Bain Capital's Stephen Pagliuca would like to become the next Senator from Massachusetts. In order to achieve this career change, he must first do something he has not previously done – win an election.
It is yet unknown whether Pagliuca possesses the right mix of skills to beat his two rivals in the upcoming Democratic party primary. But if a razor-sharp wit is an attribute in politics, then the man from Bain will be a formidable contender.
I remember attending a private equity conference in Miami several years ago at which Pagliuca was a featured speaker. Taking the podium prior to Pagliuca was the head of a major US hedge fund, who had been asked to speak about the perceived convergence between the hedge fund and private equity asset classes.
At the time, hedge funds ruled global finance and were beginning to eye private equity deals as a strategy expansion. Many buyout GPs viewed this as an encroachment on their territory. The culture clash was made sartorially evident when this hedge fund titan took the stage. He was dressed in an exquisitely and unconventionally tailored slim-fit pale suit, sans tie – the perfect fashion-forward statement for South Florida. He wore architecturally advanced glasses and close-cropped hair.
Before extolling the prowess of his public-market traders and analysts, he took what probably was a good-natured jab at the GPs in the audience by asking if the buyout dress code was blue blazers, and if he should have worn one to fit in.
Pagliuca took the stage next with a mischievious smile. He said he hadn't initially recognised his good friend the hedge fund manager. This is because he had assumed he was “the ice-cream man” come to learn about private equity.
The crowd of blue blazers burst into laughter at this remark. But Pagliuca wasn't finished. “There is a place in this world for hedge funds,” he said. “But it's not in private equity.”
More howls of laughter. In between one-liners at the expense of hedge funds generally and this hedge funder in particular, Pagliuca would pause to stress that this was actually his very, very good friend. And then he'd skewer him again.
The cutting wit was no doubt perfected at Bain Capital, which according to several insiders is not a place for those who can't take a roasting from colleagues. This culture may have been started by founder Mitt Romney, the more famous politician to have emerged from Bain Capital. According to a source, Romney once introduced Pagliuca at an event by first commenting that his friend really should not have worn a striped shirt. He later told a story about a conversation he claimed to have had with Pagliuca's wife, in which Romney repeatedly asked her if “in her wildest dreams” she ever thought Steve would become so successful. Romney then delivered the stinger: “She told me Steve wasn't in her wildest dreams.”
Pagliuca's political opponents should be warned: this is a guy who can take abuse and throw it right back in a way that delights audiences and likely voters.