Monroe Capital closed its 2022 Monroe Capital Private Credit Fund IV with $4.8 billion of investable capital, including targeted fund leverage and separately managed accounts investing alongside the fund. The fund has limited partner commitments with more than 300 investors in 17 countries. The fund primarily targets private equity sponsored and non-sponsored, lower middle-market U.S. companies with less than $35 million in EBITDA.
The fund received $2.3 billion of limited partner commitments, plus targeted leverage of $1.1 billion. In addition, it received $1.4 billion from separately managed accounts, including leverage. The fund is Monroe’s largest fund to date, exceeding Monroe Capital Private Credit Fund III, which closed in November 2018 at $2.3 billion of investable capital.
The fund will invest in private credit transactions originated and underwritten by Monroe. The investment strategy is focused primarily on senior secured loans and unitranche loans to private equity sponsored, independent sponsored and non-sponsored lower middle-market companies diversified across multiple industries, located throughout the U.S. and Canada.
Fund investors are located throughout the U.S., Canada, Europe, Australia, South America, Asia and the Middle East. Limited partners include leading public and private pension plans, insurance companies, universities, endowments, foundations, religious organizations, non-profits, sovereign wealth funds, family offices and other institutional investors. In addition to the limited partner commitments, the fund has secured term credit facilities to complement its available capital.
As of March 31, the fund is actively seeking investment opportunities and has already invested more than $1.7 billion in 90 transactions. The fund is expected to generate returns consistent with past award-winning investment funds of the firm. The fund is Monroe’s 30th investment vehicle since its founding in 2004.
“We very much value the support of our limited partners across the globe for their trust in our ability to generate consistent and attractive risk-adjusted returns,” Ted Koenig, chairman and CEO of Monroe, said. “We continue to leverage our best-in-class platform to provide unique access to niche areas within the middle-market. The low interest rate and inflationary environment we face has led many investors to seek safe floating rate yield to drive investment returns. We are proud that the institutional investor community continues to appreciate the differentiated returns that Monroe has been able to consistently generate since the inception of our firm in 2004, regardless of the business cycle or economic climate.”
”The fund was oversubscribed by over $800 million, which is a direct reflection of strong investor demand, deep relationships with long-term partners and our award-winning track record,” Zia Uddin, president and co-portfolio manager, institutional portfolios at Monroe, said. “We are pleased that the Fund was actively investing during 2021, a record year for deal volume in which Monroe Capital invested in over 130 transactions totaling over $6.3 billion. The highly fragmented and fertile nature of the lower middle market continues to offer long-tenured, skilled investors an advantage in generating above-market returns.”