New Mountain collects $10.2bn across two PE funds

New Mountain Capital LLC has raised $10.2 billion across two private equity funds.

New Mountain Capital LLC has raised $10.2 billion across two private equity funds. The funds include New Mountain’s sixth flagship private equity fund, New Mountain Partners VI LP, which raised $9.6 billion and its first non-control private equity fund, Strategic Equity Fund I LP, which raised $640 million.

PRESS RELEASE

New York, NY – January 14, 2021 – New Mountain Capital, LLC (“New Mountain”), a leading growth-oriented alternative investment firm headquartered in New York, today announced the closing of two new private equity funds, totaling over $10.2 billion in aggregate capital commitments. These funds include New Mountain’s sixth flagship private equity fund, New Mountain Partners VI, L.P. (“Fund VI”), with $9.6 billion of capital, and its first non-control private equity fund, Strategic Equity Fund I, L.P. (“SEF I”), with $640 million of capital.

Demand for Fund VI substantially exceeded the hard cap amount, and Fund VI closed with $9.0 billion of Limited Partner commitments and approximately $600 million of General Partner/Affiliated investor commitments. SEF I, which is dedicated to non-control/minority investments, held its final closing in September. New Mountain, founded in 2000, manages over $30 billion in aggregate assets in private equity, credit, net lease real estate and public equity funds.

New Mountain’s previous flagship fund, Fund V, closed with approximately $6.2 billion of commitments in 2017, and is now fully invested in platform companies, with the remaining capital reserved for follow-on growth investments. The investors in Fund VI include approximately 300 of the world’s leading pension funds, insurance companies, sovereign wealth funds, asset managers, family offices, high net worth individuals and endowments. The vast majority of Fund V investors returned for Fund VI, and the firm also added many new investors, with notable expansion from Asia, Europe and Latin American regions.

Fund VI and SEF I will continue to pursue New Mountain’s strategy of emphasizing non-cyclical growth and business building for companies in carefully selected “defensive growth” industries. New Mountain proactively develops research and operational expertise in these acyclical niches through multi-year industry deep dive work that leads to targeting industry sub-sectors and specific companies of interest.

New Mountain has built expertise in sectors that now include life sciences/advanced materials, healthcare technologies, advanced data and analytics, infrastructure/water/power services, digital transformation services, software, niche consumer products, financial services, supply chain and others. New Mountain’s team totaled 122 investment professionals and staff in 2017 when Fund V commenced and has grown to over 175 today. New Mountain has particularly sought to continuously strengthen its operational and business building capabilities over time.

Fund VI has already closed on three portfolio investments and signed a fourth investment in December. These investments include HealthComp, LLC, a health benefits administrator; Tinuiti, Inc., a digital performance marketing firm; and Inframark, LLC, a water infrastructure services company; with the fourth investment in the digital services/digital transformation space to be announced. The investments to date represent over 10% of Fund VI capital commitments and are followed by a strong pipeline of additional platform and add-on opportunities. SEF I has made two portfolio investments: Lincoln Investment Capital Holdings LLC, a full-service RIA/broker dealer, and IMA Financial Group, Inc., a property and casualty-focused specialty insurance brokerage. SEF I also has a strong pipeline of additional investments that the firm is pursuing.

This recent activity capped a strong year for New Mountain in 2020. Key events included:
Acquisition of eight new private equity platform companies, two non-control SEF I positions, and five major add-ons to existing companies, deploying $2.6 billion of fund capital in total.
Sale, or partial sales, of seven companies generating total gross cash returned or in contract, of $5.4 billion.

Continued focus on control of risk, social responsibility and broader ESG initiatives. New Mountain has never had a private equity bankruptcy or missed an interest payment in its history. Based on the firm’s last “social dashboard” (published in March 2020 representing 2019 data), the private equity portfolio companies under New Mountain’s ownership have added or created over 46,000 jobs net of any job losses and maintained a median income of ~72% above national individual median income. In addition, these companies committed $5.3 billion to R&D, software development, and capital expenditures and generated ~$37 billion of enterprise value gains. Additional details on New Mountain’s social responsibility can be found on the website: www.newmountaincapital.com.

“We thank our Limited Partners for their friendship and support, particularly during a pandemic and other significant global challenges,” said Steven Klinsky, Founder and CEO of New Mountain. “Since our founding twenty years ago, New Mountain has sought to consistently “build great businesses” in carefully chosen acyclical growth sectors, and to build a great and highly operationally-focused team. We will strive to continue to build great businesses for the benefit of our investors, and the community at large, in the years ahead.”

Simpson Thacher & Bartlett serves as legal advisor for the Fund.

About New Mountain Capital
New Mountain Capital is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit, net lease real estate and public equity funds with over $30 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. www.newmountaincapital.com