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Bain Capital raises $475m for latest fund

By Beth Healy
Globe Staff / February 12, 2009
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Despite the gloom gripping the markets, Bain Capital has raised $475 million for a new venture capital fund, according to two executives with direct knowledge of the fund.

It is the firm's fourth fund that invests in start-ups. Bain is perhaps best known for its multibillion-dollar private equity deals. The Boston firm manages about $70 billion total, including a hedge fund and a debt fund that it runs.

It took about two-and-a-half months for the firm to raise the money, according to the executives, who spoke on condition of anonymity because the fund has not been publicly unveiled. Venture capitalists and people who invest with them say only the funds with the best returns will be able to raise money in this depressed economic environment.

Bain Capital does not disclose its returns.

Many of the firm's investing clients - endowments, family offices, and pension funds - have suffered major losses in the stock market, leaving them with larger relative positions in venture and private equity than they intended. It can take five to seven years, or longer, to get money back on venture investments.

Moreover, investors in the firm's last venture fund, launched in 2007, have yet to see any returns. The plunging stock market and the recession have put a damper on deals, as well as the opportunity to sell portfolio companies or take them public. Investments by that fund last year include LinkedIn, a business-contact network, and Blip.tv, a video-blogging company.

The 2007 fund raised $550 million. The executives said the new fund could grow to $550 million, as some additional investors are still expected to participate.

Beth Healy can be reached at bhealy@globe.com.

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