Capital Southwest Expands Private Credit Reach Through New Joint Venture

Capital Southwest Corporation (NASDAQ:CSWC) is included among 10 Best Monthly Dividend Stocks to Buy Now. On January 22, Capital Southwest Corporation (NASDAQ:CSWC) announced the formation of a joint venture with another private credit asset manager. The new venture will operate as an off-balance-sheet private fund focused mainly on first-out senior secured debt investments in the lower middle market. Ownership of the joint venture will be split evenly, with Capital Southwest and its partner each holding a 50% equity stake. A board of managers, made up of equal representation from both firms, will oversee all investment and operational decisions. The venture is also expected to put a senior secured credit facility in place, using borrowed funds to support its investment activity. Capital Southwest said the joint venture should strengthen its competitive position in the lower middle market by allowing it to offer more flexible capital solutions. Management also pointed out that the structure makes it easier to place portions of larger transactions into the joint venture. That approach helps maintain portfolio diversification while broadening the range of lower middle market platform companies the firm can pursue. CEO Michael Sarner said he is encouraged by the fund’s potential and believes it will allow Capital Southwest to compete across a wider set of investment opportunities. Capital Southwest Corporation (NASDAQ:CSWC) is an internally managed business development company based in Dallas, Texas, with about $1.9 billion in investments at fair value as of September 30, 2025. While we acknowledge the potential of CSWC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 13 Companies that Just Started Paying Dividends and Dividend Growth Stocks: 25 Aristocrats Disclosure: None.