Wednesday, February 27, 2008

Amber Our Ballerina

Amber started a dance class a few weeks ago. Our cute friend Emily called me and asked if I'd want to put Amber in a class. I totally wanted to, but I thought Amber would be too shy and wouldn't participate. I put it off for about a month while we went on our cruise and when we got back Emily encouraged us to do it. That is so my personality. I always need a little nudge to get going. I'm not a go-getter. So thank you Emily for the encouragement and extra push to get her in. Amber has LOVED it! The first day was a little scary. She clung on to me and wouldn't do a whole lot of anything. She was nervous and shy. I kept prepping her for it for hours before. We went shopping together and bought a cute little ballerina outfit and tights, the whole works. I didn't buy anything too cute because I was certain she'd hate it. So I kept telling her she got to wear her special outfit, and she'd be with her friend Bailey. She kept telling me "no, I don't want to go." She fell asleep on the way to her first lesson, so I thought that was going to be a rough start! Like I said she was shy, but at least went in with out any tears. Her cute teacher is awesome and made Amber feel so welcome. She showed Amber she had candy and all sorts of fun incentives if she stayed. I was there about 30 minutes and left after she felt comfortable. It was such a fun experience. My first child off to a dance class! I felt like such a grown up Mommy with a grown up girl. I picked her up just a few minutes later, and she was so proud of herself and had stickers on her tap shoes and had treats for being so good. She was super excited and wanted to tell me all about it. She has been hooked ever since and loves Wednesdays now! She loves her teacher Miss Julie and looks forward to going.

Last week when I picked her up, she was telling me stories about her class. For the first time in her life, I had NO idea what she was talking about. We have spent practically every waking moment together, and here she is making memories with out me in them. It's kind of weird, but I love it. I love this time she gets away to just be herself and become more independent. She really is so proud of herself and just beams when I come get her.

I wish she weren't such a goof and would let me take her picture, but unfortunately she wouldn't pose (Bailey had no trouble posing). Anyway, a proud moment for the Deming family! I'm sure I'll have plenty of pictures as the weeks go on!

Sunday, February 24, 2008

Our Fun Weekend!

We just took a fun quick trip to St. George. Matt did a little bike race this weekend and did so well! We had fun cheering him on. The weather was much better there than here in SLC. We were sporting short sleeved shirts! What a nice break! During Matt's ride it rained a little, so the conditions were cold. He did awesome and rode about 65 miles (this was more of a "ride" rather than a race, no times were taken and there was a 50 mile, 65 mile or 100 mile finish). Anyway, Matt hasn't been on the bike since the LoToJa, so I expected a long day. He called me after about 3 hours and said "where are you?" I was at mile 25, and he was at 50! So I totally underestimated him. Most of the riders that day looked like they had pooped their pants, Matt included. So I took a picture of his bum because I thought it looked funny! It was a great day, and fun to get away.

Way to go Matt! We love this season. Matt's bike riding/racing takes us to all sorts of fun places.

We also went to Zions, which was a lot of fun, but cold. There was snow there, which Matt and I both agreed we hadn't ever seen Zion's with snow. It was beautiful though.

Check out my Slide Show!

Wednesday, February 20, 2008

Happy Birthday Jody!

To my good friend Jody...I hope you have a great 30th birthday! I met Jody in the Fall of 2003 at Puppy Kindergarten. We both had new puppies we were training at Willow Creek Pet Center. She and her husband Travis had just moved here from California (both originally from Montana). Today is the big day for Jody. She turned 30! Such a big deal, right? Jody is such an amazing friend. I am so glad we met! She is such an amazing mother/wife and I look up to her so much. I hope today is a great day, and enjoy your vacation to Montana!

I'm sad to say I don't have any good pictures of Jody! Whenever we're together, we're taking pictures of our dogs or kids, so this is unfortunately the only one I have.

This picture does have significance. Last year I posted about the Salt Lake City 1/2 Marathon and how my good friend Jody ran it ridiculously fast. I went there to cheer her on along with some family members and I missed her crossing the finish line because she was too darn quick.

Anyway, much love to Jody! Happy Birthday!

