Bain eyes $1 bln for debut real estate fund

  • Fund gears up to his the fundraising market
  • Real estate team led by Dan Cummings
  • Fund will hold pre-fund investments

Bain Capital plans to target $1 billion for its first real estate fund run by a team hired earlier this year from Harvard Management Co, sources told Buyouts.

The fund, to which Bain Capital plans to contribute at least $75 million, is close to hitting the market, one source with knowledge of the plans said.

Bain Capital last year said it was hiring around 22 members of the real estate group at Harvard Management, which manages the $37.1 billion endowment of Harvard University. The team is led by Dan Cummings, who helped form the real estate group in 2010.

The fund will be seeded with $200 million to $300 million of already-made investments, the source said. Doing so takes away some of the blind-pool risk for limited partners.

The Bain Capital real estate team will continue to manage a $3.4 billion portfolio of real estate investments made for Harvard Management, Bain said in a December statement.

The firm targets investments in the U.S. that benefit from trends in demographics, life sciences and e-commerce. Bain Capital has real estate experience through its credit platform as well as through its private equity investments in consumer, hospitality and retail.

A spokesman for Bain Capital declined to comment.

Harvard Management, which managed $37.1 billion as of June 30, 2017, spun off the real estate business as part of a larger overhaul of its investment program amid declining returns. Real estate was a strong performer for the endowment, contributing to an 8.1 percent return for the year ending June 30, 2017, according to an annual letter from the endowment’s CEO, N.P. Narvekar, last year.

Harvard Management said last year it was shifting from an investment model that required its  professionals to work in isolation on individual asset classes. The new model centers on a general investment structure “in which all members of the investment team take ownership of the entire portfolio,” Narvekar wrote.

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