On Monday, the White House announced it had selected Monroe Capital LLC to develop an investment strategy to focus on supporting U.S. automotive supply chain businesses.
The first-of-its-kind strategy would seek to raise up to $1 billion and focus on investing in companies that play a pivotal role in growth and innovation within the $1 trillion U.S. automotive industry, officials said. The program, the Drive Forward Fund LP, is anticipated to have advisory support from MEMA, The Vehicle Suppliers Association, and the Alliance for Automotive Innovation. Monroe will develop the strategy to support small- and medium-sized companies within the automotive value chain, officials said.
“We believe this new Drive Forward Fund will be critical to catalyzing growth and innovation within America’s automotive supply chain,” Monroe’s Chairman and CEO, Ted Koenig, said. “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 (“OEMs”), Tier 1 auto manufacturers, and other auto industry stakeholders. 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.”
The Drive Forward Fund will target suppliers, manufacturers and adjacent businesses, officials said, and use the fund to provide financial support to those businesses that supply mission critical parts like powertrain, body, drivetrain, chassis, interiors, and electrical components as well as SaaS and other technologies that cater to the industry. The fund will also evaluate growth opportunities in the battery component and subcomponent manufacturing and materials recycling area.
“A successful transformation to automotive electrification in the United States requires a cutting-edge automotive supply chain that keeps the country competitive and underpins our economic and national security,” John Bozzella, President and CEO, Alliance for Automotive Innovation said. “Automakers are investing billions in this transition and building electrified vehicles in all makes and models, but you’ve got to remember the automotive supply chain is made up of hundreds of companies – many small and medium-sized businesses – that have been churning out components and parts for generations, support communities across the country, and keep the wheels turning on the $1 trillion American auto business. Auto suppliers are essential to this transformation, and that’s what is promising about the Drive Forward Fund. It’s an option for smaller auto businesses to access private money to modernize and support the production of the vehicles of today – and tomorrow.”