Classic Deal: HCA – Chris Gordon, Bain Capital (EP.335)

08/28/23 • 51 min

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Capital Allocators – Inside the Institutional Investment Industry

Next week, we’ll release the first episode of Season 3 of Private Equity Deals, this time focusing on deals in the middle market. As an interlude between Season 2 and 3, this week’s show is a classic – it’s Bain Capital and KKR’s take private of Hospital Corporation of America (HCA) in 2006. The $33 billion club deal was the largest private equity transaction in history at the time and was significantly larger than any deal since KKR’s famous run at RJR Nabisco in the late 1980s. The HCA deal showed the private equity industry the scale of what was possible and set the stage for both mega buyouts and public to private deals ever since. My guest is Chris Gordon, a Partner and Co-Head of Private Equity in North America for Bain Capital. Bain Capital today is one of the world’s largest private, multi-asset investing firms that oversees over $165 billion in assets. Seventeen years ago, Chris was a younger member of Bain Capital’s HCA deal team. HCA is one of the nation’s leading healthcare services providers, with over 182 hospitals and 2,300 sites of care in 20 states and the United Kingdom. Its origins date back to 1968 when it was one of the first hospital companies in the United States. Our conversation covers HCA’s history, the private equity environment in the mid-2000s, and the impetus for the HCA buyout. We discuss the complexity of navigating a large-scale transaction, conducting due diligence discretely, navigating the financial crisis, and what happened to the company. We turn to HCA’s return to the public markets through an IPO in 2011, Bain Capital’s eventual exit of the investment, and the implications of the deal on the firm and industry. For full show notes, visit the episode webpage here. Learn More Follow Ted on Twitter at @tseides or LinkedIn Subscribe to the mailing list Access Transcript with Premium Membership

Previous Episode

Stan Miranda – Modern Endowment Model at Partners Capital (EP.334)

Stan Miranda is the Founder and Chairman of Partners Capital, a $50 billion OCIO that started in 2001 as a solution for private equity founders. Earlier in his career, Stan spent 17 years at Bain & Company, rising to Chairman of the Worldwide Executive Committee and leading its private equity practice. Our conversation covers the founding of Partners, learning the endowment model from first principles, and scaling Partners over the years since. We discuss the firm’s original interpretation of the endowment model, manager selection process, evolution of the endowment model since. Along the way, we touch on a range of portfolio and business management challenges, including team structure, internal and external management, succession planning, and insights across asset classes.

For full show notes, visit the episode webpage here.

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Next Episode

[REPLAY] Andrew Golden – Beyond the Long Term (Capital Allocators, EP.13)

Andy Golden is the President of Princeton University’s Investment Management Company (PRINCO). Having grown from $3B at the time of his arrival in 1995 to $22.5B today, PRINCO has been among the highest performing endowments in the world. Andy came to PRINCO from Duke Management Company, where he was an Investment Director, and received his formative training in the business working for David Swensen at the Yale University Investments Office. Andy currently serves on the fund Advisory Boards of several well-known private equity and venture capital managers, including Bain Capital, General Catalyst Partners, and Greylock Partners. He was a founding member of the Investors’ Committee of the President’s Working Group on Financial Markets and serves as a Trustee of the Princeton Area Community Foundation and Rutgers Preparatory School. Andy holds a B.A. in Philosophy from Duke University and an M.P.P.M. from the Yale School of Management.

Our conversation discusses Princeton’s endowment two decades ago and today, including its strategic advantages as an institution, shifts in thinking about asset allocation, decision making, team development, and partnership with managers. Andy’s long tenure in his seat, insight, and wisdom provides a treasure trove of information about how a top endowment manager practices his craft, and his subtle wit always keeps things light.

For full show notes, visit the episode webpage here.

Learn More Follow Ted on Twitter at @tseides or LinkedIn Subscribe to the mailing list Access Transcript with Premium Membership