American Equity Commits $1 Billion to Monroe Capital’s Software, Technology and Recurring Revenue (“STARR”) Investment Strategy Through a Strategic Partnership

Rhea-AI Summary

American Equity Investment Life Holding Company (NYSE: AEL) announced a $1 billion investment in Monroe Capital's technology lending platform, focusing on middle market Software, Technology and Recurring Revenue (STARR) loans. This partnership aims to enhance American Equity's asset allocation towards private assets, with a specific emphasis on companies with recurring revenue models. The move reflects their strategy to tap into the resilient U.S. economy's technology sector, similar to the healthcare sector's growth over the past decade.

Positive

• Strategic $1 billion investment in Monroe Capital's STARR lending platform.
• Focus on resilient technology sector with high return-on-investment potential.
• Partnership expected to enhance asset allocation towards private assets.

Negative

• None.

WEST DES MOINES, Iowa & CHICAGO--(BUSINESS WIRE)-- American Equity Investment Life Holding Company (“American Equity”) (NYSE: AEL), a leading provider of financial dignity solutions through general account annuities for individual clients in the United States and Monroe Capital LLC (“Monroe”), a premier boutique $11.2 billion asset management firm specializing in private credit, announced today a $1 billion investment in Monroe Capital’s dedicated technology lending platform focusing on middle market Software, Technology and Recurring Revenue (“STARR”) loans originated and underwritten by Monroe. The investment focus will be on software and technology enabled companies that will offer mission critical, high return-on-investment software or technology solutions for its customers.

“Our commitment to the STARR strategy demonstrates the ability of our investment platform to find assets that generate attractive investment income on a risk-adjusted basis,” said Jim Hamalainen, CIO of American Equity. “We are excited to partner with Monroe, whom we view as a best-in-class partner, as we build toward our long-term strategic asset allocation to private assets.”

Ted Koenig, Chairman and CEO of Monroe added, “We are thrilled to partner with American Equity in our technology lending platform. It is a strategy where we can add differentiation for our investor’s portfolios while generating “alpha”. Having a strategic partnership with American Equity will allow us to continue to scale our efforts in this fast-growing space. American Equity will be helpful in the distribution to other like-minded private credit investors throughout the world looking for a unique STARR investment strategy with an experienced manager known for generating consistent returns.”

Under the terms of the agreement, American Equity and Monroe will work together to scale the technology lending platform with third party investors, including other insurance companies, through structured products based on the STARR lending platform.

“STARR has emerged as a vibrant sub-sector of the U.S. economy, similar to where the health care sector was about a decade ago. It represents a highly resilient part of the U.S. economy given the focus on businesses with capacity for recurring revenue from mission critical solutions to their customers,” explained Anant Bhalla, CEO of American Equity. “This is why it has been a prime lending sector opportunity on our radar as we rolled out plans for private assets. American Equity is excited to enter this higher growth, alternative credit sector with a proven partner like Monroe.”

Zia Uddin, President of Monroe Capital and responsible for technology investments for the firm stated, “While we have been investing in technology for almost two decades, we are still early in the digital transformation for many companies, especially in the middle market. We believe there is a great opportunity set for investment in the technology sector through credit. Technology investing is specialized, whether in equity or credit, you need a deeper understanding of the technology and end products to be successful. By partnering with American Equity, we have the ability to strengthen our industry leading scale in the space with a partner that understands the investable landscape as well.”

ABOUT AMERICAN EQUITY

At American Equity Investment Life Holding Company, we think of ourselves as The Financial Dignity Company that offers solutions designed to create financial dignity in retirement. Our policy holders work with independent agents, banks and broker-dealers, through our wholly-owned operating subsidiaries, to choose one of our leading annuity products best suited for their personal needs. To deliver on our promises to policy holders, American Equity has re-framed our investments focus, building a stronger emphasis on insurance liability driven asset allocation as well as the origination and management of private assets. Our company is headquartered in West Des Moines, Iowa with satellite offices slated to open in 2022 in Charlotte, NC and New York, NY.

ABOUT MONROE

Monroe Capital LLC (“Monroe”) is a premier boutique asset management firm specializing in private credit markets across various strategies, including direct lending, asset-based lending, specialty finance, opportunistic and structured credit, 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 offices in Atlanta, Boston, Los Angeles, Naples, New York, San Francisco, and Seoul.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

The forward-looking statements in this release, such as capability, toward, and will, are based on assumptions and expectations that involve risks and uncertainties, including the "Risk Factors" American Equity describes in its U.S. Securities and Exchange Commission filings. American Equity's future results could differ, and it has no obligation to correct or update any of these statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006192/en/

Steven Schwartz | Head of Investor Relations

American Equity Investment Life Holding Company®

515-273-3763 | sschwartz@american-equity.com

Source: American Equity Investment Life Holding Company

FAQ

What is American Equity's recent investment related to AEL?

American Equity announced a $1 billion investment in Monroe Capital's technology lending platform targeting middle market STARR loans.

Which companies are targeted by American Equity's technology lending platform?

The platform focuses on software and technology-enabled companies that provide high-return solutions.

What is the significance of the STARR investment strategy for AEL?

The STARR strategy is part of American Equity's effort to enter a high-growth alternative credit sector, expected to yield attractive investment income.

How will the partnership with Monroe Capital benefit AEL?

The partnership is expected to scale the technology lending platform and attract third-party investors, enhancing capital generation.

When was the investment in Monroe Capital announced?

The investment was announced on November 4, 2021.