New Mountain Capital, a leading growth-oriented alternative investment firm based in New York, announced the $15.4 billion closing of its seventh control/control-oriented fund, New Mountain Partners VII, L.P. and its related vehicles (Fund VII). And New Mountain describes itself as a business that builds businesses and has generated over $85 billion of enterprise value gains in its private equity companies since the firm’s inception, without one PE bankruptcy or missed interest payment.
Investor demand for Fund VII substantially exceeded the Fund’s supply, and the Fund closed at its hard cap amount of $14 billion of Limited Partner commitments plus approximately $1.4 billion of General Partner commitments. And this was the firm’s largest General Partner commitment to date and exceeded the contractual amount by more than two times.
New Mountain’s previous flagship fund Fund VI was also oversubscribed and closed with about $9.6 billion of commitments in 2020. And that fund is now fully invested in platform companies, with the remaining capital reserved for follow-on growth investments.
The investors in Fund VII include approximately 400 of the world’s leading pension funds, insurance companies, sovereign wealth funds, asset managers, foundations, endowments, family offices, RIAs, and high net worth individuals, and others. And the General Partner is itself the largest investor in the Fund, representing strong GP/LP alignment. The vast majority of Fund VI investors returned as investors for Fund VII, and the firm also added approximately 100 new investors globally.
Fund VII plans to continue to pursue New Mountain’s long-standing strategy emphasizing non-cyclical growth and business building for companies in carefully chosen defensive growth industries. And New Mountain proactively develops operational expertise in these targeted acyclical sectors through deep research, resulting in what the firm believes are differentiated sourcing and value creation capabilities. It seeks to combine financial skills with operational and strategic skills at every step of the process, and primarily invests in middle market businesses.
The specific areas of focus for the firm, and Fund VII, include life sciences and advanced materials, healthcare technologies, advanced data and analytics, infrastructure services, digital transformation services, software, financial and insurance services, technology enabled business services, future of work enterprises, and others.
Fund VII already acquired two companies ahead of its final close. These investments are Consor Holdings, a leading provider of transportation and waste water engineering, and Grant Thornton Advisors, a leading US accounting, tax and advisory firm.
Since January 2021, New Mountain exited roughly 20 companies. And it has deployed nearly $10 billion in approximately 30 new platform and add-on acquisitions. Based on the firm’s last social dashboard as of December 31, 2023, New Mountain had added or created over 72,000 jobs at its private equity companies net of any job losses, with a median income of about 76% above the national average individual median income. Plus, these companies invested $8.3 billion in R&D, software development, and capital expenditures, and generated over $85 billion of enterprise value gains for all shareholders. And work force members at NMC companies (not counting the C-suite and boards) received over $1.3 billion of equity gains, on companies sold since 2018.
New Mountain’s team has grown to over 250 investment professionals and staff with 20 private equity transaction leaders, and about 40 Operating Partners and Senior Advisors/Project Partners on its masthead, plus approximately 55 operating executives (Executive Advisory Council members) that are in addition to the team count.
New Mountain has also significantly expanded its local coverage supporting investors and consultants in different regions worldwide. And the firm has expanded its London office and recently opened offices in Tokyo and Los Angeles. New Mountain has also sought to continuously build its own investment team, operating partner team, internal compliance, accounting, and operational team in a similar way.
Simpson Thacher & Bartlett serves as legal advisor for the Fund.
KEY QUOTES:
“We thank our Limited Partners for their friendship and support. Since our founding nearly 25 years ago, New Mountain has sought to consistently ‘build great businesses’ in carefully chosen acyclical growth sectors. We are proud of the firm and team we have built, as we seek to build and improve businesses across market cycles. We strive to continuously improve in the years ahead.”
- Steve Klinsky, Founder and CEO of New Mountain
“New Mountain will continue to execute on our strategy of being a top ‘specialist’ in market niches we proactively select for investment. Our team intends to continue executing, refining and systemizing our approach to identifying and backing market leading platform companies with world class leadership teams in their respective sectors.”
- Matt Holt, Managing Director and President, Private Equity
“New Mountain has continued to focus on growing our team to support business building and value creation, which are core tenets of our strategy. We have also continued to scale and strengthen our internal systems and processes and build what we believe is a best in class non-investment team including compliance, finance and operations.”
- Adam Weinstein, Managing Director, Chief Operating Officer and CFO
“We thank our investors for their outstanding support of New Mountain, even in the face of a severely capital constrained period for the private equity industry. We look forward to working closely with our limited partners in the years ahead.”
- David Coquillette, Managing Director and Head of Business Development
