Runway Growth Restores Net Investment Income After SWK Close
Net investment income was $18.2 million, or $0.43 a share, as the specialty finance company closed the SWK Holdings deal and lifted the portfolio to $1.2 billion.
Runway Growth Finance Corp. (RWAY) reported net investment income of $18.2 million, or $0.43 a share, for the quarter ended June 30, 2026, after $10.6 million, or $0.29 a share, in the first quarter. The specialty finance company’s rebound followed the close and integration of the SWK Holdings acquisition, which it had been working through in the prior period.
Total investment income was $37.0 million. The dollar-weighted annualized yield on average debt investments held at 14.2%, matching the first-quarter rate. BlueShift and Marley Spoon moving to non-accrual at the end of the first quarter modestly affected the yield. Total operating expenses were $18.8 million.
The investment portfolio expanded to $1.2 billion at fair value in 79 companies from $886.3 million in 56 companies at March 31, 2026. The book comprised $1.1 billion in loans, 98.0% of which were senior secured, and $70.0 million in warrants and other equity-related investments.
Runway Growth funded approximately $239.6 million of investments acquired with SWK Holdings, including $216.2 million across 13 loan positions and $23.4 million in equity, or $225.2 million net of the purchase discount, using cash and common stock as consideration. It also completed ten investments in new and existing portfolio companies, representing $101.7 million in funded investments, or $85.8 million net of assignments. Total debt and equity fundings net of upfront loan origination fees and purchase discounts were $325.4 million. Proceeds included $36.5 million, comprising $15.9 million in assignments, $10.5 million from scheduled repayments, and $10.1 million in equity sale proceeds.
Net asset value was $502.6 million, or $11.91 a share, up 15% from $438.2 million, or $12.13 a share, at March 31, 2026. The net increase in net assets resulting from operations was $27.2 million, or $0.65 a share, after a $34.8 million, or $0.96 a share, net decrease in the first quarter. Net realized loss was $45.3 million, compared with a $1.5 million net realized loss a year earlier. Net change in unrealized gain was $54.3 million, reversing a $46.7 million net change in unrealized loss in the first quarter.
Core leverage rose to approximately 136% from 98% at March 31, 2026. Credit-facility borrowings were $350.0 million. Available liquidity was about $210.8 million, including $10.8 million of unrestricted cash and $200.0 million of available borrowing capacity under the credit facility. The company repurchased 249,169 shares for $1.4 million.
On July 13, 2026, Runway Growth entered an eighth amendment to its credit agreement that reduced total commitments from $550.0 million to $425.0 million, permitted non-pro rata prepayment and termination of a certain lender’s commitments, amended financial covenants, updated key-person trigger events, and changed loan-eligibility criteria and borrowing-base concentration limits. From July 1 through August 6, it funded $1.9 million in unfunded commitments and received $17.1 million in debt prepayments.
The board elected Michael Rovner as Co-Chief Executive Officer effective August 6, 2026, alongside R. David Spreng, whose title changed to Co-Chief Executive Officer and President. Rovner also serves as Co-Chief Investment Officer of Runway Growth Capital LLC. The investment adviser and its affiliates announced a commitment to purchase up to 10% of outstanding shares. The board declared a third-quarter 2026 distribution of $0.33 a share, matching the second-quarter dividend, payable August 31, 2026.