Gladstone Capital’s debt investments primarily consist of three types of loans to small and medium sized businesses in the United States: senior term loans, senior subordinated loans, and junior subordinated loans. Loans typically range from $8 million to $40 million with terms of up to seven years. Gladstone Capital’s equity investments typically take the form of preferred or common equity (or warrants to acquire the foregoing). Historically, as Gladstone Capital has primarily been a debt fund, it aims to maintain a portfolio consisting of approximately 90% debt investments and 10% equity investments, at cost.
Our goals are to achieve and grow current income through our debt investments that will allow distributions to stockholders to grow over time and to provide stockholders with long term appreciation in the value of our assets by investing in equity securities that we believe can grow over time to permit us to sell our equity investments for capital gains.
We have three affiliate investment companies. Gladstone Commercial Corporation is real estate investment trust that owns net leased industrial, commercial and retail property and selectively makes long-term industrial and commercial mortgage loans. Gladstone Investment Corporation is a BDC that also invests in small and medium sized private businesses in the U.S., historically as a buyout fund. Gladstone Land Corporation is a real estate investment trust that invests in farmland located in major agricultural markets in the U.S.