YouSaid · the spoken record

Stephen Pagliuca

lines on the record: 46
first: 2023-03-31
most recent: 2023-03-31
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Reading Just Mercy, Brian Stevenson is a really interesting book. We formed Boston Celtics United for Social Justice, one of the areas is prison reform that's an incredible tale about what he's done to reform our justice system. We need to do more on that guy's an incredible hero. So I'd recommend that book.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“I would say take a long term approach to investing, outwork other people, try to analyze every issue, understand the customer better. At Bain& Company and Bain Capital, we're huge believers in primary research. When I first got into the business, I talked to many other firms and they would call consultants or they would call banks and they would call references. We would actually go out and count the number of cars that were coming into the parking lot of a factory. We would go and do 1,000 customer interviews to say, how did the customer like the product? What do they like about it? Would they not like about it? Would they recommend it? use things like net promoter score. So primary research, really understanding at a very detailed level the customer, the trajectory, and why someone would want to buy that product, that's key. Just do your homework. And that'll certainly stop you doing really bad investments, but it'll help you get pattern recognition to make good investments.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Two mentors, a guy named Harry Strachen, who's still alive today and Mike D'Amato. So I was very blessed when I came to Bain Company because I was really off the tournament. I've been an accountant, so I knew the language of business and I'd been a furniture mover, both of which were not strategic consulting. So they took me under their wing, they mentored me, and I still talked to them. I probably talked to them, believe it or not now, that's 40 years ago, I still talked to both of them regularly with any issues or problems, and they've been very successful in their own lives. Vasselis have a concept called Ubuntu, which means that you are only who you are because other people that came before you. And these guys did that for me.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“I have to go with my hometown, Peter Lynch, Peter's legendary in Boston. And what he taught me is really understand the customer. And he would say his success was based on just detailed analysis of the product and the customer. So when he liked it and he understood it inside out and he knew the customer liked it, he'd invest. And so he did that in several companies that did fantastic over a long period of time.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“The biggest lesson you learn is you've got to back A management teams and A people. It's amazing when I think back on the same business with manager X versus manager Y, the top management teams just find a way to win. And some things are unsavable, but most things are savable and flexible, smart, high integrity management teams are really key. And we don't manage the businesses. We try to be a tool for them. It's a little bit like the Celtics Analytics. We don't play the games, but we try to give them all the tools and support they can looking at acquisitions, looking at new products, looking at structures. But the biggest lesson is back great management teams.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Million equity, that six million equity has been 20 billion. I wish we would have kept it. That's one thing private equity has to do better when you get a winning business. I think we got to get away from the 10-year fund structure. And they are now with continuation funds, know the trend, but that's been a fantastic experience.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“And he didn't even know where North Carolina was, so he just gave it to me pretty cheap. And I put him three units while I was at Bain. So that was my first investment experience, which helped me actually when I came over to Bain because it had the same aspects just on a small scale people management leverage, the sales, and the rest of it. In memory of my first investment at Bain was helping the management team of the Gartner group by the Gartner group in 1991. And we bought that company. We thought it was a great company. It was owned by an advertising agency called Satchi and Sachi. And it was non-core to them, and they were having problems in the advertising agency. So they sold the business and the management team selected us. And we bought it back in the day, six million equity and 64 million debt. And it wasn't making money. I tried to raise bank debt for it. No bank would give us a debt. So the seller lent us most of the money to buy the business and done in Bradstreet, who was a partner in the fund I was running, gave us some debt as well. So we had outside debt. And fast forward the story, that was 1991. I'm still on the board. The value of the company is around $20 billion from that.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Decided to buy it. It wasn't mine, but I went and found the owner of it because there were so many lines around it. It was fresh ice cream that they made right at the site with about 20% butterfat content. It makes Hagenah's look like it's a diet ice cream. An Italian guy had bought it. And I said, gee, I think we should put one of these down at Duke. And so while I was working at Bain, I got my credit card out and I bought the franchise rights for the state of North Carolina from him.