Bain Capital

“Other things like stress credit, we'll use Canyon or Bain because we're not going to be able to have that expertise in house”

“First, it said that private equity had made the majority of its money in deals done at less than seven times EBITDA.”

“15% of every dollar is our own capital, and that's multiplied by a very large dollar amount.”

“It's like there is an inefficiency, ultimately, that remains in our industry, not to get the highest price. They'll get that, but to have the Prospect of returns be judged differently by one sponsor versus another one strategic versus another.”

“Now, mind you, today, between all of our global, at least private equity funds, we're about 23, twenty-four billion, including our own capital, so, and today, we're about probably the 10th largest fund, so it was different in scale, but the concept was the sam…”

“If you're A company today that's given away half your equity, you can only give away your equity once. You can't actually give it away twice. And so right now, that's one of the reasons why our generations of partners that are leaders now stayed and are motiva…”

“If you can find a company that you can double profits in, particularly if it's not perceived as one by others that, that is capable of that, that's gold. That's the gold of our industry is having a unique insight and then putting muscle behind making it happen…”

“And so we negotiated a carve out three times even though at that time. Which obviously today in the diagnostic world, things trade at 15 to 20 times, so that's a, in of itself, a big opportunity for us.”

“There's this natural tendency to believe or feel like that scale is correlated with lower returns, and it is, by the way, but it doesn't mean it's causal, which is to say, if you can find the selective opportunities at scale where you can generate high perform…”

“We've earned over a thousand basis points higher than The private equity mean during our history”

“Well, I think that there is this concept of adding additional voices and insights and perspectives to the room. It seems like it can only help. So having a larger and larger group of people providing input when they're really smart people, It seems intuitively…”

“If we could have 15 shots on goal to make three to, in some cases, 10 times our money, we won't do it every time. But if we do it a third of the time, then we're going to earn that thousand basis points premium.”

“And even if you look at our investment decks, 80% of it is about market, company strategy, and implementation of our thesis. And it's not like, A lot of financial models.”

“The sellers in this case had two hundred million dollars of preferred on a business that was losing fifty million dollars, and they asked us to put up some money at least to show that we had some risk capital, so we put up seven million dollars. For a business…”

“We're not in infrastructure. We're not in energy investing. There's a lot that we're not in, and frankly, we weren't even in real estate, even though we tried for all 30 of my years up until a couple years ago when we actually took over Harvard's real estate b…”

“If you sort of think about all the arbitrage that was being taken out of the market by information and factor analysis and a lot of the quantitative public investors that are out there, that's not our style and certainly never was our style, but it was the sty…”

“Seller always gets the highest price available out there. There's this famous thing that Partners will always bring into the investment committee. It's like we're the buyer of choice. And by the way, I believe we are, but that plus a nickel more will get you t…”

“I mean, I think that 80% of our people come from consulting and operating backgrounds. It's like the inverse of the rest of the industry, where 80% come from finance and investment backgrounds.”

“When we're talking in an investment committee about what do we think about this company or this investment thesis, we're asking the most junior people who are closest to the work to articulate their view. We literally go around the room And have every person o…”

“In fact, one of the big metrics that we all often sought was 10 times our money in five years, which is a 55.8% return, which was what we targeted.”

“In just shortly after the financial crisis, there were questions around skin in the game from the perspective of investors and investors were saying, yeah, your performance in the industry hasn't been that good through this cycle. And so how do I know you're i…”

“And again, back to our investment thesis, that's part of what we've been waiting for is seeing a point where even those entities being regulated are going, you know what, it's just the right thing for us to do.”

“When I moved over from stock picking to allocating, it ended up being quite a bit more similar than I thought, in the sense of, at the end of the day, you're interviewing teams about what they do in their day job, and then conducting research to try and build …”

“More recently, we've come across environmental markets in the last five years, which we think is another example of one of these nascent markets where there is not significant capital yet and move those markets to what we think is, is fair value as an example.”

