Saratoga Investment Corp. (SAR): history, ownership, mission, how it works & makes money

A Brief History of Saratoga Investment Corp. (SAR)

Company Overview

Saratoga Investment Corp. (SAR) is a publicly traded business development company (BDC) based in New York City. It was founded in 2007 and primarily focuses on providing customized financing solutions to middle-market companies.

Market Capitalization

As of October 2023, Saratoga Investment Corp. has a market capitalization of approximately $160 million.

Net Asset Value (NAV)

The company reported a Net Asset Value (NAV) of $148 million as of June 30, 2023.

Investment Portfolio

Saratoga’s investment portfolio is diversified across various sectors, including healthcare, technology, and consumer services. The total investment portfolio was approximately $232 million as of September 30, 2023.

Financial Performance

For the fiscal year ended June 30, 2023, Saratoga Investment Corp. reported total revenues of $35 million, reflecting a year-over-year increase of 7.5%.

The company declared dividends totaling $1.80 per share during the fiscal year.

Stock Performance

The stock price of SAR saw an increase of approximately 12% in 2023, closing at around $22.50 per share as of October 2023.

Dividend History

Management Team

The management team includes experienced professionals with extensive backgrounds in finance and investment. The Chief Executive Officer is Michael M. Kessler, and the Chief Financial Officer is Richard A. Auerbach.

Regulatory Compliance

Saratoga Investment Corp. is regulated under the Investment Company Act of 1940, which governs BDCs. The company complies with all regulatory requirements, including periodic financial reporting to the SEC.

Future Outlook

The company aims for continued growth in its investment portfolio and seeks to capitalize on favorable market conditions for middle-market financing opportunities. The increasing demand for alternative lending solutions positions Saratoga favorably in the evolving financial landscape.

A Who Owns Saratoga Investment Corp. (SAR)

Ownership Structure

Saratoga Investment Corp. (SAR), a business development company, has a diverse ownership structure comprised of institutional and individual shareholders. As of the latest available data, the following illustrates the ownership percentages:

Major Institutional Shareholders

Institutional investors play a significant role in the ownership of Saratoga Investment Corp. Below are some of the major institutional shareholders based on recent filings:

Insider Ownership

Insider ownership represents a critical aspect of the company's governance structure. Key insiders include executives and board members:

Share Price and Market Capitalization

As of October 2023, the share price of Saratoga Investment Corp. was approximately $20.50, with a market capitalization estimated at:

Recent Performance Metrics

Recent financial performance metrics of Saratoga Investment Corp. reflect its operational health and investment strategy. Key figures include:

Conclusion

The ownership landscape of Saratoga Investment Corp. illustrates a blend of institutional, retail, and insider investors, each contributing to the company's governance and strategic direction. The performance metrics present a snapshot of the company’s financial health, highlighting its potential for growth and return on investment.

Saratoga Investment Corp. (SAR) Mission Statement

Corporate Purpose

Saratoga Investment Corp. aims to deliver sustainable long-term value by providing superior investment performance across various asset classes while adhering to a disciplined approach to risk management.

Investment Strategy

The company focuses on:

• Identifying compelling investment opportunities in private middle-market companies.
• Maintaining a diversified investment portfolio.
• Utilizing an experienced management team to oversee investment decisions.

Recent Financial Metrics

Core Values

Saratoga Investment Corp. operates on a foundation of core values:

• Integrity - Upholding transparency and ethical standards.
• Innovation - Embracing creative solutions to enhance investment performance.
• Collaboration - Working closely with partners and stakeholders.
• Responsibility - Committed to responsible investment practices.

Commitment to Stakeholders

The mission statement outlines a commitment to:

• Delivering attractive returns to investors.
• Supporting the growth of portfolio companies.
• Fostering relationships with financial partners and community stakeholders.

Performance Objectives

To achieve its mission, Saratoga Investment Corp. focuses on the following objectives:

• Maintain a targeted annual return on equity (ROE) of >= 10%.
• Achieve an average portfolio company revenue growth rate of >= 15%.
• Increase the level of total investments by 5% annually.

