Bain Capital closes $2 billion Asia 'special situations fund'

HONG KONG (Reuters) – Bain Capital has closed a $2 billion “special situations fund” for the Asia-Pacific region to cover a range of asset types but with a focus on real estate, said Barnaby Lyons, one of the investment firm’s managing directors.

FILE PHOTO: Logo of Bain Capital is screened at a news conference in Tokyo, Japan September 28, 2017. REUTERS/Kim Kyung-Hoon

The fund is the second of its type that Bain has in Asia – the first raised $1 billion – and the closing valuation for the new fund is more than the initial $1.5 billion target.

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 told Reuters in an interview.

“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.

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