HTGC vs OTF: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. HTGC and OTF share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined HTGC and OTF exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Hercules Capital is a business development company (BDC) that provides senior secured, mostly first-lien loans to venture-capital-backed companies in technology and life sciences. It is recognized as the largest non-bank venture lender, having committed more than $27 billion to over 700 companies since inception, with over $6 billion in assets under management. Roughly 90% of its portfolio is senior secured and floating-rate, with portfolio yields averaging near 13.9%, and individual loans typically sized around $20 million to $40 million. As a BDC, Hercules must distribute most of its taxable income, which is why the stock is held primarily for income.

Full HTGC guide

Blue Owl Technology Finance Corp. is a business development company, which means it is a lender rather than an operating business. It originates and holds loans to private US technology companies, with software borrowers at the center of the book. At June 30, 2026 the portfolio was $14.7 billion at fair value across 205 companies, averaging $71.6 million per position, and 77.8% sat in first-lien senior secured debt (the company treats 56% of that first-lien exposure as unitranche). Roughly 96.7% of the debt investments carry floating rates at a weighted average spread of 5.3% over the base rate, producing a 9.6% weighted average yield on accruing debt and income-producing securities. OTF also owns equity, not just paper: preferred, common and specialty finance stakes together were about 15% of fair value. Blue Owl Technology Credit Advisors LLC runs the vehicle externally for a management fee plus incentive fees.

Full OTF guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• HTGC drivers: Record originations and portfolio growth; Floating-rate, senior-secured income engine.
• OTF drivers: Floating-rate software lending at a wide spread; The discount to NAV and the buyback against it.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Hercules lends to high-growth, frequently unprofitable venture-backed companies, so a weak venture funding environment or recession could drive rising nonaccruals and net asset value markdowns. For OTF, net asset value fell from $17.33 at December 2025 to $16.48 at June 2026, almost all of it a $0.84 per share realized and unrealized loss in the first quarter, so the discount is being applied to a mark that has already moved down.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick HTGC if you believe its drivers more; OTF if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the HTGC and OTF guides.

HTGC. Hercules generated record total investment income of about $141.5 million in Q1 2026, up roughly 22.5% year over year, with net investment income near $0.48 per share. The stock recently traded around the mid-teens, down double digits year to date, at roughly a 30% premium to net asset value, which is well below the 70%-plus premium seen in 2024. Its high yield reflects both the floating-rate portfolio and the market's pricing of venture-credit risk.

OTF. For a BDC the useful yardsticks are price to NAV, net investment income per share against the dividend, portfolio yield, non-accruals and leverage, not a sales or earnings multiple, because reported net income swings on unrealized marks rather than operations. On those measures OTF earns 9.6% on its accruing debt with 0.6% of the portfolio on non-accrual at cost (0.1% at fair value), pays a $0.35 quarterly base dividend out of $0.30 of quarterly NII, and trades near two thirds of book. The headline ~13.8x P/E and ~3.9x sales figures that screeners publish are artifacts of that accounting and should not be compared with operating companies.

Headline figures (approximate, JULY 2026): HTGC shows total investment income (q1 2026) ~$141.5M, net investment income (q1 2026) ~$88.1M (~$0.48/share), net asset value per share ~$11.90 (Mar 31 2026), market cap ~$2.8B; OTF shows total investment income (ttm) ~$1.31B, including ~$338M in Q2 2026, net investment income per share (q2 2026) ~$0.30, GAAP and adjusted, net asset value per share (june 30, 2026) ~$16.48, versus ~$17.33 at year-end 2025, price to nav ~0.67x at a ~$11.12 share price.

HTGC and OTF are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined HTGC and OTF exposure against your real portfolio. It is not an investment adviser.