Monday, February 11, 2008

Poor Libby

Our poor little Libby has gone completely blind (remember, this is our dog, but she may as well be our child). She was born mostly blind. We knew she could partially see because she'd react to some movement. We didn't realize how much that little bit of sight helped her to function. On Thursday she started acting strange. She looked scared, and I couldn't figure out why. This would often happen if we moved furniture around because she'd get all disoriented. I had a laundry rack in the hall with a bunch of laundry drying on it. I thought that was what was bothering her. I moved it out of her path, but she still looked scared and wouldn't move. I finally noticed her eyes were shut tightly and she wouldn't open them.

Matt made an appointment on Saturday to see what the deal was. What we discovered is that her cataracts are so bad they've completely covered her retina. She's 100% blind. We're going to do some additional test to see if cataract surgery would restore partial vision. It’s doubtful though. She also has arthritis & hip displaysia. I guess one common thread to hip displaysia is retina displaysia, which causes retina detachment. Anyway, our cute little Libby is quite a sad dog. She is only 3, and used to have so much energy. She loves it when I wake up for the day. She jumps up and wants me to pet her and she wags her tail so hard because she knows it’s time to eat. When Matt gets home she freaks out and gets so hyper and jumps up on him and barks and does circles around him. She loves to be wherever we are, so she’ll follow us around the house all day. Well, since Thursday she has practically stayed put…either on her pillow on in the kitchen next to her doggie door. She doesn’t get hyper, she doesn’t jump, she doesn’t do anything. She won’t even go to her dog dish for breakfast/dinner because she’s too scared and can’t find it. She goes outside and gets lost and doesn’t know how to find her way back in. She hovers really low, crouching along hoping not to fall in a hole or crash in to something. She has totally lost her spirit. It is so sad. It’s amazing how fast it all happened. She is our sweet little love, and I’m so sad for her. Both Matt and I would do anything for her; she really is like a child to us.

Stacie, do you remember this weekend? This was Moab 2006.

Wednesday, February 6, 2008


Are people not watching the debates? Are they not reading up on all the candidates’ credentials? The politics and dirty candidate crap is so dang stupid! I really have to think that people voting in the Republican Party NOT voting for Mitt are uninformed and listening way too much to the media. I was honestly disgusted watching all the recap stuff last night. That's all I'm going to say, no sense going on and on. But come on, seriously, McCain? As my sister-in-law put it (who LIVES in Arizona, "our wolf in sheep’s clothing (McCain)" DUH! He seriously is! He repeats himself over and over again and has NOTHING to offer!

Tuesday, February 5, 2008


I'm so sad I haven't posted my opinion on this whole presidential stuff until now! If any of you read this and haven't voted...GO VOTE!!! We're huge Mitt fans. We've been watching all the debates and read up as much as we could on all the candidates. Mitt is seriously the best for the job! He has done so well on all the debates and has been so consistent. I think all his ideas are exactly what Washington needs! My favorite statement he has made is that Washington is broken, why send an insider back in to fix it? You need someone from the outside. This is Mitt's biggest strength. If you want to read more on is some info from my brother (a close personal friend of the Romney's):

(This is an email I received from brother)

As most of you know, I’ve been involved with Mitt Romney’s campaign for over a year now. I’ve known Mitt and his family personally for over a decade. I realize it’s hard to get to know a candidate through media sound bites and interviews, so I’ve attached two pieces that do a wonderful job helping others get to know the man that I firmly believe should be our next President of the United States, Governor Mitt Romney.

First, the attachment and transcript below is one of the best descriptions of Mitt’s business success that I have read. It's well worth a read and passing it along to any who need convincing.

Second, this link shows a home video taken last summer at the Romney summer home in New Hampshire and really helps illustrate what is underneath the suit and tie. I’ve spent many weekends with Mitt Romney and his family at this very summer home and can attest the video is true to life—even the comment "don't be a moron, lying on top of the fireworks".

The house that Mitt built


By David Snow

Mitt Romney, the talented and charismatic former head of Bain Capital, is running for president of the United States. Those who worked with him during his private-sector years in the 1980s and 1990s describe a consulting superstar who succeeded in private equity while presiding, pater familias-like, over a team of notably aggressive and ambitious investment professionals. David Snow examines Romney’s legacy at Bain Capital and the leadership characteristics of a man who may be the next American president. investigative report: mitt romney

In 1990, when a Goldman Sachs investment banker told Mitt Romney to “shut up”, the preternaturally calm co-founder of Bain Capital momentarily lost his cool. Romney was at the time on a leave of absence from his private equity firm to rescue his former employer, consulting firm Bain & Co., which like many overleveraged businesses then was teetering on the brink of bankruptcy. The turnaround gig was tough, but perfectly suited to Romney’s virtuosity for analysis, messsorting and interpersonal refereeing.

