New Mountain revealed Fund IV’s new goal in a July SEC filing. The firm already has raised more than $3 billion for Fund IV, the filing said. The hard cap for Fund IV is $5 billion, the sources told sister website peHUB.
Such a change is not new for New Mountain. The private equity firm also had a $3 billion target for its third fund but New Mountain Partners III LP ended up raising $5.1 billion in 2008. The firm’s second fund collected $1.55 billion in 2005.
New Mountain is “nearly finished” marketing for Fund IV while the fundraise has been called a “blowout,” sources said. The firm, based in New York, has been marketing for Fund IV since early 2013, peHUB has reported.
Fund III is producing a net IRR of 11 percent and a 1.4x investment multiple as of March 31, performance data from the California Public Employees’ Retirement System said. Fund II is generating a 13.2 percent net IRR and a 2x investment multiple, CalPERS said.
New York-based New Mountain, which calls itself a generalist firm, typically invests $100 million to $500 million per deal. In January, New Mountain closed the sale of Inmar to ABRY Partners. Madison Dearborn, in December, said it would buy the commercial business of Ikaria for about $1.6 billion. New Mountain also bought Medical Specialties Distributors from Water Street Healthcare Partners that month.
Executives at New Mountain did not respond to requests for comment.
Luisa Beltran is a senior writer for peHUB.