Private equity figures to be a major political issue in the U.S. Presidential election, especially since President Obama's attacks on Mitt Romney's career at Bain Capital appear to be getting traction. And yet, as Ken Mehlman and other experts tell Big Think, private equity firms are not the “barbarians at the gate” that the media would have you believe.
In today's lesson, Romney's former partner at Bain, Ed Conard, explains Bain Capital's philosophy and the essential underpinnings of private equity firms in general. Bain Capital was, after all, enormously successful at picking winners and creating wealth. Of course, not every business they invested in succeeded, but as Canard explains, success depends on picking the types of companies that have the biggest upside. And that is what private equity is in a nutshell.
This may not always be great politics, but it's good business.