It's impossible to crack the business pages today without seeing a story on a public company's acquisition by a private equity firm. Peer deeper into those deals and there's an even chance you'll spot the helping hand of Bain & Company's private equity practice. Founded 10 years ago by Director Dan Haas and his colleagues, Bain's
private equity group consulting practice today represents one of the firm's single largest – and fastest-growing – practice area. Boston-based Bain has worked on more than $1 trillion dollars of private equity buyouts and more than half of all the $200 million-plus deals around the world.
Haas, who has personally worked on more than 300 private equity assignments, attributes the practice's success to the firm's entrepreneurial genes, a savvy business model and its tight integration with the rest of the firm.
"Honestly, when we first started out we made every mistake in the book," says Haas, who also sits on Bain's management committee. "Just like any entrepreneurial venture, this was a new business model. Luckily, we had a very patient and benevolent parent to help us along."
As Haas and his team learned the ropes, they stopped trying
to boil the ocean when conducting due diligence on potential acquisitions for their clients and greatly sharpened their analyses.
"When you really break down industries and companies to find out what makes them perform and then you apply the right tools … you can get to really powerful insights in a short period of time," he says. "If the firm does buy the company, the trick is figuring how you then work with the management team to take advantage of those insights. Private equity deals don't naturally outperform the market on their own, they outperform the market because management executes superior strategies."
Bain's private equity group also helps their clients' portfolio companies execute those strategies. And, oftentimes, the firm co-invests multiples of the fee it earns on due diligence on the acquisition. "So, you're kind of forced to eat your own cooking," Haas says. That model produces rich desserts for clients and for Bain when the ensuing performance and valuation of the portfolio companies soars – as they have consistently.
"For a company that's so focused on results," Haas says, "our practice and approach are just perfectly aligned with what the firm as a whole tries to do every day."
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