Wed, Apr 1, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Private Equity Strategies

Movers & Shakers: Monroe Capital Shows the IPO Market Isn't Dead Yet

Friday, November 16, 2012

Monroe Capital, CEO, Ted Koenig speaks to us about his successful IPO and also announced the launch of a new health care focused effort.

By: Bailey McCann

After the Facebook IPO debacle and the failure of several other IPOs to price, some industry observers are saying that the IPO market may be dead for the foreseeable future - a familiar chorus, as few things have been pronounced dead as many times as the IPO market. However, some IPOs are still seeing successful launches, and new entrants are pricing well, indicating that the market may just be rigidly focused on quality.

One recent success story can be found in Monroe Capital Corporation. Monroe Capital Corporation is a newly formed specialty finance company that intends to focus on providing financing primarily to lower middle-market companies in the United States and Canada. The business development company announced its plan to go public in October, and shortly thereafter announced an increase in its offering size. The IPO closed successfully at the end of October with 5,000,000 shares of its common stock at a public offering price of $15.00 per share, raising approximately $75m in gross proceeds.

Robert W. Baird & Co. Incorporated, William Blair & Company, L.L.C. and Janney Montgomery Scott LLC served as joint book-running managers for the initial public offering. BB&T Capital Markets, a division of Scott & Stringfellow, LLC, and Stephens Inc. served as co-lead managers, and Ladenburg Thalmann & Co. Inc. and Wunderlich Securities, Inc. served as co-managers for the initial public offering.

"Everyone involved was pleasantly surprised with how well the process went," explains Theodore L. Koenig, President and Chief Executive Officer, Monroe Capital in an interview with Opalesque. "I was confident going in that we would see a positive reaction from the market, we have worked hard to establish our track record over the years."

Monroe Capital Corporation is affiliated with Monroe Capital LLC, a leading lender to lower middlemarket companies with over $700m in assets under management; Monroe has been one of the most active investors in the middle market, investing more than $1.5bn in over 300 transactions since its inception.

Koenig explains that prior to the offering, he was confident of the results going in as the firm went through a significant due diligence process to examine the current market and what investors were looking for in order to create an attractive offering. Monroe has offices in several major US urban centers - Charlotte, Chicago, Los Angeles and New York, which serve as a basis for a portfolio of transactions that span the country. "Our team uses these hubs as springboards to reach out to middle market companies nationwide," he says.

The company engages in a variety of transaction types including - unitranche financings; senior loans; cash flow and enterprise based term loans; acquisition facilities; mezzanine debt; second lien or last-out loans, and equity co-investments. Within that, the company has announced transactions involving a diverse group of companies. According to Koenig, what matters most for him and his team is the quality of the company and its management.

"When we are looking at a transaction, we want to see a solid management team, and recognizable value in the company. We aren't limited in geography or transaction sizes. If the quality is there, there's a deal in it for Monroe."

He notes that this approach provided the basis for the company's successful IPO in a challenging market. "A lot of our competitors are out there attempting similar offerings, but they have had a hard time differentiating their platforms; investors expect a value added approach. In order to be successful in the market right now, you have to have the platform, skills and resources to create real shareholder value because it's a buyer's market for investors - they are being more discriminating in where they place their dollars."

So far, the approach seems to be working, Monroe Capital Corporation announced a fourth quarter dividend of $0.34 per share at the beginning of this month. Koenig says they plan to continue their growth strategy through 2013.

 
This article was published in Opalesque's Private Equity Strategies our monthly research update on the global private equity landscape including all sectors and market caps.
Private Equity Strategies
Private Equity Strategies
Private Equity Strategies


Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. Other Voices: The role of diversification in CTA portfolios[more]

    2014 brought a resurgence of managed futures strategies, or CTAs, which performed very well as a whole, outperforming all other hedge fund strategies. However, a closer look reveals that there was a wide range of performance, or return dispersion, across managers. The bottom line? Not all CTAs

  4. Neuberger Berman unit buys 20% stake in activist hedge fund Jana Partners for $2bn[more]

    Komfie Manalo, Opalesque Asia: Neuberger Berman’s unit Dyal Capital Partners bought a 20% stake in activist hedge fund firm Jana Partners worth $2bn, WSJ.com reports. The deal comes as activi

  5. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

banner