate-declining environment, knowing that if rates went up, we happen to benefit from that. So feel pretty good about our position relative to rates and rate sensitivity.

Christopher Muller

Got it. And rising rates are an obvious tailwind for the bottom line, but maybe thinking about some secondary effects, do you guys expect your fundraising efforts to also benefit from improving sentiment?

Kyle Brown

Yes, it's a good question. Fundraising is always hard. I think that our track record and consistency in a raising rate environments, a declining rate environment, 5 different administrations, all of that has been very consistent. And when we're talking to investors, that's really what we're pointing to is our consistency throughout different markets, our ability to gauge what's going on, understand the new risks, pivot. We like to say we're scrappy around here. I know Gerry hates that word.

Gerald Harder

Some of us like it.

Kyle Brown

But we are. And so we're going to assess what's going on. We're going to assess where the new maybe veins or pockets of investment and opportunities are. And then we're not going to be afraid to jump in there and figure it out. So fundraising is going well. It's always hard, but I would say it's going really well, and it's a big part of our future, providing liquidity through our managed funds business, which gives TRIN unlimited upside to our stock, earnings per share, NAV, et cetera.

So we're really going to focus on building out our verticals and making sure they're best-in-class. And then we're going to align that with capital through our managed funds business to make sure that we have the liquidity necessary to keep building those businesses.

Operator

We'll go next now to Christopher Nolan with Ladenburg Thalmann.

Christopher Nolan

Sarah, what's going to be the leverage level for this new JV once it's fully deployed?

Sarah Stanton

Leverage levels for the new JV? Where is it at right now, Mike?

Michael Testa

Yes. Right now, it's close to 1:1. We're going to -- it's going to be consistent with the BDC, slightly higher, trying to get up to 2:1. So moderate leverage, but it's optimal, right? You're setting it up a separate vehicle that is -- has the structure of the underlying secured facility aligned to those assets. So it's a better advance rate and you're able to manage it in a better cost of capital there.

Christopher Nolan

Okay. Is that really just bank facility type financing?

Michael Testa

That's right. A revolving facility launched it, continue to grow, expect to syndicate it further as it goes.

Christopher Nolan

What sort of advance rate are you getting?

Michael Testa

Yes. I mean, I think, again, this is a similar advance rate that our current BDC has. But again, you get better way to manage it with specific those type assets, those type of deals. So anywhere from 60% to 70%.

Christopher Nolan

Great. And I guess as a follow-up, with all these JVs going on, and you actually have a lot of outside entities that want to work with you and tap your deal flow. How -- I mean, should we expect a material increase in your operating expenses or operating efficiencies going forward? Or is there some operating leverage where you can basically scale up with incremental -- minimal incremental growth in expenses?

Kyle Brown

Yes. So I think the first thing to think about is we are -- these are all the same deals, right, with these various JVs. We're just tapping into different pockets of liquidity for them, right? So there is some scaling leverage there. But you've got to remember, we are not just a stagnant pool of assets, but a management company, an operating company, right? And so if we're growing at a 20% to 30% annual growth rate, which we have been for 5 years, that means expenses have to go up.

Now income should go up and exceed that, which it has been and will continue to over time, as our expense ratios have continued to come down to the point now where we're one of the -- we're right in line with our BDC peers. And over time, as we continue to raise more capital and grow the business, that'll just continue to improve. But we're not trying to optimize for -- that's not the -- that is a lever that externally managed BDCs use because they have no other levers. That's not what we're focused on. We are building the business. We are hiring a lot of folks. And our income and our earnings per share will increase above and beyond those additional expenses.

Sarah Stanton

And Chris, just to put a finer point on that. So like Kyle said, these are co-invest vehicles. So like the credit underwriting, the portfolio management, that's already being done. There's no incremental cost there. And then any cost directly associated with a particular vehicle, whether it's accounting costs, funded admin, those are borne by the specific vehicle, not by the BDC.

Operator

[Operator Instructions] We'll go next now to Alexander Villalobos with Jefferies.

Alexander Villalobos-Morsink

A little bit more detail on originations, just on the environment. What are you guys seeing with the spreads, covenants and leverage? Just a little more detail there and color would be great.

Kyle Brown

Yes. I think we've seen spreads -- well, it depends on the vertical. But I'd say more often than not over the last few years, spreads have tightened up in some of our verticals. Some not as much, but in some of them, they have been declining over the last few years with competition and a lot of liquidity out there. We've seen that trend start to really hold up. And in some ways, we're pushing pricing. And so I think 2027 should probably look like a spread flat to up year.

And we are certainly testing that right now, as I believe there is a lack of liquidity. As I think bank leverage and fundraising has become more difficult, supply and demand is going to start kicking in. And so when you're thinking about the broadly syndicated market and spreads there, that's just not the market we play in, right? We are originating directly with these companies. The value that we're providing to them and working directly with them means we're going to end up with a higher spread, generally.

And dealing in the market we deal in, which is this kind of growth stage to lower middle market, we just have different companies, different competition, and there are different spreads. And so we haven't seen the spread compression that the rest of the private credit market has seen over the last 5 years. It's been smaller. And now it's kind of knee-jerking back the opposite direction.

Operator

Thank you. And ladies and gentlemen, it appears we have no further questions this morning. Mr. Brown, I'll turn things back to you, sir, for any closing comments.

Kyle Brown

Great. Thank you. Well, on behalf of the Trinity Capital team, thank you for joining us today. Q3 was a strong quarter by all measures, and Trinity Capital is experiencing tremendous momentum right now. We're enthusiastic about where we're headed. We're excited to host many of you at our investor event next Thursday at the New York Stock Exchange before we have the honor of ringing the closing bell that afternoon with our team. We look forward to sharing our Q4 results in February. In the meantime, please don't hesitate to reach out to the IR desk with further questions. Have a great day. Thanks.

Operator

Thank you very much, Mr. Brown. Again, ladies and gentlemen, that will conclude Trinity Capital's third quarter earnings call. We'd like to thank you all so much for joining us. Wish you all a great afternoon. Goodbye.