New Mountain Capital is back on the market with its sixth control buyout fund, targeting $8 billion, according to pension documents.
The firm expects to hold a first close on New Mountain Partners VI in April, the documents from Pennsylvania Public School Employees’ Retirement System said, and a final close in June 2020. The firm will commit as least 4 percent of commitments to invest in or alongside the fund, according to an accompanying letter from private equity consultant Hamilton Lane.
The target is a considerable increase from its previous fund, New Mountain Partners V, which closed in 2017 on $6.15 billion, according to a press release. The fund before that, New Mountain Partners IV, closed in 2014 on $4.13 billion.
According to the PSERS memo, Fund V has a 2017 vintage, a 9.3 percent net internal rate of return and a 1.10x net multiple of investment capital as of September 30, 2019. Fund IV, a 2013 vintage, was generating a 23.9 percent net IRR and a 1.78x MOIC.
PSERS committed $175 to New Mountain Partners VI at its meeting Friday. It has invested in five previous New Mountain funds, including $200 million in Fund V and $100 million in Fund IV.
The PSERS memo described the fund’s strategy as “business building and growth in economically non-cyclical industries.” The fund will invest in companies with an enterprise value of between $100 million and $1 billion, with a goal of a $300 billion average investment.
The memo also said New Mountain was raising a non-control fund, New Mountain Strategic Equity Fund I. It has a $750 million target and will use the same overall investment philosophy but take non-control investments.
New York-based New Mountain was founded in 1999 and is run by its founder, Steven Klinsky. It has over $23 billion in assets under management.
New Mountain did not reply to a request for comment.
Action Item: read the PSERS memo on New Mountain Partners VI here.