This article is about the investment firm. For the management consulting company, see
Bain and Company.
Bain Capital, LP
 |
|
| Private, limited partnership |
|---|
| Industry | Alternative investment |
|---|
| Founded | 1984; 34 years ago |
|---|
| Headquarters | 200 Clarendon Street
Boston, Massachusetts, U.S. |
|---|
Number of locations
| Boston, Chicago, Dublin, Hong Kong, London, Luxembourg, Melbourne, Mumbai, Munich, New York, Palo Alto, San Francisco, Shanghai, and Tokyo |
|---|
Key people
| Joshua Bekenstein
John P. Connaughton
Jonathan Lavine
Steven Pagliuca |
|---|
| Products | Venture capital, investment management, public equity, private equity and credit products |
|---|
| AUM |  US$ 75 billion (2014) |
|---|
Number of employees
| 900+ (2014)[citation needed] |
|---|
| Website | www.baincapital.com |
|---|
The firm was founded in 1984 by partners from the consulting firm
Bain & Company.
[2] Since inception it has invested in or acquired hundreds of companies including
AMC Theatres,
Artisan Entertainment,
Aspen Education Group,
Brookstone,
Burger King,
Burlington Coat Factory,
Canada Goose,
DIC Entertainment,
Domino's Pizza,
DoubleClick,
Dunkin' Donuts,
D&M Holdings,
Guitar Center,
Hospital Corporation of America (HCA),
iHeartMedia,
KB Toys,
Sealy,
Sports Authority,
Staples,
Toys "R" Us,
Warner Music Group,
Fingerhut,
The Weather Channel, and
Apple Leisure Group, which includes AMResorts and Apple Vacations.
[3]
As of 2014, Bain Capital employs more than 900 people.
[citation needed] Bain Capital is headquartered at the
200 Clarendon Street in
Boston, Massachusetts with additional offices in
New York City,
Chicago,
Palo Alto,
San Francisco,
Dublin,
London,
Luxembourg,
Munich,
Hong Kong,
Shanghai,
Mumbai,
Tokyo and
Melbourne.
[4]
History[edit]
1984 founding and early history[edit]
Bain Capital was founded in 1984 by
Bain & Company partners
Mitt Romney, T. Coleman Andrews III, and
Eric Kriss, after
Bill Bain had offered Romney the chance to head a new venture that would invest in companies and apply Bain's consulting techniques to improve operations.
[7] In addition to the three founding partners, the early team included
Fraser Bullock,
Robert F. White,
Joshua Bekenstein, Adam Kirsch, and Geoffrey S. Rehnert.
[8] Romney initially had the titles of president
[9] and managing general partner
[10][11] or managing partner.
[12] He later became referred to as managing director
[13] or CEO
[14] as well. He was also the sole shareholder of the firm.
[15] At the beginning, the firm had fewer than ten employees.
[16]
In the face of skepticism from potential investors, Romney and his partners spent a year raising the $37 million in funds needed to start the new operation.
[16][17][18][19] Bain partners put in $12 million of their own money and sourced the rest from wealthy individuals.
[20] Early investors included Boston real estate mogul
Mortimer Zuckerman and
Robert Kraft, the owner of the New England Patriots football team.
[18] They also included members of elite Salvadoran families who fled the country's
civil war.
[21] They and other wealthy Latin Americans invested $9 million primarily through
offshore companies registered in
Panama.
[20]
While Bain Capital was founded by Bain executives, the firm was not an affiliate or a division of Bain & Company but rather a completely separate company. Initially, the two firms shared the same offices—in an office tower at
Copley Place in Boston
[22]—and a similar approach to improving business operations. However, the two firms had put in place certain protections to avoid sharing information between the two companies and the Bain & Company executives had the ability to veto investments that posed potential conflicts of interest.
[23] Bain Capital also provided an investment opportunity for partners of Bain & Company. The firm initially gave a cut of its profits to Bain & Company, but Romney later persuaded Bill Bain to give that up.
