Bain Capital is targeting $1 billion for a tech fund that will be led by one of the firm’s veteran tech investors, along with investment professionals from Goldman Sachs and Technology Crossover Ventures, according to a source, the firm’s website and a Form D fundraising document.
The Boston-based private equity firm will also commit $100 million to Bain Capital Tech Opportunities Fund, the source told Buyouts.
The fund will charge a 2 percent management fee, while the general partner will collect a 20 percent carried-interest rate after meeting a preferred return of 7 percent, the source said.
A spokesperson for Bain declined to comment on its fundraising activity.
The fund will focus on mid-market control buyouts, minority growth investments and cross-platform investments where it can partner with affiliates, such as Bain Capital Ventures, the firm’s early-stage and growth-equity platform.
Most tech businesses will be North America-based, though the fund may also invest selectively abroad. It will explore deals in five sub-verticals: application software, infrastructure and security, fintech and payments, healthcare IT and internet and digital media.
The fund is led by Managing Director Darren Abrahamson, a 14-year Bain veteran. Abrahamson was previously a managing director in the tech, media and telecom group and part of the North American PE team. He is a director of several companies, including Lake Mary, Florida-based public-sector software provider CentralSquare Technologies, formed by Bain and Vista Equity Partners in a 2018 merger.
Abrahamson has recently been adding to his team. Fresh hires include Scott Kirk and Hans Sherman, both brought on in July as partners.
Kirk joined from TCV, where he was a principal. Prior to TCV, he worked in the tech investment banking group of Bank of America Merrill Lynch. Sherman hails from the merchant banking division of Goldman Sachs, where he was a vice president. Previously, Sherman served as an associate with Summit Partners.
These recruits bring the most senior members of the group’s team to four, including Abrahamson and Managing Director Dewey Awad, who also has a senior role with Bain Capital Public Equity.
Other 2019 hires include Associate Zach Berger, formerly with General Atlantic; Vice President Michael Grandfield, formerly with Triarii Capital; Vice President Maren Hopkins, formerly with Morgan Stanley; Associate Ben Hotz, formerly with Apax Partners; and Associate Will MacFarlane, formerly with Bain & Co.
The Bain fund enters an increasingly crowded field of tech-focused funds, some of them closed this year.
They include Advent International’s Advent Global Technology, which raised $2 billion; TCV’s Fund X, which took $3 billion; and Vista’s Fund VII, which secured $16 billion. In addition, Accel-KKR is targeting $2.55 billion for its sixth fund.
Chris Witkowsky contributed to this report.
Action Item: See Bain Capital’s ADV filings here.