Bain Capital Wraps Up Third European Fund

Firm: Bain Capital
Fund: Bain Capital Europe III LP
Target: €2.5 billion
Amount Raised: €3.5 billion ($5.5 billion)

Boston-based LBO giant Bain Capital closed its latest European fund in earlier this month, just a few months after its late 2007 launch. The firm raised €3.5 billion ($5.5 billion).

Like its prior European efforts, Bain Capital Europe III LP is earmarked for investments in both large and middle-market buyout deals. Target companies can either be based in Europe, or headquartered abroad but with sizable European operations.

Bain Capital’s large European portfolio companies have included Brenntag, a German chemical distribution company acquired in 2003 for $1.7 billion and sold three years later to London buyout firm BC Partners for €3.1 billion ($4.5 billion). On the smaller side, the firm bought German outdoor apparel retailer Jack Wolfskin for €64 million in 2002, and sold it to Barclays Private Equity and Quadriga Capital for a reported $200 million in 2005. The firm has made a total of 22 investments using capital from its European funds. It is unclear if any capital has been deployed from the most recent fund.

For larger deals, Bain Capital often writes equity checks from its core global fund alongside capital from its European funds, a practice that will continue with Fund III, a source familiar with the fund said. For its latest European vehicle, Bain Capital more than tripled the haul of its predecessor. Bain Capital Europe II LP closed on €1 billion in 2005, and the firm’s first European fund brought in $500 million in 2002.

In addition to Bain Capital’s stellar reputation, the firm’s hefty haul may partially reflect a hearty appetite for European funds among investors. During the past few months, a slew of limited partners, from the Pennsylvania Public School Employees’ Retirement System to insurance giant TIAA-CREF, have said they’re looking to put more money into Europe-focused vehicles. Other European buyout funds that were in the market at the same time as Bain’s include Apax Europe VII LP, Bridgepoint Europe IV LP, CVC European Equity Partners V LP and PAI Europe V LP, among others.

Pennsylvania State Employees Retirement System committed €50 million to Bain Capital Europe III LP earlier this year. Investors in the firm’s prior European efforts include Allianz Group, John Hancock Mutual Life Insurance Co., Princeton University and Yale University.

Bain Capital has a total of 42 investment professionals working across the Atlantic. The firm’s European headquarters are located in London, and it also has a satellite office in Munich, Germany. —J.P.