New Mountain Capital Reaches $825M Summit

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Alternative investment firm New Mountain Capital has closed its second net lease real estate fund, New Mountain Net Lease Partners II. The investment vehicle raised $825 million in equity capital commitments, with some $725 million representing third-party Limited Partner commitments, while roughly $100 million came from the General Partner.

The total amount raised exceeded New Mountain’s initial fundraising goal of $750 million. Investors in the fund included several new participants, as well as veterans of past New Mountain fundraises. Commitments came from pension funds, insurance companies and asset managers, as well as endowments, high-net worth individuals and family offices.

Deploying capital

NMNLP II is targeting middle market facilities and private equity-sponsored businesses, with plans to invest anywhere from $5 million to $75 million of equity capital per transaction. The fund has already executed six transactions, representing upwards of $315 million of acquisition value and $115 million of equity capital commitments.

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The firm launched its net lease strategy in early 2016 as a way to utilize its analytical capabilities and leverage its deal flow, industry experience and relationships, New Mountain Managing Director Teddy Kaplan said in prepared remarks. The strategy allows New Mountain to provide investors with higher potential risk adjusted returns, said Kaplan, who is also head of New Mountain Net Lease. The firm anticipates that its net lease strategy will provide non-cyclical and consistent cash yield.

New Mountain’s net lease strategy has completed $1.9 billion of net lease acquisitions totaling 47 transactions. With over $40 billion of assets under management across private equity, credit and real estate, the firm manages 195 net lease assets across a 20 million-square-foot portfolio with more than 40 tenants.

Bridge Investment Group fund U.S. Bridge Logistics Value Fund II recently partnered with The Townsend Group to deploy $147 million for the acquisition, development and operation of logistics assets.