Analysis: Bain investors worry about returns, not Romney

Sun Mar 4, 2012 10:35am EST
 
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By Greg Roumeliotis

(Reuters) - As Bain Capital LLC prepares to market a multibillion-dollar fund, investors say the private equity firm's performance is its biggest problem -- not the 15 years it was run by presidential hopeful Mitt Romney.

Romney's bid has led to a broad attack on the private equity industry, which is accused of raiding companies and cutting jobs at a time of high unemployment and growing income inequality.

His tenure at Bain from 1984 to 1999 has made the Boston-based firm a focus of criticism, so much so that executives and investors at an industry conference in Berlin last week wanted to hear about the impact of Romney's candidacy on Bain's business.

But Bain investors contacted by Reuters, including some of the largest public pension funds, said the criticisms have made no difference in their assessment of the private equity firm and that their focus is on returns and the fees they are being charged.

"We remain focused on investment performance for all of our commitments, including Bain. Election rhetoric has neither a positive nor negative impact on our assessment of a fund's performance," said Jodi O'Neill, a spokeswoman for the Indiana Public Retirement System, a $22 billion pension fund manager that has invested in Bain's last four buyout funds.

Even investors that no longer use Bain play down the Romney factor.

"While the media coverage surrounding Mitt Romney and his track record while he was the head of Bain Capital is something we might be aware of, it would not drive a decision about investing in Bain Capital or the private equity industry," said Mauricia Geissler, chief investment officer at Amherst College Endowment, which stopped investing in Bain in 2008.

LAGGING PERFORMANCE   Continued...

 
Republican presidential candidate and former Massachusetts Governor Mitt Romney speaks at a campaign rally at Cleveland State University in Cleveland, Ohio March 2, 2012.   REUTERS/Brian Snyder