Gladstone Investment Corporation (GAIN) Bundle
A Brief History of GAIN
As of 2024, Gladstone Investment Corporation (GAIN) has continued to evolve as a business development company (BDC) focused on investing primarily in private middle-market companies. The firm primarily provides secured debt and equity investments to support the growth of its portfolio companies.
Financial Performance Overview
For the three months ending September 30, 2024, GAIN reported net investment income of $12.4 million, compared to $8.4 million during the same period in 2023. The net realized gain on investments for this period was $2, while the net unrealized depreciation of investments was $18.9 million.
Investment Portfolio Activity
As of September 30, 2024, GAIN's investment portfolio had a fair value of $853.3 million, which reflects a decrease from $920.5 million at the beginning of the fiscal year. The portfolio consisted of 22 companies with a total cost basis of $840.1 million.
| Investment Type | Fair Value (in millions) | Cost Basis (in millions) |
|---|---|---|
| Secured First Lien Debt | $469.5 | $474.9 |
| Secured Second Lien Debt | $111.3 | $138.7 |
| Preferred Equity | $228.5 | $213.5 |
| Common Equity/Equivalents | $43.9 | $93.4 |
| Total | $853.3 | $840.1 |
Capital Raising Activities
In 2024, GAIN successfully raised capital through the issuance of the 8.00% 2028 Notes, generating gross proceeds of approximately $74.8 million. Additionally, the company sold 3,097,162 shares of common stock under its ATM program, raising about $44.5 million.
Distributions to Stockholders
For the six months ended September 30, 2024, GAIN declared cash distributions totaling $17.6 million to its common stockholders. The distributions were approximately $0.24 per share during this period.
Market Performance
As of September 30, 2024, GAIN's common stock was trading at $14.45 per share, representing a 15.7% premium to its net asset value (NAV) of $12.49 per share.
Borrowing and Interest Rates
GAIN had total borrowings of $341.0 million as of September 30, 2024, with an effective interest rate of 11.0%. This was an increase from $398.3 million in borrowings from the previous year.
Conclusion on Financial Ratios
For the three months ended September 30, 2024, GAIN reported a ratio of net investment income to average net assets of 6.19%, compared to a negative 1.53% in the same period of the previous year.
A Who Owns Gladstone Investment Corporation (GAIN)
Ownership Structure
As of 2024, the ownership of Gladstone Investment Corporation (GAIN) consists of a diverse group of institutional and retail investors. The company has approximately 36,688,667 shares of common stock outstanding.
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 38.5% | 14,113,000 |
| Retail Investors | 61.5% | 22,575,667 |
Major Shareholders
The following table outlines the major shareholders of GAIN, detailing the number of shares owned and their respective ownership percentages.
| Shareholder | Shares Owned | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 3,500,000 | 9.5% |
| The Vanguard Group, Inc. | 2,800,000 | 7.6% |
| State Street Corporation | 2,200,000 | 6.0% |
| Gladstone Management Corporation | 1,500,000 | 4.1% |
| Other Institutional Investors | 4,113,000 | 11.2% |
| Retail Investors (Combined) | 22,575,667 | 61.5% |
Recent Changes in Ownership
In the past year, GAIN has seen fluctuations in its institutional ownership, with BlackRock increasing its stake by 1.2% and Vanguard reducing its holdings by 0.5%.
Market Capitalization and Stock Performance
As of September 30, 2024, GAIN's market capitalization stands at approximately $531 million, with the stock trading at $14.45 per share. The company's net asset value (NAV) per share is reported at $12.49.
| Metric | Value |
|---|---|
| Market Capitalization | $531 million |
| Share Price | $14.45 |
| Net Asset Value (NAV) | $12.49 |
Distribution History
Gladstone Investment Corporation has a history of distributing dividends to its shareholders. The following table summarizes the recent dividend distributions:
| Distribution Date | Amount per Share | Total Distributed |
|---|---|---|
| September 30, 2024 | $0.24 | $8,805,000 |
| June 30, 2024 | $0.24 | $8,805,000 |
| March 31, 2024 | $0.21 | $7,069,000 |
Conclusion of Ownership Overview
Gladstone Investment Corporation's ownership structure reflects a strong participation from both institutional and retail investors, with significant stakes held by major investment firms. The company maintains a robust dividend distribution policy, contributing to its attractiveness among income-focused investors.
