Monroe Capital To Raise Up To $500M For Lending

Firm: Monroe Capital LLC

Fund: Monroe Capital Senior Secured Direct Loan Fund LP

Target: $400 million to $500 million

Placement Agent: None

Monroe Capital LLC, which broadened its arsenal last year by introducing business development company and SBIC lending options for buyout shops, is returning to the market to raise a new limited partner-backed loan fund, a person familiar with the effort told Buyouts.

The new vehicle, Monroe Capital Senior Secured Direct Loan Fund LP, plans to raise $400 million to $500 million for investing in senior secured loans and unitranche debt, the person said. The firm is talking to existing investors now before going to the wider market and expects to be wrapped up in the next six months.

Monroe Capital, a Chicago specialty finance company that was founded in 2004, is finding “exceedingly strong demand from traditional LPs,” the person said. The firm is not using a placement agent to raise the fund.

The firm announced in March 2011 it planned to raise $150 million from public investors by forming a BDC, Monroe Capital Corp., and an SBIC, Monroe Capital Partners Fund LP, which would offer additional lending capacity of up to $225 million. BDCs and SBICs, both operating under the authority of the U.S. government, have different rules and limitations but are both designed to improve the availability of credit to smaller and mid-market business borrowers.

At the same time last year, Monroe Capital announced that it had raised $250 million for a new LP-backed fund, Monroe Capital Partners Fund LP. As part of that announcement, Theodore L. Koenig, the firm’s president and chief executive officer, said that the internal structure of the lending complex would be invisible to borrowers but would allow the firm to better match the company’s financial needs with the most appropriate lending vehicle.

Monroe Capital, which specializes in private debt, provides senior secured and junior secured debt to mid-market companies with EBITDA of $5 million and up.