Bain closes second Asia fund at $2.3b

Craig Boyce, a managing director with the private equity firm, announced the fundraise at the AVCJ USA Forum in New York. It has taken Bain about one year to complete the process. The fund is more than twice the size of its predecessor, a $1 billion vehicle raised in a fraction of the time in late 2006 and early 2007.

Fund II will mirror Fund I in targeting $400-500 million buyout opportunities and $40-50 million growth transactions. Bain's global funds - the firm is reportedly looking to raise $6 billion for its 11th vehicle - will continue to invest alongside the Asian vehicle in certain cases.

Bain executives committed $300 million of the $2.3 billion corpus. LPs are said to include Pennsylvania Public School Employees' Retirement System (PSERS) and Los Angeles Fire and Police Pension System.

Investors were offered a choice between two fee structures: a 2% management fee and 20% carried interest with a 7% hurdle rate, or a 1% management fee and 30% carried interest with a 10% hurdle rate. Industry participants say that GPs globally have to offer more flexibility to LPs in order to secure commitments in a difficult fundraising environment. Despite strong interest in Asia, it appears that funds in the region are not immune.

Bain arguably differs from the competition in its appetite for large investments in Japan plus an ability to execute them. At a time when LPs are wary of Japan and a number of GPs are backing away from the country Bain remains relatively active.

Late last month, the PE firm completed what is thought to be Japan's largest private equity transaction of the year, buying a 50% stake in Jupiter Shop Channel from Sumitomo Corp. for JPY100 billion. Bain was also responsible for the largest deal of 2011, acquiring restaurant chain Skylark from Nomura Principal Finance for an equity value of JPY160 billion. The deal was said to be worth $3.4 billion, including debt.

Speaking to AVCJ in November of last year, Managing Director Jonathan Zhu noted that Japan remains one of the most liquid debt markets globally, providing ample opportunities for leveraged buyouts.

Bain's first Asia fund was split 60-40 between China and Japan - a decision based on the firm's predilection for focusing on a limited number of core markets. The second fund is likely to be deployed more broadly.

"We feel we are reasonably well established in China and Japan, and we can also pursue some other geographies," Zhu said. "In 2008 we started operations in India, with investments drawn from Bain Capital X, our global fund. We also now have people with the capability to operate in Australia and Southeast Asia, so we are looking at those markets as well."

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• Topics
• Fundraising
• Buyout
• Bain Capital Asia
• buyout
• Fundraising