Oxford Square Capital Corp. (OXSQ): Business Model Canvas [11-2024 Updated]
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Oxford Square Capital Corp. (OXSQ) Bundle
In the dynamic world of finance, understanding the business model of a company can provide crucial insights for investors. Oxford Square Capital Corp. (OXSQ) operates within the specialized realm of high-yield investments, leveraging a unique Business Model Canvas that highlights its strategic partnerships, key activities, and revenue streams. This post delves into the essential components of OXSQ’s business model, revealing how it targets high-yield opportunities while maintaining strong relationships with its customer segments. Read on to discover the intricate framework that drives OXSQ’s success.
Oxford Square Capital Corp. (OXSQ) - Business Model: Key Partnerships
Collaborations with financial institutions
Oxford Square Capital Corp. (OXSQ) has established significant collaborations with various financial institutions to enhance its investment capacity and market reach. As of September 30, 2024, OXSQ had total liabilities amounting to $153,452,439, which includes notes payable of $44,422,169 for 6.25% Unsecured Notes and $79,021,203 for 5.50% Unsecured Notes. These partnerships facilitate access to capital and diversified funding sources, essential for expanding their investment portfolio.
Partnerships with investment managers
OXSQ leverages partnerships with investment managers, notably through an Investment Advisory Agreement with Oxford Square Management. This partnership is crucial as Oxford Square Management manages the internal affairs of OXSQ, providing expert guidance on investment strategies and portfolio management. The total investment income reported from these partnerships for the nine months ended September 30, 2024, was $32,463,804. This indicates the effectiveness of their collaborative efforts in generating substantial revenue.
Relationships with portfolio companies
OXSQ maintains strategic relationships with its portfolio companies to optimize investment performance. As of September 30, 2024, OXSQ's non-affiliated/non-control investments were valued at $258,043,987, reflecting the company's commitment to nurturing these relationships. The company also reported net unrealized appreciation on investments of $33,609,348 during the same period, showcasing the potential growth from these partnerships.
| Partnership Type | Details | Financial Impact |
|---|---|---|
| Financial Institutions | Total Liabilities: $153,452,439 | Access to diversified funding sources |
| Investment Managers | Investment Advisory Agreement with Oxford Square Management | Total Investment Income: $32,463,804 |
| Portfolio Companies | Non-affiliated/Non-control Investments: $258,043,987 | Net Unrealized Appreciation: $33,609,348 |
Oxford Square Capital Corp. (OXSQ) - Business Model: Key Activities
Managing a diversified investment portfolio
As of September 30, 2024, Oxford Square Capital Corp. (OXSQ) had a total investment portfolio valued at approximately $262.9 million. This portfolio consisted of various asset classes, with senior secured notes accounting for 58.1% of the total at $152.7 million, while CLO equity comprised 39.3% at $103.5 million.
Conducting market research and analysis
Oxford Square actively engages in market research to identify investment opportunities. The company’s investment strategy focuses on corporate debt securities, including collateralized loan obligations (CLOs). The weighted average annualized yield on debt investments was approximately 14.50% as of September 30, 2024. This yield reflects the company’s assessment of market conditions and risk profiles associated with potential investments.
Monitoring and evaluating portfolio performance
Performance evaluation is a critical activity for OXSQ. For the three months ended September 30, 2024, the net investment income was reported at $6.2 million, with a net (decrease)/increase in net assets resulting from operations of ($874,541). The company also reported net unrealized appreciation on investments of $5.8 million, highlighting the importance of continuous monitoring and adjustment of its investment strategies.
| Metric | Value |
|---|---|
| Total Investment Portfolio | $262.9 million |
| Senior Secured Notes | $152.7 million (58.1%) |
| CLO Equity | $103.5 million (39.3%) |
| Weighted Average Annualized Yield | 14.50% |
| Net Investment Income (Q3 2024) | $6.2 million |
| Net (Decrease)/Increase in Net Assets from Operations | ($874,541) |
| Net Unrealized Appreciation on Investments | $5.8 million |
Oxford Square Capital Corp. (OXSQ) - Business Model: Key Resources
Experienced investment management team
Oxford Square Capital Corp. (OXSQ) relies on a skilled investment management team led by professionals with extensive experience in the finance and investment sectors. The management team is responsible for sourcing, analyzing, and managing investments in corporate debt securities and collateralized loan obligations (CLOs). This expertise is crucial in navigating the complexities of the market and optimizing returns for shareholders.
