Great Elm Capital Corp. (GECC) Bundle
A Brief History of Great Elm Capital Corp.
Great Elm Capital Corp. (GECC) is a publicly traded business development company focused on investing in private middle-market companies. Founded in 2017, the company has established a diverse portfolio that includes debt and equity investments.
Investment Portfolio Overview
As of September 30, 2024, GECC's total investment portfolio at fair value was approximately $241.4 million. This includes $234.5 million in debt instruments across 54 companies and $98.8 million in equity investments across 20 companies.
| Investment Type | Fair Value | Number of Investments |
|---|---|---|
| Debt Instruments | $234.5 million | 54 |
| Equity Investments | $98.8 million | 20 |
Financial Performance
For the three months ended September 30, 2024, GECC reported total investment income of $11.7 million, compared to $9.3 million for the same period in 2023. The increase was primarily driven by higher interest income from the growing debt investment portfolio.
The company’s net investment income for the nine months ended September 30, 2024, was $10.3 million, reflecting an increase from $9.3 million in the prior year. The net realized gain for the same period was $2.1 million, showing a significant recovery from a net loss of $0.6 million in the prior year.
| Performance Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Investment Income | $11.7 million | $9.3 million |
| Net Investment Income | $10.3 million | $9.3 million |
| Net Realized Gain (Loss) | $2.1 million | ($0.6 million) |
Debt Financing and Interest Rates
As of September 30, 2024, GECC had issued various unsecured debt notes totaling approximately $235.3 million, which included GECCM Notes ($45.3 million), GECCO Notes ($57.5 million), GECCZ Notes ($40.0 million), GECCI Notes ($56.5 million), and GECCH Notes ($36.0 million). The company’s interest expense for the nine months ended September 30, 2024, was approximately $10.5 million.
The average interest rate on the debt investments as of September 30, 2024, was approximately 8.28%, reflecting a slight decrease from the previous year.
| Debt Type | Principal Amount |
|---|---|
| GECCM Notes | $45.3 million |
| GECCO Notes | $57.5 million |
| GECCZ Notes | $40.0 million |
| GECCI Notes | $56.5 million |
| GECCH Notes | $36.0 million |
Recent Developments
On October 12, 2024, GECC redeemed all issued and outstanding GECCM Notes at 100% of the principal amount plus accrued interest. Following this, on October 3, 2024, the company issued an additional $5.4 million of GECCH Notes.
As of October 24, 2024, GECC's stock was trading at $10.05 per share, with a total of 10,449,888 shares outstanding. The company declared a distribution of $0.35 per share for the quarter ending December 31, 2024.
| Metric | Value |
|---|---|
| Stock Price (Oct 24, 2024) | $10.05 |
| Shares Outstanding | 10,449,888 |
| Distribution per Share (Q4 2024) | $0.35 |
A Who Owns Great Elm Capital Corp. (GECC)
Ownership Structure
As of 2024, Great Elm Capital Corp. (GECC) has a complex ownership structure that includes institutional investors, individual stakeholders, and affiliated entities. The major shareholders include:
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Institutional Investors | 5,600,000 | 53.6% |
| Individual Investors | 3,200,000 | 30.6% |
| Affiliated Entities (e.g., Great Elm Group) | 1,200,000 | 11.5% |
| Other Stakeholders | 300,000 | 2.8% |
Institutional Ownership
Institutional ownership plays a significant role in GECC's capital structure, with notable entities such as:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 1,200,000 | 11.5% |
| The Vanguard Group, Inc. | 800,000 | 7.7% |
| Invesco Ltd. | 600,000 | 5.7% |
| State Street Corporation | 500,000 | 4.8% |
Recent Share Transactions
In 2024, GECC executed several significant share transactions, including:
- On June 21, 2024, GECC issued 997,506 shares to Prosper Peak Holdings, LLC at $12.03 per share, totaling approximately $12 million.
- On February 8, 2024, GECC issued 1,850,424 shares to Great Elm Strategic Partnership I, LLC at $12.97 per share, totaling approximately $24 million.
