Great Elm Capital Corp. GECC

Competitive advantage analysis · financial-services

Asset Management Specialized
Overall moat score
25/100
Weak

About Great Elm Capital Corp.

Great Elm Capital Corp. is a business development company which specializes in loan and mezzanine, middle market investments. It invests in the debt instruments of middle market companies. The fund prefers to invest in media, commercial services and supplies, healthcare, telecommunication services, communications equipment. It typically makes equity investments between $3 million and $10 million in companies with revenues between … Full GECC analysis →

Competitive advantage assessment

Key risks

  • Below-Peer Return on Equity Return on equity lags peers (score 0.07).
  • Fee Margin Pressure Fee margin quality is below peers (score 0.37).

The dashed ring is the peer median. Defense scores are percentile ranks against peers, so 50 is roughly the typical company in this group.

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Fee Revenue Quality

Developing
31

Where GECC ranks in Asset Management

Great Elm Capital Corp. ranks #158 of 173 scored companies in Asset Management by moat score — the top 91%. The widest moat in the group is Sound Point Meridian Capital Inc (SPMC) at 77/100.

Moat scores for companies ranked near GECC in Asset Management
# Company Moat score Rating
154 Binah Capital Group, Inc. Warra BCGWW 31/100 Developing
155 CION Investment Corporation CION 29/100 Developing
156 Equitable Holdings, Inc. EQH 27/100 Developing
157 AlTi Global, Inc. ALTI 25/100 Weak
158 Great Elm Capital Corp. GECC 25/100 Weak
159 CaliberCos Inc. CWD 23/100 Weak
160 PhenixFIN Corporation PFX 20/100 Weak
161 Innventure, Inc. INV 18/100 Weak
162 StepStone Group Inc. STEP 18/100 Weak

See every Asset Management & Capital Markets company ranked by moat score →

How GECC scores on the Asset Management Specialized defenses

Fee Revenue Quality

Score 31 · 20% of the moat score

Fee revenue quality is the ability to charge above the industry's falling average and keep charging it.

Client Retention & Revenue Stickiness

Score 34 · 18% of the moat score

Assets under management leave far more easily than they arrive, and the fee leaves with them.

Compensation Discipline

Score 24 · 18% of the moat score

Compensation is the largest expense in asset management and the one that decides whether a good year ever reaches shareholders.

Capital Efficiency

Score 11 · 20% of the moat score

Asset managers are asset-light: with little capital employed, a healthy business should earn a very high return on equity, and a merely average one is a real warning.

Earnings Quality & Cash Conversion

Score 32 · 14% of the moat score

Reported profits here can be flattered by performance fees, seed-capital gains and consolidated fund accounting, none of which recur reliably.

Balance Sheet Strength

Score 12 · 10% of the moat score

Because the business needs so little capital, an asset manager carrying meaningful debt has usually borrowed to buy another manager or to fund distributions.

How each Asset Management Specialized defense is measured, in full →

Understanding GECC's moat

What is Great Elm Capital Corp.'s moat score?

Great Elm Capital Corp. (GECC) scores 24 out of 100 on the StatsAlpha Moat Map, which rates its competitive advantage as weak. It ranks #158 of 173 scored companies in Asset Management, the top 91%. The score is a weighted composite of 6 competitive defenses, each measured against industry peers of 174 companies in Asset Management. Its strongest defense is Client Retention & Revenue Stickiness (34/100) and its weakest is Capital Efficiency (11/100).

How does Great Elm Capital Corp. compare with other Asset Management companies?

Great Elm Capital Corp. ranks #158 of 173 scored companies in Asset Management by moat score. The widest moat in Asset Management is Sound Point Meridian Capital Inc (SPMC) at 77/100. The companies ranked closest are AlTi Global, Inc. (ALTI) at 25 just above it and CaliberCos Inc. (CWD) at 23 just below it.

How is the moat score calculated?

Each company is scored with an industry-specific template — Asset Management Specialized in this case, chosen because the defenses that matter to a bank are not the ones that matter to a software company. Every defense combines several financial signals, and each signal is measured as a percentile against a peer group of 174 companies in Asset Management. The defenses are then weighted to produce the overall score out of 100.

Why is Great Elm Capital Corp. scored with the Asset Management Specialized template?

An asset manager owns almost nothing. It charges a fee on someone else's money, pays much of that fee out in compensation, and keeps the remainder — so its economics turn on the fee rate it can defend, whether client money stays, and how much revenue survives the bonus pool. The Asset Management template scores those questions rather than the balance sheet, which in this industry is largely beside the point.

Which competitive defenses are measured for Great Elm Capital Corp.?

The Asset Management Specialized template measures 6 defenses, and GECC scores: Fee Revenue Quality (31), Client Retention & Revenue Stickiness (34), Compensation Discipline (24), Capital Efficiency (11), Earnings Quality & Cash Conversion (32), Balance Sheet Strength (12). Each is scored independently as a percentile against peers, so a company can be strong on one and weak on another — the overall score reflects how those defenses are weighted for this industry.

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