Mission Statement, Vision, & Core Values of Saratoga Investment Corp. (SAR)

You're looking at Saratoga Investment Corp. (SAR), a Business Development Company (BDC), and wondering how their stated mission to be the 'turning point' for middle-market companies translates to your bottom line, right?

Their principles are defintely worth scrutinizing, especially when you see the 2025 fiscal year results: a total dividend per share of $3.31 and a Net Asset Value (NAV) per share of $25.86, alongside a Total Investment Income of over $148.8 million. Do their core values truly drive that 7.5% Return on Equity, and what does a low non-accrual rate-just 0.3% of fair value in 2025-tell you about their risk management philosophy?

Let's unpack the Mission Statement, Vision, and Core Values that underpin their strategy, and see how they map to the investment decisions that shape their $978.0 million in Assets Under Management (AUM).

Saratoga Investment Corp. (SAR) Overview

You're looking for a clear-eyed view of a specialty finance player, not just another BDC (Business Development Company) with a catchy ticker. Saratoga Investment Corp. (SAR) is a publicly traded BDC focused on providing customized financing solutions to US middle-market companies. They don't chase the mega-deals; their sweet spot is businesses with annual revenues between $8 million and $250 million and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) exceeding $2 million. This focus on the lower end of the middle market is a deliberate strategy to find better risk-adjusted returns.

The company's model is built on offering a diverse capital stack, including first and second lien loans, subordinated debt, and unitranche structures, plus equity co-investments to align with management teams. Honestly, their longevity speaks volumes: the senior investment team has over 200 years of combined experience, which is defintely a competitive edge in volatile credit markets. As of the latest reporting, their Assets Under Management (AUM) stood at approximately $995.3 million as of August 31, 2025, reflecting their consistent, albeit selective, deployment of capital. If you want a deep dive into how they structure these deals, you can find a lot more here: Saratoga Investment Corp. (SAR): History, Ownership, Mission, How It Works & Makes Money.

Fiscal Year 2025 Performance and Key Metrics

The numbers from the fiscal year ended February 28, 2025, show a solid foundation, even with market headwinds. Total Investment Income, which is essentially their revenue from interest and fees, climbed to $148.86 million, a 3.6% increase from the prior year. This growth is a direct result of their predominantly floating-rate asset base benefiting from the higher interest rate environment. Here's the quick math on their core results:

• Total Investment Income (FY 2025): $148.86 million
• Adjusted Net Investment Income (FY 2025): $53.0 million
• Net Asset Value (NAV) as of 2/28/25: $392.7 million
• Return on Equity (ROE) for FY 2025: 7.5%

What this estimate hides is the quarter-to-quarter volatility, but the full-year picture is one of stability. The Net Asset Value (NAV) per share was $25.86 at the fiscal year-end, which is the baseline for assessing shareholder value. They're generating income, but still maintaining a conservative balance sheet.

Recent Financial Strength and Industry Leadership

Looking at the most recent data-the fiscal second quarter of 2026, which ended August 31, 2025-Saratoga Investment Corp. continues to demonstrate strength that outpaces many peers. Their strategy of focusing on credit quality is paying off; non-accrual investments were reduced to just a single position, representing a mere 0.2% of the portfolio's fair value. That's a clean book in a tough lending environment. Their quarterly Return on Equity (ROE) hit an impressive 13.8%, significantly beating the BDC industry average of 7.3% for the same period. They're not just keeping pace, they're leading.

Plus, they're actively deploying capital. Net originations for the quarter were a healthy $22.4 million, showing they can find quality deals even as some competitors pull back. Their performance has consistently outperformed the BDC industry over the past year, with total returns nearly matching the S&P 500 at one point in 2025. This track record of outperformance and superior credit quality is why Saratoga Investment Corp. is considered a leader in the middle-market BDC space. You need to understand the drivers behind this success to make your next move.

Saratoga Investment Corp. (SAR) Mission Statement

You need a clear line of sight into what drives a company's capital allocation and long-term strategy, especially in the complex world of business development companies (BDCs). For Saratoga Investment Corp. (SAR), their mission statement is the operational blueprint for delivering value, not just a marketing slogan. Their core objective is straightforward: create attractive risk-adjusted returns by generating current income and long-term capital appreciation from their debt and equity investments. This focus directly guides their decisions on which U.S. middle-market businesses get financing.

