$525m Bain fund is its first since ’07
It has two deals done but notes prices are rising
Bain Capital’s venture capital group raised a $525 million fund at the end of last year, the firm says, its first new fund since 2007.
Following a rocky period for the venture capital industry and for markets in general, the Boston firm has completed two deals with the new fund.
One was $17 million for a start-up, the Receivables Exchange, which is a market for small businesses to sell their receivables.
The other was a $12 million preferred stock purchase in Edgar Online Inc., which provides access to corporate filings.
Bain’s partners said that investing in early-stage companies has proved to be a bargain over the past year. But the market’s improvement in recent months has been pushing up prices. That’s been driven partly by the reopening of the market for initial public offerings last year and by renewed interest among large companies in buying smaller firms.
Bain managed to sell two portfolio companies last year and to take another public. In the IPO for the software maker SolarWinds, Bain reaped about seven times its investors’ money, a person briefed on the deal said. The firm also sold Archer Technologies, a maker of risk and compliance software, to EMC Corp, and the online music company Lala Media Inc. to Apple Inc.
In the venture business, selling companies is key to delivering returns to investors - and freeing up money for them to reinvest.
The rise in deal prices is “good if you own companies,’’ said Michael Krupka, a managing director at Bain. But for new investments in promising start-ups, he said, “It’s harder to get into them at a fair price.’’
The venture group, which manages a total of about $1.5 billion, said it has hired John Connolly, former chief of institutional shareholder services, as an operating partner who will work with portfolio companies.
Bain Capital, which also does large buy-outs and runs hedge funds, oversees total assets of $65 billion.
Beth Healy can be reached at bhealy@globe.com. 
