Bain CapitalBain Capital, Inc.

Headquarters: Boston

The Company

As of March 2007, Bain Capital had raised $13 billion in private equity leveraged buyout funds. Bain Capital Inc., formerly Bain & Co., is known for charging higher carried interest than average— 30 percent versus the standard 20 percent—and is a staple of the club deal circuit. Historically, nearly half of Bain’s deals have been club deals. Bain’s club deals include Toys ‘R’ Us, with KKR and Vornado Realty Trust; AMC Entertainment, with JP Morgan, Apollo Management, Carlyle Group and Spectrum Equity Investors, and Burger King with TPG and Goldman Sachs Capital Partners. Overall, its total assets under management were valued at $40 billion in 2007. Bain’s most recent fund, “Bain Capital X,” raised $10 billion in 2006, $4 billion more than was originally anticipated.

The Moneymakers

Joshua Bekenstein: A graduate of Yale and Harvard, Bekenstein continues his ties to his alma mater, serving on Yale’s investment committee. Bekenstein and his wife, Anita, are generous political donors, giving a total of $431,000 to various candidates and PACs between 2004 and 2006.

Stephen Pagliuca: The grandson of a New York City shoemaker and the son of an army officer, Pagliuca is part owner of the Boston Celtics. Pagliuca was the lead partner on the HCA deal. Pagliuca’s net worth is estimated to be $410 million.

Mark Nunnelly: Nunnelly was the lead partner in the Domino’s Pizza deal.

Money Sources

According to Fortune magazine, in 2006, Bain Capital raised $13 billion in buyout funds largely from university endowments. Contrary to most other large buyout firms, Bain does not rely on major public pension funds as a significant source of capital.

Printing Money

• As part of a club deal with Texas Pacific and Goldman Sachs, Burger King was acquired by Bain Capital in 2002 for $1.5 billion, with Bain contributing an estimated $190 million in equity. Two dividend recapitalizations in 2005 and 2006 resulted in the Burger King club participants recouping nearly all of their original equity investment. In May 2006, the buyout group took Burger King public. Following a second share offering in February 2007, Bain still owned 19 percent of the company worth more than $560 million. According to The Deal, the two stock offerings and dividend recaps earned Bain and the other Burger King investors four times their initial investment.
• According to Forbes, Bain and the other private equity firms that acquired Warner Music Group in 2003 made $3.2 billion on a $1.25 billion investment in just a little over a year, and the company was still losing money at the time. For more information about the Warner Music deal, click here.