This mission is crucial because it sets the standard for their investment strategy-a strategy that resulted in a Total Investment Income of $148.9 million for the fiscal year ended February 28, 2025. Honestly, that's the kind of number that proves the mission is working. If you want to dive deeper into who is buying into this strategy, you should check out Exploring Saratoga Investment Corp. (SAR) Investor Profile: Who's Buying and Why?.

Partnering with and Investing in Strong, Growing Middle Market Companies

The first component of the mission is about selection: finding and backing the right businesses. Saratoga Investment Corp. focuses on established, cash-flow-positive U.S. middle-market companies, typically those with annual revenues between $8 million and $250 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) over $2 million. This niche is defintely less volatile than early-stage venture capital, but still offers significant growth potential.

The proof is in the portfolio quality. For the fiscal year 2025, the company successfully reduced its non-accrual investments-loans where interest payments are significantly past due-to just 0.3% of the portfolio's fair value. That low non-accrual rate shows a disciplined underwriting process and a commitment to partnering with financially sound companies. They are not just lending money; they are vetting partners.

Providing Flexible Financing Solutions and Strategic Support

The second pillar is about execution-how they actually deploy capital. Saratoga Investment Corp. provides customized financing solutions, which means they don't just offer one-size-fits-all loans. They primarily invest in senior and unitranche leveraged loans (debt that combines senior and subordinated tranches into a single facility), but also use mezzanine debt and equity. This flexibility allows them to structure deals for a wide range of needs, from change of ownership transactions to strategic acquisitions and growth initiatives.

Here's the quick math on their capacity: as of February 28, 2025, Saratoga Investment Corp. had a total of $292.2 million in undrawn credit facility borrowing capacity and cash/cash equivalents, plus another $136.0 million in undrawn Small Business Administration (SBA) debentures. This massive liquidity pool, totaling over $428 million, is the strategic support they can offer, ensuring they can fund new investments and support existing portfolio companies through various economic cycles.

Generating Attractive Current Income and Capital Appreciation

The final, and most tangible, component is the result for you, the shareholder. The mission explicitly targets two forms of return: current income and capital appreciation. As a BDC, the current income component is critical, as they are required to distribute at least 90% of their taxable income to shareholders.

In fiscal year 2025, Saratoga Investment Corp. delivered a strong Return on Equity (ROE) of 7.5%. More importantly, the company declared dividends per share of $3.31 for the year, which included a special dividend. This consistent, over-earned dividend-Net Investment Income per share was $3.81-is the direct outcome of successfully executing their mission to generate attractive current income from their $978.1 million in Assets Under Management (AUM).

Saratoga Investment Corp. (SAR) Vision Statement

You're looking for the North Star that guides Saratoga Investment Corp. (SAR)'s strategy, and that's smart. A company's vision isn't just a poster on the wall; it's the blueprint for how they allocate capital and generate your returns. For Saratoga Investment Corp., their long-term vision is less about a single catchy phrase and more about a three-part, actionable mandate: maximize risk-adjusted returns, anchor firmly in the U.S. middle-market, and act as a critical, strategic partner to their portfolio companies.

This approach is what drove their fiscal year 2025 performance, where they declared dividends of $3.31 per share, including a special dividend, demonstrating a clear commitment to shareholder value. That's a tangible result of their vision in action.

Maximizing Risk-Adjusted Returns for Shareholders

The core financial vision for Saratoga Investment Corp. is simple: create attractive risk-adjusted returns by generating both current income and long-term capital appreciation from their debt and equity investments. This isn't just jargon; it's a commitment to balance high-yield debt investments with a disciplined credit process, so you get paid reliably without undue risk.

Here's the quick math: For the fiscal year ended February 28, 2025, their Net Investment Income (NII) per share was $3.81. This substantial overearning of their regular dividend provides a crucial cushion against market volatility, which is defintely a realist's approach to finance.

• Generate current income through senior and unitranche loans.
• Seek long-term capital appreciation from equity positions.
• Maintain portfolio quality; non-accruals were just 0.3% of fair value in fiscal 2025.

Anchoring in the U.S. Middle-Market

Saratoga Investment Corp. sees its future tied directly to the health and growth of the U.S. middle-market-that sweet spot of businesses often overlooked by massive banks. Their vision focuses on the lower end of this market, targeting cash flow positive companies with annual revenues between $8 million and $250 million and EBITDA over $2 million.

