Bain Capital has raised around $2 billion for its “special situations fund” that will invest in a range of assets but particularly focus on real estate in the Asia-Pacific region, Barnaby Lyons, a managing director at the investment firm, said.
The special situations fund is the investment firm’s second of its type for the region, with the first raising $1 billion, and the closing valuation of the new fund said to be more than the initial $1.5 billion goal.
Taking into account access to different Bain pools of capital, the second fund means Bain now has $5 billion of capital to invest in the region across debt capital structures, structured capital deals, distressed assets, physical assets and growth equity transactions, Lyons said.
“Our strategy is deliberately regional and very opportunistic,” Lyons said in an interview.
Filling Capital Gaps
“We aim to partner with companies and entrepreneurs to fill specific capital gaps as they arise. Whether it’s the capital markets pullback in China, a growth inflection point in India, regulatory reform in Australia or ‘chaebol’-driven mergers and acquisition activity in (South) Korea.”
Lyons said the real estate, financial services and aviation sectors across Asia had been key areas for Bain’s special situations dealmaking and would remain a focus for the second fund.
“(Chinese) residential real estate, we had almost no exposure going into the regulatory changes last year and we are still cautious, but we are seeing opportunities coming out of that landscape, for example where large developer groups have assets offshore and they are looking for partners to provide liquidity against them,” he said.
China’s property market, a pillar of the world’s second-largest economy, was weakened by a government clampdown on excessive borrowing from developers last year. Analysts expect market woes to worsen this year, with home prices remaining flat and sales and investment falling further.
Bain said the second fund was the largest of its kind in Asia.
The firm’s Asia special situations team has completed more than 65 transactions worth over $6 billion, with the majority finalised in the past six years.
- Reuters with additional editing by Jim Pollard