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“My first investment was actually when I was a consultant at Bay and I looked across the street and a thing opened up called Steve's Ice Cream. It was a”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“And especially this year, we have two young superstars. And I was just talking to them after the Phoenix game. They had an amazing game against Phoenix. I said, the best thing about that game wasn't that we won by 40 points against a great team. It was the fact that the two superstars, at least six or seven times, passed up shots of their own and threw to the other guy. That's what wins you championships”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“High integrity, teamwork, working hard, and then doing everything you possibly can, driving it from the clients out to you. We never say we're here to make money. We honestly think we're trying to build great businesses and actually get returns for our limited partner investors. And if that happens, then good things will happen to us. It's very similar. You're dealing with, again, world-class athletes. You've got to give them everything you can to succeed. We give them the statistics. try to make their lives as easy as possible. treat them with respect and transparency What I didn't realize when I got involved in basketball is when you see how hard they work and they play 82 games they're playing almost every other night it's a very tough game to play because you're going full out when the fans come they think it's the first game they've ever played and they've been resting all week ready for this one game but they've been in a game the night before and they have a sprained ankle and the rest of it so i really learned to respect kind of discipline and how hard these guys play after doing it night after night and so it's been great”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“There's quite a few similarities because at Bain we're dealing with some of the most talented investors and people in the world. And the key is to make sure they have all the resources they need to make sure that they're supported to make sure we're doing everything we can so they can do their jobs. And we have to act as coaches. At the end of the day, I think the best leaders are evaluated by who they leave behind when they're done. And so the best organizations have a deep team. And that's what we try to do at Bain Capital. We have a system where we're all invested together in the deals. So we have the highest percentage of our own money in deals with our limited partners when we buy a company. That ties us together. And we have kind of a flat system where everyone can be a CEO, run their division, run their companies, and work together as a team. And our compensation systems are team-oriented. You're dealing with very high-powered folks, and you've got to give them the room to run and the resources to run and the guidance and coaching to run. So that's been our model. And finally, consistency. Consistency in values in the approach.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Because they also have family traditions, the whole town is behind the club. It's sold out every night. It's got a beautiful 25,000-seat stadium and an idyllic place. And they've done a great job managing it. Leo still owns about half the business themselves, and we've had a great partnership. And we started out very well, and we're fifth now in climbing. It's been a great layer of love, and hopefully we'll get the same kind of results that we got at the Celtics.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Interesting. I've always been a soccer fan going back to those days in Holland. Holland won the World Cup when I lived there. So it was very different. And so I couldn't get connectivity to American sports. So the big thing was soccer. So we'd watch a lot of soccer. It turns out that Holland made it to the finals of the World Cup that year. They're fanatic about it. Aranya, Orange. They're the orange. So I became a soccer fan. So you fast forward, we did the basketball thing. Soccer has a lot of similarities to basketball. It's a non-context sport. It's about teamwork. It's a global sport. The two most global sports. And so when the opportunity became available, we got contacted by a family in Italy through a partner of mine who wanted to get a savvy sports investor to invest into the club. And I got off the plane in Milan to go to Atalanta, which is right outside of Milan, beautiful town in Bergamo. And when I got off the plane, I just had a great feeling about it. Also, everybody looked like me. I'm of Italian descent. So I said, I'm really at home here immediately. So I met the Percasi family. I love the Pricasi family. Atalanta is as close to the Celtics as you can get as a soccer team.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Various levels of success, and so far it's been very effective. We have a fantastic staff, and it gets better every year because we're on the 20th version now. And in the NBA, the athletes are so great and the teams are so competitive that anything you can do to get a 1% edge that can mean the difference between coming in 10th and getting a championship. And so we're very proud of what the stat group has done. But more importantly, we have hired coaches and general managers that buy into that because it doesn't make any sense if you have a stats group and they're trying to run the team in an old school way. And we've been fortunate that we've taken the private equity venture perspective where you get a great management team and you back that management team. So in the entire 20 years, we only had three coaches and all of them have basically retired. And we've had two general managers in the 20 years. And that's very unusual. You'll think many clubs in 20 years will have 10 coaches or 15 coaches or six general managers. We've had a great team there going forward to try to get a championship team. And it's working. We have one championship and we're playing pretty well this year. So we're enjoying this year so far.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“We first purchased the team, we asked where were the data analytics, and there was a grand total of zero, and they had started that in baseball a few years before. You remember the book Money Ball. And we said, well, let's bring resources, Wick Grossbeck and myself had been venture capitalist. And so we brought a squad of folks in and we hired people from MIT. So let's try to apply the Moneyball Analytics to basketball. And I think a couple other NBA clubs were doing it, but we did it in a big way. And now we have something called the basketball intelligence agencies, the BIA, it has a little symbol on the door. And we have eight or ten people. One's a PhD from Duke, and we analyze basketball from the shot quality to efficiency, from where the shots are, where you make the different shots, and have built regression models. Now we're on Model 20. We're on 20.0 regression model on how statistics predict performance for the draft and picking players, which is really important. It's a little bit like business. The computer model doesn't pick the players, but it's a tool where if we're down to three or four players, we can look at that model and the model will predict.