Access to capital markets for funding
OXSQ has a strong presence in capital markets, which enables it to raise funds effectively. As of September 30, 2024, the company had raised approximately $14.5 million through the sale of 5,069,789 shares during the three months ended September 30, 2024, and $24.3 million from the sale of 8,326,819 shares during the nine months ended September 30, 2024. This access to capital is vital for financing investments and supporting the company's growth strategy.
| Period | Shares Issued | Capital Raised (Net of Fees) |
|---|---|---|
| Three Months Ended September 30, 2024 | 5,069,789 | $14,500,000 |
| Nine Months Ended September 30, 2024 | 8,326,819 | $24,300,000 |
Technology systems for investment tracking
Oxford Square Capital Corp. employs advanced technology systems for tracking investments and monitoring financial performance. These systems facilitate real-time data analysis, ensuring informed decision-making regarding portfolio management. The company's ability to leverage technology enhances operational efficiency and positions it to respond swiftly to market changes. As of September 30, 2024, the total assets of OXSQ were approximately $312.9 million, including significant investments in various sectors.
| Asset Category | Value ($ millions) | Percentage of Total Assets |
|---|---|---|
| Non-affiliated Investments | $258.0 | 82.4% |
| Cash and Cash Equivalents | $43.2 | 13.8% |
| Other Assets | $11.7 | 3.8% |
Oxford Square Capital Corp. (OXSQ) - Business Model: Value Propositions
Targeting high-yield investment opportunities
Oxford Square Capital Corp. focuses on high-yield investments, particularly in corporate debt securities and collateralized loan obligations (CLOs). As of September 30, 2024, the company reported a total investment portfolio valued at approximately $262.9 million, with senior secured notes representing 58.1% of the total portfolio and CLO equity making up 39.3%.
Providing consistent income through dividends
OXSQ emphasizes returning value to its shareholders through consistent dividend payments. For the nine months ended September 30, 2024, the company distributed $19,439,213 to stockholders, resulting in a distribution per share of $0.315. The total distributions paid during the three months ended September 30, 2024, amounted to $6,797,479.
Expertise in collateralized loan obligations (CLOs)
Oxford Square Capital Corp. leverages its expertise in CLOs to enhance its investment strategy. As of September 30, 2024, the company had invested approximately $103.5 million in CLO equity, which accounted for 39.3% of its total investments. The weighted average annualized yield on debt investments was approximately 14.50% as of the same date, indicating a strong potential for returns.
| Financial Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Investment Income | $6,187,155 | $6,438,818 | $20,446,617 | $19,595,383 |
| Total Distributions | $6,797,479 | $12,897,151 | $19,439,213 | $23,372,086 |
| Net Asset Value per Share | $2.35 | $2.55 | - | - |
| Total Investment Portfolio | $262.9 million | - | - | - |
| Weighted Average Annualized Yield on Debt Investments | 14.50% | - | - | - |
Oxford Square Capital Corp. (OXSQ) - Business Model: Customer Relationships
Regular updates on investment performance
Oxford Square Capital Corp. (OXSQ) provides regular updates on investment performance to its shareholders. For the three months ended September 30, 2024, the company reported a net investment income of $6,187,155, which translates to $0.10 per share. This is a slight decrease compared to the same period in 2023, when the net investment income was $6,438,818, or $0.11 per share.
