New Mountain Capital has closed its second non-control private equity vehicle, New Mountain Strategic Equity Fund II, L.P. and related vehicles (SEF II), with $1.2 billion in total commitments, exceeding the fund’s stated $1 billion “hard cap” after limited partners supported an increase to accommodate additional demand. The New York-based alternative investment firm said general partner commitments totaled more than $150 million, making the GP the fund’s largest investor and representing commitments from roughly 115 internal team members.
SEF II is dedicated to minority, non-control investments in founder- and sponsor-backed businesses, with New Mountain positioning the strategy as partnership-oriented and focused on operational support and business-building rather than control buyouts. The firm said the fund will continue its emphasis on “defensive growth” sectors that it views as acyclical, applying a research-driven underwriting approach and operational value-creation resources to middle-market companies.
New Mountain’s first strategic equity fund, SEF I, closed in 2020 with approximately $640 million and is now fully invested, the firm said, and it generated a “significant level” of co-investment opportunities for its limited partners. For SEF II, New Mountain said the investor base includes pension funds, insurance companies, asset managers, endowments, family offices, RIAs and high-net-worth individuals, and that a majority of SEF I investors returned for the successor fund.
The firm said SEF II will focus on targeted areas including infrastructure services, life sciences and advanced materials, healthcare technologies, advanced data and analytics, software, financial and insurance services, and technology-enabled business services, among others, using minority investments where it can provide operational and strategic support. Ahead of the final close, SEF II invested in one platform company, Wipfli LLP, which New Mountain described as a middle-market provider of accounting, tax and advisory services, citing prior investments in the accounting sector including Citrin Cooperman Advisors and Grant Thornton through its control private equity funds.
New Mountain said it now manages approximately $60 billion in assets across private equity, strategic equity, GP-led single-asset secondaries, credit and net lease strategies, and employs more than 300 professionals. Simpson Thacher & Bartlett served as legal advisor to the fund.
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“We thank our Limited Partners for their friendship and support. Since our founding 25 years ago, New Mountain has sought to consistently ‘build great businesses’ in carefully chosen acyclical defensive growth sectors. We are proud of the firm and team we have built, as we seek to improve businesses across market cycles as both a control and non-control shareholder.”
Steve Klinsky, Founder and CEO, New Mountain Capital
“New Mountain has had a consistent focus on its deep research and underwriting approach to defensive growth industry sectors and has continued to grow its broader team to support business building and value creation, which are core tenets of our strategy in both control and non-control settings. We thank our investors for their outstanding support of New Mountain and strive to continuously deliver in the years ahead.”
Adam Weinstein, Managing Director, President and Chief Operating Officer, New Mountain Capital
“New Mountain will continue to execute on our strategy of partnering with leading founder- and sponsor-backed businesses in market niches we proactively select for investment.”
Joe Delgado, Managing Director, Head of Strategic Equity and Member of the Private Equity Leadership Committee, New Mountain Capital
“Our team intends to continue identifying premier companies in their respective sectors and delivering our value-added approach in partnership with world class management teams.”
Harris Kealey, Managing Director, New Mountain Capital
