Bain Capital raises $475m for new venture fund

Bain Capital has raised $475 million for a new venture capital fund, according to two executives with direct knowledge of the fund, despite the gloom gripping the markets.

The fund is the firm's fourth that invests in startups. Bain is perhaps best known for its multi-billion-dollar private equity deals. The Boston-based firm manages about $70 billion in 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 firm hasn't made a public announcement about the fund), a fairly brisk turnaround given the depressed investment environment.

Many of the firm's investing clients - endowments, family offices, and pension funds - have suffered big losses in the stock market, leaving them with larger relative positions in venture and private equity than they had 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.

(By Beth Healy, Globe staff)