Bruised by Romney criticism, Bain Capital thanks investors
(Reuters) - Bain Capital LLC, the private equity firm co-founded by defeated presidential candidate Mitt Romney, thanked its investors on Thursday for their support and patience over the last year as it confronted "political hyperbole and distortion."
Romney's bid for the White House led to a broad political attack on the private equity industry, which was accused of raiding companies and cutting jobs at a time of high unemployment and growing income inequality.
"We are emerging from this unusual period in our firm's history as strong as ever, and with renewed conviction about how we add value to the marketplace and society as a whole," Bain's managing directors wrote in a letter to investors, which was first reported on by the Boston Globe and a copy of which was obtained by Reuters.
Bain became the object of political and media scrutiny after Romney cited his tenure as head of the firm - between 1984 and 1999 - as evidence that he is a good economic manager that is needed at a time when the U.S. economy is struggling to recover.
Romney's critics scrutinized his investment record and often portrayed Bain as a corporate raider which profits at the expense of average Americans. They also combed through Bain's private equity portfolio to date to see how Romney benefits.
"Early in the process we determined, deliberately and consciously, not to engage in debates with either campaign," Bain's managing directors wrote.
Private equity's lobby group, the Private Equity Growth Capital Council, embarked on a major public relations campaign, producing videos featuring success stories of private equity-owned companies and reports showing how pension funds benefit from the profits that buyout managers generate.
Bain has not been a member of the lobby group since 2010 and has relied instead on lobbying firms that include Akin Gump Strauss Hauer & Feld LLP and Public Strategies Washington Inc. Sources close to both Bain and the lobby group previously told Reuters that the Boston, Massachusetts-based firm dropped out because of disagreements with publicly listed buyout firms such as Blackstone Group LP and KKR & Co LP.
"When there were mischaracterizations of our business record, or a misstatement of fact about the firm, we worked with major press outlets to correct the record. We refused, however, to be drawn into the give-and-take of the political season," Bain's managing directors wrote in the letter on Thursday.
Complicating public relations efforts for Bain was the lack of a figurehead among its 90 managing directors. Steve Pagliuca, co-owner of the Boston Celtics and arguably Bain's most prominent managing director, made few media appearances and refused to take sides between President Barack Obama, a fellow Democrat, and Romney, who he worked alongside for many years.
Bain's main concern has been its perception among its investors. It is currently fundraising for its next $6 billion global private equity fund and will rely on many of its existing U.S. institutional investors, including some of the country's largest pension funds, to make new commitments.
Bain also sent a letter to its investors last March. In it it argued it created hundreds of thousands of jobs in its 28-year history and had supported hundreds of charities.
"Some of our U.S. team personally supported Governor Romney's campaign, while others personally supported President Obama's re-election. All of us congratulate each candidate for a hard-fought campaign," Bain's managing directors wrote.
(Editing by Eric Walsh)