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Bain raises $2.3bn towards second pan-Asia fund

29 Jun 2012

Global private equity firm Bain Capital has reportedly raised $2.3bn towards its second pan-Asia-focused private equity fund and plans to complete fundraising next month.

Bloomberg reported the news, while the South China Morning Post reported earlier this week that the firm is close to raising around $2.5bn for the new vehicle.

Earlier this week the fund agreed to buy a 50 per cent stake in Japanese television shopping company Jupiter Shop Channel for a reported value of about JPY100bn ($1.24bn), marking the biggest private equity-backed deal in Japan this year.

Bain Capital Asia II launched in June last year and raked in nearly $1bn for its first close in November. The vehicle has since held two interim closes, a source familiar with the matter told AltAssets earlier this month.

The fund has so far secured commitments from a host of blue chip investors, including US pension fund Pennsylvania Public School Employees’ Retirement System and the private equity investment arm of French insurer Groupama.

Around 15 per cent of commitments to the vehicle were from Bain Capital employees.

The firm offered investors a choice between a two per cent management fee and a 20 per cent carried interest with a seven per cent hurdle rate, or a one per cent management fee and 30 per cent carried interest with a ten percent hurdle rate.

Hard capped at $2.5bn, the fund is twice the size of its predecessor, which closed in 2007 with commitments of $1bn from investors including US pension fund CalSTRS, Emirati family office Starling Group and global fund of funds HarbourVest Partners.

Although pan Asian in scope, the new fund will primarily focus on partnering with Japanese corporates looking to expand abroad, despite the economic slowdown inflicted on the country by last year’s earthquake, tsunami and nuclear disaster.

The strong yen and an economic slowdown on domestic turf have sparked a recent trend for cross-border activity in Japan, particularly with China. The fund has already targeted food production opportunities in the country, as well as in Southeast Asia.

Bain Capital Asia boasts a high profile portfolio of companies, including Asimco, the Chinese engine part maker set up by Wall Street veteran Jack Perkowski, and Japanese telemarketing giant Bellsystem24, which the firm recently recapitalised.

The fund was generating a Net IRR of 6.7 per cent as of 30 September last year according to public disclosures by CalSTRS, which committed $25m to the vehicle. The fund is currently valued at around 1.4 times its cost as of 10 April, according to Reuters.

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