LPs

New Mexico SIC commits $500m to vehicles adjacent to Bain special situations fund

Bain has raised over $2bn for its latest fund.

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New Mexico State Investment Council will commit up to $500 million in vehicles associated with a new Bain Capital special situations fund.

Special situations funds could bode well in the current environment as rising interest rates, inflation, geopolitical concerns and other issues have created a highly volatile economic picture. Bain Capital GSS II’s mix of equity, credit and real asset investments could benefit investors navigating a tough playing field.

New Mexico approved two commitments to vehicles connected with the fund at its November 28 State Investment Committee meeting. Buyouts watched a broadcast of the meeting and reviewed accompanying board documents.

The commitments include $400 million to an evergreen SMA managed by Bain that would invest alongside GSS II, along with other GSS funds in the future.

New Mexico will benefit from reduced fees through the SMA structure, a member of the investment staff said at the meeting.

The council also approved an additional $100 million commitment to a co-investment vehicle managed by Bain set up alongside the SMA and GSS II.

“The goal of the strategy is to be a solutions provider when traditional forms of capital are not available or appropriate. Through this approach, GSS seeks to generate equity-like absolute returns but with the downside protection inherent in credit, yield or hard asset strategies,” a note from investment staff read.

Bain’s special strategies unit is co-led by partners Barnaby Lyons and Jeff Robinson, according to supporting documents from Mercer, New Mexico’s consultant.

Bain has raised over $2 billion to date for GSS II, with a $4 billion target, said a source familiar with the fund.

The predecessor fund closed in 2020 at over $3.2 billion, the source said.

Another LP in Bain GSS II is Australia-based Global Alternative Funds, which aggregates investments from sophisticated investors into alternative investments, according to the firm’s website.

Bain Capital declined to comment.