Bain Capital's Managing Partner on Private Credit, Alts, and More | At Barron's
Summary
Private Equity Outlook: The guest remains constructive on private equity’s long-term growth, noting globalization and vertical thematic opportunities despite cyclical digestion after the 2021–22 peak.
Private Credit & Software: He argues concerns are overblown, emphasizing middle-market focus, better lender protections, and that many software firms are cash-generative and not overlevered.
Consumer Brands: While retail has faced e-commerce disruption (notably from Amazon), he remains bullish on strong, adaptable brands and selective restaurant concepts, citing the Canada Goose playbook.
Data Centers Strategy: Cautious on US hyperscaler equity development due to supply-demand visibility, but active in building data center platforms in Asia and Europe and participating via credit and enabling technologies.
Financial Services: Sees attractive opportunities across fintech, payments, wealth management, and crypto infrastructure, with balance-sheet-heavy financials more compelling ex-US.
Japan: Bullish on Japan’s improving corporate governance, operational efficiency gains, and rising openness to private equity partnerships, while acknowledging gradual change.
AI Opportunity: Views AI as a generational catalyst for value creation, underwriting advantages, risk avoidance, and internal knowledge leverage—also critical for talent attraction.
Companies Mentioned: Illustrative consumer names included Canada Goose (GOOS), Burlington Stores (BURL), and a nod to Amazon (AMZN) as a retail disruptor, framing sector dynamics rather than single-stock pitches.
Transcript
Hello everyone and welcome to At Barrens. I'm Andy Sirware and welcome to our guest David Gross, managing partner of Bane Capital which is a large global private investment firm. David, nice to see you. >> Good to see you. Great to be here Andy. So tell us about how you measure the scale of Bane and how you would measure success at the company. >> So it's a great it's a great first question first question. Um you know we are perhaps a little bit different than our uh our brethren in the industry in that uh we don't look at really assets under management um as the primary mark but really it's our investment returns and our investment performance. Um, our overarching goal as a firm is to generate superior performance for our investors. We're really looking for that uh premium level of returns driven by uh alpha that's built on real capabilities. And so it really is the economic profit that we're able to generate for our investors that that's the key, you know, KPI that we're we're focused on. >> And what sort of numbers can you share with us that would speak to that? Well, we want to be in the certainly the first and second quartile of of returns and we're really shooting for, you know, very significant thousand basis point premiums to the relevant, you know, indices that we' be looking at. So, you know, we're shooting for uh high performance that's going to compound over a long period of time. Um, that's going to be differentiated in the way that we generate that performance. you know largely driven by uh value creation. Um you know we have to think about the buy and the sell but it's it's what we do in between that really really matters in terms of driving you know operating per performances and and changing trajectories of our our businesses and that's the shest way to generate that >> performance through cycles through market environments. There's going to be ups and downs uh but if you can add value to the businesses throughout that's that's the shest way to achieve achieve that goal. Can you speak a little bit more to that point about differentiation because you know frankly a lot of firms say you know we're looking to do this and that and I'm wondering exactly how Bane is kind of different. >> Sure. Well, we're different different number one in in that you know our heritage is deeply rooted in this um consulting oriented you know highly analytical approach and so we have very very big teams uh of folks with those consulting and operational uh backgrounds obviously complemented by folks in the financial industry uh but we really have the largest team per any metric you know asset owner management uh in terms of folks that can go in there and analyze businesses is uh and improve those businesses. Um that's number one. Number two is we have a deep very deep uh value creation dedicated value creation effort of some 200 people that all they do is is they're in there driving value companies developing and supporting strategies of our businesses and that's all you know that's we're supporting that that's a big investment that that we're making um as part of of bank capital. Um third I would say is really the deep vertical expertise that we have. We're organized uh you know vertically and um we're trying to bring tremendous level of detailed expertise. I mean the reality is that uh the world is organized uh that way and healthcare companies want to want to deal with experts in healthcare and and industrial companies want to deal with people who know how to run uh factories and know understand the factories of the future. And we're able to do this because we've got a number of different asset classes, but we get them working together uh on these industry thematics and verticals in such a way that it really expands the depth of of team we have. So if you take any given vertical opportunity, we probably have 50 to 60 experts in the firm uh globally uh that we can throw into a situation. So this kind of scale of team uh and the depth of team I think are probably the ones I point out as being you know most unique. And you also but you spoke about that consulting legacy which talks to speaks to the origins of the firm. >> Yes. >> So what are those origins and where did the company come from? Well, we were founded in 1984 as a spin-off uh from um Bay & Company, the consulting firm. And you know, the idea idea back then is that uh Bay & 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 and that was the whole thesis behind uh behind the firm >> and the companies are separate. Mitt Romney was instrumental in setting the company up and but they're totally