**Stellus Capital Investment Corp. Reports Fiscal Year 2025 Results**

Stellus Capital Investment Corporation (SCM), an externally managed business development company (BDC), released its financial results for the fiscal year ended December 31, 2025. The company reported total investment income of $102.1 million, a decrease from $104.7 million in 2024 and $105.8 million in 2023. This decrease was primarily attributed to falling interest rates, which was partially offset by growth in the overall investment portfolio. Net investment income for 2025 was $36.9 million, or $1.30 per share, compared to $41.9 million, or $1.64 per share, in 2024 and $42.2 million, or $1.92 per share, in 2023.

The company's operating expenses for 2025 totaled $68.6 million, compared to $64.6 million in 2024 and $63.9 million in 2023. The increase in operating expenses was primarily due to higher management fees and interest expense, which was offset by lower income incentive fees. Stellus Capital Management, the company's investment adviser, manages the investment activities and is responsible for analyzing investment opportunities, conducting research and performing due diligence on potential investments, negotiating and structuring investments, originating prospective investments and monitoring investments and portfolio companies on an ongoing basis. The company's net increase in net assets resulting from operations was $27.0 million, or $0.95 per share, for 2025, compared to $45.8 million, or $1.79 per share, for 2024 and $17.5 million, or $0.80 per share, for 2023.

As of December 31, 2025, Stellus Capital's investment portfolio had a fair value of $1.008 billion, spread across 115 companies. The portfolio consisted primarily of first lien debt (90.2%), second lien debt (1.2%), and equity investments (8.6%). The weighted average yield on debt investments was 9.3%, while the weighted average yield on all investments was 8.7%. The company's asset coverage ratio was 203%. The company's investments generally range in size from $5 million to $30 million.

Looking ahead, Stellus Capital's strategy involves focusing on direct origination opportunities in lower middle-market companies, emphasizing capital preservation through credit selection and risk mitigation. The company also announced that Stellus Capital Management entered into a definitive agreement with P10 Intermediate Holdings, LLC, an affiliate of Ridgepost Capital, Inc. (“Ridgepost”), pursuant to which Ridgepost will acquire Stellus Capital Management. The transaction is expected to close mid-2026 and is subject to customary conditions. The company also authorized a program for the purpose of repurchasing up to $20.0 million of its shares of common stock.

About Stellus Capital Investment Corp

Stellus Capital Investment Corporation is a Maryland-based business development company (BDC) that invests in private lower middle-market companies through debt and equity financing. Its core activities include originating, structuring, and monitoring senior secured, unsecured, and subordinated loans, often with equity co-investments. Managed by Stellus Capital Management, the firm focuses on industries like healthcare, software, and industrials, providing tailored financing solutions to creditworthy, growth-oriented businesses.

This description was generated via AI from an annual report. Updated 8 months ago.

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