Bain Capital Credit – Company Profile

Mezzanine financing company overview

Mezzanine firm logo:

Bain Capital Credit - mezzanine financing company logo

Headquarters location:

United States

Typical mezzanine financing range:

Up to $250 million

Geographic focus:

North America, Europe and Asia Pacific

Industry focus:

Industry agnostic

Company profile

Bain Capital Credit, an independently managed affiliate of Bain Capital, is a global credit specialist with approximately $33.5 billion in assets under management as of January 1, 2017.  The firm 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.

Bain Capital Credit was originally founded as Sankaty Advisors in 1998 by Jonathan Lavine, Co-Managing Partner of Bain Capital and Chief Investment Officer of Bain Capital Credit. The underlying premise of the fund was that the same successful models of analysis developed in Bain Capital’s Private Equity business could be applied to credit investing.

It has organically grown into a global organization of more than 230 employees. The firms operates from a network of seven offices around the world.  Bain Capital Credit employs over 110 investment professionals with sole focus on identifying the most attractive credit opportunities in North America, Europe and Asia Pacific. The team has access to a deep, highly-tenured team of analysts, financial experts and other support staff.

Investment philosophy/criteria

The cornerstone of Bain Capital Credit’s investment philosophy is to generate attractive risk-adjusted returns for investors through rigorous due diligence at the industry, company and individual security level.  They seek to maximize expected, not potential, return through fundamentally driven, bottom-up security selection that leverages the depth and experience of the firm’s investment team.

Since inception, their team has analyzed over 5,000 issuers, providing the firm with unique institutional knowledge of the market that enables them to identify attractive investment opportunities across market cycles and geographies.  The breadth of BCC’s coverage allows the firm to add additional value by investing in securities which may be underfollowed, mispriced or perhaps out of favor with the market.

Approach to investment analysis

The firm’s approach to analyzing potential investments can be broadly separated into three stages:

  • Industry analysis
    • Barriers to entry
    • Customer/supplier power
    • Substitutes/technology
    • Cyclicality
    • Market definition
    • Profit drivers
    • Risk of events
  • Competitive position analysis
    • Basis of competition
    • Benefits of scale
    • Customer stickiness
    • Segment profitability
    • Relative cost position
    • Product differentiation
    • Fragmentation
  • Company analysis
    • Historical trends
    • Asset/downside protection
    • Management/equity sponsor
    • Strategy
    • Covenants and  terms
    • Relative value/market techincals
    • Position in capital structure

Industry expertise

Bain Capital Credit’s research team is organized by industry focus rather than by asset class, which they believe is a key advantage.  Based upon underlying industry drivers, the teams are divided into local or global coverage.  With the firm’s large performing credit business and dedicated industry teams, Bain Capital Credit has the resources to track companies across market cycles.  Issuers that become distressed began as performing new issuance.

The firm states expertise/interest at least in the following industries:

  •  Aerospace/Defense
  •  Autos/Transportation
  •  Cable/Media/Telecom
  •  Chemicals
  •  Consumer/Retail
  •  Energy/Utilities
  •  Enterprise Services
  •  Healthcare
  •  Industrials/Building Materials
  •  Leisure/Gaming
  •  Metals/Mining
  •  Software/Technology
  •  European Consumer/ Retail/Industrials
  •  European Telecom/Media

Investment criteria and strategy

They focus on providing complete financing solutions to businesses with EBITDA between $10 million and $100 million located in North America, Europe and Asia Pacific.

The firm is actively looking to lead or participate in senior, second lien and unitranche loans; subordinated debt; and preferred or common equity coinvestments for traditional leveraged buyout transactions and unsponsored refinancings.  Bain Capital Credit place considerable emphasis on finding leading companies with talented management teams, and aim to provide a tailored solution to every unique opportunity by having considerable flexibility when structuring terms.  The firm can offer up to $250 million in any middle market transaction and can grow with a borrower into a broadly syndicated structure through our liquid credit strategies.

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