Recent Achievements

In 2023, Saratoga Investment Corp. reported significant achievements including:

• A successful exit from multiple investments, resulting in a realized gain of $7.2 million.
• Expanding the portfolio to 30 companies across diverse sectors.
• Receiving recognition as one of the top performing business development companies (BDCs) in the industry.

Future Outlook

The future strategies of Saratoga Investment Corp. include:

• Enhancing the investment pipeline with a focus on technology and healthcare sectors.
• Leveraging strategic partnerships to tap into new market opportunities.
• Continuing to uphold rigorous due diligence processes for better risk-adjusted returns.

How Saratoga Investment Corp. (SAR) Works

Business Model

Saratoga Investment Corp. (SAR) operates as a business development company (BDC), primarily focusing on investing in privately held middle-market companies. The firm primarily engages in debt and equity investments and aims to generate current income and capital appreciation for its shareholders.

Investment Focus

The company typically invests in various sectors, including:

• Healthcare
• Manufacturing
• Technology
• Consumer Products
• Service Industries

Financial Performance

As of the third quarter of 2023, Saratoga Investment Corp. reported the following financial metrics:

Investment Strategy

Saratoga Investment Corp. pursues a senior secured lending strategy with an emphasis on:

• Leveraged buyouts
• Growth capital
• Recapitalizations
• Acquisition financing

Portfolio Construction

The investment portfolio is diversified across various industries with a focus on maintaining a balance between debt and equity investments. As of the latest reporting period, the portfolio breakdown is as follows:

Regulatory Framework

As a BDC, Saratoga Investment Corp. is subject to regulations under the Investment Company Act of 1940, which impose specific requirements, including:

• Maintaining 70% of its total assets in qualifying investments
• Providing quarterly financial statements
• Distribution of at least 90% of taxable income as dividends

Recent Developments

In the fiscal year 2023, the company has achieved significant milestones:

• Acquisition of two new portfolio companies in the healthcare sector
• Increased dividend by 5% compared to the previous year
• Successful capital raise of $15 million through private placement

Market Position

The market environment for BDCs remains competitive. Saratoga Investment Corp. stands out due to:

• Experienced management team
• Diverse portfolio of investments
• Strong focus on middle-market companies

Shareholder Returns

As of October 2023, the performance of Sarasota Investment Corp.'s stock is as follows:

How Saratoga Investment Corp. (SAR) Makes Money

Investment Strategy

Saratoga Investment Corp. (SAR) primarily focuses on making money through its investment portfolio, which consists largely of debt and equity securities in various sectors. As of the most recent filings, SAR’s total investment portfolio was approximately $247.3 million.

Interest Income

A significant portion of SAR's revenue comes from interest income generated from its debt investments. In the fiscal year ending in March 2023, SAR reported interest income of $18.2 million, primarily from middle-market companies.

Management Fees

SAR earns management fees from its investment management services, amounting to approximately $4.0 million for the fiscal year 2023. This fee structure is typically based on a percentage of assets under management.

Dividend Income

Another revenue stream for SAR is dividend income from its equity investments. In fiscal year 2023, SAR reported receiving $2.5 million in dividends from various portfolio companies.

Investment Gains

Saratoga also benefits from realized and unrealized gains on its investments. In FY 2023, the company reported net realized gains of $3.0 million and net unrealized gains of $6.0 million, contributing significantly to its net asset value.

Expenses

On the expense side, SAR incurred operating expenses totaling approximately $8.6 million in FY 2023. These expenses include management fees, administrative costs, and interest on borrowings.

Financial Overview Table

Leverage Strategy

Saratoga employs leverage to enhance its returns, which is common among Business Development Companies (BDCs). As of the latest report, SAR's leverage ratio stood at approximately 1.2x, indicating a prudent use of debt to finance its investments.

Market Focus

SAR predominantly invests in the lower middle-market, targeting companies with revenues between $10 million and $150 million. This focus enables the company to find attractive investment opportunities often overlooked by larger investment firms.

Risk Management

Effective risk management practices are vital for SAR's long-term profitability. The company utilizes diverse portfolio strategies to mitigate risks associated with market fluctuations and individual company performance.

Conclusion of Financial Performance

In summary, Saratoga Investment Corp. generates revenue through various channels, including interest income, management fees, and investment gains, while managing its expenses and leveraging its investment portfolio for optimal returns.