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Fantastic. I want to go back to the Celtics for a minute because one of the things you also brought to the Celtics was data analytics. And I want to understand a little bit about how that has helped the way you manage the team and also talk a little bit about how you see the Celtics innovating in the future over the next couple of years.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Places like we lost the lead in tech. So let's really get together with the government, with universities, with business, and fund that. So the LifeLab came out an idea to say, let's put up a state-of-the-art wet lab on the Harvard campus near Harvard Business School, where anybody from Harvard, including the business school, engineering school, and anybody who's at Harvard, can submit an idea that they want to turn into a biotech company, and that'll be reviewed by a board, and then they'll be able to get a lab space to develop that company. And Noria and the Leadership Department's fantastic. We got the site up in about a year and a half after the idea and already over 60 companies have been formed in there. They can stay there for 12 months to two years. And then once they graduate, they get venture capital. And I think they've raised over $300 million in venture capital, and 60 companies have been formed in that vehicle. That's going to help build businesses, create jobs, and then help us keep the lead in biotech in Boston.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“The main children's charity has been fantastic. I think we started that about 15 or 20 years ago, maybe even further than that. And we all got together and said, we need to do something for the community. And so every year we have a golf tournament and we contribute directly to we match everything that we raise. So I think we've given out over 35 or 40 million dollars now to hundreds of causes in the Boston area and nationally as well. So we're very proud of that. And all of our people get to work on these projects. So to give to a project, we have to have people volunteer to do it. So we have lots and lots of volunteers. And then we help them with donations and marketing and direct help. So that's been a fantastic experience. The life lab really came out of, I do a lot of healthcare investing. And in talking to the folks at Harvard Business School, there was a big shortage of lab space. And the Boston area had lost from the 1980s, they lost the technology sector to California, but they're doing great in terms of biotech. And I wrote an editorial and said, we don't want to lose the biotech to the other.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“In terms of helping people and being involved in charity. And then an offshoot of that is Boston Celtics United for Social Justice. And every single member of the organization and all the players are on board with that. And we've just raised commitments from our investors for $25 million over the next 10 years to really attack social justice issues and try to change them. Things like prison reform, equity and health, voting, equity empowerment, business education. So we have about six areas that we're focusing on. All the investors are on committees and all the Celtics and the players and the staff are out there in the community. And that's going to be a real focus of over the next 10 years because we've got to change that situation. We've got to make a difference.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Respect. So, the first goal was to win a championship. The second goal was, which we knew we could do was make it a better fan experience when we brought the team, they basically didn't even have a customer list or emails or anything. And they also had $89 in a charity account, and we thought, boy, we can make the fan experience a lot better. We didn't have dancers. The whole NBA had cheerleaders. We had no cheerleaders. And so we came in with a program to really make it a better fan experience. We had an organ and we didn't have music. There was silence at the quarters. except for an organ sometimes. So we brought in a whole host of fan experiences, digital marketing, connectivity, more time with the players. And that's fantastic. The third objective we had was to really use the power of the Boston Celtics franchise to improve the community. So we started the Boston Celtics Shamrock Foundation 20 years ago, which has been very successful in terms of helping children in the community and underprivileged groups and getting our players involved. Our players log in, I think, more hours than anybody in the NBA.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“I give a lot of credit to the league, Adam Silver, David Stern, Mark Tatum, the Deputy Commissioner. They've done a fantastic job managing the NBA. We invested in the Celtics because I was a huge basketball fan, it was my passion. I don't think we had any expectation that the value would go up 10 times at that point in time. Most of the NBA clubs were losing money, including the Celtics period of time. And we actually came in and wanted to make some changes and lost even more money. I wouldn't say that we looked at that as a classic investment. It was a labor of love. Turns out that the league has done a fantastic job lifting the game up. They formed a partnership with the players where the revenues are split 50-50 and the game is becoming exciting. It's a global sport and really taken off. I think that there is certainly Boston, the management team and our ownership group. We focused on three things. One, trying to bring a championship to Boston. Boston is a place where they expect championships. We are not playing just to get into the playoffs. We need to play for a championship every year. Otherwise, we'll lose fan support. So it's a great market from that.