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Investing.com -- Today, Monroe Capital (NASDAQ:MRCC), Sumitomo Mitsui (NYSE:SMFG) Banking Corporation (SMBC), and MA Asset Management (ASX:MAF) announced the formation of a joint venture. This new partnership aims to invest up to $1.7 billion in senior secured loans for U.S. middle market borrowers. The joint venture combines the unique skills of the three institutions to create a distinctive platform targeting the appealing middle market subset of private credit.
The joint venture is expected to gain from wide access to high-quality, proprietary deal flow of first-lien senior-secured loans to established middle market companies. This will be achieved by leveraging 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.
The capital for investment by the joint venture will be supplied by Monroe Capital, SMBC, and MA Financial via its managed funds. Monroe Capital is one of the largest lower middle market direct lenders in the United States, SMBC is a globally recognized bank with a global middle market sponsor business, and MA Financial is an Australian-based alternative asset manager with an active presence in specialty credit in the United States, where co-lending is a core strategy.
The joint venture represents a wider shift in the private credit landscape, where asset managers and banks are joining forces to offer scalable, unique capital solutions to borrowers. With a strong alignment of interests, shared credit philosophies, and deep origination channels, the strategic partnership between Monroe Capital, SMBC, and MA Financial is well placed to meet the increasing demand for financing in a structurally underserved segment of the market.
Zia Uddin, President of Monroe Capital, stated, "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. 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, commented on the partnership, "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."
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 U.S. 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."
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