Bain BDC dedicates more than 20% of portfolio to unitranche JV

Bain has agreed to commit up to $425m to the vehicle, which can underwrite loans of up to $350m.

Bain Capital Specialty Finance has dedicated one-fifth of its investment portfolio to its joint venture with Antares Capital that provides unitranche loans, according to the firm’s annual report.

BCSF, a private business development company advised by Boston-based Bain Capital Credit, had an investment portfolio that stood at $831.58 million at fair value as of 31 December. Some $178.41 million, or 21.4 percent, was invested in the JV, Antares Bain Capital Complete Financing Solution (ABCS).

A spokesman for BCSF declined to comment.

The vehicle had investments of $956.54 million, at par, across 14 borrowers, with the largest being a facility of $106.23 million. Some $25.09 million of the total were reserved for delayed draw term loans. Industries in the portfolio include chemicals, plastics and rubber; transportation; advertising printing and publication; and banking.

ABCS, which was launched in December, has $950 million in committed capital: $425 million from BCSF and $525 million from Chicago-based Antares. The vehicle had total capital contributions of $397.99 million, according to the document filed with the Securities and Exchange Commission.

Aside from the JV, BCSF’s investment portfolio comprised, at fair value, 58.3 percent of first lien senior secured loans; 14.1 percent second lien secured loans; 3.6 percent first lien last out loans; 1.1 percent equity interests, 1 percent corporate bonds; and 0.2 percent preferred equity.

The BDC’s three highest sector exposures were to high-tech industries at 12.8 percent; healthcare and pharmaceuticals at 8.3 percent; and business services at 7.3 percent.

BCSF reported a net asset value per share of $20.30 at the end of the fourth quarter, relatively unchanged from the $20.33 as of 30 September. It posted a net investment income of $14.2 million, or 78 cents a share, for 2017, its first full year of operation. BCSF launched operations in October 2016. It listed total assets of $988.25 million and liabilities of $481.22 million.

Bain Capital Credit, which manages more than $35 billion, also invests in direct lending through closed-end funds. It also manages collateralised loan obligations as well as invests in distressed and special situations and liquid credit.