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Have to pivot to talk about the Celtics, and you became the co owner of the Boston Celtics franchise 20 years ago. And the value of the team has increased nearly tenfold since then. So what does that say about the way you've managed the team and the way the league has gone?”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“And so I asked Spain I only want to work on healthcare, which I thought would grow for a long time in 1982, and technology. So I basically, in my 30 years, I've been focused on healthcare and technology. And both those areas have grown. And I think they're still going to grow because they're taking increasing amount of banding productivity to the economy.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“I think two things. One would be continued advancement of the life sciences. Biotech, I think, is the next big thing for industry, both integrating artificial intelligence, more data on healthcare conditions. Biotechnology can be the next thing for probably the next 20 or 30 years. And so I've done a lot of personal investing in that area. Bank capital has big funds in those areas and fantastic people. So that's going to be huge amount of innovation. The mapping of the human genome, which happened 10, 15 years ago, now has advanced the science and we have better analytic tools. We can bring out lots of drugs and therapeutics, and so I'm very excited about that. I think a second area is going to be the continued technology boom on AI. AI is changing the way the cars are driven, the way we make business decisions in our daily lives. So I think those are two areas they're going to grow for the next 20 years. If I look back on my career when I came to Main& Company, I stepped back and said, I think since I'm not the smartest guy in the world, I want to work in growth areas because they hide a lot of mistakes.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“It just means the duration of the portfolio will be longer, and that's okay as long as we're growing the value of that 15 to 20 percent per year. But it just means that there'll be a little slower pace on distribution. So you won't see the fast liquidity you saw with the hot public markets where you could have a company for two to three years and then take it public and get a lot of liquidity. We tell our investors that they should take a long-term approach and we take a long-term approach and have the liquidity fund those companies over a four to five year period.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“The good news about private equity is what I really like about it personally, we're able to take a long term approach. So because the companies aren't public, we don't have to fret every day and every quarter about what the earnings are. So we try to buy a company and transform it so it will grow. And we're looking at what's going to happen in five years, not what's going to happen in three months, which I think is a fantastic aspect of private equity. How this market downturn will affect private equity today. Back in the old days, things weren't marked to market. We basically listed them at cost. Now they're marked to market. And so you'll see some portfolios take a downtrip because the comps have gone down. But that really doesn't matter because we're talking about a five to seven year investment horizon. And if we make the plan in seven years, we think multiple will normalize and we'll get through this next clip. I would be really nervous if I was a public investor waking up every day with those marks changing for one reason or another on a global macro basis. They don't change as quickly.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“I was actually at a meeting this morning with about 50 CEOs, and actually they took a survey on this, and the outlook was they think there was going to be a recession, a mild recession, or some kind of recession coming in the next nine to 12 months. Oddly, most of the performance is still pretty good. There's still a lot of cash out there that's been given out to people. They're still spending. So the business results have been good now. The market's anticipating a recession and they're anticipating recessions. So many of them have slowed hiring a bit or preparing for a case of where things will slow down a bit.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Think they're directly affecting capital flows into private equity. I would say there's two things that are affecting the investment environment. One is that political tension, the decoupling and the war in the Ukraine. And the second thing is this big energy transition that we're going through, which is also causing inflation as we try to get off the old carbon energy to new energy. And I don't think that's been thought through. But that's going to be in the next decade a big issue on how we do that in a cost-effective way so we don't increase the inflation rate.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“The first thing we did is we made sure we had conservative and locked in debt rates for most of the companies. And so they're in very good shape in terms of the kind of the ratios that you need to go through a downturn. Secondly, we said to prepare for a downturn. And so the companies have a lot of cash on the balance sheets. And third, we try to invest in companies that are going to be less hit by them. So we're hoping for a softer landing, but I think we're prepared for a recession even as a significant recession, and we should be able to get through to the other side. Fundamentally, this economic situation has been caused by that decoupling, by the huge quantitative easing we've had over the last seven years because of COVID and going all the way back to the crash. Unwinding that is going to be a 10-year process. And I think we see interest rates staying higher. Most of our lifetimes, by the way, people don't realize most of our lifetimes interest rates T-bills have been at 4% to 5% for the vast majority of the time over the last 60 years. It's only been in the last 10 years where we had basically interest rates going to almost nothing and that buildup of that money now has to go out of the system.