New Mountain Credit Sees Net Asset Growth Amidst Income Decline

TL;DR

**New Mountain Private Credit Fund is growing its asset base but struggling with profitability, making it a 'show me' story for now.**

AI Summary

New Mountain Private Credit Fund reported a net increase in net assets from operations of $24.683 million for the six months ended June 30, 2025, a significant decrease from $66.575 million in the prior year period. Total investment income for the six months ended June 30, 2025, was $84.195 million, down from $114.635 million in the same period of 2024. Net investment income also saw a decline, reaching $49.392 million for the current six-month period compared to $61.418 million previously. The fund experienced net realized losses on investments of $8.970 million and a net change in unrealized depreciation of investments of $15.739 million for the six months ended June 30, 2025, contrasting with net realized losses of $15.816 million and net unrealized appreciation of $21.119 million in the prior year. Total net assets increased to $1,016.730 million as of June 30, 2025, from $978.180 million at December 31, 2024, driven by $50.447 million in subscriptions and $10.854 million in reinvested distributions. Borrowings increased, with the GS Credit Facility rising to $456.000 million from $374.707 million, and a new NEWCRED Credit Facility of $81.000 million was established, while Unsecured Notes of $200.000 million were repaid.

Why It Matters

For investors, the significant drop in net investment income and the shift from unrealized appreciation to depreciation signal potential headwinds in the fund's portfolio performance, despite an overall increase in net assets. The repayment of Unsecured Notes and the establishment of a new credit facility indicate active balance sheet management, which could impact future financing costs and liquidity. This mixed performance, coupled with a competitive private credit market, suggests investors should scrutinize the underlying asset quality and the fund's ability to generate consistent returns. Employees and customers of the portfolio companies may face indirect impacts from the fund's investment performance and strategic shifts.

Risk Assessment

Risk Level: medium — The fund reported a net change in unrealized depreciation of investments of $15.739 million for the six months ended June 30, 2025, a stark reversal from $21.119 million in unrealized appreciation in the prior year. Additionally, net investment income decreased from $61.418 million to $49.392 million year-over-year, indicating a decline in core earnings power. These figures suggest increased risk in the underlying portfolio's valuation and income generation.

Analyst Insight

Investors should closely monitor the fund's future filings for trends in investment income and unrealized gains/losses, as the current quarter shows a concerning shift. Consider the impact of rising interest rates on the fund's floating-rate debt investments and its own borrowing costs. A deeper dive into the credit quality of the portfolio companies, especially those with PIK interest, is warranted.

Financial Highlights

debt To Equity

0.52

revenue

$84,195,000

operating Margin

58.7%

total Assets

$1,598,432,000

total Debt

$526,988,000

net Income

$24,683,000

eps

$24.55

gross Margin

N/A

cash Position

$62,192,000

revenue Growth

-26.6%

Revenue Breakdown

Key Numbers

• $84.195M — Total Investment Income (for six months ended June 30, 2025, down from $114.635M in prior year)
• $49.392M — Net Investment Income (for six months ended June 30, 2025, down from $61.418M in prior year)
• $24.683M — Net increase in net assets from operations (for six months ended June 30, 2025, down from $66.575M in prior year)
• $15.739M — Net change in unrealized depreciation of investments (for six months ended June 30, 2025, a reversal from $21.119M appreciation in prior year)
• $1,016.730M — Total Net Assets (as of June 30, 2025, up from $978.180M at December 31, 2024)
• $456.000M — GS Credit Facility (as of June 30, 2025, up from $374.707M at December 31, 2024)
• $81.000M — NEWCRED Credit Facility (new borrowing as of June 30, 2025)
• $200.000M — Unsecured Notes (repaid during the six months ended June 30, 2025)
• 42,015,372 — Common shares outstanding (as of August 12, 2025)
• $24.55 — Net Assets per share (as of June 30, 2025, down from $25.07 at December 31, 2024)

Key Players & Entities

• New Mountain Private Credit Fund (company) — registrant
• GS Credit Facility (company) — borrowing facility
• NEWCRED Credit Facility (company) — borrowing facility
• Paw Midco, Inc. (company) — portfolio company
• Legal Spend Holdings, LLC (company) — portfolio company
• Al Altius US Bidco, Inc. (company) — portfolio company
• GS Acquisitionco, Inc. (company) — portfolio company
• CCBlue Bidco, Inc. (company) — portfolio company
• Diamondback Acquisition, Inc. (company) — portfolio company
• Anaplan, Inc. (company) — portfolio company

