Prospect Capital Corp (NASDAQ: PSEC)

Prospect Capital Corporation is a financial services company that primarily lends to and invests in middle market privately held companies. It is a closed end investment company incorporated in Maryland and has elected to be regulated as a business development company under the Investment Company Act of 1940. As a business development company it also elected to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code. The firm was organized in April 2004 and completed its initial public offering in July 2004. As of June 30 2025 it reported approximately seven billion dollars of total assets and is externally managed by Prospect Capital Management L. P.

Prospect Capital Corporation generates revenue mainly from interest income dividend income and various fees earned on its investments in portfolio companies. These fees include commitment origination structuring diligence and consulting charges. The company also realizes capital gains when it sells debt or equity positions at a profit. Its revenue stream is driven by the performance of its loan and equity holdings across a diverse set of industries.

Prospect Capital Corporation is one of the longest running and largest business development companies with approximately seven billion dollars of total assets as of June 30 2025. It competes with other major BDCs such as Ares Capital Corporation Main Street Capital Corporation and FS KKR Capital Corp. Competitive advantages include its direct origination model built on long term relationships with private equity sponsors and management teams the depth of its investment team and its ability to invest across thirty two industry categories while maintaining a diversified portfolio. Its status as a regulated investment company provides tax efficiency that appeals to income focused investors.

Prospect Capital Corporation primarily serves middle market privately held companies in the United States across sectors such as manufacturing healthcare business services and technology. It also invests in some broadly traded public companies non US companies and real estate investment trusts including National Property REIT Corp. Its borrowers are often owned by private equity funds independent sponsors or company management teams.