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 LBO team in 1981.
The company currently has close to $40 billion under management, divided between its core and 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 is able to operate independently as the current partners have a 90% stake in the firm with the remainder held by Blackstone, with whom it entered into a strategic alliance in 2018.
Specializing in defensive growth
New Mountain only invests in growth-oriented, acyclical sectors, an investment strategy it defines as "Defensive Growth".
Its origination approach consists of identifying growing and resilient investment themes and sub-sectors each year. In-house teams are formed to deepen their knowledge of each target sub-sector ("Deep dive process"), working with experts in the field.
New Mountain will typically 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 the leader in the United States thanks to a large number of investments.
This strong sub-sector expertise, practiced for over 20 years, enables the team to source its deals pro-actively and proprietarily, thus avoiding competitive bidding processes.
Exemplary discipline and meticulous follow-up
New Mountain boasts high, stable returns over time and almost non-existent loss rates, which are extremely rare in the Private Equity sector.
None of the companies owned by New Mountain has ever missed an interest payment on its financial debt.
This stability and very low volatility stem from the selection of resilient target sub-sectors, well-established and constantly improved internal governance processes, highly selective investment discipline, prudent financial structures, in-depth expertise in the sub-sectors concerned, and the added value brought to portfolio companies by New Mountain's operational resources.
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 field of action to include large caps, 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 has access to the considerable resources typical of a large-cap firm, which it can use in the service of mid-cap companies. The company's best practices are now formalized in operations Playbooks that New Mountain is able to 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 operations 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
