What Does Bain Capital Do?

[Guest]

In that there's been so much conversation here about Bain Capital, I thought it might make sense just to revisit what he firm does.

Bain Capital is a Boston-headquartered alternative asset management and financial services company that specializes in private equity, venture capital, credit and public market investments. Bain invests across a broad range of industry sectors and geographic regions. As of the beginning of 2012, the firm managed approximately $66 billion of investor capital across its various investment platforms.

The firm was founded in 1984 by partners from the consulting firm Bain & Company. Since inception it has invested in or acquired hundreds of companies including AMC Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, DoubleClick, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group and The Weather Channel.

As of the end of 2011, Bain Capital had approximately 400 professionals, most with previous experience in consulting, business operations or finance. Bain is headquartered in Boston, Massachusetts with additional offices in New York City, Chicago, Palo Alto, London, Luxembourg, Munich, Mumbai, Hong Kong, Shanghai and Tokyo.

Bain has several distinct investment businesses under the "Bain Capital" umbrella.
Bain Capital Private Equity does leveraged buyouts of mature companies. Their current portfolio of companies is shown on the following website.
Bain Capital Private Equity | Portfolio (http://www.baincapitalprivateequity.com/Investments/Default.aspx)

Bain Capital Ventures is the venture capital arm of the company. "Venture capital" investments are investments in start-up companies or those companies that are immature, very early in their business cycle. The companies owned as venture capital investments are shown on the following website.
Bain Capital Ventures | Portfolio (http://www.baincapitalventures.com/portfolio/)

Sankaty Advisors is the arm of Bain that buys and sells debt instruments. They own and trade almost $16 billion in both fixed and floating rate, secured and unsecured, short-term and long-term loans.

Absolute Return Capital is the absolute return affiliate of Bain Capital. ARC manages assets in fixed income, equity, commodity, and currency markets to produce attractive risk-adjusted returns while maintaining low correlation to traditional and other alternative investments.

Brookside Capital is the trading arm of Bain that manages a private fund which invests in and trades the stock of public companies worldwide.
Investors in the various funds that Bain manages include some of the largest and most sophisticated financial institutions, corpoations, a variety of college endowments funds, a large number of state and large municipality pension funds, and many private investors. Since its founding in 1984, Bain has raised and managed hundreds of billions of dollars of invested capital. Mitt Romney was a founding partner and is now the sole owner of the firm.

[Guest]

Wait a second !! Wait a second !!!!!!!!!!!!!!!

Willard is NOT the sole owner. Well, even if was - or is - he resigned retroactively to 1999. And even though he signed papers indicating he WAS/IS the sole owner, sole shareholder, Chairman of the Board, CEO and President of Bain in 2002 and 2003 that doesn't really count - because he resigned retroactively to 1999.

.... that's a pretty good trick, resigning retroactively, have to remember that .......

So, can we please stop this talk about Bain. By now, everyone knows what Bain does ... or did .... retroactively, of course.

[Guest]

Wait a second !! Wait a second !!!!!!!!!!!!!!!

Willard is NOT the sole owner. Well, even if was - or is - he resigned retroactively to 1999. And even though he signed papers indicating he WAS/IS the sole owner, sole shareholder, Chairman of the Board, CEO and President of Bain in 2002 and 2003 that doesn't really count - because he resigned retroactively to 1999.

.... that's a pretty good trick, resigning retroactively, have to remember that .......

So, can we please stop this talk about Bain. By now, everyone knows what Bain does ... or did .... retroactively, of course.

the original post is a very good description of what Bain capital is and does. And your typical talking points manner you choose to go off to criticize Mitt Romney. I thought the original post was informative. Most intelligent people have already said that the hypotheses that you are trying to support about trickery and crimes etc. etc. there's a whole bunch of horsefeathers. Keep it up I would expect nothing less of you.

[Guest]

I should have included this in my initial post. But when we throw big numbers around, it's really easy to forget, or at least not appreciate, the "zeros" in all those numbers.

From their own website, Bain says they currently manage $65 billion of investor's funds. I explained earlier how part of Bain's profits is the "preferred carried interest" on their investments when the companies or assets are sold. Bain takes 20% of those gains (none of any losses, by the way), while their investors get 80%.