[24]
The Bain Capital team was initially reluctant to invest its capital. By 1985, things were going poorly enough that Romney considered closing the operation, returning investors' money to them, and having the partners go back to their old positions.
[25] The partners saw weak spots in so many potential deals that by 1986, very few had been done.
[26] At first, Bain Capital focused on
venture capital opportunities.
[26] One of Bain's earliest and most notable venture investments was in
Staples, Inc., the
office supply retailer. In 1986, Bain provided $4.5 million to two supermarket executives, Leo Kahn and
Thomas G. Stemberg, to open an office supply supermarket in
Brighton, Massachusetts.
[27] The fast-growing retail chain went public in 1989;
[28] by 1996, the company had grown to over 1,100 stores,
[29] and as of fiscal year end January 2012, Staples reached over $20 billion in sales, nearly $1.0B in net income, 87,000 employees, and 2,295 stores.
[30] Bain Capital eventually reaped a nearly sevenfold return on its investment, and Romney sat on the Staples board of directors for over a decade.
[16][19][26] Another very successful investment occurred in 1986 when $1 million was invested in medical equipment maker Calumet Coach, which eventually returned $34 million.
[31] A few years later, Bain Capital made an investment in the technology research outfit the
Gartner Group, which ended up returning a 16-fold gain.
[31]
Bain invested the $37 million of capital in its first fund in twenty companies and by 1989 was generating an annualized return in excess of 50 percent. By the end of the decade, Bain's second fund, raised in 1987 had deployed $106 million into 13 investments.
[32] As the firm began organizing around funds, each such fund was run by a specific general partnership—that included all Bain Capital executives as well as others—which in turn was controlled by Bain Capital Inc., the management company that Romney had full ownership control of.
[33] As CEO, Romney had a final say in every deal made.
[34]
Beginning in 1989, the firm, which began as a
venture capital source investing in
start-up companies, adjusted its strategy to focus on
leveraged buyouts and
growth capital investments in more mature companies.
[35] Their model was to buy existing firms with money mostly borrowed against their assets, partner with existing management to apply Bain methodology to their operations (rather than the hostile takeovers practiced in other leverage buyout scenarios), and sell them off in a few years.
[18][26] Existing CEOs were offered large equity stakes in the process, owing to Bain Capital's belief in the emerging
agency theory that CEOs should be bound to maximizing
shareholder value rather than other goals.
[19] By the end of 1990, Bain had raised $175 million of capital and financed 35 companies with combined revenues of $3.5 billion.
[36]
In July 1992, Bain acquired
Ampad (originally American Pad & Paper) from
Mead Corporation, which had acquired the company in 1986. Mead, which had been experiencing difficulties integrating Ampad's products into its existing product lines, generated a cash gain of $56 million on the sale.
[37] Under Bain's ownership, the company enjoyed a significant growth in sales from $106.7 million in 1992 to $583.9 million in 1996, when the company was listed on the
New York Stock Exchange. Under Bain's ownership, the company also made a number of acquisitions, including writing products company
SCM in July 1994, brand names from the American Trading and Production Corporation in August 1995, WR Acquisition and the Williamhouse-Regency Division of Delaware, Inc. in October 1995, Niagara Envelope Company, Inc. in 1996, and Shade/Allied, Inc. in February 1997.
[38] Ampad's revenue began to decline in 1997 and the company laid off employees and closed production facilities to maintain profitability. Employment declined from 4,105 in 1996 to 3,800 in 2000.
[39] The company ceased trading on the New York stock exchange on December 22, 2000
[40] and filed for bankruptcy in 2001. At the time of the bankruptcy, Bain Capital held a 34.9% equity ownership interest in the company.
