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 …
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Competitive advantage assessment
Key risks
Below-Peer Return on EquityReturn on equity lags peers (score 0.07).
Fee Margin PressureFee 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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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
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.
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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