Another source of Bain's income is an annual fee for managing the invested funds. It's common in the leveraged equity business that such fee is 2%. That means that among the other fees Bain charges, they have annual management fee income of $1.3 billion. A lot of that is distributed to the 400 or so professionals at Bain as annual bonuses. But if only 10% of just that portion of Bain's income, nowhere near as much as the capital gains portion of their earnings by the way, then $130 million would "trickle down" to the owner of the company, Mitt Romney.

It's pretty easy to see how he can afford a million dollar horse for his wife and an elevator for his cars, isn't it? It's also easy to understand why he doesn't want to release his tax returns. I wouldn't either.

But he's going to have a tough time defending the newest argument from the Democrats--would Bain make an investment in a company with only two years of financial statements as it's due diligence? The answer is no, the standard is at least five years.

None of this will deem Romney any less qualified for the job as POTUS. Quite the contrary, they'll prove him to be a very smart man who is capable of understanding and dealing with the large numbers of the federal government. But his tax returns will absolutely place him in the upper reaches of the "top 1%". Even if unimportant, how will the public react? How will the Democrats use this information in attack ads? That all remains to be seen, I guess.

[Guest]

In that there's been so much conversation here about Bain Capital, I thought it might make sense just to revisit what he firm does.

Bain Capital is a Boston-headquartered alternative asset management and financial services company that specializes in private equity, venture capital, credit and public market investments. Bain invests across a broad range of industry sectors and geographic regions. As of the beginning of 2012, the firm managed approximately $66 billion of investor capital across its various investment platforms.

The firm was founded in 1984 by partners from the consulting firm Bain & Company. Since inception it has invested in or acquired hundreds of companies including AMC Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, DoubleClick, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group and The Weather Channel.

As of the end of 2011, Bain Capital had approximately 400 professionals, most with previous experience in consulting, business operations or finance. Bain is headquartered in Boston, Massachusetts with additional offices in New York City, Chicago, Palo Alto, London, Luxembourg, Munich, Mumbai, Hong Kong, Shanghai and Tokyo.

Bain has several distinct investment businesses under the "Bain Capital" umbrella.
Bain Capital Private Equity does leveraged buyouts of mature companies. Their current portfolio of companies is shown on the following website.
Bain Capital Private Equity | Portfolio (http://www.baincapitalprivateequity.com/Investments/Default.aspx)

Bain Capital Ventures is the venture capital arm of the company. "Venture capital" investments are investments in start-up companies or those companies that are immature, very early in their business cycle. The companies owned as venture capital investments are shown on the following website.
Bain Capital Ventures | Portfolio (http://www.baincapitalventures.com/portfolio/)

Sankaty Advisors is the arm of Bain that buys and sells debt instruments. They own and trade almost $16 billion in both fixed and floating rate, secured and unsecured, short-term and long-term loans.

Absolute Return Capital is the absolute return affiliate of Bain Capital. ARC manages assets in fixed income, equity, commodity, and currency markets to produce attractive risk-adjusted returns while maintaining low correlation to traditional and other alternative investments.

Brookside Capital is the trading arm of Bain that manages a private fund which invests in and trades the stock of public companies worldwide.
Investors in the various funds that Bain manages include some of the largest and most sophisticated financial institutions, corpoations, a variety of college endowments funds, a large number of state and large municipality pension funds, and many private investors. Since its founding in 1984, Bain has raised and managed hundreds of billions of dollars of invested capital. Mitt Romney was a founding partner and is now the sole owner of the firm.

Would not the sole owner of a firm be responsible for the actions of Bain Capital during his tenure in that position???

[Guest]

I don't get what folks are looking for. So what if he was? Does that make any more of an issue for Romney than it does to ask for an accounting of every company under Obama's watch that ever outsourced a job over seas. Same thing. It was announced yesterday that a portion of the Obama's investments are in companies that do outsource jobs over seas. And that just came to light and disappeared as magically as it showed up.

If it doesn't matter for Obama it does not matter for Romney.

I know it is a challenge but how about looking at the bright side of Romney's Bain experience....if he brings that kind of capability to Washington...and if he cleans house of all the joke committees, czars and other focused do nothing teams....and brings in business based talent like they do at Bain......there is a much better probability of something positive happening to get us on the right fiscal track. That's what Bain did/does.

The problems of America are much more suited to a Bain background on a resume' than that of a community organizer. The last 3+ years have demonstrated that CLEARLY!!!

btk

PS yes there will be a reduction of force/layoff/firing/etc of the not needed people. Small price to pay to get on the right track with better results than increased government employment.

