Bain Capital Credit has closed a new distressed debt and special situations fund, with more than $3.2 billion in commitments, according to Jeff Robinson, one of the firm’s managing directors.
About 50% of that total has been invested and committed, with the majority being deployed in the last three months, Robinson said.
“While we do this in all market environments, now is one of the most attractive ones we’ve seen,” Robinson said in an interview. “On the distressed side, in any 10-year period, there are maybe two great years to be a distressed investor, and we’re in the midst of those two great years.”
The firm raised capital from existing and new investors for the program called Bain Capital Distressed and Special Situations Fund 2019. It invests globally, including in North America, Europe, Asia and Australia.
Bain joins firms like Blackstone Group Inc., Oaktree Capital Group LLC and Carlyle Group Inc. in looking to capitalize on potential opportunities created by the coronavirus pandemic that has hammered businesses.
The first wave of deal flow early in the crisis included companies that needed to raise liquidity as they contended with high levels of cash burn and an erosion of enterprise value, according to Robinson. “The second wave, which will continue for a bit longer, is going to be the core restructurings for companies that are coming into issues with maturities or other liquidity problems,” he said.
“I view 2020 as the great leveraging year,” he said. “Many companies are borrowing more debt or raising additional debt capital exactly when their earnings are declining. Will they be able to grow into that over-levered capital structure? For quite a few of them, the answer will be no.”
Bain Capital Credit has $10.4 billion in assets under management for its distressed and special situations strategy as of this fundraise, according to the firm. The firm last year raised $1.41 billion for a European special situations fund, and in 2018 raised $1 billion for an Asian special situations fund.