Transparent communication about portfolio changes
OXSQ emphasizes transparent communication regarding portfolio changes. For the nine months ended September 30, 2024, the company experienced a net change in unrealized appreciation on investments totaling $33,609,348. This reflects the company's ongoing commitment to inform shareholders about the dynamics affecting their investments.
| Period | Net Change in Unrealized Appreciation | Net Realized Losses |
|---|---|---|
| Three Months Ended September 30, 2024 | $5,843,293 | $(12,904,989) |
| Three Months Ended September 30, 2023 | $13,900,802 | $(13,646,784) |
| Nine Months Ended September 30, 2024 | $33,609,348 | $(51,439,891) |
| Nine Months Ended September 30, 2023 | $21,931,432 | $(16,978,092) |
Engaging with shareholders through annual meetings
Engagement with shareholders is facilitated through annual meetings where the company discusses financial performance and future strategies. As of September 30, 2024, OXSQ had 67,869,056 shares outstanding. The company’s net assets at the end of this period were approximately $159,471,000, showcasing the scale of operations that are communicated during these meetings.
Oxford Square Capital Corp. (OXSQ) - Business Model: Channels
Direct sales through financial advisors
Oxford Square Capital Corp. (OXSQ) engages in direct sales through a network of financial advisors. This approach allows the company to provide tailored investment solutions and maintain personalized relationships with clients. As of September 30, 2024, the company had approximately 67,892,181 shares outstanding, reflecting its active engagement with investors through these advisors.
Online investor relations and educational resources
The company maintains a robust online presence that includes investor relations and educational resources. This platform provides potential and current investors with access to financial reports, press releases, and market updates. For the nine months ended September 30, 2024, OXSQ reported net investment income of $20,446,617. Additionally, the company offers webinars and online presentations to enhance investor understanding of its investment strategies and market conditions.
Regulatory filings for transparency
OXSQ prioritizes transparency through regular regulatory filings. The company adheres to the requirements set forth by the Securities and Exchange Commission (SEC), ensuring that all financial statements and disclosures are readily available to the public. As of September 30, 2024, the company's total assets amounted to $312,923,273, while total liabilities were $153,452,439. This level of transparency is vital for instilling investor confidence and maintaining compliance with federal regulations.
| Channel Type | Details | Performance Metrics |
|---|---|---|
| Direct Sales | Network of financial advisors | 67,892,181 shares outstanding |
| Online Resources | Investor relations website, educational webinars | Net investment income: $20,446,617 (9 months ended Sept 30, 2024) |
| Regulatory Filings | Compliance with SEC requirements | Total assets: $312,923,273; Total liabilities: $153,452,439 (as of Sept 30, 2024) |
Oxford Square Capital Corp. (OXSQ) - Business Model: Customer Segments
Individual investors seeking income
Oxford Square Capital Corp. (OXSQ) primarily targets individual investors who are looking for income through dividends. The company has distributed dividends ranging from $0.105 to $0.435 per share over the past year, reflecting its commitment to providing regular income to shareholders. As of September 30, 2024, the net investment income reported was $20,446,617, translating to a net investment income per share of $0.33. This appeal to individual investors is further enhanced by the company's focus on delivering consistent returns through its portfolio of debt securities.
Institutional investors looking for diversified assets
Institutional investors form a crucial segment for OXSQ, as they seek diversified assets to manage risk and enhance returns. The company's investment strategy includes a total net asset value of $159,471,000 as of September 30, 2024. OXSQ's portfolio consists of senior secured notes, which accounted for approximately 58.1% of its total investments, indicating a strong focus on securing returns for institutional clients. The company also maintains a robust asset coverage of approximately 226% for borrowed amounts, which reassures institutional investors regarding the safety of their investments.
