This week, we speak with Steven Klinsky, founder and CEO of New Mountain Capital, which runs over $37 billion in assets under management. Prior to founding New Mountain Capital in 1999, Klinsky was co-founder of the leveraged buyout group at Goldman Sachs, where he helped execute over $3 billion of pioneering transactions for Goldman and its clients. Klinsky also served as one of the first five general partners at Forstmann Little, helping to oversee seven private equity and debt partnerships totaling over $10 billion in capital.
We discuss his graduate program thesis, which focused on the new idea of doing leveraged buyouts of public companies — 1979 was the first time this was done, and Klinsky’s was the first academic paper on the subject.
He explains how he brought in the idea of doing LBOs at Goldman Sachs; their revenue target was $3 million dollars for the first year — they generated 10X that in year one, and a new department was born.
He also explains how Forstmann Little was the white shoe alternative to the firms doing junk bond financing. often, they were the firm helping to defend the takeover targets against the barbarians at the gate that Milken/Drexel was funding.
Klinsky is also the founder of Modern States. The organization is an education philanthropy that tries to make freshman year of college tuition-free via high quality courses online from top institutions for college credit.
You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Neil Dutta, head of economic research at Renaissance Macro Research. He joined RenMac after spending seven years at Bank of America-Merrill Lynch, where he was a Sr. economist covering US + Canada. Prior to that, he was a research analyst at Barron’s.
Steve Klinsky’s Current Reading
Opening Belle by Maureen Sherry
Maximilian and Carlota: A Tale of Romance and Tragedy by Gene Smith
Chip War: The Fight for the World’s Most Critical Technology by Chris Miller
Grant by Ron Chernow
Washington: A Life by Ron Chernow
Titan: The Life of John D. Rockefeller, Sr. by Ron Chernow