separate at this point. >> They are separate um you know we'll work with the Bay & Companies and the Mckenzies and others and BCGs of the world. uh but they are they are separate firms but the ethos of the firm is of the firms are very uh similar you know we're highly analytical we're uh collaborative we're we're interested in building uh content and knowledge that can that can help support an initial investment but then pay dividends for future investments as well we take very seriously knowledge management and and creating centers of excellence in certain capabilities whether it's go to market or procurement or technology and AI to take some of the newer ones. Um, and so there are some similarities, but we're an investment firm that raises capital from uh third parties. Um, and and and generates a return on that capital. >> Now, David, there's a lot of talk about private equity and the cycle and sort of more difficult times, comeuppants, if you will, particularly in certain sectors. I'll get to that in a minute, but what is your take just generally on the macro view for private equity? >> Sure. Well, through all these, you know, cycles, um, and you're you're describing a current cycle that we're we're in, and we've seen cycles like this before. Um, you know, the industry, uh, will invest and and there'll be, uh, an upswing in in investment velocity and then a period during which you'll digest all those investments. Um, and that's kind of what you, you know, what you see in this current cycle. there's a very peak period in the 20 you know 21-22 period. Um and so some of the as you mentioned comeuppance uh question is around the point we are in that cycle but generally speaking you know through the cycles you've seen steady steady you know growth. This is an industry that's growing in double digits in terms of its available investment opportunity. It's still pretty low in terms of penetration of the available um opportunity. it, you know, is globalizing and so and we've been uh, you know, big in supporting the global expansion of of our business. More than, you know, 50% of our our business is outside the United States. That's another growth growth leg. And then there are all these interesting vertical thematic trends that our industry is investing behind like healthcare, like technology, like aerospace and defense, fintech and the like. So um you know I still from a macro perspective you know have a very constructive view on the growth prospects for the industry but we always have to ask ourselves the question what what point are we in the cycle? What are the what are the industry challenges and opportunities at that point and then step back and look at what the what the long-term curve looks like >> in private markets. One area that's been of particular concern is private credit. you're in the private credit business a bit and the specific part of that that people are concerned about is software. So my question to you is how much exposure do you have does Bane have to software in their port in your portfolio? >> Sure. So you know first on on private yes you know we're a participant we participate in a in a specific segment which is the the middle market. So we're not providers in the large cap segment and we we've chosen that because um there are better lender protections in that segment. you can have a bigger role in in the in the kind of debt consortium that gets formed. And we've been in that business since the late 90s. So, it's a very long-term long-term business. Um, on the large side, we don't provide debt, but we are users of of large cap uh private credit to fund our our buyout. So, we're present in in in really kind of both sides of of this market. um as it relates to techn you know technology's been a big part of the of the broader industries's private equity uh mix in this in this current cycle um upwards of you know 40 50% the at the industry level um you know for us we have a very diversified portfolio across sectors I mentioned you know healthcare and industrial these are equal sized uh sectors for us alongside technology so technology overall is maybe a quarter to 30% of what we do software is maybe you know probably less than less than half of that. to something in the you know 10 to 15% uh range. But you know listen I think with all the concerns about private credit and software um you know there's been a bit of a um conflation of of of what the real issue is in in you know first of all not all not all software businesses are created uh equally. There are very different ones. Uh most of them are highly cash regenerative stable have good technology positions. Um, and so you really got to do the uh exercise of going through, you know, where they're positioned relative to some SE some technology trends and not all ones that were funded with private credit are are overleveraged. So I think there's a little bit of a baby in ba out of the bathwater phenomenon going on with this right now. But but that's you know that's how we see the the relevance of it to our portfolio. >> So nothing concerns you specifically? It's not a big concern of yours. >> I I really I don't think this is a bubble. I think there has been a bit of a a search for the next bubble in this last economic cycle because the economy has been so robust for so long. It surprised many of us uh that folks are kind of looking for what's the thing that's going to uh upset the Apple card. I I don't think it's private credit and actually I don't think it's software either. >> The Department of Labor recently proposed making it easier for private investments to go into 401ks. What's your take on that specifically and more generally retail investors going into privates >> specifically? It's good that there are more rules being outlined to ensure that there is transparency and disclosure and that this is all you know being done in a way that's that's uh good for the for the investor. Um the broader trend here though is about access to uh an asset class you know alts uh that um hasn't been broadly you know uh accessible uh particularly to smaller investors. it's mostly been institutions and very high net worth um you know players and I think if you look at the asset allocation that is is a good one for a pool of