Here was a top consulting business, known as a breeding ground for good ideas, now caught in a financial death spiral of its own making. Romney was attempting to play the many impatient constituents against each other until the spiraling was brought under control. But the Goldman banker in question was rather more explicit in expressing his impatience, telling Romney in a meeting that the only hope for Bain & Co.’s resuscitation was for it to first enter into bankruptcy protection. Romney, an ace communicator, began his rebuttal, but was abrasively cut short. “I thought that he would probably kill the guy,” says a person who witnessed the confrontation. “That was probably the maddest I’ve ever seen Mitt.”

While Romney was used to – even an instigator of – vigorous, needling debate, being told to shut up deeply offended him, not because it was directed at him, but because it was impolite. Romney, the devout Mormon who never swore, drank or missed Monday-night family gatherings, demanded aggressive analysis, aggressive dealmaking and aggressive peer review from his team. But he took exception when people responded to this distinctly Bain brand of competitive energy with something other than a veneer of good manners.

Romney’s nice-guy persona was backed up by the confidence of someone who succeeded at everything he did. The undisputed alpha dog at Bain Capital had no need to bark. Even years after his departure, it is notable that at a firm bursting with self-confidence and ambition, Romney is still viewed with something akin to awe. Says Josh Bekenstein, a Bain Capital managing director and one of the firm’s first professionals: “The thing that one cannot overstate is how smart Mitt is. He’s a very, very smart guy. We interact with a lot of smart people, but I never felt that I was in a room where there were people that were smarter than Mitt.”

“Mitt was someone who was almost too good to be true,” says Charles “Chip” Baird, the founder of Greenwich, Connecticut private equity firm North Castle Capital Partners and a consultant at Bain & Co. during

Romney’s years there. “He is so good at so many different things, and that’s what drives some people bonkers.”

The confidence that Romney inspired was such that his ownership of Bain Capital’s management company was welcomed by the firm’s other partners. Romney was widely seen as the “glue” to the firm he built. When, in 2001, he turned the firm over to its employees, there was some worry among limited partners that the exit of pater familias would bring disorder to the house of Bain.

massachusetts avenue

Romney was wildly successful in private equity, but the private equity industry was not big enough for Romney’s ambitions. After a stint overseeing the scandal-marred Salt Lake City Winter Olympics, Romney was

elected governor of Massachusetts, becoming, against considerable odds, a Republican overseeing a traditional Democratic stronghold. He is now running for president of the United States of America. Romney must first defeat John McCain, Rudolph Giuliani and possibly Fred Thompson in rolling state Republican primary elections that begin in January. The winner of the Republican primaries will face the Democratic nominee in the 2008 US presidential elections.

Romney is viewed as more socially conservative than McCain and Giuliani – a potential advantage for securing the Republican nomination, until one factors in his religion, which is a minus for many of the same

socially conservative voters. Romney also has a potential liability in the form of his career in private equity, due not to any particular decisions he made at Bain Capital, but because of the generally low opinion many voters have of buyout firms. Romney lost a 1994 bid for Ted Kennedy’s Senate seat in part because of negative publicity he received from union bosses, who claimed that Bain Capital had fired workers at a tyremaking portfolio company.

Not surprisingly, there is no mention of the terms “buyout” or even “private equity” on the official Mitt Romney campaign web site. Bain Capital, one reads near the end of Romney’s bio, is “one of the nation’s most successful venture capital and investment companies”. Romney’s decision to downplay his years at Bain Capital in favour of more recent accomplishments is politically astute, but it does obscure the fact that his success at Bain Capital was the platform that allowed him to enter politics. It was the first time that Romney was able to build and control his own organisation. It created for Romney a degree of public recognition, not to mention vast personal wealth (Romney is entitled to receive distributions from Bain Capital entities until February 2009). Romney’s years at Bain Capital also allowed him to build out a network of wealthy and connected admirers, especially on Wall Street, who are now among the strongest supporters of his pro-business agenda.