“So what we have seen is a very, very disparate set of opportunities in the voluntary markets, many of which are interesting, but many of which are also not interesting, both as actually doing good in the world, as well as an investment opportunities. And like …”

“And in the window of time we're in now, sort of mid decade, 20 twenties, we are likely to be flipping into an environment where we're going to be in shortage of many of these instruments. And that's likely to cause a significant price inflection.”

“We were all heavily, heavily exposed to equity risk, so it was no surprise that a lot of what we were craving was investments that are diversifying from equity risk, so strategies that are more in the absolute return and uncorrelated buckets, so either explici…”

“And after doing that for about a decade, the firm was looking to start a new group in order to find investment opportunities for the personal capital of the partners at the firm. And I was invited to throw my hat in the ring for that opportunity. This was righ…”

“So over time that's included things like investing in healthcare royalties, which when we first started looking at it, there were a single digit number of investors and partners in that market. These days there's, you know, many dozens”

“This actually wasn't a case where we had a lot of very transformative initiatives in mind. HCA was a well-run company, and so this was much more a story about just Really focusing on a longer list of tactical optimizations with the idea that driving that kind …”

“We ended up making about a five times multiple of money on that investment.”

“If we can build the right capacity to be really important hospital systems in any given city, then that is going to put us in a position to be able to make the investments we need to make, to have the right capital base, to be able to attract the right physici…”

“We don't engage in any misinformation or anything like that, so generally the best thing you can do is just sit quietly and let it go away on its own, because the more you're making awkwardly worded, non-denial denials, the more you're probably just be contrib…”

“This might be the only time that I've ever bought a company without ever having actually visited the company's headquarters or real estate. All of this diligence Happened with the HCA management team. They were very much engaged in it, but in conference rooms …”

“Merrill Lynch first managed to get their own internal approvals, not just for the equity, but for the debt. Speaking for about a quarter of the debt deals, we decided we needed three more banks to be able to fill out the whole thing. And so then we went to the…”

“Those were in the early days of LBO investing when you could Make those investments with very small equity accounts, and if you get good growth on a very small equity account, you can have a very successful investment, and so that turned out to be a very succe…”

“Nobody would have really believed, and frankly, we weren't even sure in that 2005, six timeframe, could you really do a deal as big as HCA, which was a thirty-three billion dollar enterprise value transaction.”

“It was the largest transaction ever at the time, and by far the largest that had happened since the late eighties during that first wave of big LBOs.”

“We did go public, so that created a de-levering event. The debt markets, you know, improve a lot between 2008 or nine, which is when we would have been having this conversation, and 2011 or 12, which is really when our debt started to mature.”

“When we finally came back with our final proposal, it was literally our last dollar, probably even a little bit beyond what we thought our last dollar was going to be.”

“Back in early 21, when no one believed interest rates could ever go up, we actually put in place swaps and hedges to swap out over 95% of our variable rate interest exposure across our entire portfolio”

“It was Bain Capital, KKR, Merrill Lynch, and the Frist family speaking for the equity, but then we also needed to figure out how do we fill out north of twenty billion dollars worth of debt that was going to need to be underwritten for this transaction.”

“And actually, Tommy called us. It was the original genesis of this for us back in, it was probably late, 2005, maybe early 2006, with what almost started off as, hey, I've got a crazy idea, because the transaction was so large that no one ever really would hav…”

“Day one, that didn't affect our balance sheets. Our balance sheet was all underwritten and put in place, and we'd, you know, swapped out our interest rates, and so we had what we had from a balance sheet perspective.”

“Shortly after HCA, as the debt markets heading right into the GFC got really hot, there was a period of time where lots of different public to privates could happen and frankly did happen, but HCA was really on the very, very front Edge of that, and maybe you …”

“We went public at 30 dollars a share, which felt like a good valuation to us. And, but look, I don't think the Frist's have sold many of their shares over the years. And we ended up, I think, selling our last shares around 75 dollars a share or so.”

“The IPO is actually mainly Secondary capital, because we had done a good job of growing into our capital structure and already going down the path of spreading it over time.”

