Chicago Lender Likely To Expand Further In New York

  • Advisory arm opens an East Coast office
  • Company also expanding lending presence
  • Raising a fund in anticipation of future demand

Theodore L. Koenig, the president and chief executive officer of Monroe Capital, told Buyouts that the company plans to build up its team in anticipation of an upswing in deal activity. “I wouldn’t be surprised if our presence continues to expand in New York,” he said, although he did not provide a timeline or hiring targets for the expansion.

While Monroe Capital provides capital directly to its clients, typically in the form of senior secured and junior secured debt to mid-market companies with EBITDA of $5 million or more, Monroe Credit Advisors functions as the investment banking arm of the business, matching borrowers with third party financing.

“We provide opportunities for other lenders,” Koenig said. “On the capital side, we do our own financing. On the advisory side, it’s a good opportunity for other lenders, other investors.”

Knopping was most recently a managing director in the private capital and special situations groups at William Blair & Co., the Chicago-based investment bank. Before that, he spent 13 years at GE Capital,  where he co-founded the debt capital markets business and eventually led all capital markets activities for GE Commercial Finance and served as the chief investment officer of GE Capital’s global sponsor finance practice. He also spent six years in Citigroup’s loan syndication business.

Knopping’s appointment follows the hiring in May of Ben Marzouk, who was named managing director and group head of Monroe Capital’s New York region. Marzouk, founder and partner of Mid-Market Credit Advisors, had most recently originated lower mid-market loan transactions at Praesidian Capital. He also spent seven years as a managing director at the CIT Group Inc. and did stints at Dresdner Kleinwort Wasserstein, Citi and Manufacturers Hanover Trust Corp.

Monroe Capital is beefing up its staff at a time when dealflow is sluggish. Sister service Thomson Reuters Loan Pricing Corp. reported last week that more than $2 billion in financings have been pulled from the U.S. leveraged loan market in recent weeks due to a change in investor sentiment that continues to drive up risk premiums.

Monroe Capital, however, is planning for growth. Earlier this month, the company began marketing a new limited partner-backed loan fund, Monroe Capital Senior Secured Direct Loan Fund LP, which plans to seek $400 million to $500 million to invest in senior secured loans and unitranche debt, as Buyouts reported earlier this month. Last year, the company launched business development company and small business investment company lending operations for smaller borrowers.

Despite the general slump in new deals, Monroe Capital has seen “very steady” activity, Koenig said, driven in part by its unitranche loan package, which provides both senior and junior financing at a single, blended interest rate spread. “Our platform is being really well received in the middle market,” he said. “There’s a lot of demand for what we do.”

In addition to Chicago and New York, Monroe Capital also has offices in Los Angeles and Charlotte, N.C., according to its Web site.