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  • October 2012 (Revised September 2015)
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Altoona State Investment Board: July 2012

By: Josh Lerner and Nathaniel Burbank
  • Format:Print
  • | Language:English
  • | Pages:13
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Abstract

Considers the decision faced by state pension fund manager Rod Calhoun as he decides whether to invest $200 million in Bain Capital's eleventh global buyout fund: Bain Capital Fund XI. For the fund, Bain was offering its limited partners a choice between three different fee structures: first, a "conventional" fee structure of a 1.5% management fee with 20% carried interest and a 7% preferred rate of return; second, a 1% management fee with 30% carried interest and a 7% preferred rate of return; or third, a 0.5% management fee, 30% carried interest, and a 0% preferred rate of return. Should Calhoun invest in Bain? If he should, which fee structure should Calhoun choose?

Keywords

Management Fees; Bain Capital; Venture Capital; Private Equity; Leveraged Buyouts; Banking Industry; Boston

Citation

Lerner, Josh, and Nathaniel Burbank. "Altoona State Investment Board: July 2012." Harvard Business School Case 813-100, October 2012. (Revised September 2015.)
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About The Author

Josh Lerner

Entrepreneurial Management
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Related Work

    • October 2012 (Revised September 2015)
    • Faculty Research

    Altoona State Investment Board: July 2012

    By: Josh Lerner and Nathaniel Burbank
    • August 2017
    • Faculty Research

    Altoona State Investment Board & Bain Capital Fund XI

    By: Josh Lerner and Ted Berk
Related Work
  • Altoona State Investment Board: July 2012 By: Josh Lerner and Nathaniel Burbank
  • Altoona State Investment Board & Bain Capital Fund XI By: Josh Lerner and Ted Berk
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