American Equity Investment Life Holding Company, a provider of financial dignity solutions through general account annuities for individual clients in the United States, and Monroe Capital, an $11.2 billion asset management firm specializing in private credit, closed on a $1 billion investment in Monroe Capital’s dedicated technology lending platform focusing on middle-market software, technology and recurring revenue (STARR) loans originated and underwritten by Monroe. The investment focus will be on software and technology enabled companies that will offer mission critical, high return-on-investment software or technology solutions for its customers.
“Our commitment to the STARR strategy demonstrates the ability of our investment platform to find assets that generate attractive investment income on a risk-adjusted basis,” Jim Hamalainen, chief information officer of American Equity, said. “We are excited to partner with Monroe, whom we view as a best-in-class partner, as we build toward our long-term strategic asset allocation to private assets.”
“We are thrilled to partner with American Equity in our technology lending platform,” Ted Koenig, chairman and CEO of Monroe Capital, said. “It is a strategy where we can add differentiation for our investor’s portfolios while generating ‘alpha.’ Having a strategic partnership with American Equity will allow us to continue to scale our efforts in this fast-growing space. American Equity will be helpful in the distribution to other like-minded private credit investors throughout the world looking for a unique STARR investment strategy with an experienced manager known for generating consistent returns.”
Under the terms of the agreement, American Equity and Monroe Capital will work together to scale the technology lending platform with third-party investors, including other insurance companies, through structured products based on the STARR lending platform.
“STARR has emerged as a vibrant sub-sector of the U.S. economy, similar to where the healthcare sector was about a decade ago. It represents a highly resilient part of the U.S. economy given the focus on businesses with capacity for recurring revenue from mission critical solutions to their customers,” Anant Bhalla, CEO of American Equity, said. “This is why it has been a prime lending sector opportunity on our radar as we rolled out plans for private assets. American Equity is excited to enter this higher growth, alternative credit sector with a proven partner like Monroe.”
“While we have been investing in technology for almost two decades, we are still early in the digital transformation for many companies, especially in the middle market,” Zia Uddin, president of Monroe Capital, said. “We believe there is a great opportunity set for investment in the technology sector through credit. Technology investing is specialized; whether in equity or credit, you need a deeper understanding of the technology and end products to be successful. By partnering with American Equity, we have the ability to strengthen our industry leading scale in the space with a partner that understands the investable landscape as well.”
