New Mountain Seeks $3B for Fund IV

New Mountain Capital is raising a new buyout fund, three sources say.

The New York-based private equity firm is seeking to raise at least $3 billion for its fourth fund, one person says. The private equity firm’s prior pool, New Mountain Partners III LP, had the same target but ended up raising $5.1 billion in 2008.

Fund III is generating a net IRR of 8.3%, according to June 30 data from CalPERS.

In September, peHUB reported that New Mountain would likely be out marketing for its next fund in late 2012 or early this year. Bloomberg News reported in October that New Mountain would be targeting $3 billion for its next fund.

With Fund IV, New Mountain is offering to offset 100% of the deal fees it receives from portfolio companies to LPs, Dow Jones LBO Wire reported Friday. That’s up from 50% of fees it refunded with its third fund, Dow Jones says.

One placement agent says that 100% offset is becoming market terms. “It is getting to be that 100% of deal fees to the LPs is market standard – at least for larger funds,” a second placement agent says.

Officials for New Mountain did not return calls for comment.

Photo courtesy of Shutterstock