Bain Capital to raise US$5b in Asia fund

Smaller than the sum recently sought by global buyout counterparts, BAIN Capital has started raising a US$5 billion fund for Asia-Pacific, according to sources familiar with the situation.

An anonymous source because they were not authorised to discuss fundraising, the Boston-based buyout firm began marketing its fifth Asia fund in July with the goal of reaching first close in December and final completion in the first quarter. The fund has the capacity to increase to US$6 billion, excluding contributions from top management.

According to the sources, Bain Capital’s smaller fund reflects its efforts to balance management fees with discovering investments it can leave later for higher returns. According to the sources, after making investments in healthcare and pharmaceutical industries, digital infrastructure, software companies, and restaurant businesses, its prior four funds had net returns of 20 to 25 percent.

The targeted pool is about half the size of funds in the region from rivals KKR & Co. and Blackstone, although it is 25% larger than its previous US$4 billion fund. One of the few international private equity firms that is still unlisted is Bain Capital. Publicly listed investment managers are evaluated based on assets under management.

Bain Capital typically adds 10 to 15% of its own capital to each of its funds, which is more than most of its competitors. It has finished raising $2 billion for Asia for its second special situations fund. In response to the news, a Beijing-based representative declined to comment.