Interested in private equity? This small fund offers a 6.5% dividend paid monthly
A small U.S. fund sends shareholders $0.08 a month and occasionally throws in a bonus. Last year, it posted its biggest paper gains in its history, yet still ended up with an accounting loss. Both things have the same cause.
Key points
A small U.S. fund sends shareholders $0.08 every month and added a $0.54 bonus last year.
Over the past five years, roughly 40% of all the money paid out came from a source other than interest.
Fiscal 2026 was the fund’s best year on paper, yet it still ended with an accounting operating loss.
The stock trades below the value of its assets per share, even though the fund signed the largest sale in its history.
Management has yet to decide how much of the proceeds to send shareholders in cash and how much to keep.
Two businesses in one ticker
Gladstone Investment $GAIN is a fund that, at first glance, doesn’t seem to have much to offer: no product, no brand, and a market capitalization of just under $0.59 billion at a share price of around $14.78. It belongs to the BDC (business development company) category, the U.S. equivalent of a closed-end fund that must distribute the vast majority of its profits to shareholders and, in return, pays no corporate income tax.
But beneath one ticker lie two completely different businesses. The first is a lender: the fund buys small U.S. industrial and consumer companies, usually as a majority owner, and also lends to them at high interest rates. The second is a small private equity operation: when one of those companies does well, the fund sells it after a few years and takes in a capital gain.
The portfolio currently consists of 29 companies worth around $1.3 billion. Since its founding in 2005, the fund has bought 66 companies, sold 33 of them, and earned approximately $354 million in realized gains. For a retail investor, it’s something like a ticket to private equity, but with daily liquidity and monthly payouts.
That combination is precisely why most of the market overlooks it. Credit fund analysts don’t understand it because half its value is in equity stakes. Private equity analysts don’t follow it because it’s too small. And its accounting profit swings depending on how the portfolio is revalued.