Of course, public office was not an unexpected goal for Romney – politics was after all the family business. He is the son of George Romney, the former governor of Michigan and himself a former Republican White House hopeful (the senior Romney lost to Richard Nixon in the 1968 Republican primaries after voicing skepticism about the war in Vietnam).

George Romney first built his private-sector career during the 1940s and 1950s in the automobile industry. Mitt Romney entered the business world through the hot industry of the late 1970s – business consulting. After graduating with a joint degree from Harvard’s business and law schools, Romney was hired at Boston Consulting Group. But just three years later, in 1978, he joined a firm cofounded by Bill Bain and several other Boston Consulting defectors.

At the time, Bain & Co was encountering explosive growth and attracting the best and brightest from MBA programmes, remembers North Castle’s Baird.

Romney was quickly promoted to the equivalent of a partner at Bain & Co. and became the youngest of seven senior professionals at the firm. “Certainly, he was a star,” says Baird. “He was someone that clients liked and was someone that people liked to work for.”

Romney had all the ingredients necessary for achievement in the business of selling business advice. “A huge part of the consulting business is trust,” adds Baird. “Mitt is someone who is and comes across as an ingenuous, personable, straight shooter. Second, consultants are paid to solve business problems, and Mitt is enormously capable as an analyst, as a manager of an analytical process, as a synthesizer of options and solutions, and then as a communicator of what can be often quite obtuse, arcane types of analyses, put in a language that a general manager in a plastics company can understand.”

In addition to consulting across a range of industries, including hospitals, textiles and publishing, Romney took up the role of human capital acquirer for Bain & Co. “We were hiring huge numbers of people,” says Baird. “From 1978 to 1989 we went from 40 to 1,400 people, and for a big chunk of that time, Mitt was responsible for hiring.”

Romney became an assiduous evaluator and manager of people, and the role allowed him to hone a talent for building an organisation that achieved, as distinct from building a personal support system. He grew

into “someone who was not wildly involved in the details,” says Baird. “He would help the manager in the process outline, but not get involved in the day to day analytical exercise, necessarily.”

Not that Romney was incapable of marshalling the details when called upon. Baird remembers a particular consulting assignment that Bain & Co was bidding on, where it became apparent that the firm was on track to lose. Romney personally stepped in at the last minute. “Mitt stayed up all night and wrote the whole proposal,” says Baird. “He literally wrote every word. [It became] the biggest single piece of work that Bain had ever won in a competitive process.”

principal transition

By 1984, with the consulting business still highly lucrative, the senior partners of Bain & Co. took notice of a small but growing cluster of groups that would eventually come to be known as private equity firms.

According to Bekenstein, a client posed a question: “You guys do such a great job giving strategic advice to clients, why don’t you try to invest in companies and participate in the equity appreciation of those companies?”

Romney, along with another top producer within the consulting firm named Coleman Andrews, stepped forward to lead Bain & Co.’s expedition into private investments. The two were selected for the job because of “a

combination of them being incredibly talented, and in the course of their careers they had expressed interest in something more entrepreneurial than being consultants,” says Geoffrey Rehnert, a co-chief executive officer of Boston-based private equity firm Audax Group, and a co-founder of Bain Capital.

Romney and Andrews suggested, and the rest of the partners agreed, that Bain Capital would seek to apply Bain & Co-style strategic consulting advice to the companies in which it would invest.

The firm would “try a different strategy than most buyout firms were pursuing at the time,” says Bekenstein. “We wanted to look for buyouts that might be complex and have operational opportunities, and for venture

capital deals that weren’t just about technology.”

In retrospect, Romney’s move into the private equity business seems like a no-brainer, given the eventual success of Bain Capital. But at the time, Bain & Co., with roughly 600 consultants worldwide, was “about as

successful an organization as you can imagine,” notes Baird. “It was growing at crazy rates, everybody was getting promoted and getting paid more. Mitt jumped off the merry-goround to do something which I’d say

at that point was a question.”

To round out the initial Bain Capital team, Romney hired Bekenstein, while Andrews, who was then based in California, hired Rehnert, who had just joined the consulting firm out of Stanford Law School. “I was fortunate,” says Rehnert.

The first Bain Capital fund, called simply Bain Capital Fund, was a friends and family affair. At a Bain & Co. partners meeting in 1984, a piece of paper was passed around the table upon which the partners wrote the amounts of their respective commitments. This added up to $12 million. Romney and Andrews didn’t think it was enough, and so the two set out to meet with people in the Bain network for additional commitments. By the end of the year, Bain Capital held a final close on $37 million and a new private equity franchise was born.