Market Performance
The performance of GECC's stock has been noteworthy, with the last reported closing price on October 24, 2024, being $10.05 per share. The market capitalization as of that date was approximately $94.5 million.
Shareholder Distribution History
GECC has a consistent history of distributing dividends to its shareholders:
| Record Date | Distribution Per Share |
|---|---|
| March 15, 2024 | $0.35 |
| June 14, 2024 | $0.35 |
| September 16, 2024 | $0.35 | December 29, 2024 | $0.35 (Projected) |
Ownership Changes and Trends
As of September 30, 2024, the total number of shares outstanding was approximately 10,449,888, reflecting an increase from previous quarters due to recent issuances.
Conclusion of Ownership Analysis
In summary, GECC's ownership landscape is characterized by a mix of institutional and individual investors, alongside significant transactions that indicate a strong interest in the company's future. The ownership structure is expected to evolve as the company continues to engage with the market and its stakeholders.
Great Elm Capital Corp. (GECC) Mission Statement
Mission Statement Overview
The mission statement of Great Elm Capital Corp. (GECC) reflects its commitment to maximizing long-term value for its shareholders through strategic investments in a diversified portfolio of private and public companies. GECC aims to leverage its investment expertise and market insights to create sustainable returns while maintaining a focus on risk management.
Strategic Objectives
Great Elm Capital Corp. is dedicated to:
- Investing in high-quality companies with strong fundamentals.
- Providing consistent and attractive returns to shareholders.
- Maintaining a disciplined investment approach to capital allocation.
- Ensuring transparency and accountability in all operations.
- Fostering partnerships with portfolio companies to enhance growth and profitability.
Financial Performance Indicators
As of September 30, 2024, the financial performance indicators relevant to GECC's mission statement include:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenues | $2,811,000 | $3,293,000 | -14.6% |
| Total Expenses | $19,000 | $52,000 | -63.5% |
| Net Income | $2,792,000 | $3,241,000 | -13.9% |
| Net Investment Income | $4,072,000 | $3,052,000 | 33.4% |
| Net Asset Value per Share | $12.04 | $12.99 | -7.3% |
Investment Portfolio Breakdown
GECC's investment portfolio as of September 30, 2024, includes a range of sectors aimed at diversifying risk and enhancing returns:
| Sector | Fair Value ($) | Percentage of Total Investments |
|---|---|---|
| Structured Finance - CLO Equity | $43,821,000 | 10.0% |
| Debt Instruments | $234,500,000 | 53.5% |
| Equity Investments | $98,800,000 | 22.5% |
| Short-Term Investments | $85,484,000 | 19.5% |
Recent Developments
Key developments that align with GECC’s mission include:
- Distribution of $0.35 per share for the quarter ending December 31, 2024, reflecting a commitment to returning value to shareholders.
- Issuance of additional GECCH Notes totaling $5.4 million, enhancing financial flexibility for future investments.
- Redemption of all outstanding GECCM Notes, demonstrating proactive debt management.
Conclusion on Mission Alignment
Great Elm Capital Corp. continues to pursue its mission of delivering value through strategic investment and operational excellence, as evidenced by its financial results and ongoing commitment to shareholder returns.
How Great Elm Capital Corp. (GECC) Works
Company Overview
Great Elm Capital Corp. (GECC) primarily operates as a business development company (BDC) focused on investments in middle-market companies. As of September 30, 2024, GECC's total assets were approximately $427.0 million, with total liabilities amounting to $301.2 million, resulting in net assets of $125.8 million.
Financial Performance
For the three months ended September 30, 2024, GECC reported total revenues of $8.1 million and total expenses of $4.2 million, leading to a net income of approximately $3.5 million. For the nine months ended September 30, 2024, total revenues were reported at $23.5 million, with expenses totaling $10.5 million, resulting in a net income of $13.0 million.
Investment Portfolio
As of September 30, 2024, GECC had investments in 54 debt instruments across 45 companies, valued at approximately $234.5 million at fair value, alongside 20 equity investments in 18 companies with an aggregate fair value of around $98.8 million.
| Investment Type | Number of Investments | Fair Value ($ million) |
|---|---|---|
| Debt Instruments | 54 | 234.5 |
| Equity Investments | 20 | 98.8 |
Capital Structure and Debt
GECC has issued various notes, including:
- GECCM Notes: $45.3 million outstanding as of September 30, 2024
- GECCO Notes: $57.5 million outstanding
- GECCZ Notes: $40.0 million outstanding
- GECCI Notes: $56.5 million outstanding
- GECCH Notes: $36.0 million outstanding
The total outstanding debt across all notes amounted to $235.3 million.
Liquidity and Capital Resources
As of September 30, 2024, GECC had approximately $0.3 million in cash and cash equivalents and $25.7 million in money market fund investments.
For the nine months ended September 30, 2024, net cash provided by financing activities was $113.5 million, primarily from the issuance of common stock and various unsecured notes.
| Cash Flow Activity | Amount ($ million) |
|---|---|
| Net cash from operating activities | -114.1 |
| Net cash from investing activities | 47.0 |
| Net cash from financing activities | 113.5 |
Distributions
GECC has declared a distribution rate of $0.35 per share for the quarter ending December 31, 2024.
Market Performance
The last reported closing price for GECC's common stock on October 24, 2024, was $10.05 per share. The company has experienced fluctuations in its net asset value (NAV), which was reported at $12.04 per share as of September 30, 2024.
Risk Management
GECC is exposed to interest rate risk, with approximately $174.6 million of its debt investments bearing interest at variable rates. The company's asset coverage ratio was approximately 166.2% as of September 30, 2024.
How Great Elm Capital Corp. (GECC) Makes Money
Revenue Generation
Great Elm Capital Corp. (GECC) primarily generates revenue through a diversified investment portfolio comprising debt and equity investments. The key revenue sources include:
- Interest income from debt investments.
- Dividends from equity investments.
- Realized and unrealized gains from investment dispositions.
- Fees associated with investment management and advisory services.
Financial Performance Overview
As of September 30, 2024, GECC reported the following financial metrics:
| Metric | Q3 2024 | YTD 2024 |
|---|---|---|
| Total Revenues | $2,811,000 | $3,293,000 |
| Total Expenses | $19,000 | $52,000 |
| Net Income | $2,792,000 | $3,241,000 |
| Realized Gains (Losses) | $34,000 | $34,000 |
| Unrealized Gains (Losses) | $2,375,000 | $2,382,000 |
Investment Portfolio Composition
As of September 30, 2024, GECC's investment portfolio consisted of:
- 54 debt instruments across 45 companies, totaling approximately $234.5 million at fair value.
- 20 equity investments in 18 companies, with an aggregate fair value of approximately $98.8 million.
Debt Investment Details
GECC's debt investments are primarily structured as follows:
| Investment Type | Principal Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| GECCM Notes | $45.3 million | 6.75% | 2025 |
| GECCO Notes | $57.5 million | 5.875% | 2026 |
| GECCZ Notes | $40.0 million | 8.75% | 2028 |
| GECCI Notes | $56.5 million | 8.50% | 2029 |
| GECCH Notes | $36.0 million | 8.125% | 2029 |
Liquidity and Cash Management
As of September 30, 2024, GECC had:
- Approximately $0.3 million in cash and cash equivalents.
- Approximately $25.7 million in money market fund investments at fair value.
Recent Developments
In the latest quarter, GECC declared a distribution of $0.35 per share for the quarter ending December 31, 2024. This distribution is expected to be paid in cash from distributable earnings.
Additionally, GECC redeemed all issued and outstanding GECCM Notes on October 12, 2024, at 100% of the principal amount plus accrued interest.
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Article updated on 8 Nov 2024
Resources:
- Great Elm Capital Corp. (GECC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Great Elm Capital Corp. (GECC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Great Elm Capital Corp. (GECC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.