Shares of Horizon Technology Finance (HRZN) - Get Report have surged 23% in the past month, although they are still down over 11% year-to-date. Robert Pomeroy, CEO of Horizon, said the upswing is due to strong portfolio management and a robust pipeline.
"We grew the portfolio and at the same time had some portfolio exits which are an important part of our business because they help turn our portfolio over as well as gives us some bonus income," said Pomeroy.
Horizon Technology is a business development company that lends to the technology, life sciences, health care information and clean tech industries.
Horizon's investment objective is to generate current income from the loans it makes and capital appreciation from the warrants it receives when making secured loans to venture capital-backed companies. The company pays an 11.6% dividend.
Among the companies in Horizon's current portfolio, discount ticketing Web site ScoreBig is one in which Pomeroy sees a great deal of promise. He said the company also has investments in a number of "exciting" life sciences companies. Last month Horizon closed a new $5.5 million venture loan facility to Skyword, a content marketing software and services company, which will use the money for working capital purposes.
As for liquidity events in the coming year, Pomeroy said there are number of companies that are lining up nicely to be sold, although he declined to identify them.
"We see several companies on the technology side that we think are ripe for the picking," said Pomeroy, who has been Horizon's chief executive officer since the company's inception in 2003.
Finally, floating rate loans make up 91% of the company's outstanding principal so Pomeroy is less concerned about the effects of a Federal Reserve interest rate hike.
"We actually think that if rates move up 25 to 100 basis points slowly over time it would be a good thing for us," he said.