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Strong credit market, volatility are perfect conditions for new $1.15bn fund, New Mountain Capital says

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New Mountain Capital has raised about $1.15bn for the final close of its latest direct lending fund.

The new vehicle, New Mountain Guardian III, is almost 50% larger than the $850m Fund II the firm close in 2017.

New Mountain said Fund III would have about $2bn of investable capital including leverage, targeting lending to “the highest quality companies in select, non-cyclical defensive growth industries”.

As of September 30 Guardian III had already deployed more than $1.1bn into 79 portfolio companies across sectors including enterprise software, business services, healthcare services and healthcare technology.

Steve Klinsky, founder and CEO of New Mountain, said, “We would like to thank our investors for their strong support.

“We believe New Mountain’s investment philosophy of focusing on defensive growth industries where we have deep expertise continues to be a successful strategy for our credit business and proven to be a key differentiator.”

Robert Hamwee, managing director and co-portfolio manager of the private credit strategies at New Mountain, added, “We believe that the current environment, where robust sponsor deal activity and strong overall credit conditions are coupled with continued uncertainty and volatility in certain sectors, is especially well-suited to our agile and selective approach to credit investing.”

New Mountain said the successful fundraise builds on strong momentum across its credit business.

The firm recently completed its third US collateralized loan obligation transaction and also celebrated the ten year anniversary of the IPO of its publicly traded business development company, New Mountain Finance Corporation.

Since inception New Mountain Capital has invested about $15.1bn in credit, and was managing about $7.8bn in the subsector at the start of July this year.

New Mountain Capital hauled in $9.6bn for the final close of its sixth flagship private equity fund in January. The vehicle is about 50% bigger than the $6.2bn predecessor vehicle New Mountain closed in 2017 and beat its own hard cap.

The firm also reached a $640m final close for its first non-control private equity fund, Strategic Equity Fund I in January.

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