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  • August 2017
  • Case
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Altoona State Investment Board & Bain Capital Fund XI

By: Josh Lerner and Ted Berk
  • Format:Print
  • | Language:English
  • | Pages:14 
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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 among 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

Capital; Design; Entrepreneurship; Equity Method; Finance; Leveraged Buyout; Management; Management Buyout; Private Equity; Venture Capital; Capital; Design; Entrepreneurship; Finance; Leveraged Buyouts; Management; Private Equity; Venture Capital; Banking Industry; Massachusetts

Citation

Lerner, Josh, and Ted Berk. "Altoona State Investment Board & Bain Capital Fund XI." Harvard Business School Case 218-022, August 2017.
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About The Authors

Josh Lerner

Entrepreneurial Management
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Edward B. Berk

Finance
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  • Venture Capital's Role in Financing Innovation: What We Know and How Much We Still Need to Learn By: Josh Lerner and Ramana Nanda
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