Welcome back to the Alt Goes Mainstream podcast.

Today’s episode is with a private equity pioneer who has seen the industry evolve in the forty plus years he’s spent in private markets.

We sat down with Steve Klinsky, the Founder and Chief Executive Officer of New Mountain Capital, which he started in 1999, and has grown to over $55B AUM with an investment platform that spans strategies across Private Equity, Credit, and Net Lease Real Estate.

Steve was the Co-Founder of the Leverage Buyout Group at Goldman Sachs from 1981-1984, where he helped execute over $3B of transactions for Goldman and its clients. He then joined Forstmann Little and Co. as an Associate Partner and General Partner, helping to oversee seven private equity and debt partnerships totaling over $10B in capital.

He has since built New Mountain Capital into a leading alternative asset manager that has charted a growth path. Yet the firm has remained true to its roots and mindset of its “family business background,” which has informed how New Mountain has partnered with both GPs and LPs, and it’s a DNA that is central to their recent rollout of a wealth solutions business.

Steve and I had a fascinating discussion about the evolution of private markets and how to build a leading alternative asset manager that helps build businesses. We covered:

* How private markets have changed since Steve began in the industry.

* What it means to build “great businesses.”

* How the mindset of the “family business background” has helped inform investment strategy and deepening LP relationships.

* How Steve and New Mountain have navigated scaling the firm while focusing on generating returns for LPs.

* How New Mountain has approached launching new strategies.

* The why and how behind launching a wealth solutions business.

Thanks Steve for coming on the show to share your wisdom and expertise on private markets.

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Clip #1: What are the values that underpin building $87B of collective enterprise value?

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.

Show Notes

00:00 Message from our sponsor, Ultimus Fund Solutions

01:55 Welcome to Alt Goes Mainstream

01:58 Introducing Steve Klinsky and New Mountain Capital

03:41 Steve's Background and Early Days in Private Equity

04:00 The Beginnings of Buyouts

04:39 Challenges and Opportunities in Early Private Equity

06:57 Forstmann Little and Co. Era

07:02 Starting New Mountain Capital

07:50 New Mountain's Cultural Philosophy

08:50 Investment Strategies and Successes

10:27 Scaling New Mountain Capital

14:25 Mid-Market Focus and Growth

15:19 Opportunities in Private Equity

19:27 Synergies Across Investment Strategies

22:19 The Wealth Channel Focus

22:53 Building the New Mountain Brand

24:10 Performance and Consistency

24:33 New Mountain's Edge

27:18 Engaging the Wealth Channel

29:14 Future Plans and Products

29:28 Expanding Existing Products for Wealth Channel

29:42 Industry Evolution and Major Players

30:21 Wealth Channel vs. Institutional Channel

31:04 Institutional Side of Private Markets

31:49 New Institutions and Market Evolution

32:54 Challenges in the Wealth Channel

34:11 Painful Investment Lessons

36:03 Successful Investments and Business Building

38:22 Leveraging AI and Technology

41:27 Value Creation in Private Equity

42:24 Growth and Team Building at New Mountain

43:55 Starting New Mountain in 1999

46:06 Navigating Economic Turbulence

48:10 Private vs. Public Markets

51:07 Investment Strategies and Price Considerations

52:57 Building a Strong Team for Future Success

53:43 Global Expansion and Management

54:43 Exciting Investment Areas in Private Markets

55:46 Focus on Wealth Channel and Secondaries

56:32 Industry Evolution and Firm Growth

57:01 Closing Thoughts on Building Businesses

Editing and post-production work for this episode was provided by The Podcast Consultant.

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