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Private equity has really, I think, become more safe, more conservative, more thoughtful. And I think the record has shown that they've done a great job in paying back debt and building jobs and creating opportunities.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“And high screen, we're in pretty good shape. And things have changed in the street. Right now, the average deal is leveraged between 50 and 60 percent, not 95%. So the industry is a lot more conservative in terms of kind of equity cushion and financial structure than it was in the past. And oddly enough, people talk about all there's risk because the loans now are low coven or no covenant. That actually is a benefit because in the old days, in the 80s, if you technically violated covenant, but the business was doing great, a bank would take it over. So, for example, I was involved in one company where it was doing great, violated a small covenant. The bank took it over and then they sent a letter out to the customers. It was a medical equipment company saying we want cash on delivery for all this next sales. Of course, hospitals saw that and they stopped buying everything and the business went way down. Now, during the crisis, for example, we managed our own companies out of the crisis and we paid back almost all the debt and actually had a two-time return on that portfolio that was bought in 2007, 2008, 2006.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“The first 30 years, growth was driven by a globalization. 30 years ago, very little global trade went into the trillions of dollars of global trade over that time period. And that lifted up people all over the world, created 2 billion jobs, good paying jobs throughout the world. Now we're seeing this decoupling, and the decoupling is, I think, a result of these policies where most of the Western countries people felt left behind. And now we have political tensions. And so you're seeing high interest rates, a tougher environment. What we try to do at Bain Capital is we'll have periods where we say, let's lean forward or let's be neutral or let's lean back. This is definitely a lean back period where we're having a very high screen. Our macro team two years ago predicted high inflation and higher interest rates, so we really tried to get permanent debt in the portfolio at low cost, which we were highly successful in doing. And then we focused on businesses that would be more recession-proof because we saw that coming, inflation proof. And so we have a very diversified portfolio.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“So, what changed? First of all, the industry attracted more participants. Bank Capital did very well. The companies did very well. The next phase of it was it got global. So it worked in the United States, and now we became a global company by opening up in London and then Asia. And now that footprint is all over the world. The next thing that happened was we had started out with this strategic consulting focus, and then many people copied us. They'd hire Bain or they'd hired McKinsey or their own staffs. So to stay ahead, we decided about 15 years ago, we really had to go deep vertical industry knowledge. And so we formed industry groups, which we still have today, covering just about all the industries, medical technology, industrial, consumer, retail. And so we have these strong groups that are globally integrated. So now we have expertise, and then us in the industry, we've added more expertise in terms of now functional experiences like digital marketing, procurement. And so private equity went from a cottage industry to now a high value added global integration.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“And wheels. And basically, I think $5 million equity and $95 million. So those were different days then. And the average cost of debt was between $9 and 14%. Kind of like it is now. Back to the future. So that was the beginnings of the private equity industry. And again, we started out with a model on how do we help these companies to grow and improve. We'd give them a strategic planning staff using our own resources, which was very different than the firms we competed with. Most of the firms we competed with came from investment banking and from Wall Street and big finance experiences.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“I started was really a cottage industry. There were most often we'd show up and look at investments and there might be one or two other firms involved. So very small. That time we were probably 12 or 15 people in Boston, mainly focused on looking at U.S. growth businesses and looking at businesses.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“The first store went up by our office, and I remember sitting in the office of Maine Company at the time, and we said, gee, if it doesn't work, we can always sell the paperback, get half of our money back. And that became a billion dollar business. So it turns out that theory of taking consulting skills, figuring out market share, figuring out how to help companies do acquisitions really worked well. So from that small group of people in 1984, which, by the way, at that time, it took two years to just raise $35 million because we had no financial skills and we were going out saying, we'd like to invest your money. They said, how much money you've invested? We said nothing and how much financial experience you have nothing. But we think these consulting skills and a commitment to do it the bane way and build and grow these businesses would work. And it turns out it did, thank God.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“But I thought that sounded really exciting to me, and I'll never forget that conversation. And I thought that's probably just a recruiting pitch. But about three or four years later, they formed main capital, and I was able to apply and come over to Bain Capital from Bain& Company. And it was really true to Bill Bain's vision. The theory there was we take these consulting skills, we'd invest in companies, we'd start companies, one of the first deals that came in was an opportunity to invest in a company that had the idea to put everything you needed for an office, a stationary desks, equipment in one giant warehouse-sized building. And in those days, to start an office, you had to go to a small stationary store and buy stationary, you had to go to furniture stored by furniture, you had to go to someplace else to buy equipment. So this guy came in, Tom Stenberg, with the idea, and that turned out to be staples and Bank Capital put $2 million into staples to help found it.