Bain closes fourth Asian fund at $4b hard cap

The vehicle was substantially oversubscribed, and the fundraising process took approximately five months, according to sources familiar with the situation. Bain declined to comment on fundraising.

LPs include by Pennsylvania Public School Employees’ Retirement System (PSERS), which said in October that it expected to commit $200 million. The pension system invested $130 million in Fund III. Other LPs in that vehicle include Canada Pension Plan Investment Board (CPPIB), California State Teachers’ Retirement System (CalSTRS), and Alaska Permanent Fund Corporation.

The strategy is much like that of Bain’s previous Asia funds. The 80-strong Asia team will focus on the consumer, financial, healthcare, technology, and industrial sectors – in line with the firm’s core areas globally – with equity investments in the $100-400 million range. There is an emphasis on transforming companies by helping them add customers, develop new products, and pursue geographic expansion.

The standout investment from the past 12 months was the $18 billion acquisition of Toshiba Memory Corporation – Asia’s largest buyout deal to date and one of the most complex – which closed in June after an eight-month bidding war and a protracted period spent resolving legal disputes and securing regulatory approvals. About 20 Bain executives across Japan, Korea, China, and North America played some role in a process.

Other transactions have also necessitated the use of resources across different jurisdictions. The private equity firm teamed up with Shenzhen Tempus Global Business Services on the acquisition of Trans Maldivian Airways (TMA), recognizing the significance of Chinese tourism to the Maldives. Similarly, US-based World Wide Packaging was purchased in the knowledge it could be merged with a Chinese peer as a means of building exposure to a fast-growing market.

Meanwhile, the firm demonstrated how a China expansion strategy can pay off with its exit from Korean specialist cosmetics supplier Carver Korea in November 2017. Bain and Goldman Sachs acquired a majority stake in the company for $370 million in 2016 and sold it to Unilever 14 months later for an enterprise valuation of $2.7 billion. By this point, about 100 products had been cleared for sale in China – up from zero when they invested – and two-thirds of revenue were coming out of the country.

Bain has deployed $8.3 billion - from multiple funds – across 46 investments in the region, making realizations of $11.7 billion. Fund II closed at $2.3 billion in 2012. As of June, it had generated a multiple of 2.08x and a net IRR of 25.3%, according to PSERS. Fund III – which reached its hard cap of $3 billion in late 2015, not including an employee contribution of at least $250 million – had delivered a 1.29x multiple and a 60.9% IRR.

While Bain’s step up in fund size is not as large as some of its pan-regional peers, the trend of large managers in Asia raising substantial sums in relatively concentrated timeframes continues. Affinity Equity Partners took just four months to reach a first and final close on its fifth pan-regional vehicle of $6 billion. PAG Asia Capital also raised $6 billion in a single close, spending about five months in the market.

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• Topics
• Fundraising
• GPs
• Buyout
• Bain Capital Asia
• Asia