Bain Capital has raised $800 million in contemporary capital to again companies that the agency bets will profit not solely fund traders but in addition society at giant.
Bain Capital Double Affect, the Boston agency’s influence funding unit, has raised its second fund as funding autos centered on producing environmental, social and governance advantages have confronted their share of promoting headwinds.
Lockdowns and journey restrictions imposed because of the coronavirus pandemic have made fundraising more difficult as traders performed due diligence remotely. On the identical time, a new rule by the U.S. Labor Division made it considerably trickier for sure traders to again influence funds.
World influence funds have attracted simply $14.6 billion throughout 52 managers to this point this yr by Nov. 20, nicely off tempo from the $76.2 billion raised throughout 92 such funds in 2019, in accordance with information supplier Preqin Ltd.
Whereas momentary stay-at-home orders slowed the agency’s fundraising, Todd Prepare dinner, managing accomplice of Bain Capital Double Affect, mentioned he believes investor curiosity within the technique stays robust.
Bain Capital’s second Double Affect fund was greater than double the scale of the $390 million the agency raised for its debut effort again in 2017. The agency introduced on various new traders to its second influence fund, together with from abroad. Worldwide traders accounted for round 25% of the brand new fund’s capital. Bain Capital’s personal workers contributed round $75 million.
The agency’s influence unit sometimes seems to take a position $25 million to $75 million in fairness per deal and focuses on three broad themes: environmental sustainability, well being and wellness, and workforce improvement and schooling. Bain Capital sometimes takes controlling stakes in firms which are usually already worthwhile, usually backing three or 4 companies annually.
“There are a whole lot of enterprise and growth-equity traders in influence, however not a whole lot of traders taking already worthwhile firms and making an attempt to scale them,” Mr. Prepare dinner mentioned.
To date, Bain Capital has backed at the least 12 portfolio firms by its debut fund, together with a Could investment in PresenceLearning Inc., a New York-based supplier of on-line special-education companies for college kids in kindergarten by 12th grade.
The agency additionally efficiently exited at the least one of many investments it made by its debut providing. Final yr, the crew bought low-cost health club operator Affect Health to fellow private-equity investor Morgan Stanley Capital Partners.
“We have been in a position to accomplish what we thought would take 4 or 5 years in three or 4 years,” Mr. Prepare dinner mentioned.
Not all the agency’s investments have thrived, nonetheless, particularly as soon as the pandemic hit.
Sustainable Restaurant Holdings Inc., which operates seafood restaurant chains Bamboo Sushi and QuickFish and was initially backed by Bain Double Affect in 2018, sought bankruptcy protection in Could. Bain Capital Double Affect supplied debtor-in-possession financing to the corporate, which was acquired out of chapter in July by funding agency Sortis Holdings.
“Some [businesses] have been impacted extra by stay-at-home orders,” Mr. Prepare dinner mentioned. “We’re trying to assist the portfolio as finest we will by all of this. We supported [Sustainable Restaurant Holdings] by the [bankruptcy] financing to permit it to [restructure] in a approach that would offer for the enterprise to proceed as a going concern.”