Bain’s debut insurance fund, targeting $1bn, gets backing from New Mexico SIC

Specific niche funds could gain traction as LPs look to diversify their private equity portfolios in the face of market volatility.

New Mexico State Investment Council placed a commitment to a Bain Capital buyout fund focused on the insurance industry with a $1 billion target.

Many LPs have stressed the need to diversify their private equity portfolio across different industries, vintage years and strategies to navigate potential down years ahead. Specific niche funds focused on specific industries like insurance may play a more significant role in the year ahead.

New Mexico State Investment Council approved a $60 million commitment to Bain Capital Insurance Fund at its meeting held on January 24. Buyouts watched a broadcast of this meeting.

“We’ve been looking for investments in the financial space and this one really stood out,” said Chris Cassidy, New Mexico SIC’s private equity portfolio manager.

According to a presentation prepared by consultant Mercer for New Mexico SIC, the fund will focus on life, health and property and casualty insurers, plus annuity providers, insurance distributors, insurance services companies and related technology companies.

The fund is led by Matt Popoli, who joined Bain in 2021 after working at Insurance Capital Group, which Mercer described as insurance-focused capital vehicle. Previous to that, Popoli led insurance investments as a partner at Reservoir Capital Group and has more than 20 years of related experience, according to Mercer.

Also leading the fund are managing directors Matt Cannan and Ronald McIntosh, according to Mercer.

Cannan has been at Bain since 2012, last working in Bain Capital Credit, according to Mercer. McIntosh joined Bain Capital in 2021 and previously co-founded hedge fund manager Lomas Capital. He has more than 30 years of experience investing in the insurance industry, according to Bain Capital Insurance’s website.

The fund has a $1 billion target, with fund employees committing more than $100 million, according to Popoli, who spoke at the New Mexico SIC meeting.

“We think this really aligns our interests,” Popoli said.

The fund made its first investment in Enhance Health, which assists senior citizens with navigating Medicare and Medicare Advantage insurance plans, according to Mercer.

The management team also made two investments before raising the fund, according to Mercer.

The first was with Beat Capital Partners, a London-based insurance investment firm and provides funding and other services to specialty underwriters, according to Bain Insurance’s website.

The second investment was with Keystone Agency Partners, a Pennsylvania-based insurance brokerage platform, according to Bain Insurance’s website.

The fund filed its first Form D with the SEC in August 2021. It later filed an amended version in August 2022.

Popoli said the insurance industry is a $27 trillion industry that’s highly fragmented with many firms in existence for decades, if not longer.

“Most people would not say insurance is exciting. But we think differently,” Popoli said. “Our team is very disciplined and experienced at finding companies at meaningful discounts to the market. One of the interesting things about the space is that insurance is not correlated to other industries.”

New Mexico SIC has made more than $200 million in commitments to five Bain Capital funds, including its flagship Bain Capital Fund XIII and counterparts focused on Europe and Asia, according to Mercer.

“This is not a typical Fund 1. This is a team with a track record and Bain is throwing its full resources behind them,” Cassidy said.