Bain Capital Amasses $11.8 Billion For North America Buyout Fund

Private equity powerhouse Bain Capital has raised $11.8 billion for a new fund, Reuters first reported.

The target for the fund, according to published reports, was $9 billion.

The fund will seek investments in sectors including industrial, healthcare, business services and finance, The Wall Street Journal (WSJ) reported, citing public pension fund documents.

“We will continue to find interesting, transformational deals by leveraging our global resources and experience, our sourcing network, and vertical industry depth,” Bain Capital Co-Managing Partner John Connaughton said, per Reuters.

WSJ reported Bain Capital Fund XIII’s non-employee investors include the Alaska Permanent Fund Corp., which committed $25 million; the Virginia Retirement System, which committed $225 million; the New Mexico Educational Retirement Board, which committed $50 million; and the Tennessee Consolidated Retirement System, which committed $150 million.

The new fund is 25 percent larger than Bain’s predecessor fund, according to WSJ.

Private equity fundraising is beginning to recover after a difficult stretch caused by the pandemic, WSJ reported, citing data from Preqin. During the first calendar quarter of 2021, almost 300 funds targeting investments in North America raised in excess of $100 billion. That’s a faster pace than calendar 2020’s $611 billion raised.

Minutes of the New Mexico State Investment Council for the Aug. 25 meeting at which the commitment to the Bain Fund was approved indicate board members were displeased with some elements of the deal, even though it eventually passed with a 7-to-3 vote.

The minutes stated: “Treasurer [Tim] Eichenberg commented on his unfavorable view of the terms and disadvantageous L.P. alignment. Mr. [Richard] Pugmire [of consultant Mercer] discussed the distribution waterfall, which in Bain’s case is on a deal-by-deal basis. Mercer mentions this as unfavorable in their report due to the fact that ILPA standards endorses an all-contribution waterfall structure. Most funds still operate on a deal-by-deal waterfall and further analysis was provided on the differences between the two carried interest and distribution waterfall structures… Treasurer [Eichenberg] also commented negatively on the preferred return hurdle.”