Bain Capital's David Gross Sees Opportunity in Global Volatility

In Brief:

David Gross, co-managing partner of Bain Capital ($185B AUM), shared his perspective on global investment opportunities with Goldman Sachs' Allison Mass. Speaking from his background as a founder of Bain's Asia business, Gross outlined why the firm remains bullish on the US economy, Japan's maturing buyout market, and selected European opportunities despite macroeconomic uncertainty. He emphasized how Bain's value-creation model, which began with its consulting roots, has evolved to incorporate technology deployment and AI across its portfolio companies, creating a competitive edge in capturing growth amid volatility.

Big Picture Drivers:

• US Resilience: Strong consumer savings, government stimulus, and technological leadership position America well despite global challenges

• Japan Revival: The convergence of positive forces is finally turning Japan into a major buyout market after years of development

• European Opportunity: Pressure on export-facing German businesses may trigger corporate divestitures at attractive valuations

• India Emergence: Stable governance, maturing capital markets, and increasing control opportunities are making India more investable

Key Topics Covered:

• Private Equity Evolution: How PE globalized from US-centric origins by adapting governance models to local cultures

• Macro Analysis: Why fundamental investors need macroeconomic capabilities to anticipate scenarios and create investment themes

• Capital Returns: How Bain maintained a 30%+ distribution yield despite industry-wide challenges in returning capital to LPs

• Organizational Structure: Benefits of remaining a private partnership for alignment with investors and talent retention

Key Insights:

• Cultural Integration: Building successful global PE requires becoming "local" with deep teams in each geography, not just being "global"

• Value Creation: Bain has evolved its operational model with 130 dedicated professionals sharing best practices across business units

• Technology Edge: Connection between venture capital investments and late-stage buyouts creates visibility into emerging tech winners

• Cyclical Perspective: Current liquidity challenges reflect normal industry cycles following peak velocity in 2021, not structural issues

By The Numbers:

• $185 Billion: Bain Capital's total assets under management

• 30%+: Bain's North American distribution yield (realizations divided by NAV) last year

• 2,000: Number of people employed at Bain Capital, including 200 partners

• 130: Size of Bain's dedicated value creation team working across business units

Memorable Quotes:

• "We're all macro investors... There's so many exposures that can overwhelm certain things you may really like as a concrete driver of a company." - David Gross

• "We were much more value focused in that last super cycle... we were concerned about low interest rates and that when interest rates go up, you're going to see a multiple impact." - David Gross

• "We talk about being global, but it's really about being local and having people you can trust to have great relationships and becoming part of the cultural fabric." - David Gross

• "Every 8 to 10 years, the same article comes out... It's the end of the golden age." - David Gross

The Wrap:

As Bain Capital marks nearly 20 years in Asia, Gross's perspective highlights how patient capital, local expertise, and technology integration create competitive advantages for global investors. His career trajectory—from Japan in the late 1980s to co-managing partner today—reflects the firm's deliberate approach to globalization. While acknowledging current challenges in private markets, Gross remains optimistic about the industry's continued growth, viewing current headwinds as part of familiar cyclical patterns rather than existential threats.