FAQ

Risk Factors

• Increased Borrowings [high — financial]: Total borrowings increased to $526.988 million as of June 30, 2025, up from $567.559 million (net borrowings) at December 31, 2024, primarily due to an increase in the GS Credit Facility to $456 million and the establishment of a new $81 million NEWCRED Credit Facility. This increased leverage amplifies financial risk.
• Investment Performance Decline [medium — market]: Net investment income decreased to $49.392 million for the six months ended June 30, 2025, from $61.418 million in the prior year. The fund also experienced a net change in unrealized depreciation of $15.739 million, a reversal from $21.119 million in unrealized appreciation in the prior year, indicating a challenging investment environment.
• Repayment of Unsecured Notes [medium — financial]: The fund repaid $200 million in Unsecured Notes during the period. While this reduces a debt obligation, it may have impacted liquidity or required the use of other financing, such as the increased GS Credit Facility.
• Operational Complexity [medium — operational]: The fund operates with multiple credit facilities (GS Credit Facility, NEWCRED Credit Facility) and has managed the repayment of Unsecured Notes. Managing these diverse debt instruments and their covenants requires robust operational oversight.

Industry Context

The private credit market continues to be a significant source of financing for middle-market companies, offering flexible debt solutions. However, the sector is sensitive to interest rate fluctuations and economic downturns, which can impact investment income and asset valuations. Competition remains robust, with many funds seeking attractive risk-adjusted returns.

Regulatory Implications

As a registered investment company, New Mountain Private Credit Fund is subject to regulations governing investment advisers and private funds, including disclosure requirements and capital adequacy rules. Changes in interest rates and market volatility can trigger increased scrutiny on leverage and risk management practices.

What Investors Should Do

1. Monitor leverage levels closely.
2. Analyze the drivers of declining investment income.
3. Evaluate the impact of unrealized depreciation.
4. Assess the strategy behind new fee income.

Key Dates

• 2025-06-30: Six months ended June 30, 2025 — Period for which financial results are reported, showing a decrease in net investment income and a shift from unrealized appreciation to depreciation.
• 2025-06-30: Consolidated Statements of Assets and Liabilities — Shows total net assets of $1,016.730 million and increased borrowings, including a new $81 million NEWCRED Credit Facility.
• 2024-12-31: December 31, 2024 — Prior period balance sheet reference point, showing total net assets of $978.180 million and $200 million in Unsecured Notes outstanding.
• 2024-06-30: Six months ended June 30, 2024 — Prior year period for comparison, showing higher total investment income ($114.635 million) and net investment income ($61.418 million).

Glossary

PIK interest income

Payment-in-Kind interest income, where interest is paid in the form of additional debt or equity rather than cash. (Contributes to investment income but does not provide immediate cash flow.)

Net Assets per share

The total net assets of the fund divided by the number of outstanding shares. (Indicates the per-share value of the fund's holdings, which decreased from $25.07 to $24.55.)

GS Credit Facility

A revolving credit facility provided by Goldman Sachs, used by the fund for leverage. (The balance increased significantly to $456 million, indicating increased reliance on this debt instrument.)

NEWCRED Credit Facility

A newly established credit facility, likely with a related or new lender, adding $81 million in borrowings. (Represents new debt financing for the fund.)

Unsecured Notes

Debt instruments issued by the fund that are not backed by specific collateral. (The repayment of $200 million of these notes during the period is a significant financing event.)

Accumulated Retained Earnings

The cumulative net income or loss of the fund that has not been distributed to shareholders. (The fund shows a negative balance of ($38,078,000) as of June 30, 2025, indicating cumulative losses or distributions exceeding earnings.)

Year-Over-Year Comparison

Compared to the six months ended June 30, 2024, New Mountain Private Credit Fund experienced a significant decline in performance. Total investment income fell from $114.635 million to $84.195 million, and net investment income decreased from $61.418 million to $49.392 million. The fund also saw a negative swing in investment valuation, moving from $21.119 million in net unrealized appreciation to $15.739 million in net unrealized depreciation. While total net assets grew to $1,016.730 million, this was driven by capital inflows rather than operational performance, and leverage increased substantially with new credit facilities.

