New Mountain Capital is going where the money's moving: secondaries. The firm is now raising up to $2 billion for a new strategy aimed at backing single-asset continuation funds. The plan? Pool capital from a main fund plus deal-by-deal co-investments—letting LPs go deeper on assets they like. It's a calculated pivot led by Neal Costello (ex-AlpInvest) and veteran managing director Peter Masucci. The same team handling primary investments will handle origination and due diligence here—keeping the operation tight and familiar.
This isn't just a one-off move. It's part of a broader shift shaking up private equity. With exits stalling and dry powder stacking up, firms are tapping the $160 billion secondary market to extend the runway on crown-jewel assets. Sponsor-led deals—where firms essentially sell to themselves—made up 44% of all secondaries volume last year, according to Evercore. And New Mountain's not alone. Warburg Pincus is targeting $2 billion for its own continuation fund push. Golub Capital and Painswick are also piling in. Everyone wants a piece of this high-margin, high-certainty capital flow.
Why now? Simple. The traditional buy-sell-repeat model isn't working like it used to. IPOs are slow. Strategic buyers are picky. But LPs still want liquidity—and GPs still want to hang on to their best bets. Secondaries solve both problems. For investors, it opens doors to vetted assets with built-in visibility. For sponsors, it's an elegant way to double down without giving up control. And if New Mountain executes well, it could walk away with more than just AUM growth—it could own the next frontier of private equity exits.
