NEW YORK, June 27, 2023 – (BUSINESS WIRE) – New Mountain Capital, LLC (“New Mountain”), a leading alternative investment firm with over $40 billion of assets under management(i) across private equity, credit and real estate, today announced the closing of its second net lease real estate fund, New Mountain Net Lease Partners II, L.P. (“NMNLP II” or the “Fund”). NMNLP II closed with $825 million of equity capital commitments, including approximately $725 million of third-party Limited Partner commitments and approximately $100 million from the General Partner.
With an initial fundraising goal of $750 million, the completed capital raise substantially exceeded the target. Investors in the Fund, which were a mix of numerous new investors as well as existing New Mountain Net Lease investors, include pension funds, insurance companies, asset managers, endowments, family offices and high net worth individuals.
“The net lease business is very complementary to our private equity and credit businesses in our view, and we believe it can provide a strong risk and reward proposition for our investors,” said Steve Klinsky, New Mountain’s Founder and CEO. “We appreciate the support of the sophisticated global investors who have entrusted us with their capital in this strategy and we are also pleased to be sizable investors in our own product. We look forward to building on our strong momentum in net lease as we continue to grow our presence in the space.”
Teddy Kaplan, a New Mountain Managing Director and Head of New Mountain Net Lease commented, “We launched the net lease strategy at New Mountain in early 2016 seeking to utilize the firm’s analytical capabilities, industry experience, deal flow and relationships to build a differentiated net lease platform. Specifically, we saw an opportunity to provide investors with the higher potential risk adjusted returns that could be captured by a manager with the ability to properly underwrite more complex tenants and situations. We are thrilled with our success in delivering on that vision for our investors thus far and are excited to continue working to do so with this Fund.”
NMNLP II will continue to pursue New Mountain’s net lease strategy of focusing on operationally critical facilities at middle market and private equity sponsored businesses, often where New Mountain has deep domain expertise in the industry and in some cases has analyzed the company previously. NMNLP II will generally invest from $5 million to $75 million of equity capital per transaction and has completed six transactions to date, representing more than $315 million of acquisition value and $115 million of equity capital commitments.
Since inception, New Mountain’s net lease strategy has completed $1.9 billion of net lease acquisitions across 47 transactions and today manages a 20 million square foot portfolio of net lease assets with over 40 tenants and 195 assets. Over that time frame, the strategy has delivered consistent and tax efficient distributed cash flow, and Fund I has experienced no tenant defaults or missed rent payments.
New Mountain believes that a well-executed net lease strategy can continue to provide a path to non-cyclical and consistent cash yield and may also benefit from rising rents over time, long durations with no prepayment risk and the safety and collateral of the physical property itself.
About New Mountain Capital
New Mountain Capital is a New York-based alternative investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit and net lease real estate funds with over $40 billion in assets under management as of March 31, 2023. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected “defensive growth” industry sectors and then works intensively with management to build the value of these companies. Additional information about New Mountain Capital is available at nmcapdev.wpenginepowered.com.
Under no circumstances does the information contained herein constitute an offer to sell or a solicitation of an offer to buy any security or interest in an investment vehicle managed by New Mountain Capital. Any such offer or solicitation can only be made through a definitive private placement memorandum describing the terms and risks of an investment to sophisticated persons who meet certain qualifications under the federal securities laws and are capable of evaluating the merits and risks of the investment. Nothing presented herein is intended to constitute investment advice, and no investment decision should be made based on any information provided herein. It should not be assumed that an investment will be profitable or that the performance of any particular investment will equal its past performance. No guarantee of investment performance is being provided and no inference to the contrary should be made. There is a risk of loss from an investment in securities, including the potential loss of principal. Past performance is not indicative of future results.
(i) AUM figure as of March 31, 2023