Bain to move forward with next impact fund after Deval Patrick departure

Bain Capital’s impact investing platform will continue raising its second fund despite its founder, Deval Patrick, leaving the firm to run for president.

Bain is in the early stages of raising Double Impact Fund II, targeting $600 million, sources told Buyouts. The fund is charging a 2 percent management fee and a 20 percent rate of carried interest, with a 7 percent preferred return, one of the sources said.

The platform will be led by Todd Cook going forward, who has co-led Double Impact alongside Patrick since 2017. Cook is a Bain Capital veteran, having joined the firm in 1996. The platform has other managing directors, including Greg Shell, Cecilia Chao and Peter Spring. The total team is 16 people.

“Their team is a lot bigger than when they started it,” one of the sources said.

Bain raised $390 million for its first Double Impact fund in 2017. Around two-thirds of Fund I has been deployed across 11 companies, with exits in two of the investments. Bain sold Impact Fitness to Morgan Stanley earlier this year. The firm took public SpringWorks Therapeutics in September, raising $162 million.

Patrick announced Thursday he was running for president as a Democrat. He resigned from Bain Capital. His departure from the firm did not trigger a provision in the first fund that would allow investors to halt any new investments, known as a key-person provision, one of the sources said.

Patrick was listed as a key executive in Fund II documents, a second source said. However, Fund II has not yet collected any commitments so any changes to the leadership structure in the new fund would not be significant.

The deeper question though is whether the absence of Patrick on the impact platform will affect Bain’s ability to raise money for the strategy. Patrick was the face of Bain’s impact investing strategy, and in fact spent time speaking at events about impact investing in general.

“Deval was very important to winning some deals,” one of the sources said. The question for potential investors will be, “are you comfortable enough that Bain Capital has built up a good enough reputation in the impact space,” the source said.

Action Item: Check out info about the first Double Impact fund here: https://bit.ly/2Xji3Ez