Bain targets $5b for fifth Asia fund
Bain Capital has launched its fifth Asia-focused private equity fund with a target of USD 5bn. It comes a couple of months after the firm closed its latest regional special situations vehicle on USD 2bn.
The Fund V target was first reported by Bloomberg and has since been confirmed to AVCJ by sources close to the situation. Bain declined to comment.
Fund IV reached a first and final close at the institutional hard cap of USD 4bn in late 2018. An additional USD 650m was contributed by employees of the firm and related parties. Bain raised USD 1bn for its debut Asia vehicle in 2007 and followed up with USD 2.3bn for Fund II and USD 3bn for Fund III, in 2012 and 2015, respectively.
Bain focuses on investments in consumer, financial services, healthcare, technology, and industrial sectors – in line with the firm’s core areas globally – writing equity cheques of USD 100m-USD 400m.
The firm has been especially prolific in Japan, where it led a JPY 2trn (USD 15bn) carve-out of Toshiba Corporation’s flash memory business in 2018. More recently, it agreed to buy Hitachi Metals for JPY 816.8bn and completed a JPY 17.2bn tender offer for marketing business Tri-Stage. It has also been linked to a potential buyout of Toshiba.
Last year, Bain closed its first dedicated Japan private equity fund on JPY 110bn. The vehicle has a middle-market remit, pursuing deals that would be too small for the pan-Asia strategy.
Other recent activity includes two exits: Australian daycare provider Only About Children was sold to a US strategic for AUD 450m (USD 320m); and Japan’s hot spring operator Ooedo Onsen Monogatari Resorts & Hotels went to Lone Star for an undisclosed sum. Meanwhile, Bain paid INR 33.8bn (USD 484m) for a 24.98% stake in India’s IIFL Wealth Management.
Several global and pan-regional managers are in the market with large-cap funds. Baring Private Equity Asia had completed two closes on its eighth vehicle, receiving commitments of around USD 8.5bn, as of late 2021. A final close may have been delayed by its impending merger with EQT.
CVC Capital Partners is targeting USD 6bn for its sixth Asia fund and The Carlyle Group is reportedly seeking USD 8.5bn for its latest flagship product. Earlier this year, The Blackstone Group said it had raised USD 6.4bn for its second Asia fund, up from USD 2.3bn last time. The largest pan-regional PE fund active in the region is KKR’s fourth, which closed on USD 15bn last year.
According to Pennsylvania Public School Employees’ Retirement System (PSERS), Bain’s fourth Asia fund was marked at a 1.2x multiple and a 28.87% IRR as of year-end 2021. This compares to 1.9x and 18.85% for Fund II and 1.7x and 30.54% for Fund III.
The private equity firm raised its first Asia special situations vehicle in 2018, securing USD 1bn. Following the close of Fund II, the team now has overall firepower of nearly USD 5bn, including allocations from the global special situations pool, its India distress platform, and separately managed accounts.
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