The Business Builder: New Mountain Capital's Steve Klinsky
Get the full intelligence
Search transcripts, export clips, track mentions, and explore all topics from “The Business Builder: New Mountain Capital's Steve Klinsky” inside PodZeus.
In this episode of Goldman Sachs' Great Investors, host Alison Mass sits down with Steve Klinsky, founder and CEO of New Mountain Capital, to explore his four-decade journey in private equity. Klinsky traces his early fascination with business to his family's clothing store in Detroit and recounts his formative years at Goldman Sachs during the rise of leveraged buyouts in the 1980s, including co-founding the firm’s first LBO group. He reflects on the evolution of private equity from a debt-driven, financial engineering model to a modern focus on business building, emphasizing long-term value creation in defensive growth sectors. Klinsky shares insights into New Mountain’s investment philosophy—centered on deep industry expertise, operational improvement, and a team-based approach—and discusses how the firm integrates AI across its portfolio companies to enhance efficiency and competitiveness. He also highlights his passion for education reform, detailing his work with the Modern States Education Alliance, which offers free college credit through CLEP exams to underserved learners. As the conversation turns to the future, Klinsky envisions a shift toward longer-term ownership and trophy asset continuation vehicles, underscoring the importance of sustainable business building over short-term exits.
Private equity has evolved from financial engineering to a discipline of business building, with New Mountain Capital leading the shift through operational value creation.
Success in private equity hinges on sector expertise, a disciplined five-year value creation plan, and a team-based approach focused on improving pricing, sales, management, and expansion.
AI is being deployed across portfolio companies not as a disruptive force but as a tool to enhance margins, automate tasks, and improve decision-making in technology-enabled services.
Education reform is a personal mission for Klinsky; his Modern States Education Alliance has provided 25,000 free years of college to underserved learners through free online courses and CLEP exam support.
The future of private equity lies in long-term ownership models like trophy asset continuation vehicles, allowing firms to retain top companies and continue adding value beyond traditional five-year exit timelines.
Origins of a Business Builder: Family, Law, and the Birth of Private Equity
Steve Klinsky traces his entrepreneurial roots to his family's Detroit clothing store and his early academic ambitions in constitutional law. His exposure to the nascent field of leveraged buyouts during graduate school at the University of Michigan led him to Goldman Sachs, where he helped pioneer the firm's first private equity group in the early 1980s.
From Goldman to Forstman Little: The Early Days of Private Equity
Klinsky recounts his time at Goldman Sachs and his move to Forstman Little in 1984, a period marked by glamour, high-risk deals, and the rise of the LBO era. He reflects on the firm’s culture, the role of debt, and the personal and professional lessons learned during this formative period.
Founding New Mountain Capital: A Mission to Build Great Businesses
Klinsky discusses his departure from Forstman Little in 1999, his year-long pause to launch a charter school, and the founding of New Mountain Capital in 2000. He shares the origin story behind the firm’s name and its founding principle: building businesses, not just financing them.
The Blue Yonder Case Study: Business Building in Action
“We didn't have some special invention. It wasn't some special trick. There's 20 or 24 ways we try to build businesses and just try to go through a case study.”
Sector Strategy and CEO Selection: The Art of Value Creation
Klinsky explains New Mountain’s rigorous sector selection process, focusing on non-cyclical, defensive growth industries like infrastructure services, healthcare tech, and accounting. He discusses the criteria for selecting CEOs, emphasizing past success and cultural fit over pedigree.
“If you're Abe Lincoln and you're totally impoverished but you're ambitious, you can get a year of college this way and save a year of time and 30 grand of money.”
“There's a spark of divinity and everything and bring that spark out.”
“We didn't have some special invention. It wasn't some special trick. There's 20 or 24 ways we try to build businesses and just try to go through a case study.”
Host
Guest
Steve Klinsky
person
New Mountain Capital
organization
Goldman Sachs
organization
Forstman Little
organization
Blue Yonder
organization
Modern States Education Alliance
organization
Alison Mass
person
CLEP Exams
other
Gary Klinsky
person
John Weinberg
person
AI Exchanges: Power Problems?
Exchanges • 20m • 4/2/2026
Natural Gas in Focus: Iran Conflict Could Have ‘Very Painful’ Consequences
Exchanges • 16m • 4/7/2026
Why Aren’t Investors More Worried?
Exchanges • 19m • 4/14/2026
Apollo's Jim Zelter on the Future of Private Credit
Exchanges • 37m • 4/16/2026
Farallon Capital's Nicolas Giauque on Investing for the Long Term
Exchanges • 20m • 4/22/2026
Get the full intelligence
Search transcripts, export clips, track mentions, and explore all topics from “The Business Builder: New Mountain Capital's Steve Klinsky” inside PodZeus.
Start discovering podcast insights today
Start with a 7-day trial and explore a growing catalog of popular podcasts. No credit card required.
No credit card required • 7-day trial • Cancel anytime