Capital Southwest (NASDAQ:CSWC) sparked an enthusiastic discussion in the comments section of an article about Compass Diversified Holdings (NYSE:CODI). Capital Southwest is an investment firm that provides equity capital to small and medium-sized businesses. Where Compass Diversified is not a BDC (business development company) but operates like one, Capital Southwest has been regulated as a BDC since 1988. Where Compass Diversified purchases controlling interests in the businesses in which it invests, Capital Southwest more often limits its investments to only a 20%-45% minority interest. Both firms provide follow-on financing to the businesses.
Another significant difference in the two investment firms exists in the investment reach. Compass Diversified has just 8 investments - 4 companies with branded...
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