First, the Bain model has been copied, and the marginal benefit has declined?
(1) The operating mode of Bain Capital has not changed. Like the Romney administration, the company will assign a team of analysts to study potential acquisition targets before making an offer, and this research process often lasts for several months. If Bain Capital wins the bid, it will send about 70 consultants to the invested company internally to provide all relevant consulting services, including upgrading their computer systems to calculate the profitability of fast food. The problem is that other companies in the PE industry have also caught up with Bain Capital: Blackstone, Carlyle and almost all other big companies now send in-house consultants to the acquired companies to implement reforms.
(2) "If it was 10 to 15 years ago, Bain Capital was very different, but over time, other companies followed its business model," said Steven N. Kaplan, a professor specializing in private equity investment at the Booth School of Business at the University of Chicago. "They were able to invest in private equity in 2006, 2007 and 2007.
(3) "They began to believe a little too much in their ability to improve the operation of the acquired company, and they began to pay higher prices for the acquisition," added the partner of a PE company competing with Bain Capital. "During the economic downturn, these improvements did not create considerable profits." The partner expressed appreciation for Bain Capital's management ability, but at the same time said that it could not offset the adverse effects caused by Bain's high price when acquiring companies such as Clear Channel Communication Company, Guitar Center and Gymboree.
(4) Bain Capital is still active in private equity investment. Even after the company was censored for Romney's presidential campaign, the company's talents did not escape. In addition, they can still raise funds, as evidenced by the $2.3 billion Asian fund raised by the company this year. However, in the next five years, can those who invest in Romney blindly because they expect the brilliant investment performance during his term of office not buy the S&P 500 index fund, but rely on companies such as sweeping communication company, guitar center and Toys R Us to get higher return on investment? If we consider that Bain charges such a high management fee, can we still achieve this goal? I'm afraid not.