[Guest]

For someone with a "Bain resume", Willard sure is reluctant to discuss his "Bain resume".

Does his "Bain resume" extend to the years 2002 and 2003, or does his "Bain resume" end in 1999?

If Willard's "Bain resume" ends in 1999, like he says it does, how could be sign SEC documents in 2002 and 2003 that lists him as the sole owner?

As Tricky once said - people need to know I am not a crook. Or, in Willard's case, a felon.

And ............. how does one resign from a company "retroactively"?

[Guest]

some just continue looking for fly specs in the pepper!!

Bain is a mere distraction that only affects Obama.

The election will be won by he who addresses the real issues that affect we the people.

btk

[Guest]

Would not the sole owner of a firm be responsible for the actions of Bain Capital during his tenure in that position???
Of course, he's responsible. But the way Bain organizes it's investments in companies is in individual partnerships within the parent company. The partners in the "deal partnerships" are the Bain professionals who found and negotiated the deal, and who almost always serve on the board of directors of the acquired company.

Often, those partners actually make personal investments in the deal, parallel with the larger investment made by Bain. The key managers of the acquired company that Bain chooses to retain are almost always given options to buy shares in the company when it is sold or taken public, often as much as 10% ownership. In that way, both the Bain partners and key management of the company have "skin in the game", and potentially can make a lot of money if they do a good job in turning the company around.

But back to your question. While Romney may have been CEO and sole owner of the parent company, he would seldom get involved in the operation of the individual partnerships. He'd get periodic reports, often quarterly with lots of financial detail, but little on operational decisions. As an example, if an individual company closed a division or opened a factory in Mexico or China, that would probably be footnoted in a quarterly report. But Romney would not have been involved in those decisions.

Surely, Romney could have established a firm-wide policy not to make any decisions that would either move jobs offshore or close U.S. factories. But remember, Bain is managing and investing $65 billion of other people's money. Those investors would have the purely capitalistic goal of maximizing the return on their investments. Any such Bain policy would have to be disclosed to investors and they almost certainly would not be in agreement with such a virtuous policy.

So, was Romney responsible? Yes. Should he have known about every bankruptcy or movement if jobs offshore? That's almost ridiculous on its face. Bain owns 79 different companies, some very big ones. Should the CEO be expected to know all the operational details of each company Bain owns? Of course not.

Romney is responsible for what happens in 79 different companies managed by over 400 Bain professionals and thousands of company managers? Sure, in much the same way that President Obama is responsible for actions by government employees several levels below his pay grade.

As an example, was Obama responsible for the Energy Department's investment in the now bankrupt Solyndra? Yes, it happened on his watch. Should he have known about Solyndra's financial condition or the apparent self-dealing by federal employees and Congressional family members? Should he be blamed for their actions? I don't think so, not any more than Mitt Romney should be blamed for Bain's portfolio companies filing for bankruptcy or sending jobs offshore.

[Guest]

Unfortunately for Mitt Romney, most voters don't have the time to research Bain Capital the way posters on this forum have. What voters see is a guy who said "I like being able to fire people", "I don't care about poor people", "corporations are people, my friends", "let Detroit go bankrupt".

I have to agree with Rick Santorum who said "Romney is the worst candidate in the country to run for president" or words to that effect. Santorum was speaking about Romney's health care bill, but it also applies to Romney's business experience, which is solely what Romney wants to run on...not his experience as governor. It's just too close to the 2008 financial meltdown to put a candidate out there who is the epitome of the Gordon Gecko image many detest.

[Guest]

Unfortunately for Mitt Romney, most voters don't have the time to research Bain Capital the way posters on this forum have. What voters see is a guy who said "I like being able to fire people", "I don't care about poor people", "corporations are people, my friends", "let Detroit go bankrupt".

I have to agree with Rick Santorum who said "Romney is the worst candidate in the country to run for president" or words to that effect. Santorum was speaking about Romney's health care bill, but it also applies to Romney's business experience, which is solely what Romney wants to run on...not his experience as governor. It's just too close to the 2008 financial meltdown to put a candidate out there who is the epitome of the Gordon Gecko image many detest.

I do also agree that Mitt Romney should be focusing on what he did in MA mainly because a country is not a corporation. It does not run on the idea of profit margin. I liked Rick Santorum a lot more than Romney except that Santorum was often very hot headed which is not something one should look for in a Commander-in-Chief. His religious views were also way out there.