Bain Capital seeks US$5b in Asia fund, smaller than rivals

BAIN Capital has begun raising a US$5 billion fund for Asia-Pacific, smaller than the amount sought by global buyout peers in the recent past, people familiar with the matter said.

The Boston-based buyout firm started marketing its fifth Asia fund in July, targeting a first close in December and final completion in the first quarter, one of the people said, asking not to be identified because they’re not allowed to discuss fundraising. The fund has the remit to grow to US$6 billion, excluding senior management contributions. 

The smaller fund reflects Bain Capital trying to strike a balance between management fees and finding investments it can then exit later to reap better returns, the people said. Its previous four funds have clocked net returns of 20 to 25 per cent, the people said, after investing in healthcare and drug companies, digital infrastructure as well as software and restaurant firms. 

The targeted pool is 25 per cent bigger than its previous US$4 billion fund, but about half the size of funds in the region by rivals KKR & Co and Blackstone. Publicly listed investment managers are valued on assets under management and Bain Capital is one of the few global private-equity firms that remains unlisted.

Bain Capital generally contributes 10 to 15 per cent of its own capital in each of its funds, more than most of its rivals, one of the persons said. It recently completed raising its second special situations fund at US$2 billion for Asia. A Beijing-based spokeswoman declined to comment for the story.

Past notable deals from Asia included taking over the collapsed airline Virgin Australia in 2020 and the firm is slated to start due diligence on Japanese conglomerate Toshiba, the people said.

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Investment managers in Asia are facing headwinds in new fund raising this year amid slowing economic growth and geopolitical tensions. KKR last year raised US$15 billion for its biggest buyout fund ever in the region. Blackstone amassed US$11 billion when closing its second private-equity fund in January and Carlyle Group is currently seeking US$8.5 billion. 

Asia-Pacific-focused private capital has already expanded almost sixfold over the past decade, and is on course to reach US$6 trillion by 2025, according to Preqin. BLOOMBERG