Stellus Capital Management

What Stellus Capital Management does

Stellus Capital Management is a Houston-based lower-middle market direct lender founded in January 2012 as a spinout of the D.E. Shaw group's direct capital business. The firm originates senior secured first lien, unitranche, second lien, and mezzanine debt, typically accompanied by equity co-investments, to private equity-backed U.S. and Canadian companies generally generating $5-50 million in EBITDA. Stellus operates through a multi-vehicle structure that includes the publicly traded Stellus Capital Investment Corporation (NYSE: SCM), the Stellus Private Credit BDC, and four vintages of the Stellus Credit Fund series, collectively managing approximately $4 billion in assets as of March 31, 2026, of which roughly $2.6 billion is fee-paying AUM and over 70% is sourced from permanent capital vehicles.

The firm is led by four founding partners—Robert T. Ladd, Dean D'Angelo, Joshua Davis, and W. Todd Huskinson—who previously worked together at D.E. Shaw and collectively hold 350+ years of principal investing experience. Across the team's 22+ year history they have deployed over $10.5 billion in 375+ companies, with a current portfolio that is 100% sponsor-backed and 100% first lien/senior secured. Origination runs entirely through direct relationships with PE sponsors such as SK Capital, Clarion Capital, Northlane Capital, ICV Partners, Hidden Harbor, Tailwind Capital, CCMP, CIVC, and BV Investment Partners. The underwriting model is relationship-driven and judgment-based rather than technology-driven, relying on a deliberately small senior team to deliver speed and certainty of close.

Revenue is generated primarily through three streams: management fees on fee-paying AUM, incentive/performance fees above hurdle rates, and transaction-level arrangement fees plus equity co-investment upside. In June 2026, Stellus was acquired by Ridgepost Capital, Inc. (formerly P10, Inc., NYSE: RPC) for an initial $250 million ($125 million cash + $125 million Ridgepost units) with up to $60 million in additional earnout, while retaining operational independence under its existing partners as part of Ridgepost's alternatives platform.

Name

Stellus Capital Management

Legal name

Stellus Capital Management, LLC

Website

https://stelluscapital.com

Company type

Private

Founded year

2012

Operating status

Operating

Headcount range

11–50 employees

Short description

Stellus Capital Management is a Houston-based lower-middle market direct lender, founded in 2012 as a D.E. Shaw spinout, providing senior secured, unitranche, mezzanine, and equity co-investments to PE-backed U.S. and Canadian companies with $5-50M EBITDA across ~$4 billion in AUM.

Ownership category

akta.pro rank

Product category

Direct Lending / Private Credit

NAICS

Portfolio Management and Investment Advice (523940)

SIC

Investment Advice (6282)

akta.pro primary industry

Debt Capital Raising Intermediation (Private Debt/Mezzanine/Bonds) (FSAEALAM)

akta.pro secondary industry

Institutional Capital Introduction (LP/Family Office/Endowment Matching) (FSAEALAI)

Keywords

• Direct lending
• Private credit
• Middle market financing
• Business development company
• Mezzanine debt

Headquarters

HQ city

Houston

HQ country

United States

HQ region

North America

Offices4 records

Markets served

GTM type

B2B

Offering type

Services

Cost components

Personnel, Operations, Technology or R&D, Marketing or Sales, Infrastructure

Revenue model

1. Management Fees: Stellus generates management fee income based on assets under management across its public BDC (Stellus Capital Investment Corporation), private BDC (Stellus Private Credit BDC), and private fund structures (Stellus Credit Funds I, II, III, IV). The firm has over $2.6 billion in fee-paying AUM as of early 2026, with more than 70% of fee-related revenue generated from permanent capital vehicles.
2. Incentive/Performance Fees: The firm earns incentive fees based on investment performance, typically calculated as a percentage of investment income and realized capital gains above specified hurdle rates. These fees align manager and investor interests.
3. Interest Income from Loan Portfolio: The firm generates interest income from its portfolio of first lien, second lien, unitranche, and mezzanine loans to middle-market companies. The weighted average yield on total investments was approximately 9.0% as of Q1 2026. The portfolio generates floating-rate income from senior secured loans.
4. Transaction Fees and Co-Investment Returns: The firm earns arrangement fees on closed transactions and participates in equity co-investments alongside private equity sponsors, generating both fee income and potential equity upside.

Pricing tiers

Go-to-market motion2 records

Distribution channels3 records

Marketing channels5 records

Core offering

Stellus Capital Management is a direct lending investment manager that originates first lien, unitranche, second lien, mezzanine, and equity co-investment financing for private equity-backed lower middle market companies typically with $5 million to $50 million of EBITDA. The firm operates through two BDCs (a public NYSE-listed BDC and a private BDC) and a series of private credit funds, managing approximately $4 billion in assets under management as of March 31, 2026.

Product overview

Stellus Capital Management is a leading U.S. direct lender specializing in the lower-middle market. The firm operates a unified direct lending platform comprising two business development companies (Stellus Capital Investment Corporation, a publicly-traded BDC on NYSE, and Stellus Private Credit BDC, a private BDC) and multiple private credit funds (Stellus Credit Fund I through IV). The company focuses on providing flexible capital solutions to private middle-market companies through first lien, unitranche, second lien, and mezzanine debt financing, often accompanied by equity co-investments. The investment vehicles collectively manage approximately $4 billion in assets under management as of March 31, 2026.

