Great Elm Capital Corp. (GECC) reported a net asset value (NAV) of $8.07 per share as of December 31, 2025, a decline from $11.79 per share in the previous year. The company’s total net assets decreased to $112.9 million from $136.1 million in 2024. For the fiscal year ended December 31, 2025, GECC generated total investment income of $50.0 million, an increase from $39.3 million in 2024. This growth was primarily driven by higher dividend income, which rose significantly due to investments in collateralized loan obligations (CLOs). However, the company also faced challenges, including a net realized loss of $5.5 million and a net change in unrealized depreciation of $43.6 million, reflecting a downturn in the fair value of several portfolio investments.
Compared to the previous fiscal year, GECC's financial performance showed mixed results. While total investment income increased, the company experienced a substantial decline in net assets and NAV, largely due to unrealized losses on investments. The company’s expenses also rose, totaling $32.1 million for 2025, up from $26.5 million in 2024, primarily driven by increased interest expenses related to its debt obligations. The management fees and incentive fees paid to Great Elm Capital Management, LLC (GECM) also increased, reflecting the growth in the underlying management fee assets.
Strategically, GECC made significant moves in its investment portfolio, including the formation of a joint venture, CLO Formation JV, LLC, which focuses on investing in CLOs. The company also contributed investments to its subsidiary, Great Elm Specialty Finance, LLC (GESF), which provides various financing options to middle-market borrowers. These strategic developments are expected to generate revenue and cost synergies across the company’s specialty finance subsidiaries. As of December 31, 2025, GECC held investments in 68 debt instruments across 53 companies, totaling approximately $203.5 million at fair value, alongside 21 equity investments in 18 companies valued at approximately $94.8 million.
Looking ahead, GECC has set a distribution rate of $0.30 per share for the quarter ending March 31, 2026, which will be paid in cash. The company’s management has indicated that it expects to recognize a reversal of approximately $2.3 million in accrued incentive fees during the first quarter of 2026, which would positively impact net income. However, the company remains cautious about its ability to maintain distributions, particularly in light of its capital loss carryforwards of $188.1 million, which may limit future taxable income and distributions. Overall, while GECC is positioned to leverage its strategic investments, it faces ongoing challenges related to market conditions and portfolio performance.
About Great Elm Capital Corp.
Great Elm Capital Corp. is a Maryland-based, externally managed investment company operating as a Business Development Company (BDC) and regulated as a Regulated Investment Company (RIC). It primarily invests in debt and equity in middle-market companies, specialty finance businesses, CLOs, and related assets. The firm seeks income and capital appreciation through structured debt, equity investments, and strategic partnerships in the U.S. financial markets.
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