How can young buyout professionals jumpstart their careers when deals are scarce and opportunities to strut their analytical stuff are in short supply? Be creative, dig into your portfolio companies and don’t forget to have some integrity.
Such was the career advice dispensed this morning by Bain Capital’s Stephen Pagliuca at Buyouts Madness ’08, a networking event hosted today by Buyouts Magazine and peHUB. A co-owner of the Boston Celtics, Pagliuca also talked about Beantown’s home team with moderator and inveterate Boston fan Dan Primack.
In today’s market, when deals have vanished along with debt, analysts and associates at LBO shops can stand out by brainstorming ways to boost the performance of portfolio companies. That may mean identifying acquisition targets, churning out innovative suggestions to cut costs or finding productive ways to inject capital into the companies. “At Bain, we don’t measure people on how many deals they close. It’s how do they add value on a deal, finding different ways to do things. Don’t just run models,” Pagliuca advised.
Young buyout pros would also do well to accept responsibility for their failures as well as successes, and to conduct themselves with integrity. In Pagliuca’s view, that means “doing what you you say you’re going to do, and doing it well.” He urged analysts not to cut corners on reports and to be honest about their methods. “People who are successful jump in and proactively take responsibility for decisions, especially when things go wrong,” he said.
Bain Capital has no plans to skimp on hiring. The Boston-based buyout firm brought on a record number of new employees last year and will likely hire even more this year. “We take the 20-year view,” Pagliuca said, adding that he expects the industry to grow tremendously in the future. About today’s shaky economy he added, “It’s only a phase, but it feels like forever” when you’re living it.
Now, about those Celtics.
When Pagliuca bought the team, along with other investors, he wasn’t looking to make money. It was motivated more by his passion for the team and for Boston. But that didn’t stop him from applying private equity-style analysis to turn the team around. He even brought in The Parthenon Group’s consulting team to study the organization.
Pagliuca, who played for Duke University’s basketball team when he was a freshman there, set three goals for the Celtics when he took over: improve the fan experience, boost the team’s performance and strengthen ties to the community. By replacing the old scoreboard with a new $5 million state-of-the-art version and rolling out promotional activities, Pagliuca hoped to curry favor with fans. That he added cheerleaders to the TD Banknorth Garden didn’t hurt. Pagliuca and his fellow owners also invested $17 million, up from $4.5 million, to beef up the coaching and staff ranks. They brought on legendary Celtics player Danny Ainge to manage the team and stuck with Coach Glenn Anton (Doc) Rivers, despite intense calls for his head from the public. And by buidling a team of hungry young players, some just out of high school, Pagliuca and his partners built a team that went from having the second worst record in the NBA last year to clinching the division title this season.