American private equity firm Bain Capital has recently begun raising around EUR3.5 billion for its fourth European private equity fund.
A report by Forbes said that the investment firm is again giving investors a choice between two fee structures:
(a) 1.75% management fee, 20% carried interest and a 7% preferred return; and
(b) 0.75% management fee, 30% carried interest and no preferred return.
When Bain started raising its 11th flagship fund last year, it included similar options but the second choice had a 0.50% management fee. It also offered a third option with 1% management fee, 30% carried interest and a 7% preferred return, the report said.
Forbes, citing one source familiar with the situation, said that almost no one availed themselves of the last choice, so Bain decided to streamline this time.
According to the report, although the new European fund won't be closed anytime soon, Bain expects to finish of the 11th flagship fund early next year. By then, the private equity firm will be collecting management fees.
Bain Capital has a total of USD65 billion assets under management, its website said.
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