Wealth management firms
Wealth management firms are also a key customer segment for OXSQ, as they look for high-yield investment opportunities for their clients. With total investment income reported at $32,463,804 for the nine months ended September 30, 2024, wealth managers can leverage OXSQ's investment strategies to enhance their clients' portfolios. The firm's diversified investments in CLOs and debt securities provide wealth managers with options to tailor investment solutions that meet their clients' risk and return profiles. Moreover, the company's average net assets of $154,529,000 reflect its potential to be a reliable partner for wealth management firms seeking to optimize their investment offerings.
| Customer Segment | Key Metrics | Value Proposition |
|---|---|---|
| Individual Investors | Distributions per share: $0.105 - $0.435 Net investment income: $20,446,617 |
Regular income through dividends |
| Institutional Investors | Total net assets: $159,471,000 Asset coverage: 226% |
Diversified assets with strong security |
| Wealth Management Firms | Total investment income: $32,463,804 Average net assets: $154,529,000 |
High-yield investment opportunities |
Oxford Square Capital Corp. (OXSQ) - Business Model: Cost Structure
Management fees for investment services
The base management fee for the three months ended September 30, 2024, was approximately $1.1 million, compared to $1.2 million for the same period in 2023. For the nine months ended September 30, 2024, the base management fee was approximately $3.1 million, down from $3.6 million in 2023. These decreases were primarily attributed to reductions in weighted average gross assets.
Operational costs for portfolio management
Total operating expenses for the three months ended September 30, 2024, were approximately $4.2 million, a decrease from $6.6 million in 2023. For the nine months ended September 30, 2024, total expenses were approximately $12.0 million, compared to $19.9 million for the same period in 2023. Major components of these expenses included:
| Expense Type | Q3 2024 ($ millions) | Q3 2023 ($ millions) | 9M 2024 ($ millions) | 9M 2023 ($ millions) |
|---|---|---|---|---|
| Base Management Fees | 1.1 | 1.2 | 3.1 | 3.6 |
| Interest Expense | 2.0 | 2.5 | 5.9 | 8.7 |
| Professional Fees | 0.359 | 0.479 | 1.2 | 1.1 |
| Compensation Expense | 0.209 | 0.205 | 0.591 | 0.662 |
| General and Administrative Expenses | 0.395 | 0.458 | 1.2 | 1.3 |
| Excise Tax | 0.144 | 0.574 | 0.096 | 0.874 |
Marketing and investor relations expenses
Marketing and investor relations costs are part of the general and administrative expenses incurred by Oxford Square Capital Corp. For the three months ended September 30, 2024, general and administrative expenses totaled approximately $395,000, compared to $458,000 for the same period in 2023. For the nine months ended September 30, 2024, these expenses were approximately $1.2 million, slightly down from $1.3 million in the previous year.
Oxford Square Capital Corp. (OXSQ) - Business Model: Revenue Streams
Interest income from debt investments
As of September 30, 2024, Oxford Square Capital Corp. reported total interest income of $19,564,808 for the nine-month period ended September 30, 2024. This includes:
- Stated interest income: $17,957,697
- PIK interest income: $217,666
- Original issue discount and market discount income: $1,084,100
- Discount income derived from unscheduled remittances at par: $305,345
For the three months ended September 30, 2024, the total interest income was $6,121,942.
Dividends from equity holdings
Oxford Square Capital Corp. earns dividends primarily from its investments in collateralized loan obligations (CLOs). For the nine months ended September 30, 2024, income from securitization vehicles and investments amounted to $11,345,140. For the three months ended September 30, 2024, this income was $3,526,850.
Fees for managerial assistance to portfolio companies
In compliance with the Investment Company Act of 1940, the company may receive fee income for managerial assistance rendered to portfolio companies. However, for the three and nine months ended September 30, 2024, Oxford Square Capital Corp. reported receiving no fee income for managerial assistance.
| Revenue Stream | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 |
|---|---|---|
| Interest Income | $6,121,942 | $19,564,808 |
| Income from Securitization Vehicles | $3,526,850 | $11,345,140 |
| Managerial Assistance Fees | $0 | $0 |
| Total Investment Income | $10,340,924 | $32,463,804 |
Overall, the company has focused its revenue generation on interest income from debt investments and income from securitization vehicles, while currently not deriving any revenue from managerial assistance fees.
Updated on 16 Nov 2024
Resources:
- Oxford Square Capital Corp. (OXSQ) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Oxford Square Capital Corp. (OXSQ)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Oxford Square Capital Corp. (OXSQ)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.