capital it should have a significant portion 15 to 20% of alts in it um but the individual investor has had a harder time accessing that so that that's not a bad thing that's probably you know a good trend to democratize or you know increase access to this investment I think the question of what's the right product design for that particular customer base. What's the education process that's undertaken? What's the sales process that is undertaken? Those are really really important questions and our industry should approach approach those with much caution because it is a different investor base than what we and they are are used to. Um we're not going headlong into that. We still regard our institutional capital providers and very ultra high net worth investors as really our core base. And we think that some of the newer products and technologies with semi-liquid funds and such could be good vehicles to reach that existing customer base. So the the 401k, you know, uh owner and the uh1 to5 million asset player that some have sought, that's not uh a segment that we're looking at uh because it doesn't really fit our model. Um but with the appropriate uh testing and the appropriate education process and clarity around rules and regulations, I think this ultimately will be a very viable uh investment avenue for all types of investors down the road. >> Right? Some people say, well, you know, they're tapped out in terms of distributing to institutions because they've hit their allocations. Universities are souring on private markets and so well, this is the next place to go. any truth to that? >> It's a place to go. It's not necessarily the next place. You know, the sovereign wealth funds and and pension funds continue to have pretty significant, you know, penetration upside for our asset class. So, there is growth um in that sector to say nothing of again the ultra high net worth segment is growing very rapidly and and that segment kind of acts like like institutions. So, I do believe there's continued growth outside of that channel. Um, but it is a big channel that over time will develop. And so I think it really gets down to what your goals are. Um, for us it's really been about alignment with the investor base to our strategy, ensuring that we have the right level of capital to support our growth and the diversity of capital. Um, and once we've achieved that, we need no more capital than what will meet those goals. Um, I do think that others have sought a model of saying if there's capital out there, I'm going to go raise that capital and then I'll think about how and where it's deployed. That's a fundamentally different business model that that we're not participating in. Um, but one that I think has actually uh generated a lot of, you know, a lot of headway into the retail sector for sure. >> Speaking of capital, you recently raised fund number 14. It was 14 billion. >> Coincidence? >> North America, >> right? >> Um, is that a coincidence? So it's like 14 and 14. >> No. No. And it and 13 wasn't 13 either. So yeah, it's uh No, this is really about, you know, if we sat back for us, it's never really been about maximizing the capital base. Uh and that's the funny thing and some of the surprising thing to to some folks. Um which is, you know, we used to grow our capital base because we had good returns and people wanted to then take those now larger dollars and reinvest it into us. Um, and we've always defined first what's the business plan that we have. Uh, how much can we deploy at a at a at a portfolio construction that really makes sense? And then what's the last question is really what's the capital um to to meet that. And so we come up with our targets based on a pretty detailed business planning process that ultimately arrives at that number rather than saying how much money can we go raise. We've turned down a lot of capital um cumulatively in our years because it hasn't met our business plan. >> Historically, you guys have been somewhat famous for consumer brands, investing in it. You got uh Duncan Brands, which I guess hometown favorite there for you guys. Canada Goose, Staples, Burlington Stores, Toys R Us. Is Consumer still a focus for you all? >> Consumer is, although consumer has changed a lot um in those names. Um you mentioned a number of retail >> names and that was probably earlier in our in maybe 1015 years ago >> um and there's been tremendous dislocation um in a number of those those sectors and so those have become >> not when we invested in them luckily but in more recent years um with the incredible strength of e-commerce and Amazon and other models >> that's become a tougher area investment but we're still believers in strong uh brands. I mean there's a lot of discussion about um the you know reduction in the importance and longevity of of brands but we found that brands are also not monolithic things they can be evolved and adapted and they can be segment and stratified over time and we we have a playbook around doing that very thing and extending products and extending geographies and so if you take uh Canada goose as example as a great example of kind of a single geography single product that we took into a real you know multiaceted businesses with its own retail retail channel and tremendous amount of growth. So I think for the right opportunity, consumer brands, you know, can still be interesting and some areas of of retail. We own Fogo to Chow and some other restaurant chains that we're also very, you know, very bullish about. >> I read somewhere that you're not so keen on US data centers, which is a very hot area right now. And it also appears on the other side of the coin though that you are interested in financial services. I knew my comment on on US data centers was was potentially going to be taken uh a little bit a little bit broadly. I don't want to say out of context because there is a there's a important kernel of truth there which is >> the largecale uh standing up of of really big hyperscaler data centers uh as an equity development proposition is not our cup of tea. I think we believe it's pretty difficult to really foresee the right supply demand balance in that in that area. Having said that, we're providers of credit. We're providers of a