Monroe fund secures Chicago Police commitment

The $2.9b pension has committed $20m to the second private credit fund from Monroe, a Chicago-based mid-market lender.  

At its board meeting last month (30 June), the Chicago Policemen's Annuity and Benefit Fund approved a $20 million commitment to Monroe Capital's Monroe Private Credit Fund II, according to an email from the pension's chief investment officer.  

The $2.9 billion pension's investment committee requested in May that Maranon Capital, Crescent Capital Group and Monroe make presentations at its 20 June meeting. The request was in relation to its plans to hire an additional direct lending manager, after making a $20 million commitment to Alcentra's direct lending strategy in March.

In its request for proposals for the search, with the assistance of consultant NEPC, Chicago Police said that it would only consider funds that originate and pursue US, European and blended strategies offering senior, first lien, second lien, or unitranche loans to unsponsored or private equity-sponsored transactions. The proposal said it was not considering Asian direct, mezzanine or fund of funds in its search.

The Windy City pension fund invested in credit platforms beyond direct lending. Earlier in the year, Chicago Police also committed two separate $20 million investments to opportunistic credit platforms of both Beach Point Capital Management and Voya Investment Management.

The recent investments into private debt for the Chicago Police come under a new chief investment officer. Aoifinn Devitt (pictured) started in April as CIO, a position that had been vacant since November 2014 after former CIO Sam Kunz left for the University of California. Devitt previously founded Clontarf Capital, an alternatives research and consulting firm, in 2006 and also held positions at Cambridge Associates, Goldman Sachs and Debevoise & Plimpton.

Monroe Private Credit Fund II was launched in late 2014 with an initial target of $600 million, which it has since surpassed. In April, the fund reached a $660 million fourth close and now has a $750 million hard cap. The previous fund in the series closed on $500 million in 2013.

At least five other LPs have invested in the Monroe fund. They include the Orange County Employee Retirement System, the New Hampshire Retirement System, the Illinois Teachers Retirement System, the City of Fresno Employee Retirement System and the Alaska Permanent Fund. 

Monroe is a Chicago-based mid-market lender offering unitranche financings, cash flow and enterprise value-based loans, asset-based loans, acquisition facilities, mezzanine debt, second-lien loans and equity co-investments. Founded in 2004, the firm has approximately $3.2 billion in assets under management and maintains eight offices in the US and one in Toronto.

In June, Monroe hired former Capital One Business Credit managing director Steven Hinrichs as managing director and Southern California region group head.