Private equity is entering a tougher operating environment, where cheap debt and multiple expansion can no longer be relied on to deliver returns.
In this episode of Fund Shack, Ross Butler speaks with Emilio Domingo, Partner in Bain & Company’s London office and Chief Commercial Officer for Bain’s EMEA Private Equity practice, about Bain’s latest private equity outlook, the idea that “12 is the new five”, and what it means for GPs, LPs and portfolio company management teams.
In this episode, we cover:
🔹Why Bain says “12 is the new five” for private equity
🔹Why average buyouts may now need much higher EBITDA growth to achieve similar returns
🔹Why margin expansion has contributed surprisingly little to private equity returns
🔹The “leaky bucket” problem of inflation, price erosion and supply chain shocks
🔹Why scale, specialisation and accumulated experience are becoming more important
🔹How private equity balances value creation playbooks with entrepreneurial management
🔹Bain’s view of full potential diligence
🔹Why speed matters in private equity transformation
🔹The rise of the Chief Transformation Officer
🔹How AI is changing investment teams, value creation teams and portfolio companies
🔹Whether AI will favour emerging managers or scaled private equity platforms
🔹Why private equity-backed companies may have an edge in AI adoption
🔹Bain’s outlook for private equity and the industry’s liquidity challenge
Chapters:
00:00 Why “12 is the new five” changes private equity
02:46 The new EBITDA growth challenge for buyouts
04:34 Why margin expansion has been so difficult
07:26 Why scale and specialisation are becoming critical
09:44 Private Markets Capability sponsor message
10:39 Value creation, governance and entrepreneurial management
12:57 The art of building a world-class value creation plan
14:33 Why speed matters in private equity transformation
15:51 The rise of the Chief Transformation Officer
17:23 How AI is changing private equity investing
20:11 Will AI favour emerging managers or the largest firms?
22:23 Why private equity could become the AI winner
23:41 Bain’s outlook for the future of private equity
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Guest bio: Emilio Domingo is a Partner in Bain & Company’s London office and Chief Commercial Officer for Bain’s EMEA Private Equity practice.
In this role, Emilio drives the commercial agenda for Bain’s regional private equity practice, helping the firm bring its capabilities, solutions and products to financial investor clients.
🔗 CONNECT on LinkedIn https://www.linkedin.com/in/emiliodomingo/
🌐 https://www.bain.com/industry-expertise/private-equity/
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Host: Ross Butler is the founder and host of Fund Shack. He has worked around private capital for 25 years as a journalist, policy adviser and consultant, and is the author of Invest Like a Barbarian: Share in the Spoils of a Private Markets Revolution.
🔗 CONNECT on LinkedIn https://www.linkedin.com/in/rossbutler1/
🌐 www.fund-shack.com
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📘 Order Ross Butler’s book
👉 Invest Like a Barbarian: Share in the spoils of the Private Markets revolution
♾️ http://q-r.to/Invest-Like-A-Barbarian
#investlikeabarbarian
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About our sponsor: Private Markets Capability for Wealth Advisers
Clients are increasingly asking not only whether they should invest in private markets, but how private equity and private credit fit within a portfolio, what the liquidity trade-offs are and what the underlying risks actually look like.
The PMC-Q50 was developed to help advisers test their preparedness before those conversations take place.
The free assessment takes around 25 minutes and produces a personalised private markets capability profile. It identifies where knowledge is strong, where it may need sharpening and which areas should be prioritised next.
Take the PMC-Q50 assessment.
https://pmc-q50.scoreapp.com
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