Bain to Raise $10B Buyout Fund

Blackstone Group, Kohlberg Kravis Roberts, Texas Pacific Group, and Apollo Management are competing in the ''mega-buyout space.''
Stephen TaubMarch 17, 2006

Is there no slowing down the private-equity shopping spree?

Boston-based Bain Capital LLC is raising as much as $10 billion for a new buyout fund, reported Bloomberg, citing two people with direct knowledge of the matter. The firm itself offered no comment.

This would be the largest-ever cache of capital for Bain, but it’s certainly not the only private-equity firm seeking large sums of investor money — according to the wire service, Blackstone Group LP is looking to raise $13.5 billion; Kohlberg Kravis Roberts & Co. and Texas Pacific Group, about $10 billion each. Last year Apollo Management LP raised $10 billion for a new fund.

Bloomberg predicted that as much as $150 billion may flow into buyout funds this year, up from $134 billion in 2005, citing estimates from Private Equity Intelligence, an industry research firm in London.

One likely goal, suggested Bloomberg: more acquisitions in 2006, on the heels of $246 billion in takeovers last year. In 2005, 18 of the top 100 deals with a value of more than $1 billion involved private-equity buyers. The largest was the $15 billion purchase of Hertz by Clayton, Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global Private Equity. Other notable private-equity purchases included SunGard, Toys “R” Us, Mylan Laboratories, and Neiman-Marcus.

“To be able to compete in the mega-buyout space, size is very important,” Mike Kelly, managing director at Hamilton Lane Advisors, which oversees private-equity investments for clients, told Bloomberg. “It widens the net of available opportunities.”