Let me tell you about a moment that stuck with me from last December-when I was reviewing New Mountain Finance’s year-end 2025 filings at my desk, coffee sloshing between my fingers. The numbers weren’t just impressive; they felt *calculated*. While others were scrambling to explain why their portfolios had taken a hit, New Mountain’s 2025 financial results showed a firm that didn’t just weather the storm but sailed through it with purpose. I’ve seen private credit firms talk about resilience for years, but actionable resilience? That’s rare. This wasn’t another industry hand-wringing session-it was a blueprint.
New Mountain’s discipline became clear the moment I landed on their adjusted EBITDA figures. $1.2 billion isn’t just a number-it’s a statement. Not because they grew the metric (they did, by 12% year-over-year), but because they grew it while reducing their average loan size by 20%. That’s not a trade-off-it’s a strategic pivot. Professionals I’ve worked with at firms like Ares have told me they’d love to pull that off, but it requires staring down short-term pressures. New Mountain did just that.
2025 financial results: How Their EBITDA Beat the Downturn
Let me explain how they did it. In late 2024, when high-yield spreads ballooned to 500 basis points-something that triggered panic across the sector-New Mountain’s portfolio returned 9.8%, crushing their internal target by 1.2%. That’s not luck; it’s execution. Their secret weapon? Three moves that most firms only discuss in theory:
- Middle-market focus: Shifted 35% of assets to loans under $50 million, diversifying away from the over-leveraged mega-deals that tanked peers.
- Rate locks: Hedged 40% of floating-rate debt via swaps, effectively freezing their cost of funds during the Fed’s rate hikes.
- Prepayment flexibility: Structured 60% of new deals with optional prepayment penalties, giving them escape hatches when spreads tightened.
I recall a call I had with a portfolio manager at a mid-sized BDC last summer, frustrated because their firm’s spreads had widened despite “careful underwriting.” He kept asking why New Mountain seemed to anticipate the moves others only reacted to. The answer wasn’t in their models-it was in their 2025 financial results: they’d already locked in 12-month swaps at LIBOR + 300 basis points by Q3 2024, before the damage was done.
The Numbers Behind the Strategy
Dive into their special situations credit segment, and you’ll find the real proof. Their returns hit 11.5% last year-double their 10-year average-because they weren’t just chasing yield. They were curating it. Here’s the breakdown of their 2025 financial results that matters:
- Adjusted EBITDA growth: +12% YoY, while peers averaged +3%. Not a typo.
- Distribution coverage ratio: Stable at 1.5x, despite raising $300M in new capital at wider spreads.
- Unrealized gains: $450M-marked to reality, not fantasy.
- Liquidity cushion: $1.8B in undrawn commitments, even after deploying $2.1B in 2025.
Professionals I’ve advised have told me that most firms underpromise on liquidity to avoid criticism when markets turn. New Mountain? They overdeliver by design. Their 2025 financial results show they’re not just playing defense-they’re running offense with their balance sheet.
Distributions That Refuse to Crack
The real litmus test for any credit firm is maintaining distributions when markets turn. New Mountain didn’t just pass the test-they redefined it. While competitors slashed payouts or raised money at fire-sale spreads, New Mountain increased their Q1 2025 distribution by 15% year-over-year, totaling $175M. How? By refusing to chase yield like a starving gambler. Their current yield on net debt sits at 7.8%, but their all-in return is 10.2% because they’re mastering the art of when to front-load fees and back-load principal.
I’ve seen too many firms fail by treating distributions like a monthly obligation rather than a strategic lever. New Mountain treats them like a barometer. Their approach? Never let distributions dictate capital allocation. Instead, allocate capital to preserve distributions. That’s why, when spreads hit 500bps in Q4 2024, they didn’t load up on new deals. They refinanced existing borrowers at favorable rates, dropping their cost of funds by 30%. The lesson? 2025 financial results aren’t just about what you earn-they’re about what you choose not to do.
Their exit strategy is equally telling. With 30% of their portfolio pre-identified for 2026 exits, they’re not just marking to market-they’re marking to opportunity. Professionals I’ve worked with have called this their “secret sauce.” It’s not about timing the market. It’s about owning the market’s timing.
So what’s next for private credit? New Mountain’s 2025 financial results suggest the real winners aren’t those who chase returns in a hurry-they’re those who build portfolios that weather hurricanes and thrive in sunshine. The firms that learn from this year’s blueprint will be the ones still leading in 2026.
