U.S. Middle Market Overview

Historically strong performance throughout various economic cycles and largely uncorrelated with traditional asset classes

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

Lower default rates and higher recovery rates in middle market senior secured loans

Returns based on loan agreements requiring borrowers to pay contractual current income (coupon and fees); minimizes any J-curve effect

Investments are structured as loans with floating interest rates over LIBOR (with a floor) to hedge against rising interest rates

Senior Secured Direct Loans

Junior Secured Direct Loans

Mezzanine Debt

Bonds

Preferred Equity

Common Equity

First

Last

The U.S. middle market is defined as companies with annual revenues between $10 million and $1 billion.

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 48+ million people
Middle market firms contribute nearly $10.0 trillion to the national economy annually

United States $27.4T

China $17.8T

U.S. Middle Market $10.0T

Germany $4.5T

Japan $4.2T

1. National Center for the Middle Market, Year-End 2022 Middle Market Indicator
2. The World Bank, 2023 GDP
3. U.S. Middle Market Revenue. National Center for Middle Market Supply Chain Report

Monroe is a critical partner helping middle market companies grow. We provide capital that allows these middle market borrowers to:

WHY INVEST IN U.S. MIDDLE MARKET PRIVATE CREDIT?