Bain Fund III (aka Information Partners Capital Fund)
Vintage: 1989
Size: $60 million (invested $52.2 million, as of September 2010)
Gross profit: $226.6 million
Multiple: 4.3x
Net IRR: 32.5%

Bain’s third fund focused on late stage venture deals and invested in roughly 20 companies, including FTD, Cortera and Jostens Learning Corp.

The net IRR of 32.5% for Bain’s third fund is more than double the average IRR and more than three times the median IRR for vintage 1989 VC funds located in the United States (based on a sample size of 50 U.S. VC funds), according to Thomson Reuters. The average IRR for vintage 1989 VC funds was 12.67% and the median was 10.81%, as of March 31.

Bain Fund IV
Vintage: 1993
Size: $300 million (invested $274.1 million, as of September 2010)
Gross profit: $1.4 billion
Multiple: 5.1x
Net IRR: 66.1%

Buyout-focused fund IV invested in 28 companies, including Icon Health & Fitness, Totes Isotoners and Small Fry Snack Foods, with Icon Health and Totes going public, according to the 2000 PPM and Thomson Reuters. Along with its successes, fund IV also made one of Bain’s most controversial investments. In 1993, Bain invested $24.5 million in GS Technology, a Kansas City steel mill that was later renamed GS Industries, the Bain PPM says. Bain easily made back its investment when it received a $36.1 million dividend in 1994, Reuters has reported, implying that Bain made close to $12 million in profit. (Bain officials told the The Boston Globe in June that the profit from the GS deal was $8 million.) GS Industries ended up filing for bankruptcy in February 2001, causing some 750 people to lose their jobs. Also, the federal government provided $44 million to bail out the company’s underfunded pension plan.

Fund IV’s net IRR of 66.1% is well above the average IRR (19.29%) and median IRR (16.25%) for U.S. buyout funds raised in 1993, based on a sample size of 20 U.S. buyout funds, according to Thomson Reuters.

Bain Fund V
Vintage: 1995
Size: $500 million (invested $431.3 million, as of September 2010)
Gross profit: $1.5 billion
Multiple: 3.5x
Net IRR: 49.4%

Bain’s fifth pool, a buyout fund, backed 31 companies, including Claricom, Physicians Quality Care, and AMF Bowling, according to the PPM and Thomson Reuters. Clarity Telecom Holdings is defunct, Thomson Reuters says, while doll maker Lifelike Co. reportedly filed Chapter 7 bankruptcy in 2004. Bain invested $2.1 million in Lifelike in 1996, the PPM says.

The net IRR generated for fund V is more than four times the average IRR (11.67%) and median IRR (10.1%) for U.S. buyout funds raised in 1995, based on a sample size of 25 U.S. buyout funds, according to Thomson Reuters.

Bain Fund VI
Vintage: 1998
Size: $900 million (invested $780 million, as of September 2010, with $56 million unrealized)
Gross profit: $1.9 billion
Multiple: 2.5x
Net IRR: 13.8%

Bain Fund VI Co-Investment Fund
Vintage: 1998
Size: $317 million (invested $237.6 million, as of September 2010, with $53.8 million unrealized)
Realized gain: $667.8 million
Multiple: 3x
Net IRR: 15%

Fund VI heralded changes for Boston-based Bain. The buyout fund is reportedly the last one that Romney was involved with before he left in February 1999 to lead the Salt Lake City Olympics. In addition to fund VI, Bain also raised a co-investment buyout fund in 1998. The primary pool invested in 36 companies, of which just one, Aexis Telecom, is “defunct,” according to Thomson Reuters.

Like their predecessors, fund VI and the co-investment vehicle produced better IRRs (13.8% and 15%, respectively) than the typical U.S. buyout fund raised in 1998. Based on a sample size of 57 U.S. buyout funds, vintage 1998 buyout funds had an average IRR of 5.01% and a median IRR of 4.56%, according to Thomson Reuters.

After Romney left to run the Olympics, Bain returned to the market to raise its seventh fund. Romney was not listed as a Bain executive in the PPM for Fund VII, says a person familiar with the PPM. The pool ended up collecting $2.5 billion in 2000. The fund made roughly a dozen investments, including its buyout of Datek Online Holdings, according to Thomson Reuters. As of September 2010, fund VII realized a gain of $5.35 billion from investments totaling $2.17 billion, generating a return of 2.7x and an IRR of 19.9%, according to the Bain presentation.

Sources noted that since funds VI and VII were not fully invested as of September 2010, the returns likely have changed since then.

Photo courtesy of REUTERS/Rick Wilking