Bain Capital, Inc. is a Boston, Massachusetts-based private equity firm. Founded in 1984, at first affiliated with the major management consulting firm Bain & Co., Bain Capital, Inc. considers seed investments as well as restructurings, special situations, buyouts and acquisitions, though Bain Capital's typical investments are in late stage cash flow positive companies, including middle market to large cap take-private transactions. Among Bain Capital's notable alumni are a founding partner, former Massachusetts Governor Mitt Romney. Bain Capital was long ago spun off as an independent investment firm by Bain & Co.
Bain Capital has long been known for its outsize returns to investors, as well as for charging higher fees than most private equity competitors. Bain Capital made investors take fees of 30% of gains (above a minmum "hurdle rate" of 10%), as well as an annual management fee of 2% of all money invested. In 2011, Bain Capital began to lower its fees, beginning with a new Asia focused fund. Investors were offered one of two choices, both resulting in lower fees than Bain Capital previously had demanded. Option 1 was to pay just 20% of the fund's profits (after a 7% annual hurdle rate) plus a 2% annual management fee, or Option 2 was to pay Bain Capital 30% of the fund's investment gains, with an annual management fee of just 1% (after a 10% annual hurdle rate).
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