Cuộc họp công bố kết quả kinh doanh Q3 2026 của Trinity Capital (TRIN): NII đủ chi trả cổ tức, NAV đạt 1,3 tỷ USD

Điểm tin chính

• Tổng thu nhập từ đầu tư tăng 30% so với cùng kỳ năm trước lên 98 triệu USD. Thu nhập từ đầu tư thuần đạt 50 triệu USD, tương đương 0,52 USD/cổ phiếu, đảm bảo 103% mức phân phối cổ tức hàng quý 0,51 USD.
• Tổng tài sản thuần tăng 5% so với quý trước và tăng 33% so với cùng kỳ năm trước lên mức kỷ lục 1,3 tỷ USD. NAV trên mỗi cổ phiếu tăng 0,14 USD lên 13,61 USD, chủ yếu nhờ việc phát hành cổ phiếu theo chương trình ATM gia tăng giá trị (accretive).
• Tổng tài sản quản lý (AUM) toàn nền tảng tăng 31% so với cùng kỳ năm trước lên 3,4 tỷ USD. Các quỹ quản lý và công ty liên doanh đóng góp 0,05 USD trên mỗi cổ phiếu vào NII hàng quý.
• Trinity Capital đã giải ngân 614 triệu USD trong quý 3 và bổ sung 880 triệu USD cam kết mới. Các cam kết chưa giải ngân đạt tổng cộng 1,4 tỷ USD, mặc dù 91% trong số đó vẫn phụ thuộc vào quá trình thẩm định và sự phê duyệt của hội đồng đầu tư.
• Các chỉ số tín dụng được cải thiện, trong đó các khoản đầu tư ngừng dồn tích lãi (nonaccrual) giảm xuống còn 0,7% danh mục đầu tư theo giá trị hợp lý. Các khoản vay thế chấp thứ nhất (first-lien) chiếm 89% nợ gốc, trong khi các khoản vay được đảm bảo bằng tài sản doanh nghiệp có tỷ lệ cho vay trên giá trị tài sản đảm bảo (LTV) bình quân gia quyền là 22%.
• Ban lãnh đạo cho biết quy mô cơ hội giải ngân mới (origination pipeline) đang ở mức lớn nhất trong lịch sử Trinity Capital và dự báo chênh lệch lãi suất (spreads) năm 2027 sẽ đi ngang hoặc tăng lên, tùy thuộc vào thanh khoản thị trường và điều kiện cạnh tranh.

Dữ liệu tài chính cốt lõi

Kết quả kinh doanh và hoạt động

Năm mảng cho vay chính của Trinity Capital đã hỗ trợ hoạt động giải ngân rộng khắp trong quý. Tài trợ thiết bị chiếm 26% tổng vốn giải ngân trong quý 3, tiếp theo là cho vay công nghệ chiếm 18%, tài trợ tài chính bảo trợ (sponsor finance) chiếm 17%, chăm sóc sức khỏe và khoa học đời sống chiếm 15%, và cho vay dựa trên tài sản chiếm 14%. 10% còn lại thuộc về các thực thể ngoài bảng cân đối kế toán.

Danh mục đầu tư bao phủ 24 ngành nghề, trong đó không có bên vay nào chiếm quá 3% tổng rủi ro danh mục (exposure). Công nghệ tài chính là ngành lớn nhất, chiếm 15% giá gốc danh mục đầu tư trên 18 bên vay. Mức độ tiếp xúc liên quan đến AI được chia giữa cơ sở hạ tầng và các nền tảng tự động hóa, mỗi mảng chiếm chưa đến 7% giá gốc danh mục.

Tỷ lệ quay vòng danh mục đầu tư tiếp tục diễn ra. Khoảng 78% tài sản tính theo giá gốc đã được khởi tạo kể từ đầu năm 2025, trong khi các khoản vay khởi tạo trước năm 2024 chiếm chưa đến 7%. Kỳ hạn bình quân của các khoản vay đã thực hiện là 30 tháng.

