Monroe works with White House to fund US automotive market
Private credit specialist Monroe Capital has been chosen by the White House to develop an investment strategy to support businesses in the US automotive market.
The Drive Forward Fund aims to raise up to $1bn (£0.75bn) to fund companies in the $1tn US car market.
“We believe this new Drive Forward Fund will be critical to catalysing growth and innovation within America’s automotive supply chain,” said Monroe’s chairman and chief executive, Ted Koenig.
“The fund will have an opportunity to provide essential financial support to small and medium-sized businesses and will help provide a consistent and reliable supply chain to the original equipment manufacturers, Tier 1 auto manufacturers, and other auto industry stakeholders.
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“In addition, the fund will strive to provide support to auto industry suppliers as they become more competitive and remain local community anchors as they grow their businesses to support key initiatives within the overall automotive industry.
“Monroe Capital is honoured to play a leading role in this new strategy.”
The venture will be supported by MEMA, The Vehicle Suppliers Association and the Alliance for Automotive Innovation.
Earlier this year, Vice President Kamala Harris gave a speech in Detroit pledging to support growth and jobs in the automotive industry.
The Monroe fund will build on this strategy by providing capital solutions to help manufacturers, suppliers, and service providers modernise the key automotive supply chains. It will also provide companies with access to funding for technology investments.
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Monroe intends to pair private investor capital with leverage, including low-cost government-guaranteed leverage.
“Looking ahead, we believe the automotive industry is poised for transformative changes driven by advancements in electric vehicles, hydrogen fuel cell technology, and autonomous driving systems, among others,” said Alex Parmacek, portfolio manager for the fund at Monroe.
“We believe a shift towards clean energy and sustainable vehicles can play a role in efforts to reduce carbon emissions and create a more durable supply base for the original equipment manufacturers and Tier I suppliers.
“This Drive Forward Fund expects to play a pivotal role in supporting these technological innovations, to help ensure that the U.S. remains at the forefront of automotive technology and manufacturing.”
The Drive Forward Fund will be advised by a council of experts from across the automotive industry to help ensure capital is directed to small and medium-sized auto suppliers, manufacturers, and service providers with ties to significant domestic manufacturing content.
The fund will work to generate “attractive returns on investment” for its limited partner investors.
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