New Mountain Finance Corporation (NMFC) has filed its 10-K report, revealing its financial activities and performance. The company, a non-diversified management investment firm regulated as a Business Development Company (BDC), reported a net asset value of $1.18 billion as of December 31, 2025, invested across 113 portfolio companies. The fair value of these investments totaled $2.74 billion. NMFC's investment strategy focuses on direct lending solutions to U.S. upper middle market companies, primarily through senior secured loans and select junior capital positions.

NMFC's portfolio composition includes 66.3% in first lien loans, 3.3% in second lien loans, 4.4% in subordinated debt, 0.1% in structured finance obligations, and 25.8% in equity and other investments. The weighted average yield to maturity at cost for income producing investments was 10.5%, while the weighted average yield to maturity at cost for all investments was 9.6%. The company's top industry concentrations were in software (18.1%), business services (17.8%), and healthcare (16.0%). The company's financial performance is influenced by its ability to manage growth, compete effectively, and navigate regulatory constraints imposed by the Investment Company Act of 1940 and the Internal Revenue Code.

The company's financial results are subject to various factors, including changes in interest rates, market conditions, and the performance of its portfolio companies. The company's investment income decreased from $371.7 million in 2024 to $327.1 million in 2025, primarily due to a lower invested asset base and lower all-in yields. Net expenses decreased from $225.4 million to $190.7 million, driven by a reduction in management and incentive fees, as well as lower interest and financing expenses. The company experienced a net loss of $119.3 million in 2025, compared to a net loss of $31.5 million in 2024, primarily due to realized losses in Notorious Topco, LLC and unrealized depreciation in TVG-Edmentum Holdings, LLC and ACI Parent Inc., partially offset by realized gains in OA Topco, L.P. and unrealized appreciation in HS Purchaser, LLC.

Looking ahead, NMFC intends to maintain its status as a Regulated Investment Company (RIC) and distribute substantially all of its income to stockholders. The company's ability to pay distributions is subject to its financial performance, regulatory compliance, and adherence to debt covenants. The company's future growth will depend on its ability to raise additional capital and manage its investment portfolio effectively. On February 21, 2026, NMFC entered into a definitive agreement to sell $477.0 million of its and its wholly-owned subsidiary’s (NMF Holdings) assets to a third-party purchaser at 94% of December 31, 2025 fair value. The Asset Sale is expected to close on March 10, 2026.

About New Mountain Finance Corp

New Mountain Finance Corporation is a business development company providing direct loans and equity investments to U.S. middle-market companies across sectors like software, healthcare, and business services. It focuses on senior secured debt, often in defensive industries with recurring revenue, and targets private equity-backed firms. Its business model emphasizes generating income and capital appreciation through disciplined investment selection, leveraging sector expertise, and maintaining regulatory compliance.

This description was generated via AI from an annual report. Updated 9 months ago.

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