technology. Um, we have a venture capital company called Cruso, which is instrumental to building many of these very large hyperscaler companies, cyber security and the like. So, that's an interesting target segment. But where we're developers of big data centers is mostly outside the United States. We have one of the biggest data center platforms in Asia and we have a we're building a big one um in Europe. And so I would say we like that, you know, category in general, but we're a little bit nuanced in terms of what part of the value chain that you're you're playing in there. >> And financial services, >> financial services is, you know, broadly a sector that we think is interesting. I think when you take core balance sheet oriented financial services, that's more of a non- US phenomenon. And so that's things like in Asia, that's interesting market opportunity. But we're big investments in fintech, um, in financial payments, in wealth management. Um, we have a dedicated crypto fund. Um, and so the newer technology aspects of financial services, um, ways to develop um, uh, new and more efficient um, backends for banks, um, new products and services for consumers. Those are those are pretty interesting. you spent time earlier in your career in Japan and I'm wondering how that informs your thinking what you think about the Japanese market. Are you still interested in it? >> Yes, I'll start with the last question for you. We're still very interested in in fact uh you know for someone who's been involved in Japan for 30ome years um 20 of it and 25 of it in kind of private equity. Um you know I do think it's uh we're finally seeing the attention that Japan deserved. I think when people were a little bit negative on Japan, I think they were too negative. Uh they may be getting a little too >> uh too positive because things in Japan, you know, change but at a slow pace. But I think what you see happening in Japan is a genuine uh change in the nature of their economy. I think 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 um and making them much more uh efficient and then using those gains to now invest in in new areas. So there's a very positive cycle happening in Japan right now. there's much greater receptivity to uh folks like us um and to thinking about um capital partners and and operational partners as people who could help them achieve their goals maybe not forever. It used to be like, "Oh my gosh, you know, selling selling my company. I I we can't do that." You know, I we founded this company, it's been our family for so many years, or it's been part of this corporation as a business unit. Um that mentality has changed and that's been, I think, a huge catalyst to, you know, private equity activity and we're, you know, we're really bullish on it, building a lot in Japan right now. >> And final question, you just became the sole leader of the firm earlier this year. So I'm wondering where you're looking to take Bane over the next say five years. >> Sure. Well, you know, probably a few dimensions I'll I'll focus on. I think first is to really um you know, protect and grow this this great differentiated business model that I that I talked about. I mean we're we're big believers in this value added approach in this differentiated vertical capability and we've broadened our business and we've deepened it as I mentioned and now it's I it's really about having the agility to bring together all these disparate pieces because the most interesting you know opportunities that we find sit at the intersection of certain trends um it's you know healthcare technology it's you know real estate and labs it's defense technology ology and it's not just one thing and and deals also don't move in a linear progression. Um sometimes they start as a control deal and then they might turn into a minority deal and so our ability to bring our different divisions and business geographies together to seek those opportunities is potentially a huge area differentiation. So, you know, I believe, you know, one of my core goals is to really get us humming across this platform that we have and to be agile to respond to market opportunities as they as they develop. That's, you know, that's number one. Um, second is absolutely to pursue this massive opportunity around technology um and AI. This is this is a a generational uh opportunity. Um, you know, I said it's like, you know, a kid in a candy store for us because, you know, we're big on value creation and and and driving enterprisewide change in in companies. This is now a massively powerful tool to do just that. And so, if we can be the ones who are at the forefront of applying and molding this technology so that it can help business processes achieve their business goals, huh? That's going to be huge to increasing opportunity companies. It'll be an underwriting advantage when we look at a new investment because we'll say hey we know how to leverage this technology to advance something. It'll help us stay away from areas that will be um you know dislocated and it will actually help us run our own business because we're very knowledge and data intensive investors. And so think about all the years of history that we have across you know thousands of investments we've made. If we can bring that to bear with an intelligence tool that helps us make better investments, helps us forecast better, think about pitfalls and opportunities better, uh that's got huge potential. On the flip side, we have to be new economy company. You know, we have to futureproof organization. I think if you're not a leader in this area, um you won't be the place, you won't be the talent magnet. You won't be the the place that people want to come work. And so the third point I'd say is that you know we ensure that that Bane Capital can attract the best talent, the best technology, the talent, the best people who are proficient with technology, uh the best people who understand life sciences and aerospace and defense. Um look at this as a growthful exciting place to come and so you know that's that's my key goal. >> David Gross, managing partner of Bang Capital, thank you so much for joining us. >> Thank you. Really enjoyed it. >> This is at Barrens. I'm Andy Sirwer. We'll catch you next time.
