By Andy Serwer
Bain Capital looks to beat the benchmarks big time for its clients, according to the firm's managing partner, David Gross.
"We want to be in the first and second quartile of returns," Gross said. "We're really shooting for very significant, 1,000 basis-point premiums to the relevant indices." (1,000 basis points is ten percentage points.) Gross, named sole head of the firm earlier this year, was interviewed as part of the At Barron's series.
Bain, a global private investment firm, was founded in 1984 as a spin-off from the consulting firm Bain & Company -- and initially led by Mitt Romney. "The idea back then is that Bain & Company was developing great insights that would have tremendous impact, but was there a way to then drive that into execution and to participate in the upside that was created from those insights," said Gross.
The two Bains are completely separate today. "But the ethos of the firms are very similar," said Gross. "We're highly analytical, we're collaborative. We're interested in building content and knowledge that can, that can help support an initial investment, but then pay dividends for future investments."
Is Gross concerned about any weakness in private credit and investments in software?
"There's been a bit of a conflation of what the real issue is," he said. "Not all software businesses are created equally. Most of them are highly cash generative, stable, and have good technology positions. Not all ones that were funded with private credit are over-leveraged. I think there's a little bit of throwing a baby with the bathwater phenomenon going on."
Is there systemic risk here?
"I really don't think this is a bubble," Gross said. "I think there has been a bit of a search for the next bubble because the economy has been so robust for so long. What's the thing that's going to upset the apple cart? I don't think it's private credit. And actually, I don't think it's software either.
As for Bain's exposure to software in its private credit business, Gross said it's "something in the 10 to 15% range."
Giving retail investors access to private market investors has been a hot trend lately. Gross is cautious though, saying retail distribution is something his "industry should approach with much caution, because it is a different investor base than what we are used to." Bain, he said, is "not going headlong into that."
Bain has been known for investing in high-profile consumer brands such as Dunkin' Donuts, Toys-R-Us, and Staples, though a bit less so recently. "There's been tremendous dislocation" in the retail and consumer segments, he said, which has "become a tougher area of investment, but we're still a believer in strong brands," mentioning Canada Goose, which the company owned some ten years ago, and the Brazilian steakhouse chain Fogo de Chão, which the company currently owns.
Today, Gross said, Bain is intrigued by financing data centers mostly outside the U.S., as domestically "it's pretty difficult to really foresee the right supply demand balance in that area." Financial services is "broadly a sector that we think is interesting," mostly outside the U.S., he added.
Gross spent a good portion of his early career working in Japan. What does he think of that country's prospects now? "I do think we're finally seeing the attention that Japan deserved," he said. "I think what you see happening in Japan is a genuine change in the nature of their economy.
"There's a big focus on corporate governance, on taking these great companies that had really interesting technologies, but maybe were not run as efficiently as their peers, and making them much more efficient," he added. "We're really bullish and building a lot in Japan right now."
Write to Andy Serwer at andy.serwer@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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April 04, 2026 01:01 ET (05:01 GMT)
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