CareersInvestor LoginContact Us About Us Financing Solutions Transactions Investment Products Team News and Events U.S. MIDDLE MARKET OVERVIEW Overview U.S. Middle Market Overview Monroe Capital Advisors Responsible Investing WHY INVEST IN U.S. MIDDLE MARKET PRIVATE CREDIT? ATTRACTIVE YIELDS Historically strong performance throughout various economic cycles and largely uncorrelated with traditional asset classes DOWNSIDE PROTECTION OF SECURED LOANS Senior secured loan positions generally provide a higher level of safety and lower volatility than junior debt, mezzanine or equity. Top of the capital structure with a senior-lien on assets and often a pledge of company stock STRONG RISK ADJUSTED INVESTMENT RETURNS Lower default rates and higher recovery rates in middle market senior secured loans CONTRACTUALLY MANDATED CURRENT CASH FLOW Returns based on loan agreements requiring borrowers to pay contractual current income (coupon and fees); minimizes any J-curve effect EFFECTIVE INTEREST RATE HEDGE Investments are structured as loans with floating interest rates over LIBOR (with a floor) to hedge against rising interest rates INDICATIVE CAPITAL STRUCTURE POSITION IN CAPITAL STRUCTURE Senior Secured Direct Loans Junior Secured Direct Loans Mezzanine Debt Bonds Preferred Equity Common Equity First Last U.S. MIDDLE MARKET OVERVIEW The U.S. middle market is defined as companies with annual revenues between $10 million and $1 billion and is equivalent in size to the world’s 3rd largest economy at $6.0 trillion There are nearly 200,000 companies that make up this group These companies are owned by families, entrepreneurs, private equity sponsors and occasionally, public shareholders These companies manufacture, distribute, or otherwise provide a necessary product or service filling an important market niche They generate approximately one third of the private sector GDP and employ roughly 47.9 million people These businesses outperformed through the financial crisis by adding 2.2 million jobs across major industry sectors As of Q4 2019, the rate of year-over-year revenue growth for middle market companies was 7.5% Middle market firms contribute nearly $6.0 trillion to the national economy annually United States $22.3T China $15.3T U.S. Middle Market $6.0T Japan $5.4T Germany $4.0T India $3.2T MONROE CAPITAL & THE U.S. MIDDLE MARKET Monroe is a critical partner helping middle market companies grow. We provide capital that allows these middle market borrowers to: Make acquisitions Solve for generational or family transfers of ownership Fund private equity merger and acquisition (M&A) transactions Invest in property, equipment, and other capital expenditures Increase working capital Expand revenues and grow internationally Follow Monroe Capital: Chicago Atlanta Boston Los Angeles Naples New York San Francisco Seoul © 2021 Monroe Capital LLC. All Rights Reserved. - Terms of Use