“I think that evolution resulted in us all going to larger deals and deploying capital, and then our resources deployed against larger companies, because we put half our people more often in the companies on a day-to-day basis, and so having the ability to actu…”

“It's a hundred percent people. Look, I do think the all asset space, there's a long time between when the active management public space went from being a really people driven business to becoming a more distribution business and more commoditized. I think in …”

“Over time we're a 180. We have two hundred billion of assets. We have 13 strategies.”

“Founder-oriented models, generally the ones that didn't survive more than A generation.”

“I think we bought Accuride. I think it was levered, 8515, or ninety-ten, and had five million of investment, and we made 25 times our money. And that's because we turned the business around, not because it was just financial engineering. We actually took a bus…”

“Starting businesses, we've started eight new businesses since 2015, and it's all with our people, and I think the opportunity to do that not by having a brand, And capital, but by having people who have decided they really wanted to really pursue an opportunit…”

“We didn't have LPs that were institutional. We didn't know anybody on Wall Street. We actually started out in venture capital and growth equity because you could just write checks, didn't rely on other people's checks. And the money we raised was from the part…”

“We are an industry of practitioners who also need to take leadership roles, and I think that type of credibility of having people who have been doing deals making an impact in companies and then putting them in leadership, that's been part of how we've grown o…”

“We've had the same country managers in Japan, in China, in India, Korea, and Australia from the very beginning, and we've been there for 20 plus years”

“So think about low rates of 1920, and 21, where we raised the capital, and then think about Our average returns being 20 to 25%.”

“I think that in terms of attracting and retaining people, I think people who come to a firm where we have a hundred percent of our economics to invest in our people and our partnership versus having 50% of it gone forever, I think that's fundamentally more att…”

“And the rest of the industry was hiring from investment banks, which I think are principles at one level, but at the same time, they're really about getting fees for transactions, not for making returns on investment. So it's probably the worst possible place …”

“We had 250 people. Two thirds of those people were working inside the companies and we call it getting across the icy river. We got across the icy river, which was probably in some ways we'll never get rewarded for it, but it was probably one of our finest mom…”

“I think the failures, look, we're 40 years in, the narrative for our industry is still pretty negative. It's not that far away from the barbarians at the gate stereotype that we've been living with from the start, and so I think that we need to turn that aroun…”

“There are incredibly successful Dealmakers and portfolio folks would not be great leaders or don't want to be. And so I think that's a common mistake that firms make is they put their best dealmakers who don't either have the interest or capabilities leaders, …”

“And on top of that, we always had two deal partners. And more recently, we also have a portfolio partner on every Transaction.”

“So we bought almost all cyclical businesses in O six and O seven.”

“We're trying to find asymmetric upside, 15 to 20 shots on goal where we can not just generate a good return. And it may not be 25 times like it was in the beginning, it may not be 10 times like it was 20 years ago, but it can be three To five, and sometimes 10…”

“We wanted to create a form of governance that allowed for the broad number of partners that remained to elect the group that could lead, but they would be accountable to the broad partnership for that leadership. And that structure, I think, worked pretty well…”

“Our ability to generate consistent differentiated thousand basis points of premium over our public equity return reference points”

“We've always been the head of the pack in terms of how much money we put in our own deals, and every one of the partners does that, and every one of the employees does that, is they're investing their deals.”

“Honestly, we were the first ones to really start recruiting right out of college or certainly right after a couple of years in their first job, and I think getting people in early to really get the mentorship and training From people more experienced over a lo…”

“The only reason you can do that is to create some form of inflection, some form of strategic repositioning, some form of asymmetric upside in the operating outcomes, some M&A. And so everything we do is to say, okay, we're going to buy a business based on what…”

“I think the second one is that you cannot be successful at the firm unless you have terrific upward feedback and are able to manage a team, and we measure that every deal.”

“Insurance companies are going to be much bigger allocators. Lincoln recently partnered with Bain and Partners Group, these really strategic partnerships. They have hundreds of billions of dollars in the general account to invest into private markets and So the…”