Gladstone Investment Corporation (GAIN) Mission Statement
Gladstone Investment Corporation (GAIN) is dedicated to providing superior investment returns through income and capital appreciation by investing in a diversified portfolio of debt and equity securities. The company aims to achieve consistent growth in net asset value while ensuring the stability of income distributions to its shareholders.
Investment Objectives
The primary investment objectives of GAIN include:
- Achieving and growing current income by investing primarily in secured first lien and second lien loans.
- Providing long-term capital appreciation through equity investments in established private businesses.
- Maintaining a balanced portfolio comprising approximately 75% debt investments and 25% equity investments.
Financial Highlights as of September 30, 2024
| Metric | Value |
|---|---|
| Net Asset Value (NAV) per Share | $12.49 |
| Total Net Assets | $458.375 million |
| Weighted-Average Shares Outstanding | 36,688,667 |
| Total Investment Portfolio Fair Value | $853.307 million |
| Investment Income (Last Quarter) | $22.565 million |
| Net Investment Income | $12.414 million |
| Realized Gain on Investments | $42.303 million |
| Net Unrealized Depreciation of Investments | ($18.942 million) |
Investment Strategy
GAIN focuses on investments in lower middle-market companies through a strategy that combines debt and equity investments to support management buyouts and recapitalizations. The company has exited investments in 32 portfolio companies, generating approximately $332.5 million in net realized gains since inception, reflecting a robust strategy aimed at achieving capital gains alongside current income.
Recent Investment Activity
During the six months ended September 30, 2024, GAIN executed significant transactions:
- Exited investment in Funko Acquisition Holdings, resulting in a realized gain of $2,000.
- Invested $18.5 million in Nocturne Luxury Villas, Inc. through secured first lien debt.
- Exited investment in Nth Degree Investment Group, LLC, achieving a realized gain of $42.3 million and repayment of a $25 million debt investment.
Distribution Policy
As part of its commitment to shareholder returns, GAIN declared the following distributions:
| Record Date | Payment Date | Distribution per Common Share |
|---|---|---|
| October 22, 2024 | October 31, 2024 | $0.08 |
| November 20, 2024 | November 29, 2024 | $0.08 |
| December 20, 2024 | December 31, 2024 | $0.08 |
| Total for the Quarter | $0.24 |
Capital Raising and Financial Stability
Gladstone Investment Corporation has effectively accessed capital markets, with a total commitment amount of $200 million available through its credit facility, which can potentially increase to $300 million. As of September 30, 2024, the company maintained an asset coverage ratio of 229.3% on senior securities representing indebtedness, showcasing its financial strength and ability to support ongoing investment activities.
Additionally, GAIN has engaged in various financing activities, including issuing unsecured notes and common stock, further solidifying its capital base.
How Gladstone Investment Corporation (GAIN) Works
Business Model
Gladstone Investment Corporation (GAIN) operates as a business development company (BDC) focused on investing in small and mid-sized businesses. The company primarily invests in secured first lien and second lien debt, as well as equity securities of its portfolio companies.
As of September 30, 2024, GAIN had a total investment portfolio valued at $853.3 million, with the breakdown as follows:
| Investment Type | Fair Value ($ in thousands) |
|---|---|
| Secured First Lien Debt | 469,480 |
| Secured Second Lien Debt | 111,344 |
| Preferred Equity | 228,528 |
| Common Equity/Equivalents | 43,955 |
| Total | 853,307 |
Investment Income
For the six months ended September 30, 2024, GAIN reported total investment income of $44.7 million, a 10.3% increase compared to $40.6 million for the same period in 2023. This increase was attributed to higher interest income and dividend and success fee income.
The breakdown of investment income for the six months ended September 30, 2024, is as follows:
| Income Source | $ in thousands |
|---|---|
| Interest Income | 41,621 |
| Dividend and Success Fee Income | 3,122 |
| Total Investment Income | 44,743 |
Operating Expenses
Total expenses for the six months ended September 30, 2024, amounted to $25.0 million, reflecting a decrease of 26.1% from $33.9 million in the prior year. The expense breakdown is as follows:
| Expense Type | $ in thousands |
|---|---|
| Base Management Fee | 9,065 |
| Loan Servicing Fee | 4,416 |
| Incentive Fee | (1,556) |
| Administration Fee | 1,073 |
| Interest Expense | 12,879 |
| Total Expenses | 25,038 |
Net Investment Income
For the six months ended September 30, 2024, GAIN reported a net investment income of $19.7 million, compared to $6.7 million in the same period of 2023, marking a significant increase of 193.7%.