Bain Capital's Managing Partner on Private Credit, Alts, and More | At Barron's
Summary
Transcript
Hello everyone and welcome to At Barrens. I'm Andy Sirware and welcome to our guest David Gross, managing partner of Bane Capital which is a large global private investment firm. David, nice to see you. >> Good to see you. Great to be here Andy. So tell us about how you measure the scale of Bane and how you would measure success at the company. >> So it's a great it's a great first question first question. Um you know we are perhaps a little bit different than our uh our brethren in the industry in that uh we don't look at really assets under management um as the primary mark but really it's our investment returns and our investment performance. Um, our overarching goal as a firm is to generate superior performance for our investors. We're really looking for that uh premium level of returns driven by uh alpha that's built on real capabilities. And so it really is the economic profit that we're able to generate for our investors that that's the key, you know, KPI that we're we're focused on. >> And what sort of numbers can you share with us that would speak to that? Well, we want to be in the certainly the first and second quartile of of returns and we're really shooting for, you know, very significant thousand basis point premiums to the relevant, you know, indices that we' be looking at. So, you know, we're shooting for uh high performance that's going to compound over a long period of time. Um, that's going to be differentiated in the way that we generate that performance. you know largely driven by uh value creation. Um you know we have to think about the buy and the sell but it's it's what we do in between that really really matters in terms of driving you know operating per performances and and changing trajectories of our our businesses and that's the shest way to generate that >> performance through cycles through market environments. There's going to be ups and downs uh but if you can add value to the businesses throughout that's that's the shest way to achieve achieve that goal. Can you speak a little bit more to that point about differentiation because you know frankly a lot of firms say you know we're looking to do this and that and I'm wondering exactly how Bane is kind of different. >> Sure. Well, we're different different number one in in that you know our heritage is deeply rooted in this um consulting oriented you know highly analytical approach and so we have very very big teams uh of folks with those consulting and operational uh backgrounds obviously complemented by folks in the financial industry uh but we really have the largest team per any metric you know asset owner management uh in terms of folks that can go in there and analyze businesses is uh and improve those businesses. Um that's number one. Number two is we have a deep very deep uh value creation dedicated value creation effort of some 200 people that all they do is is they're in there driving value companies developing and supporting strategies of our businesses and that's all you know that's we're supporting that that's a big investment that that we're making um as part of of bank capital. Um third I would say is really the deep vertical expertise that we have. We're organized uh you know vertically and um we're trying to bring tremendous level of detailed expertise. I mean the reality is that uh the world is organized uh that way and healthcare companies want to want to deal with experts in healthcare and and industrial companies want to deal with people who know how to run uh factories and know understand the factories of the future. And we're able to do this because we've got a number of different asset classes, but we get them working together uh on these industry thematics and verticals in such a way that it really expands the depth of of team we have. So if you take any given vertical opportunity, we probably have 50 to 60 experts in the firm uh globally uh that we can throw into a situation. So this kind of scale of team uh and the depth of team I think are probably the ones I point out as being you know most unique. And you also but you spoke about that consulting legacy which talks to speaks to the origins of the firm. >> Yes. >> So what are those origins and where did the company come from? Well, we were founded in 1984 as a spin-off uh from um Bay & Company, the consulting firm. And you know, the idea idea back then is that uh Bay & 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 and that was the whole thesis behind uh behind the firm >> and the companies are separate. Mitt Romney was instrumental in setting the company up and but they're totally separate at this point. >> They are separate um you know we'll work with the Bay & Companies and the Mckenzies and others and BCGs of the world. uh but they are they are separate firms but the ethos of the firm is of the firms are very uh similar you know we're highly analytical we're uh collaborative we're we're interested in building uh content and knowledge that can that can help support an initial investment but then pay dividends for future investments as well we take very seriously knowledge management and and creating centers of excellence in certain capabilities whether it's go to market or procurement or technology and AI to take some of the newer ones. Um, and so there are some similarities, but we're an investment firm that raises capital from uh third parties. Um, and and and generates a return on that capital. >> Now, David, there's a lot of talk about private equity and the cycle and sort of more difficult times, comeuppants, if you will, particularly in certain sectors. I'll get to that in a minute, but what is your take just generally on the macro view for private equity? >> Sure. Well, through all these, you know, cycles, um, and you're you're