The deal between Bain Capital and the partners of Bain & Co. gave the consulting firm fifty percent of the carried interest as well as an interest in the general partnership of the firm. For technical reasons, Romney’s and Andrews’ salaries were initially paid by Bain & Co. Bain Capital declined to give details on its evolving ownership structure.

Coleman Andrews left Bain Capital in 1986 to pursue his interests in the airline industry. He was replaced by Robert White, another Bain & Co. consultant.

White, Bekenstein, Rehnert and Romney became the four general partners of Bain Capital, with Romney, aged 38, a good decade older than his three partners. Although all partners were involved in all aspects of the firm, a pattern emerged whereby “Mitt was clearly the adult. He was the guy who flew out to meet with the CEO to negotiate the transaction” while the others focused more on financial models and deal terms, says Rehnert.

“Mitt’s got a commanding presence when he comes into a room,” adds Rehnert. “People notice him. He’s charismatic and energetic.”

The young firm had two early, audacious successes. And while Romney will likely not use the phrase “leveraged buyouts” during his presidential campaign, Bain Capital’s first two homeruns were highly leveraged,

classic mid-1980s LBOs. The first was Calumet Coach Company, a provider of mobile medical-imaging units. The deal, sourced by Rehnert in 1986, involved an equity cheque of $1 million and $10 million in debt. Twenty-seven months later Bain Capital exited the deal with a 35-times multiple on its investment. It was the firm’s first leveraged buyout.

Next came Accuride, a division of tyre giant Firestone that was spun-out by Bain Capital near the end of 1986. The deal was referred by Bain & Co., a pleasing validation of hoped-for synergies between the two firms. Bain Capital invested $2.6 million in equity and structured the deal with 40-to-1 leverage. Fifteen months later the company was sold and Bain Capital realised 24 times its investment. Calumet Coach and Accuride alone would return three times the value of the first Bain Capital fund.

All involved were pleased with the results, and the next Bain Capital fund received commitments from three insurance companies and the Bessemer Trust Company, in addition to enriched friends and family.

battleship bain

The stage was set for Bain Capital to grow beyond its pass-the-hat origins, and at this point Romney’s most valuable skill sets kicked in. Rehnert argues that the press coverage focused on Romney’s dealmaking during those years misses the essence of his success with Bain Capital, which was as a builder of an organisation.

Remembers Bekenstein: “He was a huge believer in finding the best people. That was always the most important thing.”

A person who used to work closely with Bain Capital says the firm developed a reputation for hiring highly ambitious, intelligent, even “cocky”, professionals, at least in the eyes of the limited partners and investment

bankers who interfaced with them. The term “Battleship Bain” came to be used by some investment bankers, the person says (several Bain Capital professionals say they have never heard of this term). The person summarises the reputation of the firm’s deal professionals under Mitt Romney as “not the Care Bears”.

Bekenstein says Bain Capital’s culture remains one of “ambitious people” in a very competitive market, but he adds that he is confident that Bain professionals are also perceived in the market to be “respectful”. “There’s no yelling and screaming at the firm,” he says.

Romney, perhaps taking a cue from his legal training, encouraged a decision- making culture whereby the smart, aggressive Bain professionals would gather and intensely debate investment and strategic options.

Romney often played the Socratic referee. His goal, says Bekenstein, was to arrive at consensus, but not without first going through a rigorous discussion.

Mike Goss, the current Bain Capital chief financial officer who joined the firm in its earliest years, says that all partners at the firm were expected to ask tough questions of each other, but no one was a more persistent questioner than Romney. Says Goss: “If you suddenly said that you weren’t interested in doing the deal any more, Mitt would switch sides and ask you to explain why.”

Adds Bekenstein: “If Mitt and other team members asked a bunch of tough questions, and the deal team said, okay, maybe we should pass on this deal, Mitt would be the first guy to say, ‘Well wait a second, are you sure you want to kill the deal? Maybe we should evaluate it some more.’”

“The culture at Bain has never, ever been, ‘Let’s just do this the easy way,’” says Goss.

