Key Highlights

  • GECC reported third quarter 2026 total Investment income of $8.7 million, down from $10.6 million a year earlier.
  • Net investment income was $2.4 million, roughly flat from a year earlier.
  • Net Assets decreased $4.2 million from operations, or $0.30 per share, against a $22.0 million decrease a year ago.
  • Net asset value per share was $7.40 at Sep 30, 2026, versus $8.07 at Dec 31, 2025.
  • The board set a fourth-quarter 2026 distribution of $0.25 per share, payable Dec 31, 2026.

Investment Income Slips While Net Investment Income Holds Near $2.4 Million

Great Elm Capital (NASDAQ:GECC) reported results for the third quarter ended Sep 30, 2026, in a filing dated Nov 2, 2026. Total investment income was $8.7 million, or $0.63 per share, down from $10.6 million, or $0.86. Net investment income was $2.4 million, roughly flat from a year earlier.

Great Elm Capital is a Business Development Company that invests in senior secured Debt of middle-market companies, specialty finance Equity and collateralized Loan obligation securities. Interest income dropped to $5.5 million from $7.6 million as the debt portfolio shrank to about $175.4 million of principal from $224.1 million, though the average coupon rose to 11.2% from 10.8%.

Dividend income increased to $2.6 million from $2.1 million, helped by $2.2 million of distributions from its CLO joint venture, up from $1.5 million.

Lower Interest Costs Cut Expenses 18% but Unrealized Losses Weigh on Net Assets

Net expenses were $6.5 million versus $8.0 million a year earlier. Interest expense fell to $3.7 million from $5.5 million, and management fees declined to $1.0 million from $1.3 million. Incentive fees were $0.6 million, compared with none a year ago.

The company recorded a net realized loss of $2.2 million, driven by a $4.1 million loss on one equity investment sale, and a $4.4 million net decrease in unrealized value. The unrealized decline was led by about $3.3 million on the CLO joint venture and $1.3 million on its specialty finance subsidiary.

Net assets decreased $4.2 million from operations, or $0.30 per share, far smaller than the $22.0 million, or $1.79 per share, a year earlier. For nine months, net assets rose $1.5 million, or $0.10 per share.

NAV per Share of $7.40 Reflects Smaller Balance Sheet After Note Repayments

Net asset value per share was $7.40 at Sep 30, 2026, against $8.07 at Dec 31, 2025, and net assets totaled $102.7 million versus $112.9 million. Total investments were $251.0 million, down from $331.1 million, and total assets fell to $256.7 million from $340.8 million.

Total liabilities were $154.0 million versus $227.8 million. During the first nine months, the company spent $45.5 million repurchasing and redeeming notes, including its 5.875% notes due 2026 and part of its 8.50% notes due 2029. Its asset coverage ratio was approximately 166.3%.

Its external investment manager waived incentive fees accrued through June 30, 2026, which lifted nine-month Net Income and NAV. The company also used $0.5 million for share repurchases and $11.1 million for distributions.

Fourth-Quarter $0.25 Distribution Is the Next Dated Event for GECC Holders

The board set the fourth-quarter 2026 distribution at $0.25 per share, payable in cash on Dec 31, 2026 to holders of record on Dec 15, 2026, from distributable earnings. Third-quarter net investment income was about $0.17 per share (calculated), below that rate. The company said it has enough Liquidity for at least the next 12 months.