describing a current cycle that we're we're in, and we've seen cycles like this before. Um, you know, the industry, uh, will invest and and there'll be, uh, an upswing in in investment velocity and then a period during which you'll digest all those investments. Um, and that's kind of what you, you know, what you see in this current cycle. there's a very peak period in the 20 you know 21-22 period. Um and so some of the as you mentioned comeuppance uh question is around the point we are in that cycle but generally speaking you know through the cycles you've seen steady steady you know growth. This is an industry that's growing in double digits in terms of its available investment opportunity. It's still pretty low in terms of penetration of the available um opportunity. it, you know, is globalizing and so and we've been uh, you know, big in supporting the global expansion of of our business. More than, you know, 50% of our our business is outside the United States. That's another growth growth leg. And then there are all these interesting vertical thematic trends that our industry is investing behind like healthcare, like technology, like aerospace and defense, fintech and the like. So um you know I still from a macro perspective you know have a very constructive view on the growth prospects for the industry but we always have to ask ourselves the question what what point are we in the cycle? What are the what are the industry challenges and opportunities at that point and then step back and look at what the what the long-term curve looks like >> in private markets. One area that's been of particular concern is private credit. you're in the private credit business a bit and the specific part of that that people are concerned about is software. So my question to you is how much exposure do you have does Bane have to software in their port in your portfolio? >> Sure. So you know first on on private yes you know we're a participant we participate in a in a specific segment which is the the middle market. So we're not providers in the large cap segment and we we've chosen that because um there are better lender protections in that segment. you can have a bigger role in in the in the kind of debt consortium that gets formed. And we've been in that business since the late 90s. So, it's a very long-term long-term business. Um, on the large side, we don't provide debt, but we are users of of large cap uh private credit to fund our our buyout. So, we're present in in in really kind of both sides of of this market. um as it relates to techn you know technology's been a big part of the of the broader industries's private equity uh mix in this in this current cycle um upwards of you know 40 50% the at the industry level um you know for us we have a very diversified portfolio across sectors I mentioned you know healthcare and industrial these are equal sized uh sectors for us alongside technology so technology overall is maybe a quarter to 30% of what we do software is maybe you know probably less than less than half of that. to something in the you know 10 to 15% uh range. But you know listen I think with all the concerns about private credit and software um you know there's been a bit of a um conflation of of of what the real issue is in in you know first of all not all not all software businesses are created uh equally. There are very different ones. Uh most of them are highly cash regenerative stable have good technology positions. Um, and so you really got to do the uh exercise of going through, you know, where they're positioned relative to some SE some technology trends and not all ones that were funded with private credit are are overleveraged. So I think there's a little bit of a baby in ba out of the bathwater phenomenon going on with this right now. But but that's you know that's how we see the the relevance of it to our portfolio. >> So nothing concerns you specifically? It's not a big concern of yours. >> I I really I don't think this is a bubble. I think there has been a bit of a a search for the next bubble in this last economic cycle because the economy has been so robust for so long. It surprised many of us uh that folks are kind of looking for what's the thing that's going to uh upset the Apple card. I I don't think it's private credit and actually I don't think it's software either. >> The Department of Labor recently proposed making it easier for private investments to go into 401ks. What's your take on that specifically and more generally retail investors going into privates >> specifically? It's good that there are more rules being outlined to ensure that there is transparency and disclosure and that this is all you know being done in a way that's that's uh good for the for the investor. Um the broader trend here though is about access to uh an asset class you know alts uh that um hasn't been broadly you know uh accessible uh particularly to smaller investors. it's mostly been institutions and very high net worth um you know players and I think if you look at the asset allocation that is is a good one for a pool of capital it should have a significant portion 15 to 20% of alts in it um but the individual investor has had a harder time accessing that so that that's not a bad thing that's probably you know a good trend to democratize or you know increase access to this investment I think the question of what's the right product design for that particular customer base. What's the education process that's undertaken? What's the sales process that is undertaken? Those are really really important questions and our industry should approach approach those with much caution because it is a different investor base than what we and they are are used to. Um we're not going headlong into that. We still regard our institutional capital providers and very ultra high net worth investors as really our