Returns in private equity, of course, arent monolithic either, which is why LPs have tended to reward certain funds over others. A unique partnership that combines breakthrough carbon footprint analytics with decarbonization strategy. As private equitys relative outperformance attracts increasing amounts of capital from investors, competition for a limited number of high-quality assets increases, driving up average purchase price multiples. There were 28 of these firms in our sample, and they clearly won on a deal-by-deal basis, as measured by internal rate of return. Most PE investors cant get enough: Around 50% of LPs are heading into 2020 underallocated to private equity. Private equity outdid itself in 2021 as investors raced to capture technology-fueled growth. We are proud to lead the industry on environmentally responsible practices as a Certified 100% CarbonNeutral Company. We work with environmental NGOs to strengthen their conservation efforts, and with corporate clients to embed sustainability and reduce environmental impact. Its all about streamlining operations or improving outcomes. An integrated approach that connects sustainability to your strategyand to results. Bain & Company mobilizes its global talent, strategic expertise and partnerships with leading social innovators to tackle economic, educational and environmental challenges According to Bain & Companys latest Social Impact Report, 70 percent of its 8,000 employees have participated in social impact work in the last year, Our dedicated case teams typically partner with clients over a prolonged period of time to address their most complex, big-picture management issues. These employee-led teams identify and implement environmentally sustainable practices in their local offices and share best practices globally. We partner with a range of organizations that are creating meaningful change in our communities. *I have read thePrivacy Policyand agree to its terms. The debate is heating up, and it may shed light on the future of ESG investing. *I have read thePrivacy Policyand agree to its terms. Our depth of expertise and strong market positioning have played a pivotal role in more than half of $500 millionplus buyout transactions globally since 2000. Improving the efficiency and productivity of Indian agriculture. Externs can also work with alternative organizations based on the causes they are personally passionate about. Bainies across the globe give their time and talent to make a difference. Please select an industry from the dropdown list. Since our founding in 1984, weve applied our insight and experience to organically expand into several asset classes All things being equal, public equities offer more liquidity at less cost. Through these "Extra 10%" projects, volunteer teams provide consulting advice to nonprofits and social enterprises. To tackle these issues, we have organized around four key areas. We have recently announced our renewed and strengthened commitment to advancing racial equality and social justice in our communities. As strong as private equitys performance has been for the past decade, buyout returns have been trending downward over the past 30 years. At the same time, US equities benefited from a global flight to quality as bad news in EuropeBrexit, sovereign default scares, the threat of recession in Germany and Southern Europedrove investors to seek solace in the S&P 500. Deals flow from provider demand for supply chain resilience, expense management, and support for alternative care. Incremental capital helps cutting-edge firms scale up operations. WebWe created the Net Promoter System to help companies measure and manage customer loyalty. Nicolas Bloch is a coleader of Bain & Companys Strategy practice. Our ESG expertise combined with powerful analytics from EcoVadis to reach your sustainability goals higher faster. Private equity investors recognize this and continue to believe in the consistent, long-term outperformance that buyout funds deliver. We can help youembrace a holistic approachthat spans the entire investing value chain, so you achieve superior returns and help create a more sustainable world. Our team of more than 2,000 private equity consultants serves clients globally, providing essential guidance on strategy, sourcing, due diligence, post-acquisition value creation, and institutional investor strategy. If you dont have an angle, youre going to be the odd firm out. If you draw a trend line between the 10-year return in 1999 and the 10-year return today, it would show a decline of 6 percentage points over that period (see Figure 3.5). Determine a targets full potential and provide a clear post-acquisition agenda. Determine a targets full potential and provide a clear post-acquisition agenda. By Hugh MacArthur, Josh Lerner and State Street Global Markets & State Street Private Equity Index. In the decade following the dot-com crash (through March 2010), the PME indexs annual return fell to 0.08%, while private equity maintained a 7.5% average. These are a few of the ways our people take action. WebBain & Company is a top management consulting firm. We advise investors across the entire investment life cycle. Since 2000, net asset value for global buyouts has grown 3.5 times faster than the public markets (see Figure 3.4). Please read and agree to the Privacy Policy. *I have read thePrivacy Policyand agree to its terms. Theres little reason to believe that US equities will somehow break out of this pattern and sustain these double-digit returns over the long term. Please read and agree to the Privacy Policy. There is growing evidence that when investors embed ESG considerations into their strategies, they achieve superior valuations and a host of positive outcomes. The first clue: The surge in public valuations following the global financial crisis is neither surprising nor unprecedented. While competition from the public markets will surely ease off at some