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Bain Capital raises $1.15bn insurance private equity fund


Private equity specialist investment manager Bain Capital has raised a $1.15 billion fund targeted at deployment into opportunities in the insurance and reinsurance space.

bain-capital-logoReuters was first to report that Bain Capital raised more funds than initially targeted for the strategy, perhaps underscoring how attractive the insurance and reinsurance market is today.

Bain Capital then published a press release, acknowledging the final close of its inaugural private equity fund, Bain Capital Insurance Fund, L.P. at $1.15 billion.

$1 billion of this was from outside commitments from institutional investors and high-net-worth individuals and family offices, while Bain Capital employees committed the balance of the fund.

Other publications had reported Bain Capital as having a $1 billion target for the Bain Capital Insurance Fund, with pensions named as some of the early backers.

Reuters cites a $750 million target for the insurance private equity fund strategy, but notes that $1.15 billion has now been raised, confirmed by Bain Capital, with high-net-worth individuals, institutional investors and family offices among the backers.

We understand the Bain Capital Insurance strategy will look to deploy capital to both life and non-life opportunities in the sector, with specific areas of focus on health, property and casualty and annuities.

All of which have seen significant interest from private equity and buyout specialists in recent years, with that interest seen to accelerate through the hardening market of the last few years.

Matt Popoli, global head of Bain Capital Insurance, explained to Reuters that the Bain Capital Insurance Fund will provide the firepower to invest in middle-market insurance firms that have often been overlooked by others.

“Our approach to insurance is to avoid the crowd, and we have a big enough team with the expertise to drill down where the herd has not gathered and find opportunities where we can really grow and add value,” he explained.

There is said to be a North America and European focus, in terms of opportunities for the fund, which is no surprise.

While niche insurance brokers are also seen as in scope, as they can be acquired at more reasonable prices than larger players, Reuters reported.

Popoli also cited opportunities in markets where other players are exiting, with Reuters citing property catastrophe risks and the significant rate rises seen there, as an example.

Bain has already started to deploy the fund, Reuters said.

In the press release, Popoli said, “This significant milestone reflects the enthusiasm and trust of our investors, the relationships we’ve built with business leaders and entrepreneurs across the industry, and the significant opportunities we see to drive value across the complex insurance value chain.

“We’ve built a scaled team of insurance investing experts, deep researched-backed themes, and the value creation approach to embrace that complexity, all supported by the global and platform advantages of the integrated Bain Capital platform.”

The press release also explained the specific target areas for the insurance private equity fund:

  • corporate transformations, such as management partnerships, carve-outs, and turnarounds
  • launching and building new insurance platforms; and
  • inflection or event-driven investments driven by supply/demand imbalances, evolving business models, and shifting industry trends.

Bain Capital had previously backed specialist underwriting group Beat Capital Partners syndicate at Lloyd’s, through its private credit arm.

This is another move that underscores the fact insurance and reinsurance markets are particularly attractive to third-party and institutional investors at this time, and shows them seeking to deploy their capital to different points on the value-chain, to operations as well as to risk as we see in ILS today.

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