core base. And we think that some of the newer products and technologies with semi-liquid funds and such could be good vehicles to reach that existing customer base. So the the 401k, you know, uh owner and the uh1 to5 million asset player that some have sought, that's not uh a segment that we're looking at uh because it doesn't really fit our model. Um but with the appropriate uh testing and the appropriate education process and clarity around rules and regulations, I think this ultimately will be a very viable uh investment avenue for all types of investors down the road. >> Right? Some people say, well, you know, they're tapped out in terms of distributing to institutions because they've hit their allocations. Universities are souring on private markets and so well, this is the next place to go. any truth to that? >> It's a place to go. It's not necessarily the next place. You know, the sovereign wealth funds and and pension funds continue to have pretty significant, you know, penetration upside for our asset class. So, there is growth um in that sector to say nothing of again the ultra high net worth segment is growing very rapidly and and that segment kind of acts like like institutions. So, I do believe there's continued growth outside of that channel. Um, but it is a big channel that over time will develop. And so I think it really gets down to what your goals are. Um, for us it's really been about alignment with the investor base to our strategy, ensuring that we have the right level of capital to support our growth and the diversity of capital. Um, and once we've achieved that, we need no more capital than what will meet those goals. Um, I do think that others have sought a model of saying if there's capital out there, I'm going to go raise that capital and then I'll think about how and where it's deployed. That's a fundamentally different business model that that we're not participating in. Um, but one that I think has actually uh generated a lot of, you know, a lot of headway into the retail sector for sure. >> Speaking of capital, you recently raised fund number 14. It was 14 billion. >> Coincidence? >> North America, >> right? >> Um, is that a coincidence? So it's like 14 and 14. >> No. No. And it and 13 wasn't 13 either. So yeah, it's uh No, this is really about, you know, if we sat back for us, it's never really been about maximizing the capital base. Uh and that's the funny thing and some of the surprising thing to to some folks. Um which is, you know, we used to grow our capital base because we had good returns and people wanted to then take those now larger dollars and reinvest it into us. Um, and we've always defined first what's the business plan that we have. Uh, how much can we deploy at a at a at a portfolio construction that really makes sense? And then what's the last question is really what's the capital um to to meet that. And so we come up with our targets based on a pretty detailed business planning process that ultimately arrives at that number rather than saying how much money can we go raise. We've turned down a lot of capital um cumulatively in our years because it hasn't met our business plan. >> Historically, you guys have been somewhat famous for consumer brands, investing in it. You got uh Duncan Brands, which I guess hometown favorite there for you guys. Canada Goose, Staples, Burlington Stores, Toys R Us. Is Consumer still a focus for you all? >> Consumer is, although consumer has changed a lot um in those names. Um you mentioned a number of retail >> names and that was probably earlier in our in maybe 1015 years ago >> um and there's been tremendous dislocation um in a number of those those sectors and so those have become >> not when we invested in them luckily but in more recent years um with the incredible strength of e-commerce and Amazon and other models >> that's become a tougher area investment but we're still believers in strong uh brands. I mean there's a lot of discussion about um the you know reduction in the importance and longevity of of brands but we found that brands are also not monolithic things they can be evolved and adapted and they can be segment and stratified over time and we we have a playbook around doing that very thing and extending products and extending geographies and so if you take uh Canada goose as example as a great example of kind of a single geography single product that we took into a real you know multiaceted businesses with its own retail retail channel and tremendous amount of growth. So I think for the right opportunity, consumer brands, you know, can still be interesting and some areas of of retail. We own Fogo to Chow and some other restaurant chains that we're also very, you know, very bullish about. >> I read somewhere that you're not so keen on US data centers, which is a very hot area right now. And it also appears on the other side of the coin though that you are interested in financial services. I knew my comment on on US data centers was was potentially going to be taken uh a little bit a little bit broadly. I don't want to say out of context because there is a there's a important kernel of truth there which is >> the largecale uh standing up of of really big hyperscaler data centers uh as an equity development proposition is not our cup of tea. I think we believe it's pretty difficult to really foresee the right supply demand balance in that in that area. Having said that, we're providers of credit. We're providers of a technology. Um, we have a venture capital company called Cruso, which is instrumental to building many of these very large hyperscaler companies, cyber security and the like. So, that's an interesting target segment. But where we're developers of big data centers is mostly outside the United States. We have one of the biggest data center platforms in Asia and we have a we're building a big one