point, the long-term trend in PE returns is more troublesome. Healthcares resilience attracts both more capital and creative new forms of capital. Together, we achieve extraordinary outcomes. Comprehensive analysis and benchmarking results in a clear plan to increase EBITDA while boosting ESG performance. Large-scale and tech-savvy assets get the lions share of investment. Is your sweet spot clear and distinctive? We support the drive for rapid returns by developing a strategic blueprint, leading workshops that align management with strategic priorities, and directing focused initiatives. We advise leaders on strategy, marketing, organization, operations, IT and M&A, across all industries and geographies. This explains why a large majority of the capital flowing into private equity is targeting these top-tier firms. The buyout world is dominated by technology deals, but due diligence is still catching up at many firms. Our team helped StateHoldingCo renew its core investment strategy through embedding environmental, social, and corporate governance criteria into deal decisions. WebBain Boston was founded by Bill Bain in 1973 and serves as the corporate headquarters. Investors have poured more than $2 trillion into buyout funds over the past decade for a simple reason: They deliver. The real lesson from this period of convergence is that if you arent in that group, your ability to raise funds in the future will likely be compromised. Once public, growth-backed software companies continued to perform. Explore our Sustainability & Corporate Responsibility work. Of course, what came next also followed a pattern. They are also meeting demand for more sustainable, socially conscious corporate behavior, weaving ESG into all operationsand gaining market share in the process. We advise investors across the entire investment life cycle. We can help you find the answers. High multiples arent as scary as they seem, but differentiated expertise is critical in this burgeoning sector. Our healthcare and life sciences consulting expertise is built on a detailed understanding of each player across the value chain, from doctors and patients to payers, drug developers and manufacturers. Stay ahead in a rapidly changing world. They had many more deals with an IRR above 15% (32% of their portfolios vs. 18% for the laggards) and far fewer write-offs (5% vs. 8%). Learn about our economic development work. Your friend needs our help. Bain teams have worked with the Office of the UN High Commissioner for Refugees to develop and operationalize a sustainable fundraising strategy and operating model, which will nearly triple current private-sector funding to $1 billion. Inevitably, such periods of exuberance in public markets are punctuated by years of lethargy as performance reverts to the mean. Please select an industry from the dropdown list. Stand apart from your peers and develop tailored strategies for continued excellence. The institutions that allocate increasing portions of their portfolios to buyout funds have good reason to expect a premium. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. WebAcross the private equity industry, a new focus on environmental, social and governance (ESG) issues is taking hold, as investors realize ESG can not only increase valuations but also drive a wide range of positive social outcomes. Investors are hunting for value in a time of discontinuity. They're thinking of opening a coffee shop in a new city and wants our business advice before they proceed. As employees, consumers, and communities raise their voices in support of ESG initiatives, companies that lead on these issues will achieve clear differentiation. 2022 Diversity, Equity, and Inclusion Report, The approach you take to solving a problem, How analytical and creative your thinking is, Your usage of data to quantify and make your recommendations, Your communication skills in conveying your ideas, How you would suggest implementing these proposals. They source deals better than others based on a keen understanding of what theyre looking for and where to find it. Please select an industry from the dropdown list. We work with innovative education nonprofits and school systems to create better opportunities for underserved students to lead choice-filled lives. Bain Capital, LP is one of the worlds leading private investment firms with approximately $160 billion of assets under management that creates lasting impact for our investors, teams, businesses, and the communities in which we live. In a record-breaking year, private equity investors made it plain that its not just about buyout anymore. Focused firms winand win consistentlybecause commitment to a formula sharpens all phases of the value-creation cycle. Please read and agree to the Privacy Policy. *I have read thePrivacy Policyand agree to its terms. Stay ahead in a rapidly changing world. Do you have differentiated scale that allows you to overwhelm the competition with more resources and staying power. 2022 Diversity, Equity, and Inclusion Report. Stay ahead in a rapidly changing world. Investing with Impact: Todays ESG Mandate in Private Equity, Private Equitys New Path to Payoff in Payments, Harnessing Pricing Power to Create Lasting Value, How to Assess Disruption in Due Diligence. *I have read thePrivacy Policyand agree to its terms. Our pro bono work brings Bains talent, expertise and insight to organizations tackling todays urgent challenges in education, racial and social equity, economic development and the environment. Further is a service mark of Bain & Company, Inc. Please select an industry from the dropdown list. