17 August, 2012

No Alpha: Bain Capital’s Investment Results | The Big Picture

No Alpha: Bain Capital’s Investment Results | The Big Picture: In my opinion, the whining (from the right!) about Bain’s outsourcing, layoffs, and the fortunes produced for insiders are misguided. That’s not why Bain should be criticized. Their fundamental flaw, at least according to the math, is that they took lots of risk, use immense leverage, and charged enormous fees, for performance that was more or less the same as indexing.

Said differently: Bain’s sins are the same sins most of Wall Street committed: Too high leverage, too much risk, excessive fees for too little performance.

Bain is worth criticizing not because they are so different, but rather, because they are pretty much just like the rest of Wall Street. And THAT’S nothing to brag about . . .