David Gross, co-managing partner of Bain Capital, joined the firm in 2000 and became a founding member of the Asia business six years later. He launched and managed the Tokyo office, playing a key role in several of the firm’s most prominent buyouts in the region. Bain has USD 185bn in assets under management globally and recently closed its latest flagship North America private equity fund on USD 14bn. Its latest North America, Europe, and Asia buyout funds amount to more than USD 27bn.

Q: What has the liquidity situation been like in 2025?

A: It’s getting better, but not at the pace people would have hoped for this year, and there are some macro dimensions to that. But if you have truly added value and improved the companies in your portfolio, it’s been a good year for liquidity. In terms of distribution yield – the amount of liquidity divided by the net asset value of all our funds – it’s been a record year for us. We were 23%-24%, while the industry was 11%-12%. To me, it’s not really a question of liquidity; it’s a question of valuation. There’s plenty of liquidity, financing is robust, and strategic investors are acquisitive in the US. So, again, it’s more a question of whether you’ve bought companies at the right price and created real improvement – if so, buyers are there.

Q: Where are the exits coming from?

A: We took some businesses public, we sold some to strategics, some to financial buyers, including private sales to the likes of Middle East direct investing entities. There has been conversation about continuation vehicles – we’ve done one this year – but that’s part of the mix, not the whole story. More traditional channels are available for the right assets. What we can say is that IPOs historically have occupied a larger portion than they currently represent, and you must be selective when taking that route. If the public market likes an asset and its trajectory, the results speak for themselves. If they aren’t interested, it is a much more difficult ask.

Q: You recently closed the latest North American fund. Based on feedback, what issues are most important to LPs right now?

A: It was a very successful fundraise in terms of the quantum and time it took to get to that quantum. We had numerous recommitments from long-time investors and were able to broaden our capital base to new investors, too. That points to there being a healthy base of investors interested in private equity as an asset class and specifically to our model.

As you might imagine, LPs were very focused on liquidity. One, it gives them money to reinvest into our funds. Second, it validates the story and model. When talking about your progress and performance, a monetised asset is tangible and means a lot more than an unmonetized asset. We also got questions about how we are navigating the macro environment, how we are leveraging our vertical expertise and global platform, our approach to valuations, and how we are deploying AI [artificial intelligence] and technology in the portfolio. Finally, in nearly every senior meeting, we were asked if Bain Capital would follow some of our peers in aggressively pursuing alternative or new forms of capital that some institutional investors may perceive as a threat.

Q: And the answer is…?

A: We are very committed to the institutional LP base, and the answer is both in how we structured the fund, and the high degree of capital committed from our firm and partners. We do highly value the direct relationships we enjoy with ultra-high net worth and high net worth investors. But to us, that’s just a different way of aggregating capital for the same closed-end private fund.

Q: How do you right-size the fund for the opportunity set?

A: We have a disciplined view of what our annual deployment is likely to be, and we want to comfortably invest these funds over a 3.5-4-year period. There has been a fair amount of cyclicality in the US market, but we have maintained that investment time horizon and sought not to overextend ourselves past the best-fit opportunities. Those are mini cycles; when you throw them all together, they create a natural balance. The last fund was USD 11.8bn; this one is USD 14bn, because deal sizes are still growing. Including our regional funds, we have a USD 30bn fund complex for large-cap private equity globally, with the flexibility for our funds to both invest together in the right opportunities and partner with other strategies across our platform.

Q: Have the recent bankruptcy filings of First Brands and Tricolour made creditors more reluctant to provide financing?

A: The short answer is no. There haven’t been significant defaults for several years now. That’s atypical, and they will happen. However, our credit business looks at the markets in detail every day. There aren’t really any signs of major systemic credit risk. In fact, we’re probably at one of the healthiest points of the credit cycle right now. Yes, there’s a lot of covenant light loans out there, but the underlying performance of companies is still solid and there’s a lot of capital available. Particularly in the large-cap side of the market, we continue to see that private credit funds are very aggressive, offering large ticket unitranche deals at attractive rates with no covenants. One thing we are watching very closely, however, is that we haven’t been through a real economic cycle; there have been interest rate and valuation cycles, but not an economic cycle.

Q: What kind of appetite is there currently for exposure to Asia?

A: We are seeing huge demand for Asia. The region has come a long way: investors have priced in idiosyncratic risks in China, they are very interested in Japan and India, and they look at the region as a whole and feel they are underexposed. There also appears to be consolidation around some of the bigger pan-Asian players, and investors don’t have as many options as in the US, or even in Europe to get exposure. That is a significant draw to firms like ours with an established track record of nearly two decades in the region.

Q: To what extent is the region a tough sell?

A: You used to have to really explain the thesis behind investing in Asia. Now, we don’t have to answer that question as much. The first question is often about Japan. People want and need exposure. There’s a strong performing equity market to which they are often highly underexposed, and then they see the private equity market is gaining momentum and big companies are divesting assets. They don’t want to miss the party. I find that ironic because, for a lot of years, the party wasn’t happening in Japan.

Q: What will characterise the next set of opportunities in Japan?

A: As we’ve seen, corporate Japan is increasingly open to new types of ideas on governance and strategy to improve performance. The capital and interest is certainly available as well. Next, I think you will see take-privates of major companies – whole companies – in Japan. Then there is the deep cohort of middle-market or upper middle-market companies. We have founders coming to us and saying, ‘I don’t think the company is trading at the right level, and I’m under pressure from certain shareholders, can we explore a take-private?’ For the first 10 years, the enquiry-to-reverse-enquiry ratio was 800:0, then it became 20:1, and now it’s around 10:1, which is great to see for the type of partnership capital we offer.

Q: For take-privates of major companies, would there need to be Toshiba-levels of stress?

A: There could be things that do not ultimately rise to Toshiba’s level of external pressure that pave the way for a deal. Several large companies don’t have the right strategic alignment, so they need to do something with certain non-core assets. This is especially critical for listed companies, which means external parties could play a role. With Toshiba, the banks were a critical driver – they were overexposed and concerned about Toshiba’s ability to realise value from assets. But I don’t think you need that anymore for large deals to occur.

Q: How is the special situations strategy doing in Asia?

A: People are really starting to understand the value of flexible capital – they don’t have to sell control, and they can bring in an influential and value-added partner. Companies historically had three paths – stay the course, issue stock, or sell outright. Now, there are more choices. We are helping corporations, founders, and sponsors address liquidity needs, and there are some hard assets and real estate-related work as well. While we see some distress, it’s a minority of what we are doing.