New Mountain Finance Corporation is a Business Development Company specializing in investments in middle market companies and debt securities at various levels of the capital structure, including first and second lien debt, unsecured notes, bonds, and mezzanine securities.
It invests in various industries that include software, education, business services, distribution and logistics, federal services, healthcare services and products, healthcare facilities, energy, media, consumer and industrial services, healthcare Information Technology, Information Technology and services, specialty chemicals and materials, telecommunication, retail, and power generation. It seeks to invest in United States.
It typically invests between $10 million and $50 million. Within middle market it seeks to invest in companies having EBITDA between $20 million and $200 million. It prefers to invest in equity interests, such as preferred stock, common stock, warrants, or options received in connection with its debt investments and directly in the equity of private companies.
The fund makes investments through both primary originations and open-market secondary purchases. It invests primarily in debt securities that are rated below investment grade and have contractual unlevered returns of 10% to 15%.
The firm may also invest in distressed debt and related opportunities and prefers to invest in targets having private equity sponsorship. It seeks to hold its investments between five years and ten years. The fund prefer to have majority stake in companies.