Differentiator

Problem solved

Functional benefit

Brands

• Stellus Credit Fund I:
• Stellus Credit Fund II
• Stellus Credit Fund III
• Stellus Credit Fund IV

Products and services

• Stellus Capital Investment Corporation (NYSE: SCM) An externally managed, closed-end, non-diversified investment company regulated as a business development company (BDC) under the Investment Company Act of 1940. Invests primarily in private middle-market companies through first lien, second lien, unitranche and mezzanine debt financing, often with corresponding equity investments. Available to public market investors via NYSE under ticker SCM with monthly dividends.
• Stellus Private Credit BDC An externally managed, closed-end, non-diversified management investment company regulated as a business development company under the Investment Company Act of 1940. Focuses on investing through first lien (including unitranche) loans, often with corresponding equity investments in private middle-market companies typically with $5.0 million to $50.0 million of EBITDA. Maintains a portfolio that is approximately 100% first lien/senior secured debt with a 10.92% ITD total return as of Q1 2026.
• Stellus Credit Fund IV A private credit fund focused on identifying and pursuing private credit opportunities originated and underwritten by Stellus across a diverse range of industries in the United States and Canada. Targets lower middle market direct lending and invests in first lien, unitranche, second lien, mezzanine, and equity co-investments in PE-backed companies.
• Stellus Credit Fund I First generation private credit fund managed by Stellus Capital Management, providing lower middle market direct lending solutions to private equity-backed companies.
• Stellus Credit Fund II Second generation private credit fund managed by Stellus Capital Management, providing lower middle market direct lending solutions to private equity-backed companies.
• Stellus Credit Fund III Third generation private credit fund managed by Stellus Capital Management, providing lower middle market direct lending solutions to private equity-backed companies.

Quantifiable outcome

• 10.92% ITD Total Return (Stellus Private Credit BDC as of March 31, 2026)
• +3 more outcomes

Named customers20 records

Segments3 records

Ideal customer profiles3 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Scale indicators13 records

Recent moves8 records

Expansion highlights6 records

Direct peers

• Golub Capital: Golub Capital is one of the largest direct lenders to the U.S. middle market, focusing on senior secured loans to PE-sponsored companies. It operates a public BDC (Golub Capital BDC) and private credit funds, making it highly comparable to Stellus's lower-middle market direct lending platform.
• Ares Capital Corporation: Ares Capital is the largest publicly traded BDC and a leading direct lender to U.S. middle-market companies through first lien, second lien, and mezzanine debt. Its scale, product mix, and PE-sponsor focus directly parallel Stellus's investment strategy.
• Churchill Asset Management (Nuveen): Churchill is a private credit manager within Nuveen (TIAA) focused on senior and unitranche loans to PE-backed U.S. middle-market companies. Its product set, target borrower profile, and sponsor-driven origination are highly aligned with Stellus's strategy.
• Crescent Capital Group: Crescent Capital is a Los Angeles-based private credit firm managing senior loans, unitranche, mezzanine, and special situations funds for middle-market companies. Its middle-market direct lending franchise is a direct comparable to Stellus's core business.
• HPS Investment Partners: HPS is a leading global private credit investment firm managing direct lending, mezzanine, and special situations strategies across multiple funds. Its middle-market direct lending franchise and PE sponsor relationships closely mirror Stellus's approach.
• Antares Capital: Antares Capital is a leading middle-market direct lender, providing senior and unitranche financing to PE-sponsored companies. It is owned by CPP Investments and is one of the most direct comparables to Stellus in terms of borrower profile and loan products.
• Madison Dearborn Partners (Private Credit): Madison Dearborn's private credit arm provides senior debt financing to lower-middle market PE-sponsored companies. Its focus on smaller deals and lower-middle market borrowers is closely aligned with Stellus's niche strategy.
• PennantPark Floating Rate Capital: PennantPark Floating Rate Capital is a publicly traded BDC that primarily invests in floating-rate first lien senior secured loans to U.S. middle-market PE-sponsored companies, making it a direct comparable in portfolio composition and target borrower.
• Bain Capital Credit: Bain Capital Credit is the credit affiliate of Bain Capital, operating direct lending, mezzanine, and special situations strategies targeting middle-market companies. Its direct lending platform competes directly with Stellus in the U.S. lower-middle market.

Broad incumbents

• Oaktree Capital Management: Oaktree is a large global alternative investment manager with a substantial direct lending franchise serving U.S. middle-market companies. While it operates across many strategies (credit, real estate, private equity), its direct lending business is a broad peer to Stellus.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat5 records

Key risks5 records

Key highlights6 records

Customer concentration

• LinkedInlinkedin.com/company/stellus-capital-management

Revenue estimate

Valuation estimate

Number of profiles

Profiles18 records

Subsidiaries1 record

Funding overview

Funding rounds3 records

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments38 records

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Stellus Capital Management