The initiative will target suppliers and manufacturers with advisory support from MEMA to bring innovation and fuel growth
Chicago—The White House selected Monroe Capital LLC to develop a first-of-its-kind investment strategy focused on supporting businesses operating in the U.S. automotive supply chain.
Along with the anticipated advisory support of MEMA, The Vehicle Suppliers Association and the Alliance for Automotive Innovation, Monroe intends to launch this new strategy to help address the White House initiative. The Drive Forward Fund LP will seek to raise up to $1 billion and focus on investing in companies that play a pivotal role in fueling growth and innovation within the $1 trillion U.S. automotive industry.
Monroe will develop this White House strategy to support small and medium-sized companies operating within the automotive value chain that are essential to the growth and modernization of the U.S. automotive industry.
The Drive Forward Fund will target suppliers and manufacturers, as well as other adjacent businesses that provide complementary products and services to the industry. The mission of the Drive Forward Fund LP is to provide financial support to the businesses that supply mission critical parts such as powertrain, body, drivetrain, chassis, interiors, and electrical components, as well as complementary Software-as-a-Service (SaaS) and other auto technology and business service providers that cater to the industry.
The Fund will also evaluate growth opportunities to invest in innovative companies in battery component and subcomponent manufacturing and materials recycling. .
Monroe will seek to provide capital solutions to help manufacturers, suppliers, and service providers modernize the key automotive supply chains, including the clean vehicle supply chain, as well as support jobs in the automotive industry—more than 9.7 million across the country.
As part of its strategy, the Fund also intends to provide companies access to funding for technology investments, including but not limited to investments in the transition from internal combustion production to EVs, as well as the software offerings that will drive the industry’s shift from a purely transaction sales model to a complete vehicle lifecycle.
Major technological enhancements transforming the industry include Software-Defined Vehicles (SDV), autonomous driving systems, smart factories, and many other connected technologies. The Fund’s investments will intend to not only allow these businesses to capitalize on the industry’s growth tailwinds, but also to navigate supply chain challenges and the rapidly evolving operating landscape.
Monroe intends to pair private investor capital with leverage, including low-cost government-guaranteed leverage that Monroe hopes to obtain through applying for a U.S. Small Business Administration (SBA) Small Business Investment Company (SBIC) license for the Fund.
Bill Long, President and CEO of MEMA, stated, “MEMA is pleased to have a seat at the table in our ongoing collaboration with the White House to address industry challenges associated with the transition to advanced technology vehicles and to enhance manufacturing competitiveness in the US. In this role, MEMA will continue to provide insights to ensure the supplier community is best served going forward.”
The Drive Forward Fund plans to 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. Monroe anticipates the advisory council will include representatives from MEMA and Alliance for Automotive Innovation, with support from the OEMs, consultants and business organizations who recognize the importance of providing adequate liquidity and stability for the auto supply chain and critical suppliers.
For limited partner investors, the Fund will seek to generate attractive returns on investment while targeting exposure to manufacturers and other business service providers, coupled with growth opportunities in the EV and clean energy markets and auto technology.
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