Monroe Capital is set to raise approximately $350m through a collateralised fund obligation (CFO) backed by limited partnership interests in several of its private credit vehicles, according to a report by Bloomberg citing sources familiar with the transaction.
Jefferies is advising on the deal, which marks Monroe’s second CFO issuance following a $315m transaction completed in late 2024, also structured with Jefferies’ support. Both firms declined to comment.
The vehicle will securitise cash flows from Monroe’s fund stakes, issuing structured tranches of debt and equity to investors. As with similar CFO structures, the equity tranche will absorb first-loss risk, while senior tranches are expected to appeal to institutional buyers, particularly insurance firms seeking lower capital charges relative to direct fund ownership.
CFOs – which reemerged in recent years as a liquidity solution for private market investors – have seen renewed uptake amid a slower exit environment and constrained distributions.
While historically more common in private equity, CFOs are increasingly being deployed by private credit managers looking to unlock financing across fund portfolios without selling underlying assets.
Monroe, which specialises in direct lending and private credit strategies, manages $21.6bn in assets across its platform.