Filing Documents

• newcred-20250630.htm (10-Q) — 5975KB
• smbc-nmpcxresponsetocomm.htm (EX-10.1) — 9KB
• newcred-06302025xexhibit311.htm (EX-31.1) — 9KB
• newcred-06302025xexhibit312.htm (EX-31.2) — 9KB
• newcred-06302025xexhibit321.htm (EX-32.1) — 4KB
• newcred-06302025xexhibit322.htm (EX-32.2) — 4KB
• smbc-nmpcxresponsetocomm001.jpg (GRAPHIC) — 532KB
• smbc-nmpcxresponsetocomm002.jpg (GRAPHIC) — 263KB
• 0002037804-25-000016.txt ( ) — 19028KB
• newcred-20250630.xsd (EX-101.SCH) — 76KB
• newcred-20250630_cal.xml (EX-101.CAL) — 67KB
• newcred-20250630_def.xml (EX-101.DEF) — 388KB
• newcred-20250630_lab.xml (EX-101.LAB) — 758KB
• newcred-20250630_pre.xml (EX-101.PRE) — 510KB
• newcred-20250630_htm.xml (XML) — 3598KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Statements of Assets and Liabilities as of June 30, 2025 (unaudited) and December 31, 2024 3 Consolidated Statements of Operations of Successor for the three and six months ende d June 30 , 2025 (unaudited) and the Predecessor for three and six months ende d Ju ne 3 0 , 2024 (unaudited) 4 Consolidated Statements of Changes in Net Assets of Successor for the three and six months ended June 30 , 2025 (unaudited) and Predecessor's Members' Capital for the three and six months ended June 30 , 2024 (unaudited) 5 Consolidated Statements of Cash Flows of Successor for the six months ended (unaudited) June 30, 2025 and Predecessor for the six months ended June 30, 2024 (unaudited) 6 Consolidated Schedule of Investments as o f June 30, 2025 (unaudited) 7 Consolidated Schedule of Investments as of December 31, 2024 23 Notes to the Consolidated Financial Statements of New Mountain Private Credit Fund (unaudited) 36 Report of Independent Registered Public Accounting Firm 61 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 62 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 76 Item 4.

Controls and Procedures

Controls and Procedures 77

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 78 Item 1A.

Risk Factors

Risk Factors 78 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 78 Item 3. Defaults Upon Senior Securities 79 Item 4. Mine Safety Disclosures 79 Item 5. Other Information 79 Item 6. Exhibits 80

Signatures

Signatures 81 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements New Mountain Private Credit Fund Consolidated Statements of Assets and Liabilities (in thousands, except shares and per share data) (unaudited) June 30, 2025 December 31, 2024 Assets Non-controlled/non-affiliated investments at fair value (cost of $ 1,547,646 and $ 1,524,545 , respectively) $ 1,502,908 $ 1,495,564 Cash and cash equivalents 62,192 66,683 Interest and dividend receivable 12,090 8,772 Receivable from unsettled securities sold 4,515 — Deferred tax asset 6 7 Receivable from affiliate — 7 Other assets 16,721 441 Total assets $ 1,598,432 $ 1,571,474 Liabilities Borrowings GS Credit Facility $ 456,000 $ 374,707 NEWCRED Credit Facility 81,000 — Unsecured Notes — 200,000 Deferred financing costs (net of accumulated amortization of $ 4,379 and $ 12,133 , respectively) ( 10,012 ) ( 7,148 ) Net borrowings 526,988 567,559 Payable for unsettled securities purchased 17,938 19,036 Subscriptions received in advance 12,482 — Distribution payable 7,904 — Interest payable 7,192 4,560 Incentive Fee Payable 3,482 496 Management fee payable 3,126 492 Payable to affiliate 385 — Payable for share repurchases 353 — Other liabilities 1,852 1,151 Total liabilities 581,702 593,294 Commitments and contingencies (See Note 8) Net Assets Common shares, $ 0.001 par value ( 41,415,942 and 39,025,005 ) shares issued and outstanding, respectively 41 39 Additional Paid in Capital 1,054,767 995,040 Accumulated Retained earnings ( 38,078 ) ( 16,899 ) Total net assets $ 1,016,730 $ 978,180 Total liabilities and net assets $ 1,598,432 $ 1,571,474 Net Assets per share $ 24.55 $ 25.07 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents New Mountain Private Credit Fund Consolidated Statements of Operations (in thousands, except shares or units and per share or per unit data) (unaudited) Successor Predecessor Three months ended June 30, 2025 Six Mont

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