Monroe Capital Funds Make Strategic Investment in Second Avenue

CHICAGO--(BUSINESS WIRE)--Monroe Capital LLC (“Monroe”), on behalf of its investment funds, today announced it has acquired a strategic minority ownership interest in Second Avenue’s operating company and has allocated approximately $250 million of additional capital to its investment platform through a mix of debt and equity capital. The $250 million is structured as a follow-on investment that is expected to be deployed across various opportunities in 2024. This is in addition to Monroe’s previously $250 million investment in April 2021 that has been fully deployed to acquire approximately 500 homes.

Second Avenue is a full-service, institutional single-family rental platform (“SFR”). This transaction further demonstrates Second Avenue’s standing as a premier end-to-end single-family rental platform differentiated by its acquisition capabilities, end-to-end technology platform (“Jiffy”) and property management capabilities. Second Avenue ended 2023 with approximately $1.0 billion assets under management having deployed approximately $800 million across 3,000 homes, representing a 114% YoY increase in home count. Second Avenue expects to double its home count in 2024 with Monroe’s follow-on commitment plus remaining previously committed capital.

This transaction is representative of Monroe’s Real Estate and Specialty Finance divisions within the Opportunistic Private Credit group. The group focuses on complex and special situation structured debt and equity financings covering all asset types and geographies. In 2023, the Opportunistic Group closed over 15 debt and equity transactions. The team has a broad investment mandate, flexible capital and prides itself not only on its “bottoms up” expertise but also on its ability to move quickly and efficiently and provide certainty of execution on complex transactions. For over 20 years, the firm has been investing in asset-backed transactions with attractive collateral as well as cash flow and enterprise value-based loans.

Ted Koenig, Chairman and CEO of Monroe, said: “We have been extremely impressed with Mike Rothman, who has decades of experience building and leading companies, and his ability to attract a seasoned management team and utilize technology to enable growth at scale. We believe Monroe’s long-term investment can strategically enhance Second Avenue as one of the largest and more importantly efficiently managed SFR platforms in North America.”

Mike Rothman, CEO and Founder of Second Avenue, said: “Second Avenue is extremely excited to announce our continued partnership with Monroe Capital, both from a PropCo and now an OpCo perspective. It speaks volumes when an investor doubles down on its initial commitment and illustrates how Second Avenue’s industry leading, technology-driven SFR platform delivers for investors and residents alike. Further, Monroe Capital’s OpCo investment creates a strategic partner that Second Avenue can leverage for additional growth in an asset class with increasing investor demand based on strong, recession resistant fundamentals.”

Kyle Asher, Partner and Co-Head of Monroe’s Opportunistic Credit Group, stated, “We are pleased to continue our successful partnership with Second Avenue to support their growth and grow our existing SFR portfolio, at a time when we believe the market is beginning to be very ripe for activity. This partnership represents the continued growth of our specialty finance and real estate businesses and demonstrates our conviction in the Second Avenue platform and in the SFR asset class in general.”

About Monroe Capital

Monroe Capital LLC (“Monroe”) is a premier boutique asset management firm specializing in private credit markets across various strategies, including direct lending, technology finance, venture debt, opportunistic, structured credit, real estate and equity. Since 2004, the firm has been successfully providing capital solutions to clients in the U.S. and Canada. Monroe prides itself on being a value-added and user-friendly partner to business owners, management, and both private equity and independent sponsors. Monroe’s platform offers a wide variety of investment products for both institutional and high net worth investors with a focus on generating high quality “alpha” returns irrespective of business or economic cycles. The firm is headquartered in Chicago and maintains 10 offices throughout the United States and Asia.

Monroe has been recognized by both its peers and investors with various awards including Private Debt Investor as the 2023 Lower Mid-Market Lender of the Decade, 2023 Lower Mid-Market Lender of the Year, 2023 CLO Manager of the Year, Americas; Inc.’s 2023 Founder-Friendly Investors List; Global M&A Network as the 2023 Lower Mid-Markets Lender of the Year, U.S.A.; DealCatalyst as the 2022 Best CLO Manager of the Year; Korean Economic Daily as the 2022 Best Performance in Private Debt – Mid Cap; Creditflux as the 2021 Best U.S. Direct Lending Fund; and Pension Bridge as the 2020 Private Credit Strategy of the Year. For more information and important disclaimers, please visit www.monroecap.com.

About Second Avenue

Second Avenue provides high quality professionally managed rental homes for today’s families. A full-service single-family rental platform, founded in 2017, Second Avenue offers proprietary, technology based solutions to home buyers, sellers, renters, and investors. The firm’s unified, end-to-end institutional quality asset management platform aggregates and enhances all aspects of single family rental investment and operations. With approximately $1 billion under management, Second Avenue is privately held and headquartered in Tampa with regional teams throughout the United States. For more information, visit www.secondavenue.com.