Bain Capital Credit LP has registered Bain Capital Specialty Finance Inc. as a business development company with the U.S. Securities and Exchange Commission. The BDC, which is Bain Capital’s first, is investing primarily in middle-market companies with between $10 million and $150 million Ebitda, according to the Oct. 6 filing.
“We intend to focus on senior investments with a first or second lien on collateral and strong structures and documentation intended to protect the lender,” says the filing. “We may also invest in mezzanine debt and other junior securities and in secondary purchases of assets or portfolios, as described below. Investments are likely to include, among other things, (i) senior first lien, stretch senior, senior second lien, unitranche, (ii) mezzanine debt and other junior investments and (iii) secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt.”
Bain Capital Specialty Finance was formed on October 5, 2015, as a Delaware corporation, according to the SEC filing. The lender has collected more than $500 million in equity commitments, according to the Wall Street Journal, which points out that, due to the rules governing BDCs, Bain will have more than $1 billion in new money to invest. Bain, which is still fundraising, is declining to comment beyond the SEC filing.
Bain Capital Credit, founded as Sankaty Advisors in 1998, currently operates as an independently managed affiliate of Bain Capital with more than $30 billion in assets under management. The credit group invests across the full spectrum of credit strategies, including leveraged loans, high-yield bonds, distressed debt, private lending, structured products, non-performing loans (NPLs) and equities.
Several private equity firms have raised BDCs, including Apollo Global Management LLC (NYSE: APO), the Carlyle Group LP (Nasdaq: CG), Kohlberg Kravis Roberts & Co. (NYSE: KKR) and TPG. Tied closely to the stock markets, BDC share prices have been rising over the last six months. Observers predict consolidation ahead for BDCs.