[41] The assets were acquired in 2003 by
Crescent Investments. Bain's eight years' of involvement in Ampad is estimated to have generated over $100 million in profits ($60 million in dividends, $45–50 million from the proceeds from stock issued after the company went public, and $1.5-2 million in annual management fees).
[42]
In 1994, Bain acquired
Totes, a producer of umbrellas and overshoes.
[43] Three years later, Totes, under Bain’s ownership, acquired Isotoner, a producer of leather gloves.
[44]
Much of the firm's profits was earned from a relatively small number of deals, with Bain Capital's overall success and failure rate being about even. One study of 68 deals that Bain Capital made up through the 1990s found that the firm lost money or broke even on 33 of them.
[51] Another study that looked at the eight-year period following 77 deals during the same time found that in 17 cases the company went bankrupt or out of business, and in 6 cases Bain Capital lost all its investment. But 10 deals were very successful and represented 70 percent of the total profits.
[52]
Romney had two diversions from Bain Capital during the first half of the decade. From January 1991 to December 1992,
[26][53] Romney served as the CEO of
Bain & Company where he led the successful turnaround of the consulting firm (he remained managing general partner of Bain Capital during this time).
[10][11] In November 1993, he took a leave of absence for his unsuccessful
1994 run for the U.S. Senate seat from Massachusetts; he returned the day after the election in November 1994.
[26][54][55] During that time, Ampad workers went on strike, and asked Romney to intervene; Bain Capital lawyers asked him not to get involved, although he did meet with the workers to tell them he had no position of active authority in the matter.
[56][57]
In 1994, Bain invested in
Steel Dynamics, based in
Fort Wayne, Indiana, a prosperous steel company that has grown to the fifth largest in the U.S.A, employs about 6,100 people, and produces carbon steel products with 2010 revenues of $6.3 billion on steel shipments of 5.3 million tons.
[58] In 1993, Bain acquired the
Armco Worldwide Grinding System steel plant in
Kansas City, Missouri and merged it with its steel plant in
Georgetown, South Carolina to form
GST Steel. The Kansas City plant had a strike in 1997 and Bain closed the plant in 2001 laying off 750 workers when it went into bankruptcy. The South Carolina plant closed in 2003 but subsequently reopened under a different owner. At the time of its bankruptcy it reported $553.9 million in debts against $395.2 in assets. Bain reported $58.4 million in profits, the employee pension fund had a liability of $44 million.
[59][60][61][62]
Bain's investment in
Dade Behring represented a significant investment in the
medical diagnostics industry. In 1994, Bain, together with
Goldman Sachs Capital Partners completed a carveout acquisition of Dade International,
[63] the medical diagnostics division of
Baxter International in a $440 million acquisition. Dade's private equity owners merged the company with DuPont's
in vitro diagnostics business in May 1996 and subsequently with the Behring Diagnostics division of
Hoechst AG in 1997.
[64] Aventis, the successor of Hoechst, acquired 52% of the combined company.
[65] In 1999, the company reported $1.3 billion of revenue and completed a $1.25 billion
leveraged recapitalization that resulted in a payout to shareholders.
[64] The dividend, taken together with other previous shareholder dividends resulted in an eightfold return on investment to Bain Capital and Goldman Sachs.
[31][52]Revenues declined from 1999 through 2002 and despite attempts to cut costs through layoffs the company entered into bankruptcy in 2002. Following its restructuring, Dade Behring emerged from Bankruptcy in 2003 and continued to operate independently until 2007 when the business was acquired by
Siemens Medical Solutions. Bain and Goldman lost their remaining stock in the company as part of the bankruptcy.
[66]
By the end of the decade, Bain Capital was on its way to being one of the top private equity firms in the nation,
[24] having increased its number of partners from 5 to 18, having 115 employees overall, and having $4 billion under its management.
[16][18] The firm's average annual return on investments was 113 percent.
[17][67] It had made between 100 and 150 deals where it acquired and then sold a company.
