Pagliuca: Bain helped create ‘hundreds of thousands of jobs’(2)

Bain Capital became the unlikely source of a major political controversy last year after firm founder Mitt Romney emerged as a front runner in the 2012 Presidential Election. While that created its share of difficulties, it also forced the firm to thoroughly examine its history and track record, said managing director Steve Pagliuca. 

Fortunately, he liked what he saw. 

“We went back and we looked at the 350 companies that we’d bought over the last 30 years or so … and we tried to study them from every angle,” he said in a keynote interview at Harvard Business School’s Venture Capital and Private Equity Conference last week. “And it turns out – we actually got the facts, we wouldn’t have ever done this on our own because we’re not historians – but we got the facts on the companies, and the companies over a 28 year period had outgrown the S&P and industry average in terms of revenues, sales – which is a proxy in our view for jobs and growth – by 2.5x.”

“And actually, hundreds of thousands of jobs were created from the inception of investment until today.”

Unfortunately for Romney, Pagliuca (a Democrat) made his “hundreds of thousands of jobs” comment four months too late to make any difference in the election. The former Bain Capital chief took a lot of heat for claiming that he had helped create 100,000 new jobs during his time at Bain Capital in the midst of the campaign, a number many fact-checkers found impossible to verify.  

Despite the public beating Bain withstood over the course of the campaign, Pagliuca claims that the firm remained relatively unaffected internally. 

“We’ve had a base of investors for 28 years – basically the same group of investors – they know Bain Capital, they know what Bain Capital does. And so there was a maelstrom on the outside but we weren’t that affected on the inside,” he said. “You can get really upset about that, you can let it roll by. I think if you get defensive, get upset, you’re starting down a bad path.”

After all, even with the hyperbole, the 2012 campaign was relatively tame by historical standards. Pagliuca – who pointed out his mother’s background as a history teacher – told one anecdote about how Thomas Jefferson bribed one reporter to publish a negative story about his opponent, John Adams. 

“The article said he was a philanderer, he called him a ‘hermaphrodite’, probably a bad thing. The good news is, back then, there wasn’t CNN, Fox, MSNBC, the global media … but I would say it was less accurate and more nasty than they are today,” Pagliuca said. 

One has to wonder if Mitt Romney would beg to differ.