Bain Capital prepares to raise new $8 billion fund

Bain Capital is preparing to raise a new private equity fund that will be smaller than its last fund, at $7 billion to $8 billion, according to two people briefed on the discussions.

Bain, based in Boston, has been planning for its eleventh fund in the heat of the media spotlight as its founder and former chief executive, Mitt Romney, runs for president. The firm’s last global fund, Fund X, was $10.7 billion, plus $2 billion more in co-investments from a side fund, raised in 2008.

Bain’s private equity funds are known for giant leveraged buyouts such as Dunkin’ Donuts, Hospital Corporation of America, and Clear Channel Communications.


In a special letter to investors in March, Bain defended its record of growing companies, saying it had helped create “hundreds of thousands’’ of jobs over its 28-year history. The letter seemed intended to address the potential concerns of pension funds and endowments in advance of the firm’s efforts to launch another large new fund.

In January, Bain’s venture capital group announced a $600 million fund to invest in smaller deals, including start-ups, and the firm is currently raising about $2 billion for an Asia fund.

The size range of the new private equity fund was first reported by Reuters. It likely will include different options on fees, Reuters reported, following pressure from pension funds and other investors in the private equity and alternative assets.

Bain declined to comment on the new fund.

It has long commanded unusually high incentive pay — 30 percent of the profits made on its funds, compared with the 20 percent most firms charge — but could lower its up-front fee of 2 percent to 1 percent or 0.5 percent for the new fund, people briefed on the details confirmed.

There has been no formal offering on the fund yet.


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