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Great Elm Group Announces Strategic Partnership with Kennedy Lewis Investment Management

Strategic Insights

— 2 min read

Great Elm Group, Inc., a publicly traded alternative asset manager, has announced a transformational strategic partnership with Kennedy Lewis Investment Management LLC. This partnership will bring in up to $150 million in leverageable capital to support the continued growth of Great Elm's real estate platform, which includes Monomoy REIT, Monomoy CRE, Monomoy Construction Services, and Monomoy BTS.

Under the terms of the transaction, Kennedy Lewis will provide an initial $100 million term loan to Monomoy REIT and the option for an additional $50 million in future capital. Additionally, Kennedy Lewis will purchase 4.9% of Great Elm's common stock at market price, approximately $2.11 a share, and hold an initial 15% profits interest in the newly formed Great Elm Real Estate Ventures, LLC, which consolidates Great Elm's real estate subsidiaries. This partnership will strengthen Great Elm's position as a full-spectrum real estate enterprise and enable it to deliver superior value to its tenants and clients.

The partnership highlights Kennedy Lewis' commitment to a long-term partnership, with the firm appointing board representatives at both Great Elm and Monomoy REIT. This strategic partnership will significantly improve Monomoy REIT's cost of capital, allowing for the refinancing of existing convertible debt and repayment of key credit facilities. The capital will also be used to fund new acquisitions and further scale Monomoy's operations.

Key Takeaways:

  • Great Elm Group, Inc. has announced a strategic partnership with Kennedy Lewis Investment Management LLC to support the continued growth of its real estate platform.
  • The partnership will bring in up to $150 million in leverageable capital to support the growth of Monomoy REIT, Monomoy CRE, Monomoy Construction Services, and Monomoy BTS.
  • Kennedy Lewis will provide an initial $100 million term loan to Monomoy REIT and the option for an additional $50 million in future capital.
  • Kennedy Lewis will purchase 4.9% of Great Elm's common stock at market price, approximately $2.11 a share, and hold an initial 15% profits interest in the newly formed Great Elm Real Estate Ventures, LLC.
  • The partnership will strengthen Great Elm's position as a full-spectrum real estate enterprise and enable it to deliver superior value to its tenants and clients.
  • The partnership will also enable Great Elm to improve its cost of capital, allowing for the refinancing of existing convertible debt and repayment of key credit facilities.
  • The capital will also be used to fund new acquisitions and further scale Monomoy's operations.
  • Great Elm's real estate platform will benefit from the expertise of Kennedy Lewis, with the firm's investment in the platform.
  • The partnership will enable Great Elm to expand its services to its tenants and clients, creating a comprehensive and value-added real estate partner.

Statistics:

  • Great Elm Group, Inc. has a total of $400 million in diversified net leased IOS assets.
  • The partnership will bring in up to $150 million in leverageable capital to support the growth of Monomoy REIT, Monomoy CRE, Monomoy Construction Services, and Monomoy BTS.
  • Kennedy Lewis will provide an initial $100 million term loan to Monomoy REIT and the option for an additional $50 million in future capital.
  • Monomoy REIT has approximately $400 million of diversified net leased IOS assets.
  • Great Elm Real Estate Ventures will consolidate the Monomoy real estate platform, which includes Monomoy CRE, LLC, Monomoy Construction Services, LLC, and Monomoy BTS Corp.

Sources:

  • Great Elm Group, Inc.
  • Kennedy Lewis Investment Management LLC
  • GlobeNewswire
  • Securities and Exchange Commission (SEC)

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