Runway Growth Finance Corp

Runway Growth Finance reported second-quarter net investment income of $18.2 million, or $0.43 per share, up from $10.6 million in the prior quarter and exceeding its $0.33 base dividend. The SWK Holdings acquisition expanded the portfolio to $1.2 billion and contributed approximately $0.05 per share of quarterly income. The company recorded $45.3 million in net realized losses, mainly from Marley Spoon and Blueshift, though management said much of the impact had already been reflected in prior-period unrealized losses. Portfolio credit metrics improved, with 94% of investments rated category 3 or better and an average risk rating of 2.34. Shares traded at more than a 49% discount to NAV, prompting ongoing repurchases and a commitment from BC Partners affiliates to buy up to 10% of outstanding shares while the discount remains substantial. The company declared a $0.33-per-share third-quarter distribution and appointed Mike Rovner as co-CEO.

Bulldog Investors, LLP, a shareholder owning more than 3% of Runway Growth Finance Corp. with 1,127,854 shares, is calling on management to materially expand its share repurchase program. Runway’s stock closed at $5.49 on July 2nd, a 55% discount to its last reported net asset value of $12.13, and down from a five-year peak of almost $15. Bulldog argues that instead of issuing new loans that the market devalues by more than 50%, Runway should use investible cash to repurchase shares and reduce debt. If management declines, Bulldog may nominate directors to pursue a transaction to maximize shareholder value, including possibly winding up the company.