MidCap Financial Investment Corporation (Former name Apollo Investment Corporation) is business development company and a closed-end, externally managed, non-diversified management investment company. It is elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act) specializing in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing and private middle …
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Competitive advantage assessment
Key strengths
Sticky AUM BaseRevenue stickiness is high (stability score 0.77).
Durable Capital ReturnsReturn durability is high (score 0.83).
Key risks
Below-Peer Return on EquityReturn on equity lags peers (score 0.33).
Weak Cash ConversionCash conversion is weak (score 0.21).
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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MidCap Financial Investment Cor ranks #99 of 173
scored companies in Asset Management by moat score — the top 57%.
The widest moat in the group is Sound Point Meridian Capital Inc (SPMC)
at 77/100.
Moat scores for companies ranked near MFIC in Asset Management
How MFIC scores on the Asset Management Specialized defenses
Fee Revenue Quality
Score 54
· 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 49
· 18% of the moat score
Assets under management leave far more easily than they arrive, and the fee leaves with them.
Compensation Discipline
Score 48
· 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 48
· 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 46
· 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 27
· 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.
What is MidCap Financial Investment Cor's moat score?
MidCap Financial Investment Cor (MFIC) scores 47 out of 100 on the StatsAlpha Moat Map, which rates its competitive advantage as developing. It ranks #99 of 173 scored companies in Asset Management, the top 57%. 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 Fee Revenue Quality (54/100) and its weakest is Balance Sheet Strength (27/100).
How does MidCap Financial Investment Cor compare with other Asset Management companies?
MidCap Financial Investment Cor ranks #99 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 BlackRock Health Sciences Term Trust (BMEZ) at 47 just above it and SuRo Capital Corp. (SSSS) at 47 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 MidCap Financial Investment Cor 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 MidCap Financial Investment Cor?
The Asset Management Specialized template measures 6 defenses, and MFIC scores: Fee Revenue Quality (54), Client Retention & Revenue Stickiness (49), Compensation Discipline (48), Capital Efficiency (48), Earnings Quality & Cash Conversion (46), Balance Sheet Strength (27). 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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