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“I went to business school. As he said, I was going to get the doctorate, but I couldn't afford it. So I looked down the list what was the highest paying job in Boston? That was a summer job with Bain& Company. It was kind of an upstart consulting firm at that time. And Bill Bain's theory was to compete with McKinsey and BCG and do it by working for one client per industry and driving results for that client. And honestly, I didn't know what consulting was when I got the job. So it was really eye-opening to me. And I had a great summer and worked on with Dunner Bradstreet on figuring out credit strategy. They grew that business very rapidly. So at the end of the summer, Bill Bain came to me and said, we love you to come back and we'll pay for your doctorate. You can get it later. And you can make enough money to put yourself at school. And I said, that's great. And he mentioned as a recruiting bitch, which I just thought was a recruiting pitch at that time, it was the summer of 1981. He said someday I think we're going to figure out how to take these consulting skills and then use those skills to build and grow great businesses, either venture capital and do that investing equity instead of doing consulting fees by the hour.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Even had to learn Dutch, they sent me up to a nunnery where they taught immersion Dutch, so I lived in an attic and I spoke to nuns for about four weeks till I learned enough Dutch. And I lived in a place near the Hague on the beach. It's called Schwening. And most people can't say Schevening throughout the world, but because I took that immersion course, I can semi-speak Dutch.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“The way it happened was when I graduated from college, I found out I thought you just had to pass a test to get the CPA certificate to become a certified public accountant. So I then found out to my chagrin, you had to have three years work experience. So I applied to seven accounting firms. And I didn't tell them why, but I went back to them each and said, I'll take a job if you'll send me overseas right out of school. The reason I did that was I knew I didn't want to do accounting. I didn't like accounting, but I wanted to learn about the world. At that time, nobody was going to send a 22-year-old kid overseas. But one firm stepped up. They wanted me to come back to the U.S. So they said that they would start me out in Holland. So I jumped on a plane and of course never been to Holland. I landed there green, raining. And then I actually basically didn't come back to the US. I spent three years in Holland's account. I really enjoyed it. There, enjoyed the culture, became a soccer fan. Still have lots of friends there today.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Coach K right before Coach K. I had two sons that had the opportunity to play for Coach K, so I lived vicariously through them. They were actually good players.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“That's why there weren't great teams. They had three coaches in three different years. So it was a transitional phase to say the least. The program turned around the year after I graduated. So it was a quick turnaround after I was gone.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“I got to do it in August to try to get in shape to play football, and in getting in shape, I started playing basketball with the basketball players on the team. And the coaches came to me and said, we need an extra player. We'd love you to try out for the team. We think you'd make the team. And then I went to the football team and looked at them. They were all twice as big as I was. I said, probably better percentage chance to stay alive. I'll play basketball. And I played a couple years on the freshman team. That's the good news. The bad news is I was the worst player on the worst Duke team ever, which is a record I think I'll hold in perpetuity.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“My best friend's father owned a moving truck and they needed an extra person, so they taught me how to move furniture and stack it up and hard work, by the way. I wanted to save money also after making money in the summer to go down to college, being a furniture mover was a good high-paying job in the summer. So I was very fortunate. So I offered to help fill up a truck that was going to Florida and said, can you drop me off? And my total possessions at that point in time was one duffel bag. And we load up the whole truck with a family's furniture, put my duffel bag in the very back, and we drove down to North Carolina. And so all these people were pulling up in Mercedes and cars. And we pulled up in a 45-foot moving truck. And I opened up the back to get my bag and I took it out. I saw these people looking at me. And I said, I'll get the rest of stuff later. I love that story.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT
“Very interesting, Mike. Grandfather and grandmother came from Italy, and he was a shoemaker in New York. I think he was getting paid $8 a week, made very fancy shoes. And I always noticed that about my grandparents. They always had great shoes. My father went to World War II. He was first generation. And they impressed upon me, they always thought that the next depression was going to happen at any time. So that definitely shaped my worldview. And they said, if you go to college, you need to be an accountant because accountants are always employed during the Depression. Not that I had a love for accounting, but that was the pitch.”
2023-03-31 · Goldman Sachs Exchanges · Bain Capital’s Stephen Pagliuca on private equity and the Boston Celtics · IDENTIFIED FROM THE TRANSCRIPT