Realized and Unrealized Gains
During the six months ended September 30, 2024, GAIN recorded net realized gains of $42.3 million, while net unrealized depreciation reached $(53.1) million.
The overall net increase in net assets resulting from operations was $8.96 million for the period, down from $56.1 million in the prior year.
Portfolio Composition
As of September 30, 2024, GAIN's investment portfolio comprised 22 portfolio companies with an aggregate cost basis of $840.1 million. The fair value of the investment portfolio was 101.6% of the cost basis, indicating a fair value surplus of $13.2 million.
Credit Facility
GAIN has a Credit Facility with a maximum borrowing capacity of $200.0 million, with $8.9 million outstanding as of September 30, 2024. The interest rate on borrowings is based on the 30-day Term SOFR plus a margin of 3.15%.
Market Performance
As of September 30, 2024, GAIN's common stock closed at $14.45 per share, representing a 15.7% premium to its net asset value (NAV) of $12.49 per share.
Distributions
For the quarter ending December 31, 2024, GAIN declared a total cash distribution of $0.24 per common share. This includes monthly distributions of $0.08 each for October, November, and December 2024.
Regulatory Compliance
GAIN's asset coverage ratio on senior securities representing indebtedness was 229.3% as of September 30, 2024, well above the regulatory requirement of 150% under the 1940 Act.
How Gladstone Investment Corporation (GAIN) Makes Money
Investment Income
Gladstone Investment Corporation generates income primarily through interest from debt securities, dividends, and success fees. For the six months ended September 30, 2024, the total investment income was $44.743 million, an increase of 10.3% compared to the previous year.
| Source of Income | Amount (2024) | Amount (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Interest Income | $41.621 million | $38.670 million | $2.951 million | 7.6% |
| Dividend Income | $1.419 million | $1.907 million | ($0.488 million) | (25.6%) |
| Success Fee Income | $1.703 million | $0.000 million | $1.703 million | NM |
| Total Investment Income | $44.743 million | $40.577 million | $4.166 million | 10.3% |
Debt Investments
The weighted-average principal balance of GAIN's interest-bearing investment portfolio was $578.1 million as of September 30, 2024, compared to $519.7 million in the previous year. The weighted-average yield on these investments was 14.4% for the six months ended September 30, 2024.
For the three months ended September 30, 2024, interest income from debt securities was reported at $20.996 million, reflecting a steady investment strategy with a focus on high-yield opportunities.
Realized and Unrealized Gains
GAIN also earns income through realized and unrealized gains from its investment portfolio. For the six months ended September 30, 2024, the net realized gain was $42.305 million, while the net unrealized depreciation was $(53.054) million.
| Type of Gain | Amount (2024) | Amount (2023) | Change ($) |
|---|---|---|---|
| Net Realized Gain | $42.305 million | $1.444 million | $40.861 million |
| Net Unrealized Depreciation | ($53.054) million | $47.988 million | ($101.042 million) |
Expenses and Management Fees
Operating expenses include management fees, interest expenses, and other administrative costs. For the six months ended September 30, 2024, total expenses, net of credits from the adviser, were $25.038 million, down from $33.867 million in 2023.
| Expense Type | Amount (2024) | Amount (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Base Management Fee | $9.065 million | $8.272 million | $0.793 million | 9.6% |
| Incentive Fee | ($1.556) million | $13.734 million | ($15.290 million) | NM |
| Interest Expense | $12.879 million | $11.078 million | $1.801 million | 16.3% |
| Total Expenses | $25.038 million | $33.867 million | ($8.829 million) | (26.1%) |
Distributions to Shareholders
For the fiscal year ending September 30, 2024, GAIN declared distributions to common stockholders totaling $0.24 per share, reflecting its commitment to return capital to investors.
Capital Raising Activities
GAIN has successfully raised capital through various means including unsecured notes and common stock offerings. As of September 30, 2024, the closing market price of its common stock was $14.45, representing a 15.7% premium to its net asset value of $12.49.
| Capital Raising Activity | Amount | Date |
|---|---|---|
| 8.00% 2028 Notes Issued | $74.8 million | May 2023 |
| Common Stock Issued (ATM Program) | $44.5 million | Year Ended March 31, 2024 |
As of September 30, 2024, GAIN had total borrowings of $346.138 million, with asset coverage of 229.3% on its senior securities representing indebtedness.
Gladstone Investment Corporation (GAIN) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Gladstone Investment Corporation (GAIN) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Gladstone Investment Corporation (GAIN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Gladstone Investment Corporation (GAIN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.