Great Elm Capital Corp. (GECC) reported its financial results for the first quarter of 2026, revealing a total investment income of $9.5 million, a decrease from $12.5 million in the same period last year. The decline in revenue was primarily attributed to lower interest income, which fell to $6.7 million from $8.0 million, driven by a reduced average coupon rate and a smaller debt investment portfolio. The company’s net investment income for the quarter was $5.0 million, compared to $4.6 million in the prior year, reflecting a slight increase in profitability despite the drop in total revenue.
The company’s total expenses also decreased significantly to $4.5 million from $7.9 million year-over-year, largely due to a waiver of accrued incentive fees amounting to $2.8 million. This waiver, effective February 2026, contributed to a net realized gain of $2.6 million for the quarter, compared to a modest gain of $0.3 million in the same quarter of 2025. However, GECC experienced a net change in unrealized depreciation of $8.4 million, leading to a net decrease in net assets of $0.7 million for the quarter, down from an increase of $0.5 million in the previous year.
In terms of operational developments, GECC has made strategic moves to enhance its investment portfolio. Notably, the company formed a joint venture, CLO Formation JV, LLC, to facilitate the creation of collateralized loan obligations (CLOs) and invested in its subsidiary, Great Elm Specialty Finance, LLC, which provides various financing options to middle-market borrowers. As of March 31, 2026, GECC's investment portfolio was valued at approximately $267.2 million, down from $298.3 million at the end of 2025, with a focus on structured finance and specialty finance sectors.
The company reported a total of 13,892,045 shares of common stock outstanding as of April 27, 2026, with a net asset value (NAV) per share of $7.74, down from $8.07 at the end of 2025. The market price of the stock was reported at $5.52 per share, indicating a significant discount to NAV. GECC has also initiated a stock buyback program, repurchasing 106,123 shares at an average price of $4.98 per share during the quarter.
Looking ahead, GECC remains optimistic about its ability to generate income and capital appreciation through its investment strategies. The company has indicated that it has sufficient liquidity to meet its obligations and plans to continue leveraging its investment management capabilities to navigate market conditions. The board has declared a distribution of $0.25 per share for the quarter ending June 30, 2026, payable from distributable earnings, reflecting the company's commitment to returning value to shareholders.
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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