By Daniel Lanyon on Monday 17 October 2016
The US-based firm has added a new portfolio to its stable to increase its reach into the middle market lending business.
Monroe Capital LLC has closed its latest portfolio in the alternative credit space with $800m of limited partner commitments, according to regulatory filings.
Monroe Capital Private Credit Fund II LP had an initial target of $600m but was oversubscribed and therefore when combined with the target fund leverage, it will have nearly $1.5bn of firepower. This is the largest fund raised in Monroe Capital’s 12-year history.
The Fund invests in private credit transactions originated and underwritten by Monroe Capital. The investment strategy is focused primarily on senior secured loans and unitranche loans to private equity sponsored and non-sponsored middle market companies located throughout the U.S and Canada.
It is Monroe Capital’s eleventh investment vehicle since its founding in 2004. The fund has over 20 new institutional investors located in the U.S. and Europe, including large public and private pension plans, insurance companies, universities, endowments, foundations, religious organizations, hospitals, non-profits, sovereign wealth funds, family offices and other institutional investors, it said in statement.
Ted Koenig, president and chief executive officer of Monroe Capital, says it fills a growing demand from institutions for direct lending exposure.
“Private credit is an appealing area for institutional investors due to the ability to generate consistent yield in a yield starved world. Investors have many choices in this space, most of which are newly created firms over the last several years.”
“I am very pleased and proud that the sophisticated institutional investor and limited partner community has come to understand and appreciate the differentiated absolute returns and consistent risk adjusted returns that Monroe has been able to generate for them each and every year over a 12-year period, regardless of the business cycle or the economic environment”.
Monroe Capital has a total $3.6bn of assets under management all within the alternative credit market, specialising in senior and junior debt and equity co-investments to middle-market companies in the U.S. and Canada. Investment types include unitranche financings, cash flow and enterprise value based loans, asset based loans, acquisition facilities, mezzanine debt, second lien or last-out loans and equity co-investments.