Monroe Capital

Monroe Capital LLC has closed its second credit fund, called Monroe Capital Private Credit Fund II LP, at $800 million. CEO Ted Koenig tells Mergers & Acquisitions the fund is approximately 30 percent invested.

Fund II exceeded its $600 million fundraising target and will have approximately $1.5 billion in investable capital once combined with the firm’s undisclosed credit facility. The lender will target companies across a variety of industries that have between $3 million and $30 million in Ebitda. The fund has made several investments, including companies such as: Mitchell Gold and Bob Williams Furniture Co., a maker and retailer of home-furnishings; Pure Barre, a fitness and pilates studio for women; Interior Logic, a producer and seller of interior design products; Output Services Group, a billing and invoice professional services company; Familia Dental, a general dentistry and orthodontics company with offices in the Midwest and Southern U.S.; and furniture company Twin Star International.

Fund II, the firm’s eleventh fund since its inception, will invest in private credit transactions originated and underwritten by Chicago-based Monroe Capital. The fund’s investment strategy will target senior secured loans and unitranche loans to middle market companies in the U.S. and Canada. More than 20 new investors committed to Fund II, spanning from public and private pension plans to endowments and family offices.

“Private credit is an appealing area for institutional investors due to the ability to generate consistent yield in a yield starved world,” states Koenig, CEO of the $3.6 billion private credit asset manager. “Investors have many choices in this space, most of which are newly created firms over the last several years.”

Other private equity firms have also raised loan funds, reinforcing investors’ interest in the private debt landscape, which is not yet as crowded as it is among private equity firms. Recent fund closings include: Chicago-based NXT Capital LLC closing its fourth debt fund at $900 million; Audax Group’s raising nearly $1.2 billion in capital for the firm’s fourth mezzanine fund; and The Carlyle Group LP’s (Nasdaq: CG) announced completion of fundraising efforts for a $403 million collateralized loan obligation fund. In 2014, Monroe Capital closed a $500 million leveraged loan fund.

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