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. Bookmark content that interests you and it will be saved here for you to read or share later. WebBain & Company has been named one of the world's best places to work, offering a wide range of career options for undergraduates, MBAs, advanced degree holders and experienced professionals. None of this means that the private equity industry should relax, however. While average returns have declined over time, top-quartile returns have essentially held steady. Social impact externships provide our people with deep, hands-on experience working for a wide variety of NGOs, social enterprises and public sector organizations around the world. There, PEs historic outperformance continues (see Figure 3.2). Bookmark content that interests you and it will be saved here for you to read or share later. Womxn at Bain (WAB) leads global initiatives to enable our members to thrive, as part of our overall mission to make Bain the best place to work globally. Private equity is in our DNA. As healthcare providers enter a new period of disruption, their software investment priorities present opportunities for vendors and investors. Given the historic sell-off in the wake of the crisis, US stocks were teed up for an equally historic rebound. Bain is proud to share that we have led the industry as a 100% CarbonNeutral Company since 2012, offsetting all emissions, including client travel. Hgs Matthew Brockman explains how sector specialization can deliver stable returns, even through unsettling times. Similarly, if youre doing your first industrial turnaround, you might think twice if youre bidding against a firm that is an expert at reducing costs quickly and at improving margin sustainably. WebBain Capital, LP is one of the worlds leading private investment firms with approximately $160 billion of assets under management that creates lasting impact for our investors, teams, businesses, and the communities in which we live. Telecommunications M&A deal values continued to fall in the first half of 2022 after last years surge, but some deal types remain strong. We provide opportunities to work with our key partner organizations, such as Acumen, Endeavor, Ethiopian Agribusiness Accelerator Platform and KIPP. Stand apart from your peers and develop tailored strategies for continued excellence. A loose acronym for Input, Recommend, Agree, Decide and Perform, RAPID assigns owners to the five key roles in any decision. And with deal multiples at record levels, its not going to get any easier in the years ahead to generate the kind of performance investors are looking for. WebWould you like to hire us? Well help you join the ranks of leading investors, those companies that are driving positive outcomes across the full spectrum of ESG considerations: decarbonization, waste reduction, sustainable sourcing, diversity and inclusion, and many more. Returns rose and private equity again outperformed the regions public markets by 4 to 6 percentage points across 5-, 10-, and 20-year horizons. Middling funds can step up their game by developing the kind of differentiated focus that distinguishes the top tier. of limited partners would walk away from an investment opportunity if it posed an ESG concern, cite better investment performance as a key reason to incorporate ESG. First, US monetary and tax policy couldnt have been more accommodating, leading to a slow but steady expansion that produced the lowest level of unemployment in half a century. Its also clear, however, that an elite group of firms has found a way to buck the trend. We have led hundreds of Extra 10% cases over the past few years, providing unique professional development opportunities while positively impacting local communities. The Net Promoter Score SM (NPS ) is a single, easy-to-understand metric that predicts overall company growth and customer lifetime value.These powerful tools can help you earn the passionate loyalty of your customers while inspiring the energy, enthusiasm Bookmark content that interests you and it will be saved here for you to read or share later. Investors look for companies that can easily scale up across borders. According to Bain & Companys latest Social Impact Report, 70 percent of its 8,000 employees have participated in social impact work in the last year, uniting behind the firms commitment to invest $1 billion in pro bono consulting by 2025. WebBain & Company is the leading consulting partner to the private equity industry and its key stakeholders. WebBain & Company is one of the leading strategy consulting firms in the world. Learn about our economic development work. WebThe 12th annual event is focused on best practices in private equity portfolio operations and value creation across all functional business areas. Technology: Bubble or Opportunity for Private Equity Investors? ESG has grown beyond its socially conscious roots to become a core component of creating value in private equity. Our recruiting process is outlined on this site. The best deal decisions require more than commercial diligence. Buying at premium prices makes it ever more challenging to create value during ownership and exit with an acceptable return. They lock up their money for a period of years with the presumption that professional managers will generate alpha through innovative value-creation strategies and leverage. As strong as private equitys performance has been for the past decade, buyout returns have been trending downward over the past 30 years. Bookmark content that interests you and it will be saved here for you to read or share later. Bain & Company ist eine international agierende Strategieberatung mit rund 12.000 Mitarbeitern. Data cant really capture how these firms consistently outperform, but a more qualitative and experience-based analysis suggests it boils down to focus: The best firms know what they are good at and wield that as a competitive weapon. Proprietary data tools, such as DealEdge, SPS, OPEXEngine, and Pyxis, reveal key insights and boost our best-in-class capabilities. As the firms oldest and largest office, it has played an integral role in transforming Bain into one of the world's leading management consulting firms. Record-high valuations are forcing acquirers to get creative. By just about any measure, private equity set a remarkable new standard in 2021. Is that about to change? In a world of high prices and intense competition, they understand that expertise matters. Everyones buzzing about web3 and the metaverse, but what are the real-world implications for your business? We work with ambitious leaders who want to define the future, not hide from it. Bain has partnered with theKnowledge is Power Program (KIPP) since 2010 to increase the number of its low-income students graduating from college and more than double the number of students served. We are the worlds leading consulting firm for the industry with a global practice more than three times the size of our nearest competitor. More private equity sponsors team up to win bids and spread risk. