New Mountain Capital
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New Mountain was founded in the USA in 1999 by Steve Klinsky, an American private equity pioneer who co-founded Goldman Sachs' first Leveraged Buyout ("LBO") team in 1981.
The company currently manages close to $55 billion, divided between its long-standing private equity business and its private debt business launched in 2008.
The company employs over 200 people, more than half of whom are dedicated to investment.
It operates independently, being over 90% owned by the current partners, with the remainder held by Blackstone, with whom it entered into a strategic alliance in 2018.
Specializing in defensive growth
New Mountain only invests ingrowth-oriented, acyclical sectors, an investment strategy it defines as "Defensive Growth".
Its origination approach consists of identifying investment themes and growing, resilient sub-sectors each year. Internal teams are formed to deepen their knowledge of each target sub-sector ("Deep dive process"), in particular by enlisting the help of experts. New Mountain will only make its first investment in a target sub-sector several years after identifying it.
As a result, the team has developed very strong differentiating expertise in certain segments of the Healthcare sector, such as services or products supplied to the Life Sciences sector, and in sub-sectors positioned at the intersection between the Technology sector and other sectors such as Healthcare IT or Infrastructure Services. In these market segments, New Mountain has become a leader in the United States thanks to a number of successful investments.
This strong sub-sector expertise, practiced for over 20 years, enables the team to source its deals pro-actively and proprietarily to avoid competitive bidding processes.
Exemplary discipline and meticulous follow-up
New Mountain's track record of high, consistent returns and near-zero loss rates since inception is a rarity in the private equity industry. None of New Mountain's investee companies has missed an interest payment on its financial debt.
This stability and very low volatility are the result of :
- The selection of resilient target sub-sectors,
- Well-established internal governance processes that are constantly being improved,
- A highly selective investment discipline,
- Prudent financial structures,
- Strong sub-sector expertise,
- And the added value of New Mountain's operating resources in portfolio companies
Prudence and operational excellence
In value creation plans, New Mountain teams are very active and committed alongside managers, and co-lead numerous operational and strategic improvements within acquired companies, with a particular focus on risk management.
Leverage, while present, has historically played a secondary role in generating returns. Priority is given to the growth of investee companies during their holding phase, reinforcing the robustness of New Mountain's portfolio.
New Mountain has built its success on 4 pillars:
- Talent of the management team in place at companies
- Moderate use of leverage
- Sustained external growth around leading platforms ("buy and build" strategy)
- The methodical application of the New Mountain operational Playbook methodically built up over more than 20 years around the past experiences of operating partners in their chosen sectors.
Consistent positioning and growing resources
Despite its success, which would naturally enable it to broaden its scope of action towards the broad cap, the company has maintained its position in the mid-market segment. New Mountain has steadily strengthened its organization by institutionalizing it and intensifying its internal operational capabilities. As a result, the company now possesses the considerable resources typical of a large-cap firm, which it can put at the service of mid-cap companies.
The company's best practices are now formalized in operational playbooks that New Mountain can apply systematically. New Mountain has all the in-house expertise needed to create value in its portfolio: a highly experienced investment team, a dedicated, highly specialized operational team with a wealth of functional expertise, and a capital markets team dedicated to structuring deals.
Their long-standing commitment to ESG criteria (over 15 years) is also an exceptional feature for a private equity fund, all the more rare in the USA than in Europe.
New Mountain Partners VII
New Mountain Strategic Equity Fund II
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