Monroe Capital, Sumitomo Mitsui Banking Corporation (SMBC) and MA Asset Management have formed a new joint venture that will invest up to $1.7bn (£1.3bn) in senior secured loans to US middle market borrowers.
The partnership will leverage the loan origination capabilities of Monroe Capital’s direct lending infrastructure, SMBC’s established private credit and sponsor finance platform and MA Financial’s expertise in specialty credit and co-lending.
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Monroe Capital is one of the largest lower middle market direct lenders in the US, SMBC is a global bank with a middle market sponsor business, and MA Financial is an Australia-headquartered alternative asset manager with an active presence in specialty credit in the US.
“We are excited to partner with MA Financial and SMBC to leverage Monroe’s robust and comprehensive origination platform for middle market transactions in the United States,” said Zia Uddin, president of Monroe Capital.
“We continue to innovate new structures to be the financier of choice for lower middle market corporate borrowers and their private equity owners.”
Glenn Autorino, co-general manager, managing director and co-head of leveraged finance, SMBC Americas division, said: “By partnering with two leading credit-focused asset management firms, SMBC will enhance the financing solutions we provide to our middle market financial sponsor client base and continue to grow our footprint with the sponsor community.
“SMBC, Monroe and MA Financial each share a similar approach to private credit investing with a focus on providing loans to high quality borrowers backed by top-tier middle market private equity owners. These partnerships are an important strategic milestone for the continued development of SMBC’s private credit business, and we are excited to commence capital deployment.”
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Frank Danieli, head of global credit solutions at MA Financial Group, said: “We believe that strategic partnerships between specialist lenders, asset managers and banks are the next evolution in private credit. We’re pleased to partner with Monroe Capital and SMBC in this innovative joint venture, reflecting the emerging paradigm shift toward co-lending.
“The US middle market presents a compelling opportunity to deploy capital to real world economy businesses while earning strong risk-adjusted returns and benefiting from robust lender protections that are foundational to our credit philosophy. We are excited to unlock access to this opportunity for our clients.”
Banks and asset managers are increasingly partnering in the private credit space to boost their origination networks and lending capabilities.
Groups that have set up such partnerships include Apollo and Citigroup, and Centerbridge Partners and Wells Fargo.