Bain Capital has raised $9.4 billion for its 12th flagship buyout vehicle, according to Bloomberg, surpassing both a $7 billion target and an $8 billion hard cap. The additional $1.4 billion will reportedly come from the firm itself, representing a bigger contribution than is typical for the Boston-based buyout shop.
The news is yet another example of the current red-hot fundraising environment, as firm after firm raises more than ever before to pursue new private equity deals.
For Bain Capital, the fund represents a 29% increase from its previous vehicle, Bain Capital Fund XI, which closed on a reported $7.3 billion in 2014. Several other buyout heavyweights have seen similar growth trends in terms of fund size. Here's a closer look, plotting the size of the five most-recent flagship buyout vehicles for Bain Capital and for five other top firms, all of which closed funds this year on at least $10 billion:
This year's increases in size are especially noteworthy. Apollo's latest effort is about 34% bigger than its predecessor, for instance, while CVC's newest namesake vehicle is more than 52% larger than the firm's previous fund. The trend is perhaps even more pronounced with smaller investors, as several other firms have nearly doubled the sizes of their previous funds this year.
Globally, investors have now raised around $220 billion for buyout funds so far during 2017—already more than was raised in six of the past eight years, according to the PitchBook Platform. Spread across 215 funds, that means the average vehicle size this year is more than $1 billion.
And while at least some of Bain Capital's fundraising success is due to the ease with which investors of all stripes seem to be gathering new capital, the performance of the firm's previous vehicle is surely also a factor. With an IRR of 29.9%, Bain Capital Fund XI currently resides at the top of its peer benchmark, per PitchBook data.
Check out our previous coverage of PE fundraising.
Article by Kevin Dowd, PitchBook