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. The network holds knowledge-building events and offers opportunities for Bainies to support developing-market social enterprises. The results: superior returns as well as benefits for internal and external stakeholders, their communities, and the planet. Shorten the time frame, however, and the picture isnt what most PE investors were expecting. We partnered with the company as it sought new opportunities to improve ESG performance, including a more rigorous approach to emissions reporting and monitoring. Diagnostics labs and R&D technology firms have attracted more investments from private equity firms. Through the waves, towards a sea of opportunity. This article is Section 3 of Bains 2020 Global Private Equity Report. WebPrivate Equity Bain is the leading consulting partner to the private equity industry and its key stakeholders. 2022 Diversity, Equity, and Inclusion Report, Identify specific ESG strengths, weaknesses and potential areas that might impact business operational and financial performance, Benchmark a target against peers based on prioritized ESG themes, Provide perspectives on initiatives that can enhance ESG value creation. WebBain Capital is one of the worlds leading alternative investment firms. Stay ahead in a rapidly changing world. Well help you determine your unique priorities and opportunities and embed the appropriate ESG considerations into every relevant investment decision. Weve partnered with the leading climate management and accounting platform to bring you breakthrough carbon analytics and help you accelerate your decarbonization strategy. For those in the bottom quartiles, raising a fund is already becoming more difficult. Bainies can rally around issues they are passionate about by joining one of our global affiliation groups. Roll-ups and portfolio expansion underlie many corporate deals. WebRapidly evolving market dynamics, regulatory forces and consumer expectations are continually adding new layers of complexity to the healthcare industry. 2022 Diversity, Equity, and Inclusion Report. In about 30% of those years, the public markets generated negative real returnsthree times private equitys down-year rate for its 30-year history (see Figure 3.3). We work with ambitious leaders who want to define the future, not hide from it. Asia-Pacific Private Equity Practice Co-Leader. The diagnostic tool weve developed leverages our deep industry expertise, data science experience, and unique access to proprietary data from best-of-breed partners to: ESG projects across the investment value chain, leading investors have discussed ESG strategies with us. Bookmark content that interests you and it will be saved here for you to read or share later. Private Equity in 2019: Strong Deal Activity Despite Worsening Macro Conditions. Margin expansion, currently a minor factor in returns, is bound to become more important. Please read and agree to the Privacy Policy. All consulting role candidates (and some non-consulting roles) can expect a case interview, regardless of which office they apply to. Sector strategy is about more than tapping what's hotits about using data to determine where you can win. WebThe Covid-19 pandemic has shaken virtually every industry, none more than healthcare. Our economic development work leverages the power of markets and business enterprise models to create jobs, fuel income growth and improve the quality of life for the world's poor. Over the past 30 years, US buyouts have generated average net returns of 13.1%, compared with 8.1% for an alternative private-market performance benchmark, based on the Long-Nickels public market equivalent (PME) method and using the S&P 500 as the proxy. With a deep bench, proven expertise, and state-of-the-artadvanced analytics tools, we can help you navigate these changes and achieve superior results. Get to know what it's like to sit down and see how we run through a case interview. Bain's Hugh MacArthur discusses private equity's record year and the future outlook amid rising inflation. WebOur unique approach to change management ( Results360 ) helps structure, orchestrate and enable sustained results. The private equity landscape is being reshaped by myriad forces: the rise of virtual sales, the omnipresence of digital, a renewed focus on talent, and, most notably, ESG (environmental, social, and governance) investing. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. We help leading social pioneers scale and amplify their impact. FashionCo's CEO, a player in the women's fashion market wants us to figure out how they can drive more revenue since they've been in decline for the past couple of years. In 2017, two-thirds of all Bainies were involved in some form of social impact initiative across the globe, contributing over 30,000 hours of volunteer service and raising $1.5 million for local nonprofitsin addition to the countless hours and millions of dollars invested through our pro bono casework. Its time to shift the ESG paradigm from compliance to impact and value. We measure our success by the success of our clients: more than 60% of the Global 500, private equity funds representing 75% of global equity capital, leading nonprofits and innovative startups. Prioritize your ambitions, sharpen your investment decisions, and fortify your firms foundation. Globally, private equity generated $512 billion in buyout deal value during the first half of 2022, putting it on pace to produce the second-highest annual total ever (behind 2021s all-time record). 