Các quỹ quản lý và công ty liên doanh đã cung cấp công suất gần 1 tỷ USD. Quỹ SBIC đã hoàn tất hơn 75 triệu USD cam kết vốn cổ phần và sử dụng đòn bẩy liên bang với tỷ lệ nợ trên vốn chủ sở hữu 2:1, dự kiến sẽ tạo ra công suất nền tảng hơn 300 triệu USD khi hoạt động hết quy mô theo đánh giá của ban lãnh đạo.

Trinity Capital cũng đã thành lập liên doanh thứ hai với Capital Southwest. Thực thể này hướng đến các tài sản tài trợ bảo trợ và có công suất tiềm năng đạt 500 triệu USD. Liên doanh đầu tiên với Capital Southwest đã nắm giữ 132 triệu USD tài sản tại 14 công ty trong danh mục đầu tư vào cuối quý.

Vị thế vốn và tín dụng

Công ty đã thanh toán 125 triệu USD trái phiếu không đảm bảo đáo hạn vào tháng 8. Công ty cũng thông báo đợt phát hành 350 triệu USD trái phiếu ưu tiên không đảm bảo kỳ hạn 5 năm vào ngày cuối cùng của quý; giao dịch đã hoàn tất sau khi kết thúc quý.

Trinity Capital đã huy động được 58 triệu USD thông qua chương trình ATM với mức thặng dư trung bình 32% so với NAV. Ban lãnh đạo cho biết đợt phát hành này giúp gia tăng giá trị cho các cổ đông hiện hữu.

Chất lượng tín dụng tiếp tục ổn định. Khoảng 99,3% các khoản đầu tư nợ tính theo giá trị hợp lý đang hoạt động bình thường, và xếp hạng tín dụng nội bộ trung bình cải thiện nhẹ lên 3,1 trên thang điểm 5. Có ba công ty trong danh mục đầu tư thuộc diện ngừng dồn tích lãi, giảm sau khi hai khoản đầu tư ngừng dồn tích lãi nhỏ được tất toán và không có khoản tín dụng mới nào được thêm vào trong quý 3.

Quý này ghi nhận 7,5 triệu USD lỗ thực hiện thuần, được bù đắp một phần bởi 4,4 triệu USD giá trị tăng thêm chưa thực hiện thuần.

Triển vọng từ ban lãnh đạo

Ban lãnh đạo cho biết quy mô cơ hội giải ngân hiện tại đang ở mức lớn nhất trong lịch sử công ty. Mảng tài trợ thiết bị dự kiến sẽ duy trì đà tăng trưởng tương đối mạnh mẽ, nhờ nhu cầu sản xuất và thiết bị trong nước, bao gồm cả các hoạt động liên quan đến cơ sở hạ tầng AI.

Đối với năm 2027, ban lãnh đạo dự kiến chênh lệch lãi suất sẽ đi ngang hoặc tăng lên khi thanh khoản cho vay trở nên thắt chặt hơn. Đây là góc nhìn của ban lãnh đạo chứ không phải là hướng dẫn tài chính định lượng.

Công ty kỳ vọng các quỹ quản lý sẽ đóng góp đáng kể hơn vào lợi nhuận theo thời gian. Ban lãnh đạo chỉ ra rằng chi phí phân bổ khoảng 2 triệu USD hàng quý cho cố vấn đầu tư đã đăng ký là mức chi phí định kỳ (run rate) hợp lý trong ngắn hạn nếu không có thực thể mới nào được triển khai và các quỹ hiện tại mở rộng quy mô đồng đều.

Đối với liên doanh tài trợ bảo trợ mới với Capital Southwest, ban lãnh đạo có kế hoạch tăng đòn bẩy từ mức khoảng 1:1 lên gần 2:1. Hạn mức tín dụng tuần hoàn gốc hiện cung cấp tỷ lệ giải ngân (advance rate) khoảng 60% đến 70%.

