Great Elm Capital Raises $15.0 Million of Equity
Where To Now?
Back To The Well
Once again, Great Elm Capital (GECC) has lined up a new investor and raised fresh equity capital:
Great Elm Capital Corp. (GECC), a business development company, has issued approximately 1.3 million shares, representing 9.9% of the Company’s outstanding common stock, at $11.65 per share for gross proceeds of $15.0 million to an affiliate of Booker Smith, a newly appointed director of Great Elm Group, Inc. (GEG), with extensive experience in corporate credit and real estate investing.
Press Release - GECC - August 27, 2025
Here are the details from GECC's official filing:
On August 27, 2025, Great Elm Capital Corp. (the “Company”) entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Poor Richard LLC, a Delaware limited liability company (the “Purchaser”), an affiliate of Booker Smith, pursuant to which the Purchaser purchased, and the Companyissued, 1,290,000 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at a price of $11.65 per share, for an aggregate purchase price of $15,028,500. The Shares were issued in a private placement exemptfrom registration under Section 4(a)(2) and Rule 506(b) ofRegulation D of the Securities Act of 1933.
In a subsequent filing, when GECC took into account its latest ATM share issuance, total shares outstanding came to 12,977,634, up from 11,568,378 shares at the end of June - a 12% increase.
Inquiring Minds
By the way, you might be asking who is this Booker Smith who has both invested in GECC and been appointed to the Board of the BDC's external manager.
We ran a search and were told he is a research analyst at Imperial Capital LLC in Los Angeles - just down the street from the BDC Reporter. (Another source said he was a Senior Vice President - so go figure). He appears to have graduated from George Washington University as recently as 2017. From a Google search, he seems to have some expertise in convertibles and has been asking questions on conference calls. Why Mr Smith is interested in GECC is not known.
One Of Many
Anyway, this is one more in a series of mini-capital raises GECC has undertaken in recent years. For example, there was another a year ago where 1.0mn shares were issued at $12.03 a share.
A little curiously, while last year's equity issuance was priced at book value, this latest one came in below book and at a lower price even though - on paper - the BDC's performance has improved of late.
For example, GECC announced this at the top of its most recent earnings press release:
Total investment income (“TII”) for the quarter ended June 30, 2025 was a record $14.3 million.
GECC - IIQ 2025 Earnings Press Release
Wither?
With a mysterious new shareholder and armed with more equity capital and a Revolver recently doubled in size, we wonder where GECC goes next?
Will the small coterie of finance companies acquired in recent years get pumped up with additional funds?
Will more money flow into the BDC's "idiosyncratic" CLO joint venture that has done so much to boost its income?
Or will GECC be targeting another of its other JVs - "CW Opportunity 2 LP, a vehicle created to hold convertible preferred equity in CoreWeave, an AI hyperscaler that IPO-ed earlier this year and has seen strong post-IPO equity performance".
Or is there yet another investment angle the external manager of GECC favors?
VIEWS
Confused
As our questions above make clear, we are not sure what is the strategic objective of GECC or what markets the BDC intends to serve over the long term.
Over at BDC Best Ideas, we put every BDC into one of 5 categories based on the principal markets in which they operate. The first 4 categories are the lower middle market; the middle market (which some BDCs insist on calling the "core middle market"; the upper middle market and the venture debt market.
Then there's a fifth catch-all category for BDCs operating in multiple markets.
GECC falls into that category which we've inelegantly labeled the "Hybrid" market.
There's nothing wrong with being multi-focused (SLR Investment - SLRC - has being doing so very successfully for years) but GECC's preferences seem to be constantly shifting, leaving those of us watching from the sidelines scratching our head.