um in Europe. And so I would say we like that, you know, category in general, but we're a little bit nuanced in terms of what part of the value chain that you're you're playing in there. >> And financial services, >> financial services is, you know, broadly a sector that we think is interesting. I think when you take core balance sheet oriented financial services, that's more of a non- US phenomenon. And so that's things like in Asia, that's interesting market opportunity. But we're big investments in fintech, um, in financial payments, in wealth management. Um, we have a dedicated crypto fund. Um, and so the newer technology aspects of financial services, um, ways to develop um, uh, new and more efficient um, backends for banks, um, new products and services for consumers. Those are those are pretty interesting. you spent time earlier in your career in Japan and I'm wondering how that informs your thinking what you think about the Japanese market. Are you still interested in it? >> Yes, I'll start with the last question for you. We're still very interested in in fact uh you know for someone who's been involved in Japan for 30ome years um 20 of it and 25 of it in kind of private equity. Um you know I do think it's uh we're finally seeing the attention that Japan deserved. I think when people were a little bit negative on Japan, I think they were too negative. Uh they may be getting a little too >> uh too positive because things in Japan, you know, change but at a slow pace. But I think what you see happening in Japan is a genuine uh change in the nature of their economy. I think 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 um and making them much more uh efficient and then using those gains to now invest in in new areas. So there's a very positive cycle happening in Japan right now. there's much greater receptivity to uh folks like us um and to thinking about um capital partners and and operational partners as people who could help them achieve their goals maybe not forever. It used to be like, "Oh my gosh, you know, selling selling my company. I I we can't do that." You know, I we founded this company, it's been our family for so many years, or it's been part of this corporation as a business unit. Um that mentality has changed and that's been, I think, a huge catalyst to, you know, private equity activity and we're, you know, we're really bullish on it, building a lot in Japan right now. >> And final question, you just became the sole leader of the firm earlier this year. So I'm wondering where you're looking to take Bane over the next say five years. >> Sure. Well, you know, probably a few dimensions I'll I'll focus on. I think first is to really um you know, protect and grow this this great differentiated business model that I that I talked about. I mean we're we're big believers in this value added approach in this differentiated vertical capability and we've broadened our business and we've deepened it as I mentioned and now it's I it's really about having the agility to bring together all these disparate pieces because the most interesting you know opportunities that we find sit at the intersection of certain trends um it's you know healthcare technology it's you know real estate and labs it's defense technology ology and it's not just one thing and and deals also don't move in a linear progression. Um sometimes they start as a control deal and then they might turn into a minority deal and so our ability to bring our different divisions and business geographies together to seek those opportunities is potentially a huge area differentiation. So, you know, I believe, you know, one of my core goals is to really get us humming across this platform that we have and to be agile to respond to market opportunities as they as they develop. That's, you know, that's number one. Um, second is absolutely to pursue this massive opportunity around technology um and AI. This is this is a a generational uh opportunity. Um, you know, I said it's like, you know, a kid in a candy store for us because, you know, we're big on value creation and and and driving enterprisewide change in in companies. This is now a massively powerful tool to do just that. And so, if we can be the ones who are at the forefront of applying and molding this technology so that it can help business processes achieve their business goals, huh? That's going to be huge to increasing opportunity companies. It'll be an underwriting advantage when we look at a new investment because we'll say hey we know how to leverage this technology to advance something. It'll help us stay away from areas that will be um you know dislocated and it will actually help us run our own business because we're very knowledge and data intensive investors. And so think about all the years of history that we have across you know thousands of investments we've made. If we can bring that to bear with an intelligence tool that helps us make better investments, helps us forecast better, think about pitfalls and opportunities better, uh that's got huge potential. On the flip side, we have to be new economy company. You know, we have to futureproof organization. I think if you're not a leader in this area, um you won't be the place, you won't be the talent magnet. You won't be the the place that people want to come work. And so the third point I'd say is that you know we ensure that that Bane Capital can attract the best talent, the best technology, the talent, the best people who are proficient with technology, uh the best people who understand life sciences and aerospace and defense. Um look at this as a growthful exciting place to come and so you know that's that's my key goal. >> David Gross, managing partner of Bang Capital, thank you so much for joining us. >> Thank you. Really enjoyed it. >> This is at Barrens. I'm Andy Sirwer. We'll catch you next time.