Episode summary
New Mountain Capital's Steve Klinsky - building a business that builds businesses
Alt Goes Mainstream
· · Hosts: Michael Sidgmore · Guests: Steve Klinsky
Summary
Steve Klinsky argued that private equity has evolved from a small, highly levered niche into a far larger business of building and improving companies. He traced that shift from the early 1980s, when he was doing Goldman Sachs’ first buyout work in a market dominated by stagflation and very high rates, to today’s roughly $5 trillion private equity ecosystem with about 5,000 firms. He said New Mountain Capital was built to fit that new world by focusing on defensive growth, operational improvement, and deep industry specialization rather than financial engineering.
He described New Mountain’s culture as “family business theory” applied at institutional scale: flat, non-political, respectful, and highly operational. That mindset, he said, has helped the firm avoid bankruptcy and missed interest payments in its private equity history while expanding into credit, net lease real estate, and wealth solutions. The firm’s recent $15.4 billion raise above a $12 billion target was framed as evidence that its team and strategy scale together, with a “talent per dollar ratio” that he believes matters more than raw fund size.
Klinsky also emphasized that the wealth channel is the next major growth area, but it will require product selection, education, and brand-building rather than mass marketing. He expects a smaller set of winners in that channel and sees New Mountain’s edge in its performance, operating playbook, and ability to offer the same investments in a format suited to wealth investors.
Key takeaways
- Steve Klinsky said private equity has shifted from finance into business building, with deep sector knowledge now more important than leverage alone.
- New Mountain targets mid-market companies, which Klinsky thinks offer more room for operational improvement, add-on acquisitions, and international expansion.
- Klinsky said the firm’s edge is its “talent per dollar ratio,” with team growth outpacing fund growth and improving investing capacity.
- He said the $15.4 billion fundraise above a $12 billion hard cap showed investors value New Mountain’s process and returns.
- Klinsky sees wealth solutions as a major opportunity, but expects only a smaller number of major brands to win in that channel.
Notable quotes
“we don't have portfolio theory, we have family business theory. When we invest in a company in private equity, we treat it like the new family business”
“it's gone from a form of finance into a form of business”
“what's key is not the fund size. What's key is the fund size relative to the talent within the fund”
“We are a business that builds businesses and I'm trying to build a business that builds businesses”
How the episode opens
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Delivering operational excellence, Ultimus helps firms manage the everchanging 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. Trusted by institutions, investment consultants, registered investment adviserss, state governments, and fund managers, Ultimus provides solutions for nearly every investment structure in the marketplace.
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Venture capitalists to athletes to creators to the person who's collecting trading cards. We're going to collision of culture and finance. Welcome back to the Elkco's mainstream podcast.
Today's episode is with a private equity pioneer who has seen the industry evolve in the 40 plus years he spent in private markets. We sat down with Steve Klinsky, the founder of New Mountain Capital, which he started in 1999 and has grown to over 55 billion of aum with an investment platform that spans strategies across private equity, credit, and net lease real estate.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private markets evolution
- private equity
- credit investments
- net lease real estate
- wealth solutions business
Companies and tickers mentioned
- New Mountain Capital
- Goldman Sachs
- Forstmann Little and Co.
Watch the episode
Watch “New Mountain Capital's Steve Klinsky - building a business that builds businesses” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Alt Goes Mainstream, this episode and its artwork belong to Michael Sidgmore. Octagon is not affiliated with the show; this page is an independent summary.
