Capital Southwest Corporation (CSWC) is trading at a near 30% discount to its asset value, and is attracting investors with its diversified portfolio, low operating expense ratio and access to private-equity types of investments, says Gary L. Martin, Chairman, President & CEO of Capital Southwest Corporation.
“What I hear a lot about when I speak to our existing investors when I make visits to them, is that they truly respect our 51-year track record of success. They like that the portfolio is reasonably diversified, and they very much like the fact that we operate this very, very efficiently…and although we are publicly held, our operating expense ratio here, as reported by independent third parties, is 1.1% of net assets. The next closest in our peer group is more than twice that, and the average is five times that,” Martin said.
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Martin says that new investors are enjoying access to private-equity types of investments without the burden of typical private equity fund restraints. Additionally, CSWC is trading at a near 30% discount to its asset value and will pay a decent dividend in March, Martin says.
“Our discount over time has ranged from the 12% range to as much as 35%, but at the current time it’s probably little under 30%. Our stock has done pretty well. We have another good dividend being paid in March; it’s ex-dividend now. What that means, in essence, is an investor can spend $1.00 on our stock and basically get the benefit of $1.30 of investment value. Over time, that’s important,” Martin said.
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