[31][51][52]
1999–2002: Romney departure and political legacy[edit]
Romney was not involved in day-to-day operations of the firm after starting the Olympics position.
[71][72] Those were handled by a management committee, consisting of five of the fourteen remaining active partners with the firm.
[34] However, according to some interviews and press releases during 1999, Romney said he was keeping a part-time function at Bain.
[34][73]
During his leave of absence, Romney continued to be listed in filings to the
U.S. Securities and Exchange Commission[74] as "sole shareholder, sole director, Chief Executive Officer and President".
[75][76] The SEC filings reflected the legal reality
[77] and the ownership interest in the Bain Capital management company.
[33][78] In practice, former Bain partners have stated that Romney's attention was mostly occupied by his Olympics position.
[77][79] He did stay in regular contact with his partners, and traveled to meet with them several times, signing corporate and legal documents and paying attention to his own interests within the firm and to his departure negotiations.
[78] Bain Capital Fund VI in 1998 was the last one Romney was involved in; investors were worried that with Romney gone, the firm would have trouble raising money for Bain Capital Fund VII in 2000, but in practice the $2.5 billion was raised without much trouble.
[34] His former partners have said that Romney had no role in assessing other new investments after February 1999,
[34] nor was he involved in directing the company’s investment funds.
[33] Discussions over the final terms of Romney's departure dragged on during this time, with Romney negotiating for the best deal he could get and his continuing position as CEO and sole shareholder giving him the leverage to do so.
[34][77]
Although he had left open the possibility of returning to Bain after the Olympics, Romney made his crossover to politics in 1999.
[68] His separation from the firm was finalized in early 2002.
[34][80] Romney negotiated a ten-year retirement agreement with Bain Capital
[34] that allowed him to receive a passive profit share and interest as a retired partner in some Bain Capital entities, including buyout and Bain Capital investment funds, in exchange for his ownership in the management company.
[81][82] Because the private equity business continued to thrive, this deal would bring him millions of dollars in annual income.
[82] Romney was the first and last CEO of Bain Capital; since his departure became final, it has continued to be run by management committee.
[34]
Bain Capital itself, and especially its actions and investments during its first 15 years, came under press scrutiny as the result of Romney's
2008 and
2012 presidential campaigns.
[31][83][84] Romney's leave of absence and the level of activity he had within the firm during the 1999-2002 period also garnered attention.
[85][86][87][88][89][90]
Early 2000s[edit]
In 2000,
DIC Entertainment chairman and CEO
Andy Heyward partnered with Bain Capital Inc in a management buyout of DIC from
The Walt Disney Co. Heyward continued as chairman and CEO of the animation studio, which has more than 2,500 half-hours of programming in its library. He purchased Bain Capital's interest in 2004 and took the company public the following year.
Bain Capital began the new decade by closing on its seventh fund, Bain Capital Fund VII, with over $3.1 billion of investor commitments. The firm's most notable investments in 2000 included the $700 million acquisition of
Datek, the online stock brokerage firm,
[91] as well as the $305 million acquisition of
KB Toys from
Consolidated Stores.
[92] Datek was ultimately merged with
Ameritrade in 2002. KB Toys, which had been financially troubled since the 1990s as a result of increased pressure from national discount chains such as
Walmart and
Target, filed for
Chapter 11 bankruptcy protection in January 2004. Bain had been able to recover value on its investment through a
dividend recapitalization in 2003.
[93] In early 2001, Bain agreed to purchase a 30 percent stake, worth $600 million, in
Huntsman Corporation, a leading chemical company owned by
Jon Huntsman, Sr., but the deal was never completed.
[94][95]
With a significant amount of committed capital in its new fund available for investment, Bain was one of a handful of private equity investors capable of completing large transactions in the adverse conditions of the
early 2000s recession. In July 2002, Bain together with
TPG Capital and
Goldman Sachs Capital Partners, announced the high-profile $2.3 billion leveraged buyout of
Burger King from
Diageo.
