Todd Cook, Bain Capital Double Impact managing director, says Fund I's exits are 'off to a very good start' Source: NPM

Bain Capital has begun marketing its third impact fund, New Private Markets can exclusively report. Double Impact Fund 3 has a $1 billion target, according to three sources with knowledge of the fund.

Its strategy is largely in keeping with Bain’s previous two impact funds, targeting growth and buyout opportunities in climate, health and education themes. The strategy is led by partners Cecilia Chao, Todd Cook, Iain Ware, Peter Spring, Jacob Donnelly and Klaus Koenigshausen.

Bain Capital declined to comment on fundraising matters.

Fund II is now nearly fully invested, New Private Markets has learned. Bain Capital is due to announce one of its final deals Wednesday: a growth investment in Branching Minds, an education technology company that provides schools with digital learning support tools to manage students’ learning and needs. The company “[goes] beyond data analytics to serve as a co-pilot and central hub for student interventions” and “supports the needs of students effectively and efficiently, regardless of socioeconomic background,” Ware said in a press release seen by New Private Markets.

Bain Capital was one of the first generalist private equity firms to move into impact investing to target competitive returns alongside measurable impact. The Double Impact vertical was established in 2016 by former Massachusetts governor and one-time US presidential candidate Deval Patrick – the same year TPG launched its Rise strategy. Patrick returned to Bain as an adviser for the Double Impact funds in 2021 following his bid for the 2020 Democratic Party nomination; last week, he left Bain to join the Vistria Group as an adviser.

Fund II closed on $800 million in October 2020, having targeted $600 million, with LPs including pension funds Caisse de dépôt et placement du Québec and the Netherlands’ PGGM, the Franke Family Charitable Foundation and Goldman Sachs Foundation. Fund I closed on $390 million in 2017, with commitments from CDPQ, Los Angeles City Employees’ Retirement System, Los Angeles Fire & Police Pension System, Community Development Venture Capital Alliance, Surdna Foundation and Dedalus Foundation.

Speaking at NPM‘s Impact Investor Summit last October, Cook was asked whether managers in the private equity impact space had yet proved their ability to deliver competitive financial returns alongside impact. “I can’t really get into specifics per se on returns, but I can say – at least in the number of exits we have had in the first fund – we are off to a very good start,” he said. “We have continued to see exits that have been meeting or exceeding our [target] returns.”

Bain Capital was one of the top five impact funds recognised by impact verification organisation BlueMark as “practice leaders” in 2022, achieving top-quartile grades across the eight principles in BlueMark’s benchmarking system.