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WIKI ANALYSIS
MCG Capital Corporation (MCGC) is a business development company that primarily provides capital to support the internal growth and corporate development initiatives of small- to medium-sized private companies in domestic growth industries such as media, communications, information services, and technology. Originally consisting of the media communications lending group of Signet Bank (which was acquired by First Union in November 1997 and later merged into Wachovia), MCG was bought by management and affiliates of Goldman Sachs in June 1998 and went public in December 2001.
MCG is a non-diversified, internally managed, closed-end investment company that has elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (which means among other things that it is required to invest at least 70% of its assets in private or thinly-traded public U.S. companies). MCG has also elected to be treated as a regulated investment company (RIC) for federal income tax purposes, which requires it to pay out the vast majority of its earnings each year.
MCGC's strategy is to use its in-depth knowledge and expertise in particular sectors to identify attractive companies in which to invest, providing funding primarily in the form of senior secured commercial loans, and, to a lesser extent, subordinated debt and equity investments.
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