MA Financial partners to invest $2.6bn in middle market loans

The joint venture, which includes three partnering institutions, is aiming to establish a differentiated platform focused on the US middle market.

MA Financial Group, Monroe Capital and Sumitomo Mitsui Banking Corporation (SMBC) will invest up to US$1.7 billion (AU$2.6 billion) in senior secured loans to US middle market borrowers.

The joint venture expects to benefit from broad access to high-quality, proprietary deal flow of first-lien senior-secured loans to middle market companies by leveraging the loan origination capabilities of Monroe Capital's direct lending infrastructure, SMBC's private credit and sponsor finance platform and MA Financial's expertise in specialty credit and co-lending.

With a "strong alignment" of interests, they said the strategic partnership is well positioned to meet growing demand for financing in a structurally underserved segment of the market.

MA Financial will contribute to the investible capital via its managed funds.

MA Financial Group head of global credit solutions Frank Danieli said the partnership is the "next evolution" in private credit.

"The US 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," Danieli said.

"We're pleased to partner with Monroe Capital and SMBC in this innovative joint venture, reflecting the emerging paradigm shift toward co-lending."

SMBC co-general manager, managing director and co-head of leveraged finance in the Americas division Glenn Autorino said the partnership will enhance its financing solutions.

"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," Autorino said.

"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."

Further, Monroe Capital president Zia Uddin said: "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 US."

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

The collaboration follows MA Financial's launch of its first listed investment trust, the MA Credit Income Trust on the ASX on March 5.