Bain Capital is on the hunt for its next airline investment after more than tripling its capital on Virgin Australia Holdings, underscoring a rare success in a notoriously tough sector for private equity, according to a report by Bloomberg.
The US buyout firm sold a 30% stake in Virgin Australia, the country’s second-largest carrier, through a AUD685m ($447m) IPO last month. This exit boosted Bain’s return to approximately 3.5x its original investment, made at the onset of the pandemic.
Bain retains close to 40% ownership, currently valued at around AUD1bn, which could lift the total payout multiple to five times if sold at today’s prices.
The turnaround of a near-defunct airline amid a global health crisis has built significant sector expertise within Bain, according to Mike Murphy, Sydney-based partner and lead on the Virgin Australia deal. He confirmed the firm has already evaluated airline opportunities in India.
Airline ownership changes are rare, with buyouts in the space even more so – Bain’s deal remains one of the few high-profile examples globally since the pandemic. Murphy’s openness to further airline investments highlights Virgin Australia’s strong returns and signals a potential reservoir of value in struggling carriers, a sector often shunned by institutional investors.
Since the IPO, Virgin Australia’s shares have gained roughly 10%, pushing the airline’s market capitalisation to AUD2.5bn.
Bain acquired Virgin Australia in 2020 for AUD730m following the airline’s collapse under heavy debt. The firm is permitted to sell the remainder of its shares from mid-2026, targeting a full exit potentially by 2027.
Despite market volatility, Bain’s success was evident well before the IPO – it had already returned over AUD1bn through capital distributions and dividends, including a 25% stake sale to Qatar Airways earlier this year.
Reflecting on the deal’s intensity, Murphy said the pre-acquisition phase alone demanded more than 16,000 hours of internal effort, with sustained commitment over the subsequent years.