[96] However, in November the original transaction collapsed, when Burger King failed to meet certain performance targets. In December 2002, Bain and its co-investors agreed on a reduced $1.5 billion purchase price for the investment.
[97] The Bain consortium had support from Burger King's franchisees, who controlled approximately 92% of Burger King restaurants at the time of the transaction. Under its new owners, Burger King underwent a major brand overhaul including the use of
The Burger King character in advertising. In February 2006, Burger King announced plans for an
initial public offering.
[98]
Bain and the 2000s buy-out boom[edit]
Bain led a consortium in the buyout of
Toys "R" Us in 2004
In 2004 a
consortium comprising KKR, Bain Capital and real estate development company
Vornado Realty Trust announced the $6.6 billion acquisition of
Toys "R" Us, the toy retailer. A month earlier,
Cerberus Capital Management, made a $5.5 billion offer for both the toy and baby supplies businesses.
[100] The Toys 'R' Us buyout was one of the largest in several years.
[101] Following this transaction, by the end of 2004 and in 2005, major buyouts were once again becoming common and market observers were stunned by the leverage levels and financing terms obtained by financial sponsors in their buyouts.
[102]
The following year, in 2005, Bain was one of seven private equity firms involved in the buyout of
SunGard in a transaction valued at $11.3 billion. Bain's partners in the acquisition were
Silver Lake Partners,
TPG Capital,
Goldman Sachs Capital Partners,
Kohlberg Kravis Roberts,
Providence Equity Partners, and
Blackstone Group. This represented the largest leveraged buyout completed since the takeover of
RJR Nabisco at the end of the 1980s leveraged buyout boom. Also, at the time of its announcement, SunGard would be the largest buyout of a technology company in history, a distinction it would cede to the buyout of
Freescale Semiconductor. The SunGard transaction is also notable in the number of firms involved in the transaction, the largest
club deal completed to that point. The involvement of seven firms in the consortium was criticized by investors in private equity who considered cross-holdings among firms to be generally unattractive.
[103][104]
In 2006, Bain Capital and
Kohlberg Kravis Roberts, together with
Merrill Lynch and the Frist family (which had founded the company) completed a $31.6 billion acquisition of
Hospital Corporation of America, 17 years after it was taken private for the first time in a management buyout. At the time of its announcement, the HCA buyout would be the first of several to set new records for the largest buyout, eclipsing the 1989 buyout of
RJR Nabisco. It would later be surpassed by the buyouts of
Equity Office Properties and
TXU.
[106] In August 2006, Bain was part of the
consortium, together with
Kohlberg Kravis Roberts,
Silver Lake Partners and
AlpInvest Partners, that acquired a controlling 80.1% share of semiconductors unit of
Philips for €6.4 billion. The new company, based in the Netherlands, was renamed
NXP Semiconductors.
[107][108]
During the buyout boom, Bain was active in the acquisition of various retail businesses.
[109] In January 2006, Bain announced the acquisition of
Burlington Coat Factory, a discount retailer operating 367 department stores in 42 states, in a $2 billion buyout transaction.
[110] Six months later, in October 2006, Bain and
The Blackstone Group acquired
Michaels Stores, the largest arts and crafts retailer in North America in a $6.0 billion leveraged buyout. Bain and Blackstone narrowly beat out
Kohlberg Kravis Roberts and
TPG Capital in an auction for the company.
[111] In June 2007, Bain agreed to acquire
HD Supply, the wholesale construction supply business of
Home Depot for $10.3 billion.
[112] Bain, along with partners
Carlyle Group and
Clayton, Dubilier & Rice, would later negotiate a lower price ($8.5 billion) when the initial stages of the
subprime mortgage crisis caused lenders to seek to renegotiate the terms of the acquisition financing.
