Gladstone Capital Corporation - Closed End Fund

Gladstone Capital Corp. is an externally managed business development company that provides debt and equity capital to established private businesses in the United States, primarily in the lower middle market. It invests through senior secured loans, second lien debt, and equity co-investments, aiming to earn current income and capital appreciation while holding many investments through repayment or exit.

— Gladstone Capital Corporation - Closed End Fund
%
Senior secured debt55% First lien and other senior loans to private middle-market companies.
Junior debt20% Second lien, subordinated and other higher-yield debt instruments.
Equity investments15% Common and preferred equity stakes, often alongside debt financing.
Syndicated loan investments10% Participations in broadly syndicated senior loans and similar credit assets.

Gladstone Capital's customers are private U.S. businesses, especially established lower middle market companies that...

  • Lower middle market private businessesprimary

    Established U.S. private companies that borrow for growth, acquisitions, or balance-sheet restructuring.

  • Private equity-backed portfolio companiesprimary

    Sponsor-owned companies that need structured debt and sometimes equity capital.

  • Broadly syndicated loan market participantssecondary

    Borrowers and transactions where Gladstone takes participations rather than sole-source lending.

  • Affiliated co-investment vehiclessecondary

    Transactions shared with Gladstone Investment, Gladstone Alternative, or future affiliated funds.

Gladstone Capital is focused on the United States and was formed to invest in U.S.-operating private businesses...

  • •U.S.-focused investment mandate and portfolio
  • •Domestic middle-market origination and underwriting
  • •No meaningful non-U.S. operating footprint disclosed
  • •U.S. credit conditions drive portfolio performance
  • •Lower FX risk than globally diversified lenders

The company’s strategy is to originate and hold secured debt investments in lower middle market businesses while...

01
Maintain disciplined credit underwritingshort-term

The business depends on preserving principal and generating interest income from private borrowers.

02
Expand origination through adviser networkmedium-term

Deal flow and underwriting quality depend on access to private equity and banking relationships.

03
Use co-investment capacity efficientlymedium-term

Co-investment with affiliates can increase access to larger transactions and diversify exposure.

Gladstone Capital is exposed to credit losses, valuation volatility, and borrower performance because it lends to...

high

Portfolio company credit deterioration

The company lends to private businesses that may face operating stress, refinancing risk, or default.

Scope
Debt investments and equity co-investments
Materiality
high
high

Fair value volatility in illiquid investments

Private investments are marked using estimates and comparable transactions, which can change materially.

Scope
Net asset value and reported unrealized gains/losses
Materiality
high
medium

Interest rate and credit spread sensitivity

Borrower demand, portfolio yields, and financing costs all move with rates and spreads.

Scope
Net investment income and borrowing costs
Materiality
high
medium

Liquidity and leverage risk

The company funds illiquid assets with debt and must manage maturities and covenant capacity.

Scope
Credit facility and notes payable
Materiality
high
medium

Related-party conflict risk

The adviser and administrator are affiliated and also serve other Gladstone funds.

Scope
Fee allocation, co-investment decisions, portfolio company relationships
Materiality
medium
Fair value of private investments
Can materially change NAV and quarterly earnings through unrealized appreciation/depreciation
Revenue recognition on debt investments
Affects net investment income and dividend coverage
Incentive fee and fee credits
Affects operating expense run-rate and comparability across periods
Realized gains and losses
Can make earnings volatile and less representative of recurring income

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: 28/04/2026