Monroe snags $800m for second private credit fund – exclusive

The Ted Koenig-led firm will invest in businesses both with and without a private equity sponsor.

Monroe Capital has locked down up to $1.5 billion for its latest investment vehicle, which amounts to its largest fund ever.

The Chicago-based mid-market lender said Wednesday it had closed its Private Credit Fund II (PCF II) with $800 million in equity commitments, surpassing its goal of $600 million. The remaining amount of capital will come from a “significant” warehouse facility, Monroe said.

Some 20 new institutional investors committed to PCF II, including public and private pension plans, insurance companies, endowments, non-profits and endowments, among others. The fund will target deals both with and without a private equity sponsor for transactions involving companies that post $3 million to $30 million in EBITDA. 

The average commitment size for the fund, which carried an $800 million hard-cap, stood at between $20 million to $50 million. The fund held several closes, a source familiar with the matter said.

CEO Ted Koenig said in a statement: “Private credit is an appealing area for institutional investors due to the ability to generate consistent yield in a yield-starved world. Investors have many choices in this space, most of which are newly created firms over the last several years.” Koenig added he is “very pleased” institutional investors and LPs “understand and appreciate” the returns that Monroe generates.

According to a source familiar with the matter, Monroe is also in the market with several other funds, including its Opportunistic Private Credit Fund and its Income Plus.

Editor's note: This article has been updated to reflect additional information about the fund.