Originally Posted by ikestoys
Yeah, Bain was so awful when they were the first investor in staples, which allowed them to grow from 1 store to thousands. The bastards MADE MONEY!
Companies like bain make monies when they make companies better. They lose monies when they don't. Essentially you're criticizing Bain for adding value and being wildly successful.
Did you even read my post? I actually said they are probably a net positive. But just assuming that they make companies better is just lolworthy. On average they don't on an individual basis. What they do very well is allocating capital, but that means they engage in financial brinkmanship for the individual businesses which will go broke during a small downturn or if credit dries up. But Bain will walk away almost unscathed and the capital will be allocated more efficiently.
While this is very good for the markets it's not that great for the employees and other stakeholders in the businesses that blows up spectacularly. I think it's a completely fair political position to prefer the benefit of employees and local communities over a little more efficient capital allocation.
Originally Posted by seattlelou
Successful PE firms add value to the companies they buy, period. How is this anything but positive?
If a company goes broke because of the leverage it's a negative for a lot of people. Especially if the business would have been fine without the extreme leverage. I know here is where the 'they bought crap broke companies and fixed them' meme comes in but that's just not true.
By the way, I have owned previous Bain businesses and I have posted about it in BFI. They're often very shareholder friendly.