Bain Capital may be the next mega-buyout firm to raise a renminbi-denominated private equity fund, in order to better facilitate Chinese transactions. Bain managing director Mark Nunnelly explained his firm is considering such a move “in the medium term,” while speaking today at the Reuters Private Equity and Hedge Fund summit.
When asked if the planning process was already underway, Nunnelly said, “I’d be very surprised if we were if we this conversation in 18 months from now and we are not actively managing an RMB fund.”
Most of Bain Capital’s peers have already begun the raising an RMB fund or are preparing to do so. Blackstone Group said last week it had received three commitments for its RMB fund, including one from China’s national pension fund, National Social Security Fund . Blackstone said the fund will be capped at around $730 million because of a Chinese law limiting fund size. Meanwhile Carlyle Group joined forces with a Chinese conglomerate to raise a $100 million yuan-denominated fund. Kohlberg Kravis Roberts & Co is also in the process of raising an RMB fund, according to Reuters.
Nunnelly said the firm will seek to pre-empt any potential conflicts related to the RMB fund. International investors, including those in Bain’s existing Asia-focused fund, are not allowed to commit to the yuan funds, which reports have flagged as a potential source of tension over deal flow and returns. Bain Capital currently operates a $1 billion Asia-focused fund which invests in Japanese, Chinese and Indian companies. Bain’s Asia fund is roughly 55% to 60% deployed, and the firm’s next fundraising effort may come in the form of a new Asia fund, an RMB fund, or both, he said.