New Mountain Finance Corporation (NMFC) Bundle
A Brief History of New Mountain Finance Corporation
New Mountain Finance Corporation (NMFC), established in 2012, is a closed-end investment company primarily engaged in providing debt financing to middle-market companies. It is managed by New Mountain Capital, LLC, a private equity firm.
Company Growth and Financial Performance
As of September 30, 2024, NMFC reported total assets of approximately $1.4 billion with net assets amounting to $1.4 billion. The company has consistently focused on generating strong investment income through various channels.
| Metric | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Total Investment Income | $95.3 million | $94.3 million |
| Net Investment Income | $17.0 million | $16.8 million |
| Earnings per Share - Basic | $0.22 | $0.28 |
| Net Asset Value per Share | $12.62 | $13.06 |
| Market Value per Share | $11.98 | $12.95 |
Investment Strategy
NMFC adopts a diversified investment strategy, focusing on senior secured loans, subordinated debt, and equity investments across sectors such as healthcare, technology, and business services. By September 30, 2024, NMFC had made investments in 127 portfolio companies, with a fair value of approximately $3.3 billion.
Funding and Debt Structure
As of September 30, 2024, NMFC’s debt structure included:
- Unsecured Notes: $990 million
- Holdings Credit Facility: $407.6 million
- SBA-guaranteed Debentures: $300 million
- Convertible Notes: $260 million
- Credit Facilities: $55 million
The average debt outstanding was $706.3 million with an effective interest rate of 7.3%.
| Debt Type | Principal Amount | Fair Value |
|---|---|---|
| Unsecured Notes | $990 million | $988.6 million |
| Holdings Credit Facility | $407.6 million | $406.1 million |
| SBA-guaranteed Debentures | $300 million | $270.8 million |
| Convertible Notes | $260 million | $263.3 million |
| NMFC Credit Facility | $55 million | $54.1 million |
Recent Developments
In 2024, NMFC launched an at-the-market (ATM) offering program, increasing the maximum amount of shares to be sold from $250 million to $400 million. As of September 30, 2024, the company had raised approximately $67.7 million from share issuances under this program.
Market Position and Returns
NMFC reported a total return based on market value of 2.40% for the nine months ended September 30, 2024, compared to 13.49% for the same period in 2023. The company's asset coverage ratio stood at 179.18%.
As of September 30, 2024, NMFC's portfolio turnover was 17.99%, indicating a strategic approach to maintaining a balanced investment portfolio while optimizing returns.
Ownership Trends
Ownership trends indicate a gradual increase in institutional interest in NMFC, reflecting confidence in the company's management and investment strategy:
- 2022: Institutional ownership was at 60%.
- 2023: Increased to 65%.
- 2024: Further increase to 68.4%.
Conclusion on Ownership Structure
The ownership structure of New Mountain Finance Corporation as of 2024 showcases a robust mix of institutional and retail investors, with a notable concentration among major institutional shareholders. This mix is indicative of NMFC's strategic positioning in the financial market and its appeal to a diverse investor base.
New Mountain Finance Corporation (NMFC) Mission Statement
Overview
The mission statement of New Mountain Finance Corporation (NMFC) emphasizes its commitment to providing innovative capital solutions to middle-market companies while delivering strong risk-adjusted returns to its investors. NMFC focuses on investments that contribute positively to the growth and sustainability of its portfolio companies.
Investment Strategy
NMFC's investment strategy is centered around:
- Targeting middle-market businesses.
- Utilizing a combination of first-lien debt, second-lien debt, and equity investments.
- Maintaining a disciplined approach to risk management.
Financial Data
As of September 30, 2024, NMFC reported the following financial metrics:
| Metric | Value |
|---|---|
| Total Assets | $3,414,256,000 |
| Total Liabilities | $2,046,677,000 |
| Total Net Assets | $1,367,579,000 |
| Net Asset Value per Share | $12.62 |
| Weighted Average Shares Outstanding | 107,851,415 |
| Basic Earnings per Share | $0.22 |
| Distributions Declared per Share | $0.34 |
Investment Portfolio
NMFC's investment portfolio as of September 30, 2024, includes a diversified array of sectors:
| Sector | Percentage of Total Investments |
|---|---|
| Software | 26.89% |
| Business Services | 17.93% |
| Healthcare | 15.87% |
| Education | 7.03% |
| Consumer Services | 6.39% |
| Energy | 2.16% |
| Financial Services | 3.49% |
| Others | 20.04% |
Recent Developments
In the first three quarters of 2024, NMFC has focused on enhancing its capital structure and improving operational efficiencies. Key highlights include:
- Net investment income of $111,381,000.
- Total investment income of $280,471,000.
- Net change in unrealized appreciation of investments of $19,672,000.
Through its mission, New Mountain Finance Corporation aims to not only achieve financial success but also to make a meaningful impact on the communities and businesses it serves.
How New Mountain Finance Corporation (NMFC) Works
Business Model
New Mountain Finance Corporation (NMFC) operates as a business development company (BDC) focusing on the private equity and debt markets. Its primary objective is to generate current income and capital appreciation through investments in private middle-market companies.
Investment Strategy
NMFC primarily invests in:
- Senior secured loans
- Subordinated debt
- Equity investments
As of September 30, 2024, NMFC's portfolio consisted of approximately $1.4 billion in investments across various sectors including healthcare, business services, and technology.
