The White House is launching the Drive Forward Fund LP, a pioneering investment strategy to inject up to $1 billion into small and medium-sized businesses that are integral to automotive supply and innovation.
The fund focuses on companies that are vital to the automotive sector's modernization, including suppliers of essential components like powertrains and electrical systems, as well as firms specializing in cutting-edge technologies such as Software-as-a-Service (SaaS).
Monroe Capital has been selected by the White House to back the fund, with advisory support from MEMA, The Vehicle Suppliers Association and the Alliance for Automotive Innovation.
"The Drive Forward Fund will be critical to catalyzing growth and innovation within America’s automotive supply chain," said Ted Koenig, Monroe’s chairman and CEO.
In addition to traditional automotive components, the fund will explore investment opportunities in emerging sectors such as battery component manufacturing and materials recycling, aiming to bolster the U.S. at the forefront of global automotive markets.
The announcement builds on Vice President Kamala Harris's commitment in Detroit last May, which highlighted the administration's focus on fostering growth and supporting over 9.7 million jobs across the automotive industry.
Monroe plans to leverage both private and potentially government-backed funds, seeking a U.S. Small Business Administration (SBA) Small Business Investment Company (SBIC) license to enhance the fund’s reach and impact.
The Drive Forward Fund is set to be advised by a council of experts from across the automotive industry, ensuring investments are directed to the most impactful areas of the auto supply chain.
As the fund moves forward with its fundraising efforts post-SBA licensing approval, it aims not only to support the burgeoning sectors of EV and clean energy but also to deliver attractive returns to its investors, aligning with the White House’s commitment to a future made in America by American manufacturers and workers.
“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 OEMs and Tier I suppliers.”
“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 U.S.,” said Bill Long, president and CEO of MEMA. “In this role, MEMA will continue to provide insights to ensure the supplier community is best served going forward.”
