Bain Capital Drops Out Of PE Growth Capital Council

Bain Capital, one of the original members of the Private Equity Growth Capital Council, did not renew its membership for 2011, the council confirmed for peHub. The firm no longer appears on the member list on the PEGCC website.

Bain’s departure marks a blow to the council’s revenue stream. However, membership has been growing since the council opened its doors to smaller buyout shops early last year, mitigating the loss. Lately, PEGCC has been active in the nation’s capital improving the industry’s image and fighting increases on carried interest taxes.

Neither Bain Capital nor the council would comment on the annual dues that the firm has paid (nor would executives at Bain Capital comment on anything related to this story). However, that Bain Capital and its affiliates have an estimated $65 billion under management suggests the firm was paying as much as $750,000 per year, based on information supplied by PEGCC to sister magazine Buyouts in early 2010—see dues levels below. That said, it’s not unheard of for members of associations to negotiate reduced rates.

Bain Capital also has political connections that the council could have viewed as an asset in its battles on Capitol Hill. Managing Director Stephen Pagliuca, for example, recently ran (unsuccessfully) for a U.S. Senate seat in Massachusetts.

A source familiar with the situation called the departure amicable, and not related to any disagreements with the council, and said that Bain Capital plans to continue to work with PEGCC on different issues. However, the source said, the firm felt it wanted to take a more individual approach to dealing with “key constituencies”—presumably meaning groups such as regulators and legislators.

Bain Capital was one of roughly a dozen original members of PEGCC, then called the Private Equity Council. Other original members include Apollo Global Management, The Blackstone Group, The Carlyle Group, Hellman & Friedman and Kohlberg Kravis Roberts & Co. Thomas H. Lee Partners, also once of the original members, dropped out for a spell but has since returned.

PEGGC limited its membership to firms with at least $8 billion under management when it launched in late 2006. But early last year, seeking to broaden its umbrella, the council opened its doors to all buyout shops with operations in the United States. Since then, it has expanded its membership to 33 firms, including Avista Capital Partners, Brockway Moran & Partners and Genstar Capital.

Read more about PEGCC’s efforts to expand its membership, and the challenges it faces, in the next edition of Buyouts magazine.

PEGCC Dues Levels

AUM: Annual Dues

Under $8B: $25,000
$8B to $15B: $200,000
$15B to $30B: $500,000
$30B+: $750,000

Source: PEGCC and Buyouts Magazine, as of April 2010