In a joint statement on Wednesday, MA Financial Group, Monroe Capital, and Sumitomo Mitsui Banking Corporation (SMBC) unveiled a new joint venture (JV) that will deploy up to US$1.7 billion in senior secured loans to US middle market borrowers.
The JV will harness the combined strengths of all three firms to build a platform focused on private credit’s middle market segment. It brings together Monroe Capital’s direct lending expertise, SMBC’s capabilities in private credit and sponsor finance, and MA Financial’s proficiency in specialty credit and co-lending.
“Strategic partnerships between specialist lenders, asset managers and banks are the next evolution in private credit,” said Frank Danieli, head of global credit solutions at MA Financial Group.
“We’re pleased to partner with Monroe Capital and SMBC in this innovative joint venture, reflecting the emerging paradigm shift toward co-lending.”
The collaboration is set to benefit from broad access to a pipeline of high-quality, proprietary deal flow, targeting first-lien senior-secured loans to established US middle market companies.
“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,” Danieli added.
This joint venture underscores a growing shift in the private credit market, where banks and asset managers are increasingly teaming up to deliver scalable and differentiated capital solutions to borrowers.
Moody’s highlighted this trend late last year, noting the rise of major partnerships between traditional banks and asset managers – an evolution it said could nearly double the size of the private credit market in the coming years.
Currently valued at around US$1.5 trillion, private credit is projected by Moody’s to swell to US$3 trillion over the next three years.
According to the ratings agency, the drive behind these alliances is the ambition to become full-service investment platforms, catering to a broad spectrum of clients, including retail investors, pension funds and sovereign wealth funds.
“Depending on the type of partnership, alternative managers can achieve much greater lending clout at a much faster pace than the path of organic growth,” it said.
“Achieving scale and greater diversification will become more essential as capital demand accelerates across the global economy and clients want to do more with fewer general partners,” it continued, adding that partnerships with banks allow alternative asset managers to significantly boost lending capacity without the high cost of building large loan origination operations.
Banks, for their part, are also deepening their involvement in private credit, including by lending directly to alternative asset managers. Such partnerships allow banks to retain the least risky portion of transactions while preserving valuable customer relationships, Moody’s noted.
