New Mountain Capital, a leading growth-oriented alternative investment firm headquartered in New York, announced the $1.2 billion closing of its second non-control private equity fund, New Mountain Strategic Equity Fund II, L.P. and its related vehicles (collectively, “SEF II” or the “Fund”). New Mountain describes itself as “a business that builds businesses,” and has generated over $100 billion of enterprise value gains in its control private equity companies since the firm’s inception.

Investor demand for SEF II exceeded the Fund’s “hard cap” amount of $1 billion and Limited Partners supported relief from the “hard cap” to accommodate the additional commitments. In addition, General Partner commitments totaled over $150 million, representing the largest investor in the Fund and significant GP/LP alignment.

New Mountain’s previous non-control private equity fund, SEF I, closed with approximately $640 million of commitments in 2020. That fund is now fully invested in platform companies and generated a significant level of co-investment opportunity for its Limited Partners.

Investors in SEF II include leading pension funds, insurance companies, asset managers, endowments, family offices, RIAs, and high-net-worth individuals, among others. The majority of SEF I investors returned as investors for SEF II.
“We thank our Limited Partners for their friendship and support,” said Steve Klinsky, Founder and CEO of New Mountain. “Since our founding 25 years ago, New Mountain has sought to consistently ‘build great businesses’ in carefully chosen acyclical defensive growth sectors. We are proud of the firm and team we have built, as we seek to improve businesses across market cycles as both a control and non-control shareholder.”

Consistent Execution of Defensive Growth Strategy in Non-Control Situations

SEF II intends 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. New Mountain proactively develops operational expertise in these targeted, acyclical sectors through deep, fundamental 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.

Specific areas of focus for the firm, and SEF II, include infrastructure services, life sciences and advanced materials, healthcare technologies, advanced data and analytics, software, financial and insurance services, technology enabled business services, and others. SEF II intends to invest in these areas via minority, non-control transactions and add value, providing operational and other support.

SEF II has invested in one platform company ahead of its final close. Wipfli LLP is a leading middle market provider of accounting, tax, and advisory services. This investment follows previous New Mountain investments in the accounting sector, including Citrin Cooperman Advisors LLC and Grant Thornton LLP out of the firm’s sixth and seventh control private equity funds, respectively.

“New Mountain has had a consistent focus on its deep research and underwriting approach to defensive growth industry sectors and has continued to grow its broader team to support business building and value creation, which are core tenets of our strategy in both control and non-control settings,” said Adam Weinstein, Managing Director, President and Chief Operating Officer. “We thank our investors for their outstanding support of New Mountain and strive to continuously deliver in the years ahead.”

“New Mountain will continue to execute on our strategy of partnering with leading founder- and sponsor-backed businesses in market niches we proactively select for investment,” said Joe Delgado, Managing Director, Head of Strategic Equity and a member of the Private Equity Leadership Committee. Harris Kealey, Managing Director, added, “Our team intends to continue identifying premier companies in their respective sectors and delivering our value-added approach in partnership with world class management teams.”

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