With the financing markets in disarray, specialty lender Monroe Capital has launched a new credit advisory practice to help middle-market companies navigate the turbulent tides.
The new entity, Monroe Credit Advisors LLC, will provide consulting services on a variety of matters, from balance sheet issues brought on by the current economic downturn to advice on new or replacement financings and who the right lender might be for a particular situation.
“There are a lot of middle market firms out there that don’t have the resources to hire a dedicated capital markets professional, and those are the firms that we think we can help,” said Mark Gertzof, a former managing director at Merrill Lynch Capital who now serves as a managing director and co-head of Monroe Credit Advisors.
Also leading the new firm is Christopher Gentry, previously a director with boutique investment banking and financial advisory firm Concord Financial Advisors.
Headquartered in Chicago, Monroe Credit Advisors will cover clients nationwide. Gertzof said the firm is still in hiring mode and currently has three full-time professionals in addition to the ability to draw upon the experience and relationships of Monroe Capital’s senior bankers, Ted Koenig, Mike Egan and Tom Aronson.
Given the market’s dreary state, it’s expected that Monroe Capital Advisors will spend a good amount of its time in the near-term working with companies that have encountered problems with their existing credit facilities—mediating between all parties involved and providing advice on possible solutions.
But the most pressing issue in the credit market today, according to Gertzof, is the lack of cash flow lenders in the middle market. “Ultimately it’s a problem that will self-correct itself, but it will take a while for that capital to form,” he said.
In the meantime, Monroe Credit Advisors plans on helping its prospective private equity clients with the transition to the use of asset-based financing alternatives.
“A lot of firms don’t have extensive experience and relationships in the asset-based world, and that opens the door for us to be a value-add by helping them find the right capital structure and the right lender,” Gertzof said.
When the cash flow lending market does eventually begin to recover, Monroe Capital Advisors’s strategy is to build relationships with the new lenders as they emerge and to keep track of existing lenders as they reenter the market after having been on the sidelines in order to be able to introduce its clients to them for specific deals.