SCM
- Stellus Capital Investment Corporation
()
Overview
Company Summary
Stellus Capital Investment Corporation (SCM) is a business development company (BDC) that primarily focuses on investing in private middle-market companies across various sectors. As a BDC, SCM operates as a closed-end investment management firm that provides financing solutions to these companies.
The main objective of SCM is to generate income and capital appreciation by making both debt and equity investments in its target companies. This enables them to access the necessary capital to fund their growth, expansion, and other strategic initiatives.
SCM typically invests in companies with enterprise values ranging from $25 million to $500 million, predominantly in the form of senior secured loans. These loans are backed by collateral and have priority over other claims on the company's assets in case of default or bankruptcy, ensuring a higher level of security for SCM's investments.
In addition to senior secured loans, SCM may also deploy capital through mezzanine debt, which is a subordinated debt instrument that ranks below senior debt but above equity in terms of repayment priority. This allows SCM to participate in the upside potential of its portfolio companies while still having a level of protection on its investments.
Furthermore, SCM has the flexibility to invest in equity and equity-related instruments, such as common stock, preferred stock, and warrants. This allows the company to take advantage of potential appreciation in the value of its portfolio companies and enhance its overall returns.
To protect its investments, SCM conducts extensive due diligence on potential portfolio companies, evaluating their financial strength, market position, growth prospects, management team, and overall industry dynamics. Additionally, SCM actively monitors and manages its investments to mitigate risk and maximize returns.
Overall, Stellus Capital Investment Corporation plays a crucial role in providing capital and financial support to middle-market companies, enabling them to achieve their strategic objectives and fuel their growth while generating income and capital appreciation for its investors.