Financial Performance
For the nine months ended September 30, 2024, NMFC reported:
- Total investment income: $280.5 million
- Total interest income: $208.8 million
- Total dividend income: $63.1 million
- Net investment income: $111.4 million
Net Asset Values
As of September 30, 2024, NMFC's net assets were approximately $1.36 billion, with a net asset value per share of $1.08.
Portfolio Composition
The following table summarizes the portfolio composition as of September 30, 2024:
| Investment Type | Principal Amount | Fair Value | Percentage of Net Assets |
|---|---|---|---|
| First Lien Debt | $1,156,000 | $1,130,000 | 82.8% |
| Subordinated Debt | $156,000 | $147,000 | 10.8% |
| Equity Investments | $100,000 | $90,000 | 6.4% |
Borrowings and Credit Facilities
As of September 30, 2024, NMFC's outstanding borrowings included:
| Facility | Principal Amount | Fair Value |
|---|---|---|
| Unsecured Notes | $990 million | $988 million |
| Holdings Credit Facility | $407.6 million | $406.1 million |
| SBA-guaranteed Debentures | $300 million | $270.8 million |
| Convertible Notes | $260 million | $263.3 million |
| NMFC Credit Facility | $55 million | $54.1 million |
Distributions and Dividends
For the nine months ended September 30, 2024, NMFC declared total distributions of approximately $111.6 million.
The following table outlines the cash distributions per share:
| Quarter | Date Declared | Payment Date | Distribution Amount |
|---|---|---|---|
| Q1 2024 | January 30, 2024 | March 29, 2024 | $0.36 |
| Q2 2024 | April 18, 2024 | June 28, 2024 | $0.34 |
| Q3 2024 | July 23, 2024 | September 30, 2024 | $0.34 |
Recent Developments
As of September 30, 2024, NMFC had cash and cash equivalents of approximately $61.9 million. The company is actively managing its liquidity through operational cash flows and has significant available capacity under its credit facilities.
Market Outlook
NMFC continues to focus on growing its investment portfolio while managing risks associated with market volatility and interest rate fluctuations. The company remains well-positioned to capitalize on opportunities in the middle-market lending space.
How New Mountain Finance Corporation (NMFC) Makes Money
Investment Income
New Mountain Finance Corporation primarily generates revenue through investment income, which includes interest, dividends, and other income from its portfolio of investments. For the nine months ended September 30, 2024, NMFC reported total investment income of $280,471,000, compared to $281,794,000 for the same period in 2023.
| Type of Income | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Total Interest Income | $208,831,000 | $219,720,000 |
| Total Dividend Income | $63,058,000 | $54,547,000 |
| Other Income | $8,582,000 | $7,527,000 |
| Total Investment Income | $280,471,000 | $281,794,000 |
Net Investment Income
Net investment income is calculated after deducting expenses from total investment income. For the nine months ended September 30, 2024, NMFC's net investment income was $111,381,000, down from $118,990,000 in the prior year.
Expenses
NMFC incurs various expenses related to its investment operations, including interest expenses, management fees, and other administrative costs. For the nine months ended September 30, 2024, total expenses amounted to $171,469,000, compared to $165,575,000 in the same period in 2023.
| Type of Expense | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Interest and Other Financing Expenses | $101,790,000 | $93,921,000 |
| Management Fee | $34,048,000 | $34,549,000 |
| Incentive Fee | $27,760,000 | $29,748,000 |
| Administrative Expenses | $3,135,000 | $2,996,000 |
| Total Expenses | $171,469,000 | $165,575,000 |
Realized and Unrealized Gains and Losses
NMFC also reports realized and unrealized gains and losses from its investments. For the nine months ended September 30, 2024, NMFC experienced net realized losses of $44,955,000, compared to gains of $7,917,000 in the same period in 2023.
Distributions
The corporation declared distributions totaling approximately $111.6 million for the nine months ended September 30, 2024. The distribution per share was $1.04.
| Quarter | Declared Date | Payment Date | Per Share Amount |
|---|---|---|---|
| Third Quarter 2024 | July 23, 2024 | September 30, 2024 | $0.34 |
| Second Quarter 2024 | April 18, 2024 | June 28, 2024 | $0.34 |
| First Quarter 2024 | January 30, 2024 | March 29, 2024 | $0.36 |
Net Asset Value and Earnings Per Share
As of September 30, 2024, NMFC's net asset value per share was $12.62, compared to $13.06 in 2023. The basic earnings per share for the three months ended September 30, 2024, was $0.22, down from $0.28 in the previous year.
| Metric | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Net Asset Value per Share | $12.62 | $13.06 |
| Basic Earnings per Share | $0.22 | $0.28 |
| Diluted Earnings per Share | $0.22 | $0.27 |
Debt and Financing
NMFC maintains various debt facilities to support its investment activities. As of September 30, 2024, the outstanding balance on the NMFC Credit Facility was $55,031,000, with a remaining borrowing capacity of approximately $583,500,000.
| Debt Facility | Outstanding Balance | Remaining Capacity |
|---|---|---|
| NMFC Credit Facility | $55,031,000 | $583,500,000 |
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Article updated on 8 Nov 2024
Resources:
- New Mountain Finance Corporation (NMFC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of New Mountain Finance Corporation (NMFC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View New Mountain Finance Corporation (NMFC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.