This focus is strategic, not sentimental. It allows them to provide customized financing solutions where traditional capital is scarce, giving them a pricing advantage. Their Assets Under Management (AUM) stood at $978.1 million as of February 28, 2025, nearly all of it invested in this core market, across 48 portfolio companies. This targeted scale is their competitive edge. You can see how this strategy evolved over time by reviewing Saratoga Investment Corp. (SAR): History, Ownership, Mission, How It Works & Makes Money.

Being the Strategic 'Turning Point' for Portfolio Companies

The third pillar of their vision is operational: being the 'turning point' for the companies they invest in. This means they don't just hand over a check; they bring their knowledge and capital to creatively and effectively close transactions, supporting change of ownership, strategic acquisitions, and growth initiatives.

This value-add approach is a core part of their core values. It's what helps them generate a strong Return on Equity (ROE), which was 7.5% for the fiscal year 2025. They know that helping a portfolio company succeed is the most reliable way to create long-term capital appreciation for their own shareholders. So, they act more like a partner than just a lender.

Saratoga Investment Corp. (SAR) Core Values

You're looking for the bedrock of a company's strategy, the principles that translate into hard numbers. For Saratoga Investment Corp., a specialty finance company, their core values aren't just words on a wall; they are the engine driving their performance as a Business Development Company (BDC). They focus on generating attractive risk-adjusted returns by investing in U.S. middle-market businesses, and their values explain how they do it. You can see how these principles shape their operations and their commitment to long-term growth by reviewing their history and structure in more detail: Saratoga Investment Corp. (SAR): History, Ownership, Mission, How It Works & Makes Money.

The firm's approach distills into three core commitments: maximizing shareholder returns, truly partnering with middle-market companies, and maintaining a disciplined investment focus. Let's look at how their 2025 fiscal year data proves this out.

Maximizing Shareholder Value

This is the primary objective for any BDC, and Saratoga Investment Corp. demonstrates its commitment through consistent and growing distributions. The goal is to generate attractive current income and long-term capital appreciation for you, the shareholder. Here's the quick math on their recent performance: for the fiscal year ended February 28, 2025, the company declared dividends per share totaling $3.31. That's a clear signal of their commitment to returning capital.

Plus, they don't just stop at the base dividend. In November 2025, the Board declared a special cash distribution of $0.25 per share to fulfill their final Fiscal Year 2025 spillover income distribution requirements. This reflects a strong level of spillover income generated in fiscal year 2025, and it's a tangible way to reward shareholders efficiently. That kind of consistent over-earning of the dividend is defintely what you want to see.

• Declared $3.31 per share in dividends for Fiscal Year 2025.
• Announced $0.25 per share special dividend in November 2025.
• Net Investment Income (NII) per share was $3.81 for the 2025 fiscal year.

Strategic Middle Market Partnership

Saratoga Investment Corp. views itself as a 'turning point' for its portfolio companies, not just a lender. Their mission is to partner with and invest in strong, growing middle-market companies, providing flexible financing solutions and strategic support. This value is about more than just wiring money; it's about aligning their capital and knowledge with the needs of U.S. businesses with annual revenues typically between $8 million and $250 million.

In the fiscal year 2025, the company's investment activity reflected this partnership model. They made $168.1 million in total investments, which included three new platform investments and 35 follow-on investments in existing portfolio companies. The large number of follow-on investments shows they are actively supporting the growth and recapitalization of their current partners, which is a true sign of commitment. They help their partners grow, and that, in turn, helps the firm.

Disciplined Risk Management

The third core value is a disciplined, risk-adjusted approach to investing. Given the volatile macro environment, maintaining a high-quality portfolio is crucial. This value is best measured by the health of their investments and their capital structure. What this estimate hides, of course, is the constant work of portfolio monitoring.

Their focus on first lien term loans-which are the most senior debt and thus lowest risk-is a key part of this discipline. As of May 31, 2024 (Q1 Fiscal 2025), their portfolio composition was heavily weighted toward 86.3% in first lien term loans. More importantly, their non-accrual investments-loans where interest payments are significantly past due-were reduced to a mere 0.3% of fair value and 0.5% of cost in fiscal year 2025. By the end of Q2 Fiscal 2026 (August 31, 2025), non-accruals were down to only 0.2% of portfolio fair value. This low non-accrual rate is a powerful metric that speaks volumes about their underwriting and management quality.