Rủi ro và các điểm cần theo dõi

• Trong số 1,4 tỷ USD cam kết chưa giải ngân, 91% vẫn phụ thuộc vào quá trình thẩm định tiếp theo và sự phê duyệt của hội đồng đầu tư. Do đó, việc giải ngân trong tương lai không được đảm bảo.
• Thu nhập phí được hưởng lợi từ phí khởi tạo, phí đại lý, phí trả nợ trước hạn và phí thoát khoản đầu tư. Các khoản này phụ thuộc vào giao dịch và có thể biến động theo quy mô khởi tạo và hoàn trả nợ.
• Ban lãnh đạo cho biết khoản hoàn trả nợ tự nhiên sẽ thay đổi theo từng quý và không xem mức hoàn trả cao hơn trong quý 3 là một xu hướng kéo dài.
• Lãi suất cao hơn có thể làm tăng thu nhập hiện tại vì hầu hết các hạn mức tín dụng đều có sàn lãi suất nhưng không có trần. Tuy nhiên, chúng cũng có thể thúc đẩy hoạt động tái cấp vốn và trả nợ trước hạn diễn ra nhanh hơn.
• Ban lãnh đạo đang đánh giá sự thiếu chắc chắn về mặt pháp lý và chính trị ảnh hưởng đến việc xây dựng trung tâm dữ liệu và triển khai GPU trước khi cam kết bổ sung vốn.
• Quá trình thẩm định tín dụng ngành phần mềm có tính đến sự gián đoạn tiềm ẩn do AI, bao gồm việc xem xét liệu bên vay có sản phẩm có khả năng phòng thủ, đà thu hút khách hàng đã được định hình và các hệ thống tích hợp sâu hay không.

Tóm tắt phần Hỏi & Đáp với chuyên viên phân tích

Liên doanh tài trợ bảo trợ: Thực thể mới hợp tác với Capital Southwest sẽ cùng đầu tư vào các giao dịch tài trợ bảo trợ do Trinity khởi tạo. Các bên vay mục tiêu thường là những công ty phân khúc trung bình thấp (lower-middle-market) đã trưởng thành, có EBITDA dương, đặc biệt là các doanh nghiệp phần mềm tích hợp và một số công ty dịch vụ được lựa chọn.

Cơ cấu khởi tạo khoản vay: Các cam kết chưa giải ngân cho thấy bức tranh về cơ hội giải ngân. Khoảng một phần ba liên quan đến chăm sóc sức khỏe và khoa học đời sống, khoảng một phần tư thuộc về tài trợ thiết bị và khoảng 20% là cho vay công nghệ, phần còn lại thuộc về cho vay dựa trên tài sản và tài trợ bảo trợ.

Thu nhập phí: Mảng tài trợ thiết bị thường tạo ra phí hoàn tất và cấu trúc từ 2% đến 3%. Quý 3 cũng được hưởng lợi từ phí trả nợ trước hạn trong mảng cho vay công nghệ và khoa học đời sống, bên cạnh phí khởi tạo và phí đại lý.

Phát hành cổ phiếu theo chương trình ATM: Ban lãnh đạo cho rằng tốc độ phát hành ATM chậm hơn trong quý 3 là do các khoản hoàn trả nợ và hợp vốn (syndication) tăng cao. Công ty dự kiến tiếp tục sử dụng chương trình này khi việc phát hành giúp gia tăng giá trị cho NII hoặc NAV và phù hợp với nhu cầu vốn.

Đòn bẩy hoạt động: Ban lãnh đạo dự kiến chi phí sẽ tăng khi nền tảng phát triển, nhưng cho biết thu nhập sẽ tăng nhanh hơn theo thời gian. Chi phí thẩm định tín dụng và quản lý danh mục đầu tư được chia sẻ giữa các thực thể đồng đầu tư, trong khi các chi phí kế toán và quản trị riêng của từng thực thể sẽ do thực thể đó gánh chịu.

Toàn văn Biên bản Cuộc họp Báo cáo Kết quả Kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

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.

Phần hỏi đáp

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.