Muzinich Bets Heavily on Hercules Capital (HTGC) by Acquiring 254,651 Shares
Key Points
Muzinich & Co., Inc. added 254,651 shares of Hercules Capital in an estimated $4.88 million trade based on the average price during the third quarter of 2025.
Transaction value represented 1.89% of Muzinich & Co. Inc.’s reportable U.S. equity assets as of Q3 2025.
Post-trade position totals 992,820 shares, valued at $18.77 million at the end of the third quarter.
The stake now accounts for 7.25% of fund AUM, placing it outside the fund’s top five holdings.
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What happened
According to a filing with the Securities and Exchange Commission dated October 20, 2025, Muzinich & Co., Inc. increased its holding in Hercules Capital (NYSE:HTGC) by 254,651 shares during Q3 2025. The estimated value of the transaction, based on the average price during the period from July 1 to September 30, was approximately $4.88 million.
What else to know
Muzinich & Co. Inc. increased its Hercules Capital stake to 7.25% of reportable assets as of 2025-09-30.
Top holdings after the filing:
NASDAQ: ARCC: $33.47 million (13.0% of AUM) as of 2025-09-30.
NYSE: OBDC: $24.92 million (9.7% of AUM) as of 2025-09-30.
NYSE: BXSL: $23.67 million (9.18% of AUM) as of 2025-09-30.
NYSE: MAIN: $23.35 million (9.0% of AUM) as of 2025-09-30.
NASDAQ: GBDC: $22.25 million (8.63% of AUM) as of 2025-09-30.
As of October 19, 2025, shares of Hercules Capital were priced at $17.27, down 14.25% over the past year, underperforming the S&P 500 by 19.64 percentage points (price change and S&P 500 comparison based on 252 trading days ending October 19, 2025).
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $348.92 million |
| Net Income (TTM) | $-4.29 million |
| Dividend Yield | 10.81% |
| Price (as of market close 2025-10-17) | $17.27 |
Company Snapshot
Hercules Capital provides venture debt, senior secured loans, and growth capital primarily to privately held, venture-backed companies, with a focus on technology, life sciences, and sustainable technology sectors.
Operates as a business development company, generating revenue through interest income, fees, and equity participation in portfolio companies.
Targets emerging growth and mid-to-late stage companies in the United States, especially those backed by institutional venture capital investors.
Hercules Capital, Inc. is a leading specialty finance company focused on providing customized debt and growth capital solutions to innovative, high-growth companies. With a diversified portfolio and deep sector expertise, the firm leverages structured debt as well as selective equity investments.
Foolish take
Business development company (BDC) stocks like Hercules Capital aren't just for institutions like Muzinich. Income-seeking investors love them because their earnings are untaxed as long as they distrbute nearly everything they earn as a dividend to shareholders.
Shares of Hercules Capital underperformed in 2025. The stock is down about 11% since the end of 2024. The BDC's dividend has also decreased. If the next 12 months of dividend payments fall in line with the previous 12 months, investors can look forward to an 8.95% yield at recent prices.
In the second quarter, Hercules reported net losses of $57.6 million due largely to losses on debt and warrant investments. Net investment income, though, is still moving in the right direction thanks to record levels of new investments. The BDC issued $1.0 billion in new debt and equity committments during the three months ended June. It was the second consecutive quarter with at least $1 billion in new committments.
Glossary
AUM (Assets Under Management): The total market value of assets a fund or investment firm manages on behalf of clients.
Business Development Company (BDC): A publicly traded firm that invests in small and mid-sized businesses, often through debt and equity.
Venture Debt: Loans provided to early-stage, venture-backed companies, typically as an alternative to raising equity.
Senior Secured Loans: Loans backed by collateral and given repayment priority over other debts if the borrower defaults.
Growth Capital: Funding provided to mature companies to expand operations, enter new markets, or finance acquisitions.
Equity Participation: When a lender or investor receives a share of ownership or profits in a company, often as part of a financing deal.
Institutional Venture Capital Investors: Large organizations, such as pension funds or endowments, that invest in startups through venture capital funds.
Reportable Assets: The portion of a fund's assets required to be disclosed in regulatory filings.
Stake: The ownership interest or share an investor holds in a company or fund.
Portfolio Companies: Businesses in which a fund or investment firm has invested.
TTM: The 12-month period ending with the most recent quarterly report.
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Cory Renauer has positions in Ares Capital. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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