Fidus Investment Corporation Reports 12.3% Increase in Total Investment Income for 2024

Fidus Investment Corporation (FIC), a Maryland-based business development company (BDC), reported a total investment income of $146.1 million for the year ended December 31, 2024, a 12.3% increase from the $130.1 million reported in 2023. This increase stemmed primarily from a $14.4 million rise in interest income, a $1.0 million increase in dividend income, a $0.1 million increase in fee income, and a $0.5 million increase in interest on idle funds. Total expenses, including income tax provision, rose by 10.0% to $71.5 million in 2024, primarily due to increased interest and financing expenses, base management fees, and income incentive fees, partially offset by a decrease in capital gains incentive fees. Net investment income for 2024 was $74.6 million, a 14.6% increase compared to 2023.

The company's total return based on net asset value (NAV) per share was 12.4% for 2024, compared to 15.1% in 2023. The total return based on market value was 20.1% for 2024, compared to 17.8% in 2023. As of December 31, 2024, FIC held debt and equity investments in 91 portfolio companies, with an aggregate fair value of $1.1 billion, representing an increase from 82 portfolio companies with a fair value of $957.9 million as of December 31, 2023. The weighted average yield on debt investments was 13.3% as of December 31, 2024, down from 14.2% as of December 31, 2023. The geographic distribution of the portfolio remained largely within the United States, with investments across various industry segments including information technology services, business services, and healthcare products.

During 2024, FIC invested $394.5 million in new debt and equity investments, including 16 new portfolio companies, and received $276.9 million in proceeds from sales or repayments of investments, including exits from ten portfolio companies. The company's investment strategy focuses on lower middle-market companies with revenues between $10 million and $150 million and EBITDA between $5 million and $30 million. FIC's investment process involves rigorous due diligence and underwriting, active portfolio management, and a focus on capital preservation. The company utilizes both direct investments and investments through its SBIC Funds, leveraging lower-cost capital through the SBA's SBIC debenture program.

FIC's investment rating system categorizes investments on a scale of 1 to 5, with 1 representing the least risk. As of December 31, 2024, the weighted average rating of the portfolio was 2.0 on a fair value basis and 2.2 on a cost basis. The company's net asset value per share was $19.33 as of December 31, 2024. FIC's investment advisor, Fidus Investment Advisors, LLC, manages the company's day-to-day operations and receives a base management fee and an incentive fee based on the Company's performance. The Investment Advisory Agreement was renewed through June 20, 2025.

FIC's outlook includes a continued focus on originating new debt investments and maintaining a diversified portfolio. The company anticipates utilizing both its direct investment capabilities and the SBIC Funds to pursue investment opportunities. However, the filing also highlights several risk factors, including economic downturns, interest rate volatility, competition, and the illiquidity of its investments. The company's ability to maintain its RIC tax treatment and pay distributions to stockholders is also contingent upon meeting certain requirements.