Bain Capital Fund XI will also have a co-investment pool in which clients can take part in certain deals alongside the main fund, which may bring the total capital to $9 billion to $10 billion, said the person, who asked not to be named because the information isn’t public. The firm’s prior fund, Bain Capital Fund X, gathered about $10 billion in 2008.
A spokesman for Boston-based Bain Capital declined to comment.
The firm will offer three fee options to entice investors, including reduced carried interest and management charges, according to the person familiar with the matter. Under one choice, clients will be able to pay a 1.5 percent management fee; and 20 percent carry, or the share of profit kept by private-equity managers, once a 7 percent preferred return is achieved. The second option comprises a 1 percent management fee, 30 percent carry and the same preferred return hurdle. The third variation is a 0.5 percent management fee, 30 percent carried interest and no preferred return.
Buyout firms are devising new ways to trim fees in a crowded fundraising market. New York-based KKR & Co. (KKR) is offering clients in its KKR Asian Fund II the option of paying a lower management fee or receiving a greater share of commissions levied on its portfolio companies, according to marketing documents obtained by Bloomberg News.
Firms such as BC Partners Ltd. and Permira Advisors LLC have offered fee discounts to investors that join before the first close of fundraising.
Fortune reported on the Bain fundraising earlier today.
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