[113] Just days after the announcement of the HD Supply deal, on June 27, Bain announced the acquisition of
Guitar Center, the leading musical equipment retailer in the U.S. Bain paid $1.9 billion, plus $200 million in assumed debt, representing a 26% premium to the stock's closing price prior to the announcement.
[114] Bain also acquired
Edcon Limited, which operates Edgars Department Stores in South Africa and Zimbabwe for 25 billion-rand ($3.5 billion) in February 2007.
[115]
Other investments during the buyout boom included:
Bavaria Yachtbau, acquired for €1.3 billion in July 2007
[116] as well as Sensata Technologies, acquired from
Texas Instruments in 2006 for approximately $3 billion.
[117]
Since 2008[edit]
Subsequent investments include, but are not limited to:
- July 2008 – Bain, together with Thomas H. Lee Partners, acquired Clear Channel Communications.[120]
- July 2008 – Bain acquired D&M Holdings for $442 million.[121]
- June 2009 – Bain Capital announced a deal to acquire a 9–23 percent stake in Chinese electronics manufacturer GOME Electrical Appliances for $233–432 million.[122]
- March 2010 – Bain acquired Styron (polystyrene, latex), a division of The Dow Chemical Company, for $1.6 billion.[123]
- October 2010 – Bain acquired Gymboree for $1.8 billion.[124]
- July 2011 – Bain acquired Securitas Direct AB together with Hellman & Friedman
- January 2012 – Bain acquired Physio-Control for $478 million.[125]
- August 2012 – Bain Capital announced that it had entered into an agreement to acquire a 30.49% stake in Genpact Ltd., India's Largest BPO / Call Center Outsourcing firm, (NYSE:G) from General Atlantic LLC and Oak Hill Capital Partners for $1 Billion U.S. Dollars.[126]
- October 2012 – Bain Capital acquired hand and power tool company Apex Tool Group from Cooper Industries and Danaher Corporation for a fee of around $1.6 billion.[127]
- May 2013 – Bain Capital and Investment Firms Golden Gate Capital, GIC Private Limited, and Insight Venture Partners entered into agreement to purchase BMC Software for a fee of around $6.9 billion.[128]
- December 2013 – Bain Capital acquired a majority stake in the clothing chain, Canada Goose Inc.[129] Invests $20 million in Observeit, a leading provider of user activity recording and auditing software.[130]
- April 2014 - Bain Capital purchases a controlling stake in Viewpoint Construction Software, a construction-specific software company based in Portland, Oregon.[131]
- November 2014 - Bain Capital and Virgin Group announced they were creating a new cruise line, Virgin Holidays Cruises.[132]
- December 2014 - Bain Capital agreed to a purchase of four divisions of CRH for a sum of £414 million, including its subsidiary Ibstock.[133]
- March 2015 - Bain agrees to buy Blue Coat Systems for around $2.4 billion[134]
- In 2016, the firm elevated Jonathan Lavine and John Connaughton to co-managing partners, while also naming Steven Pagliuca and Joshua Bekenstein co-chairman of the firm.[135]
- August 2017 - Bain acquired together with Cinven German company Stada Arzneimittel.[136]
- February 2018 - Bain agreed to acquire Bugaboo International for an undisclosed amount.[137]
- March 2018 - Bain purchased 19.99% of shares in Tower Ltd that Suncorp has ownership in.[138]
Businesses and affiliates[edit]
Bain Private Equity[edit]
Bain Capital Private Equity has raised ten funds and invested in more than 250 companies. The
private equity activity includes
leveraged buyouts and
growth capital in a wide variety of industries.
[139] Bain began investing in Europe in 1989 through its
London-based affiliate Bain Capital Europe.
[140] Bain also operates international affiliates Bain Capital Asia and Bain Capital India.
Bain Capital Private Equity is made up of more than 250 investment professionals, including 38 managing directors operating from offices in Boston, Hong Kong, London, Mumbai, Munich, New York, Shanghai, and Tokyo, as of the beginning of 2011.
