MA Financial forms “strategic” JV in US middle market lending

Alternative asset manager, MA Financial Group, has become one of three members in a “strategic” joint venture (JV) set to revitalise the middle market subset of private credit in the US.

Joined by US lower middle market direct lender, Monroe Capital, and global bank, Sumitomo Mitsui Banking Corporation (SMBC), the JV has promised up to US$1.7 billion in senior secured loans for US middle market borrowers through its “differentiated” platform that leverages the complementary capabilities of each institution.

The deal is expected to provide access to “high-quality, proprietary deal flow of first-lien senior-secured loans” to middle market companies, channelling Monroe Capital’s loan origination functions, SMBC’s longstanding private credit and sponsor finance platform, and MA Financial’s experience in specialty credit and co-lending.

“We believe that strategic partnerships between specialist lenders, asset managers and banks are the next evolution in private credit,” Frank Danieli, Head of Global Credit Solutions at MA Financial Group, said.

“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.”

The strategic partnership seeks to service a “structurally underserved” part of the market where innovative solutions for financing are in constant demand and suggests that evolution in the private credit space lies in collaboration between asset managers and banks.

“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,” Zia Uddin, President of Monroe Capital, said.

“We continue to innovate new structures to be the financier of choice for lower middle market corporate borrowers and their private equity owners.”

“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,” Glenn Autorino, Co-General Manager, Managing Director and Co-Head of Leveraged Finance, SMBC Americas Division, said.

“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.”