2022 Diversity, Equity, and Inclusion Report, ESG (environmental, social, and governance) investing. Vector is a service mark of Bain & Company, Inc. Comprehensive analysis and benchmarking results in a clear plan to increase EBITDA while boosting ESG performance. Private equity outdid itself as investors raced to capture technology-fueled growth. Encouraged by new owner CVC Capital Partners, the insurer launched a bold four-part strategy to revive growth and reclaim the mantle of disruptor. Together, we achieve extraordinary outcomes. While a 15% average annual return net of fees is impressive even by private equitys own high standard, parity with public markets is not what PE investors are paying for. This article is part of our 2020 Global Private Equity Report. Public vs. In a carve-out deal, you dont want to be the rookie in a process dominated by firms that have done 20 similar carve-outs and know precisely how much margin they can capture and how they will do it. Since our founding in 1984, weve applied our insight and experience to organically expand into several asset *I have read thePrivacy Policyand agree to its terms. To a large degree, this is a function of maturity. Limited partners will continue to gravitate to the industrys top performers. We help you maximize the value of your portfolios with an approach that spans all industries, geographies, and asset classes. Among software companies, growth equity-backed tech companies account for only 8% of revenue, but 19% of growth, 14% of sales and marketing spending, and 13% of research and development spending. WAB ensures our members are equipped to achieve their full potential here and A raft of new public policies will not only reshape portfolio strategies, they could also transform the way private equity houses run and grow their businesses. Build a foundation from which to deliver analytics strategy, develop analytic capabilities and create personalized flagship use cases. Over the past decade, returns from private and public equity have converged. Our partnership with the worlds most trusted provider of sustainability ratings gives us access to unmatched insights into ESG risks and opportunities across the private equity value chain. We support the drive for rapid returns by developing a strategic blueprint, leading workshops that align management with strategic priorities, and directing focused initiatives. Hgs Matthew Brockman describes the technological trends that could reshape the workplace for decades to come. We are focused on creating and inclusive culture and promoting programs and policies to achieve that mission. Post-acquisition, we support the pursuit of rapid returns by developing strategic blueprintsfor acquired companies, leading workshops that align management with strategic priorities, and directing focused initiatives. Develop a strategy for continued excellence, winning the war for talent and maximizing investment capabilities. They also continue to vote with their wallets. Healthcare companies are responding to changes wrought by the coronavirus and gearing up to anticipate future outbreaks. (LPs) by Bain & Company and the Institutional Limited Partners Association (ILPA) 93%. We assess a companys software or e-commerce platformfrom its product functionality and infrastructure to its securityto identify opportunities, avoid risk, and ultimatelydetermine a targets full potential. The industry roared back after a pandemic-induced lull in 2020. This is why our 10-year commitment to invest$1 billion in pro bono consulting workis so important. We have helped the leading institutional investors and sovereign wealth funds develop top-performing investment programs across private equity, real estate, and infrastructure asset classes. How to take the promise of career-connected learning to scale. As noted earlier, the PME index has posted an 8.1% annualized return over the past 30 years, which is consistent with the 8% average logged by the S&P 500 over the 140 years for which public market data is available. Ensuring you have the right investment thesis and winning approach strategy, we help focus your deal generation and sector screening process. Eric Almquist is a partner with Bain & Companys Customer Strategy & Marketing practice and the global head of consumer insights for Bain. 2022 Diversity, Equity, and Inclusion Report. During ownership, they know what works and what doesnt, and they have a clear, active strategy for capturing value. Capital is flowing to innovative technologies and business models across sectors. Big deals roar back, especially in Europe. Developing Repeatable Models to scale the adoption of agricultural innovations. *I have read thePrivacy Policyand agree to its terms. Join the PE operating partner community to discuss and debate the best strategies to deliver maximum portfolio growth this October in-person in New York City. PE comprises about one-third of our global business, having grown eightfold in the last 15 years. During interviews, were looking for more than a rsum. As an employer, as a business and as a member of our global community, were challenging ourselves to build a more equitable, sustainable future for all. Several periods in US market history have produced similar surges, including the decade ending in March 2000, when accommodating monetary policy and the inflating dot-com bubble drove a 19.4% 10-year return for the S&P 500 PME index. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. 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