Monroe Capital holds second close on latest private credit fund

Chicago-based fund manager Monroe Capital has held a second close on its Monroe Capital Private Credit Fund IV, raising more than half of its $1.5 billion target, sources close to the firm said.

The fund, a successor to Monroe Capital Private Credit Fund III, has $855 million in equity commitments, and already has invested 37.5 percent of its capital in 16 positions in US lower middle-market direct loans.

The sources said Monroe expects the fund, whose first close came in October, when it was launched, to hold its final close in June. The second close was held in December, and the source expects a third close in March. Public records show that New Hampshire Retirement System has invested $50 million in the latest fund, whose investors also include Fairfax County Uniform Retirement System, Oklahoma Tobacco Settlement Endowment Trust, and Public Officials Benefit Association, of South Korea.

Monroe is targeting returns of 6 percent-9 percent, unlevered, and 9 percent-12 percent, levered. The predecessor fund, a diversified US lower middle-market vehicle whose vintage year is 2018, raised $1.33 billion, well above its $800 million target. Monroe Capital Private Credit Fund III is 85 percent called, with a net internal rate of return of 12.3 percent, levered, and 8.1 percent, unlevered, according to the sources.

Monroe Capital is a private credit asset manager specialising in direct lending, with $9.1 billion of committed and managed capital.