At a recent luncheon, Rich Handler, CEO of Jefferies Group, hosted Steven Klinsky, Founder and CEO of New Mountain Capital, for a conversation on one of finance’s most ambitious career paths: launching and scaling a private equity firm.
Mr. Klinsky — whose New Mountain Capital has grown into a $60-billion AUM platform and one of the most respected names in global investing — spoke to a room of entrepreneurs and investors about his trajectory, the highs and lows along the way, and what still motivates him today.
This article captures the main takeaways from the discussion. Quotes have been edited for length and clarity.
Klinsky’s Rise Through PE’s Formative Years
Mr. Klinsky began his career at Goldman Sachs, where he co-founded the Leverage Buyout Group. Those early years, he said, were private equity’s wild west. The first major public LBO had been led by KKR in 1979, and the field was still dominated by a handful of small, scrappy firms. Within Goldman’s LBO Group, Mr. Klinsky helped execute more than $3 billion in early landmark transactions as the industry took shape.
He joined Forstmann Little & Co. in 1984, at a moment when private equity was starting to professionalize and scale. Over the next 15 years, he rose to General Partner and helped oversee private equity and debt partnerships totaling more than $10 billion.
When he founded New Mountain Capital in 1999, he centered the firm on two principles: defensive growth, meaning never invest in a cyclical industry that can disappear under you, and business building, a disciplined focus on being the best repeat builder of companies, deal after deal.
What It Takes to Raise a First Fund
“Raising the first fund was very challenging,” Mr. Klinsky said. “You endure a lot of rejection. It’s always the hardest part.”
He urged the audience to keep their pitch simple and lead with the investment narrative. There’s a reflex in fundraising meetings to begin with context and a wall of data. That information matters, he noted, but you risk burying your story if you don’t establish it upfront. Clarity, simplicity, and conviction are a fundraiser’s best assets.
Mr. Klinsky also emphasized the importance of confidence. To win over a naturally scrupulous and skeptical audience, he said, you need to project strong belief in your vision and track record.
Ultimately, he added, these tactics only worked because New Mountain Capital was built on two sound and consistent, core principles. A grounded commitment to defensive growth and business building gave substance to every pitch and investment that followed.
Inside New Mountain’s Culture of Collaboration
As New Mountain Capital continued to grow, several audience members asked what it takes to build a professionalized, collaborative culture inside a scaling firm.
Mr. Klinsky emphasized qualities that echo Mr. Handler’s own vision for Jefferies: a flat, collaborative, intellectual culture consistently wins. “Everyone in the firm gets equity in every deal, from our general partners to our receptionists,” he said. “And every associate is involved in the investment committee from day one.”
Even on their first deal, associates are expected to present and handle questions at IC. Their views are weighed on merit, not seniority.
Mr. Klinsky also described a practice unique to New Mountain: each year, everyone at the firm writes an anonymized memo arguing for which defensive-growth sectors to add to the portfolio. The memos are circulated internally, scored by the entire team, and the top ideas often become guiding investment theses in the years ahead.
Execution Is the Differentiator
As he moved through questions about LP relationships, attracting the right advisors, and building firmwide capabilities, one theme kept surfacing: excellent execution enables everything.
Mr. Klinsky’s guidance to current and aspiring fund managers consistently came back to his founding principle of business building. If you take a best-in-class approach to developing companies, he said, the rest will follow.
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