Historically, Bain has primarily relied on
private equity funds, pools of committed capital from
pension funds,
insurance companies,
endowments,
fund of funds,
high-net-worth individuals,
sovereign wealth funds and other
institutional investors. Bain's own investment professionals are the largest single investor in each of its funds. From 1993, when Bain raised its first institutional fund through the beginning of 2012, Bain had completed fundraising for 11 funds with total investor commitments of over $38 billion, including its global private equity funds and separate funds focusing specifically on investments in Europe and Asia. Since 1998, each of Bain's global funds has invested alongside a
coinvestment fund that invests only in certain larger transactions. The following is a summary of Bain's
private equity funds raised from its inception through the beginning of 2012:
[141]
| Fund | Vintage
Year | Committed
Capital ($m) |
|---|
| Bain Capital Fund IV | 1993 | $300 |
| Bain Capital Fund V | 1995 | $500 |
| Bain Capital Fund VI | 1998 | $1,400[142] |
| Bain Capital Fund VII | 2000 | $3,117[142] |
| Bain Capital Fund VIII | 2004 | $4,250[142] |
| Bain Capital Fund VIII-E (Europe) | 2004 | $1,015 |
| Bain Capital Fund IX | 2006 | $10,000[142] |
| Bain Capital Europe III | 2008 | €3,500 |
| Bain Capital Asia | 2008 | $1,000 |
| Bain Capital Fund X | 2008 | $11,800[142] |
| Bain Capital Asia II | 2011 | $2,000 |
Bain Capital Ventures[edit]
Bain Capital Ventures is the
venture capital arm of Bain Capital, focused on seed through late-stage growth equity, investing in business services, consumer, healthcare, internet & mobile, and software companies. Bain Capital Ventures has raised approximately $1.53 billion of investor capital since 2001 across four investment funds.
| Fund | Vintage
Year | Committed
Capital ($m) |
|---|
| Bain Capital Venture Fund | 2001 | $250 |
| Bain Capital Venture Partners 2005 | 2005 | $250 |
| Bain Capital Venture Partners 2007 | 2007 | $500 |
| Bain Capital Venture Partners 2009 | 2009 | $525 |
| Bain Capital Venture Partners 2012 | 2012 | $600[143] |
Bain Capital Public Equity[edit]
Previously known as Brookside Capital,
[146] Bain Capital Public Equity is the
public equity affiliate of Bain Capital. Established in October 1996, Bain Capital Public Equity's primary objective is to invest in securities of publicly traded companies that offer opportunities to realize substantial long-term
capital appreciation. Bain Capital Public Equity employs a
long/short equity strategy to reduce market risk in the portfolio
[147]
Bain Capital Credit[edit]
Formerly known as Sankaty Advisors,
[146] Bain Capital Credit is the
fixed income affiliate of Bain Capital, a manager of
high yield debt securities. With approximately $30 billion of assets under management, Bain Capital Credit invests in a wide variety of securities, including
leveraged loans,
high-yield bonds,
distressed securities,
mezzanine debt,
convertible bonds,
structured products and
equity investments. Bain Capital Credit has approximately 140 employees, including 80 investment professionals across offices in the United States, Europe, Asia and Australia.
[148]
Appraisals and critiques[edit]
In his 2009 book
The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, Josh Kosman described Bain Capital as "notorious for its failure to plow profits back into its businesses," being the first large private-equity firm to derive a large fraction of its revenues from corporate dividends and other distributions. The revenue potential of this strategy, which may "starve" a company of capital,
[150] was increased by a 1970s court ruling that allowed companies to consider the entire fair-market value of the company, instead of only their "hard assets", in determining how much money was available to pay dividends.
[151] In at least some instances, companies acquired by Bain borrowed money in order to increase their dividend payments, ultimately leading to the collapse of what had been financially stable businesses.
[55]
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