New Mountain eyes big jump in target for second non-control fund

New Mountain Capital is seeking $1 billion for its second non-control fund, an increase of over 50 percent from what it raised for its 2021 debut fund.

Many managers raising new funds have limited their expectations on targets as overallocations and slowed distributions have forced many LPs to slow their commitment pacing. New Mountain’s ambitions fly in the face of this dynamic as the manager also has an aggressive target for its latest flagship fund.

Information about New Mountain Strategic Equity Fund II’s target was included in documents from Indiana Public Retirement System’s September 8 board meeting, reviewed by Buyouts. Indiana announced a $100 million commitment to the fund.

No other details about the economics of Fund II were available by press time.

Fund I closed on $640 million in January 2021, according to a press release from New Mountain.

“They’re seeking a larger fund size for Fund II because they have a good story. It’s a differentiated approach,” said an industry source.

Fund II also has “a meaningful co-investment component that people really appreciate,” the industry source added.

According to the industry source, New Mountain’s minimum check size for its strategic equity investments is $75 million.

Known transactions suggest New Mountain has its eye on financial services firms through its strategic ground funds.

New Mountain has announced investments in Lincoln Investment Capital Holdings, an RIA/broker-dealer, and property and casualty insurance broker IMA Financial Group through its first fund.

SEC documents also show that New Mountain purchased a roughly 40 percent stake in Homrich Berg, a $12 billion wealth manager based in Atlanta.

“Within financial services, they like insurance brokerages and wealth management firms. They do not do balance sheet intensive financials,” the industry source said.

Information about management fees, fund terms or further investment strategies in Fund II were not made available by press time.

New Mountain declined to comment on the story.