Bain works out ways to profit on Chinese NPLs

Bain Capital has figured out a way to make fat returns investing in Chinese non-performing loans hand pick loans backed by saleable property and turf out dead-beat borrowers who are big employers.

Bain Capital Credit, the fixed income arm of Boston-headquartered Bain Capital, said on Monday it had bought a portfolio of non-performing loans NPLs in China worth $200 million.

The US firm bought the loan portfolio from one of China’s state-backed bad loan banks, China Huarong Asset Management, a person familiar with the matter said. Bain Capital declined to comment on the identity of the seller.

Bain Capital Credit spent weeks...