French investment company Wendel has entered a deal to acquire a 75% stake in US private credit manager Monroe Capital.
The move aligns with Wendel’s roadmap to expand its third-party asset management platform.
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Initially, Wendel will invest $1.13bn to acquire 75% of Monroe Capital’s shares. This includes 50% from Monroe’s management and 25% from Bonaccord Capital Partners, a minority owner.
Wendel will also gain rights to approximately 20% of the carried interest from past and future funds. Following completion of the deal, Monroe’s management will retain a 25% ownership stake.
Monroe will also retain its operational independence and its brand, with its investment committee remaining completely independent.
Furthermore, Wendel plans to invest another $1bn into Monroe to facilitate its growth.
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By GlobalDataThe deal also incorporates an earn-out mechanism amounting up to $255m for Wendel’s purchase of the remaining 25% of Monroe between 2028 and 2032, based on the growth of its fee-related earnings.
Wendel’s strategy to enhance its third-party asset management platform includes capital sponsorship for new strategies and initiatives, leveraging its network for strategic partnerships, cross-selling opportunities, and developing a centralised fundraising platform.
The completion of the transaction is anticipated in the first half of 2025, contingent on regulatory approvals and other closing conditions.
It is set to significantly expand Wendel’s asset management capabilities and rebalance its business model.
Monroe, established in 2004, has a presence in the private credit sector, managing over $19.51bn across various investment vehicles.
The company focuses on several verticals such as Lower Middle Market Direct Lending, and Alternative Credit.
Wendel Group CEO Laurent Mignon said: “One year after announcing the acquisition of 51% of IK Partners, we are proud to announce the acquisition of 75% of Monroe Capital LLC, creating a strong partnership with a private credit leader in the U.S. lower midmarket. “Monroe Capital is strategically positioned to capitalise on this increasing demand, attracting both institutional and retail investors.”
