Monroe Capital entered into a definitive partnership agreement with Wendel Group relating to Wendel’s strategic investment in Monroe. At closing, Wendel will commit $1 billion for seed capital and GP commitments for current and future Monroe investment strategies and take a 75% equity stake in Monroe. Wendel will support Monroe to fund growth initiatives and expand Monroe’s private credit platform in the United States, while further developing Wendel’s third-party asset management platform._x000D_
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Monroe will continue to operate independently, retaining its current governance and leadership structure, including Theodore L. Koenig as CEO chairman, Zia Uddin as president, Michael Egan as vice chairman and chief credit officer and Tom Aronson as vice chairman and head of originations. Monroe’s investment process, strategy and operations will remain the same, and the investment advisory agreements between Monroe and its funds, including its business development companies, are expected to remain substantively the same._x000D_
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In order to maintain alignment with investors, Monroe’s management team will retain a 25% stake in the business and there will be no change to the firm’s broader economic alignment with limited partners, including existing fund commitments and carried interest._x000D_
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In addition, Wendel and Monroe Capital intend for AXA IM Prime to participate in the transaction. Both companies are now in discussion to confirm AXA IM Prime investment (up to $50 million) as a minority shareholder, through its GP-stake fund “AXA IM Prime Capital Partners I” (PCP I), alongside Wendel in Monroe Capital. AXA Group (CS-FP) is the anchor investor of PCP I and already a significant and historic limited partner in Monroe Capital’s funds._x000D_
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“We are excited to partner with Wendel on this next chapter of Monroe’s growth,” Koenig said. “Their commitment to our business will provide meaningful and stable capital to thoughtfully scale our platform and better capture the attractive and expanding opportunity in middle market private credit. Specifically, Wendel’s $1 billion commitment will accelerate our client-centric growth strategy and deliver meaningful benefits to our global investor base.”_x000D_
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“Through this partnership with Wendel we have achieved an important milestone in further securing the stability and growth of Monroe Capital for the next several decades,” Uddin said. “Wendel’s more than 320-year heritage as a family-owned business and the group’s long-term investment horizon align closely with our values at Monroe, and we are confident that we have found the right partners to collaborate with as we focus on continuing to build an incredible asset management platform. We look forward to working together with the Wendel teams.”_x000D_
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“We have long known and admired the team at Monroe, who over the past two decades have built a leading middle-market U.S. private credit firm,” Laurent Mignon, group CEO of Wendel, said. “Since inception, Monroe has delivered strong and differentiated outcomes for its diversified global client base. Furthermore, the partnership will strengthen Wendel’s third-party asset management platform by enabling it to capitalize on the growing opportunity set in private credit and persistent growth in demand for direct lending solutions from investors and borrowers globally. We are excited to collaborate with Ted, Zia, and their talented teams to support the next phase of Monroe’s growth.”_x000D_
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The transaction is expected to close in Q1/25. Goldman Sachs acted as exclusive financial advisor to Monroe, and Fried, Frank, Harris, Shriver & Jacobson acted as legal counsel to Monroe. UBS acted as financial advisor to Wendel and Kirkland & Ellis acted as legal counsel to Wendel.
Forward for Specialty Finance
