Photo: Bloomberg TV
Bain Capital’s Managing Director Stephen Pagliuca said in an interview this morning with Bloomberg TV that his firm’s goal is not to create jobs.Rather, the aim is to create great companies: “Bain Capital is not trying to create jobs. It’s trying to create great companies, but great companies create jobs.”
That narrative is in many ways closer to what private equity does than the almost solely job creation focus Mitt Romney has offered as he runs for the Republican Presidential nomination. One should note, though, that generating returns for investors was notably absent from Pagliuca’s comment.
The private equity industry has been reaching for a way to defend itself against an onslaught of criticism since Romney’s career at Bain was brought up in the Republican race. Focusing on the idea that private equity creates great companies and not specifically jobs has been thrown about as a way to play that defence.
Take Dan Primack’s Term Sheet column, for instance. He suggested that PE heads should make this argument on Monday.
A big complaint I’ve heard from PE investors – including from some at Bain Capital – is that Romney chose to emphasise job creation over managerial execution. Don’t make the same mistake (as David Rubenstein began to do today). Creating jobs isn’t your job. There’s no shame in that. It’s not my job either.
One item you could quibble with in Pagliuca’s statement, though, is the notion that great companies create jobs. This can be but is not necessarily true, particularly in the U.S. Indeed, particularly over the last decade, a key issue for the American economy has been that great companies have not always created large numbers of domestic jobs.
For background on his partisan leanings, in 2009, Pagliuca ran unsuccessfully in the Democratic primary for the opportunity to succeed Ted Kennedy in the U.S. Senate.
Here’s the full via [via Bloomberg TV]: