Bain eyes small step-up in size for sixth Europe fund

The PE manager's GP commitment will account for 10% of Bain Europe VI's total.

Bain Capital is targeting 11 percent more for its latest European buyout fund, a conservative step-up compared with many of its peers.

The Boston-headquartered private equity manager has set a hard-cap of €5 billion for Bain Capital Europe Fund VI, according to a presentation before the board of the New Mexico State Investment Council on Tuesday.

This compares with €4.5 billion for its 2018-vintage predecessor and €3.5 billion for its 2014-vintage fund, according to PEI data.

Fund VI will include a GP commitment of €500 million, said David Lee of pension consultant Mercer at the meeting. This is in line with Bain’s historically high level of 10 percent, which affiliate title PE Hub noted as far back as 2015.

The fund will target the European industrials, consumer, tech, financial and business services and healthcare sectors with cheque sizes of €200 million to €400 million, Lee said. It will make 12-15 investments.

Investing in Fund VI is a way for New Mexico to up its exposure to Europe without adding a new GP relationship, said Richard Pugmire of Mercer, noting that the sovereign fund’s PE portfolio has a target allocation to Europe of 10-25 percent.

New Mexico approved an investment of €25 million, the fourth commitment it has made to a Bain Capital fund.

Bain Europe II and III are top-quartile performers, while some companies in Funds IV and V “have been impacted by covid-19 supply chain disruption”, said Pugmire. Bain’s operational team has done a good job of helping these businesses navigate the pandemic, he added.

There are several large Europe-focused funds in market, according to PEI data. KKR is targeting €10 billion for its sixth dedicated vehicle, which came to market in July. Its 2018-vintage predecessor raised €5.8 billion.

ICG and PEI Media owner Bridgepoint are also in market with Europe-focused funds. The latter is targeting 40 percent more than the target of its predecessor fund, according to PEI data.

Funds targeting Europe raised $71.5 billion in 2021, while Europe-focused funds in market were targeting $98.8 billion as of 15 January, according to a PEI data download.

– This report was updated to correct the percentage increase of Bridgepoint’s fund’s target.

To access more Bain Capital insights, analysis and data, click here