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Bain fund hits $8bn

Bain Capital has run into its $8 billion ceiling for its ninth fund, and the Boston-based group is still in the market with a $2 billion co-investment vehicle.

As expected, Bain Capital hit its $8 billion (€6.5 billion) cap for its ninth fund, Bain Capital IX. The Boston firm continues to raise a co-investment vehicle, which sources say is seeking as much as $2 billion.

As an investor, your focus is on your net returns – cash in/cash out. So far the firm has provided outstanding net returns.

Industry source, speaking about Bain’s track record.

The successful fundraise may not be as large as some of Bain’s peers but it is equally impressive, as the firm was able to round up commitments without even spending six months in the market. Adding to the significance of Bain’s fundraise is that the vehicle will receive a 30 percent carry on profits as opposed to the industry standard 20 percent that most firms charge.

One source recently told PEO that while the carry may outwardly seem prohibitive, Bain has historically been a “top quartile performer”.

“As an investor, your focus is on your net returns – cash in/cash out. So far the firm has provided outstanding net returns,” the source said.

There has been no word as to investors in the new fund, but past Bain vehicles have leaned heavily on the endowments. The Regents of the University of California, The University of Washington, Stanford Management Co., The University of Notre Dame, Yale, Duke University and The Massachusetts Institute of Technology are among the firm’s past limited partners.

Bain’s new fund adds to the growing lot of mega funds that are either currently in the market or have already closed. The Blackstone Group is set to announce an anticipated $13 billion-plus fundraise, while The Financial Times reported that Texas Pacific Group will close on $14 billion by the end of the month.

Bain’s $3.5 billion eighth fund was raised just two years earlier. The firm has wasted no time in putting capital from that vehicle to work, and has notched recent buyouts of Burlington Coat Factory, Dunkin’ Donuts and CRC Health Group.

Bain declined comment for this story.