Still, says Rehnert, “Mitt was not a deal junkie. In the 1980s there were a lot of guys who negotiated because they loved the sport of negotiation. Over time there were plenty of deal junkies at Bain Capital. Mitt became a manager of deal junkies. He was smart enough to hire and train and develop them. It was during the course of the growth of Bain Capital that he really learned how to run an organisation.”

Those on the other side of the table from Bain Capital pros during a transaction learned to expect the attack of the deal junkies. Romney encouraged a very aggressive approach to negotiations. “It’s going over every term,” says a person familiar with Bain’s negotiating style. “If there are 20 cookies on the table, I’m going to explain why I deserve 16 and you deserve four. And if you only give me 15 cookies, I want the biggest ones.”

Under Romney, Bain Capital took the unorthodox step of moving from a 20 percent to a 30 percent carry. The firm remains one of the few large private equity firms to charge higher than a 20 percent carry. The change came in 1998 with Bain’s sixth fund, just before Romney left to lead the Salt Lake Olympics. A source says the impetus to raise the carry came from Romney and Bekenstein, although Bekenstein says it was a collaborative decision among the firm’s partners. He says Bain Capital had a very peopleintensive style of investing, and the extra carry was conceived of mostly as a way to help pay this larger team.

A limited partner source says Bain Capital raised its carry because, frankly, it could – the firm’s track record by 1998 was phenomenal, with an average return on each Bain deal of roughly 100 percent.

With returns like that, Rehnert says of the move to 30 percent carry, “It would almost be stupid not to charge premium carry.”

While Bain Capital worked relentlessly to get the best terms for the firm, within the firm several current and former employees describe a general sense that compensation was remarkably fair under Romney. “Mitt was very generous with economics,” says someone who worked for Romney. “People got paid what they deserved.”

Romney created a system around compensation at the firm, which involved extensive peer review, although Romney ultimately “controlled the money bag”, as a Bain insider puts it. Several Bain insiders note that Romney structured a compensation methodology that most agreed was transparent. Goss says he remembers being hired by Romney, and asking about what it would take to become a partner at the firm. He was impressed when Romney, without promising anything, replied: “All I can tell you is that we will give you a piece of the pie if we believe that the pie will get bigger as a result of your having a piece.”

Anyone who underperformed at Bain likely would not get a lecture directly from Romney. “He was good at creating an organisation where colleagues delivered the pressure and the bad news,” says Rehnert. “Mitt would set the stage for the information to be received.”

While Bain & Co. owned a stake in the early Bain Capital funds, the creation of Bain Capital Inc. in 1992 saw Romney become the 100 percent owner of the firm’s management company, which technically gave him control of decision making at the firm. In practice, however, Romney broadly shared economics and kept in place a governance structure characterised by consensus-building among the many professionals. The other Bain Capital professionals saw Mitt’s ownership not only as acceptable, but as a much simpler alternative to the many other potential structures, given the trust they placed in Romney. “People were willing to concede that,” says Rehnert. “He had established enough credibility, enough trust, that it was better to have him be the sole decision maker rather than have a bunch of young guys beating each other up” in deciding on a shared ownership structure.

Ironically, given his future in politics, Romney enforced a no-press policy throughout his firm, a policy which persists in a somewhat relaxed form to this day. The radio-silence helped build up an elite aura around Bain Capital, but by the time Romney left, there existed an antagonistic relationship between the firm and some members of the media. In 2000, this relationship was tidily summed up when, on the occasion of a very rare interview with a trade reporter, a Bain Capital senior partner began by saying: “You guys give us abysmal coverage.”

Life and work at Bain Capital under Romney was not all grind. The head of the firm occasionally unleashed a wicked sense of humour against his colleagues. And though he never drank, Romney would join in any celebrations with the firm. People at Bain Capital also observed that Romney would religiously head home early each Monday for an evening with his family. “He was very committed to that. He’d just get up from his desk and go,” says someone who worked with him at the time. “But he’d work his ass off the rest of the time.”

romney to the rescue

As Bain Capital grew, it became apparent that Romney was restless for different challenges. In 1990, R o m n e y a g r e e d t o r e t u r n temporarily to Bain & Co. as CEO to help the damaged consulting firm

through a painful restructuring. Rehnert says he considers this period to have highlighted Romney at his best. “In the end, everyone was better off if Bain & Co. survived,” remembers Rehnert. “But if it was

going to go bankrupt, any one of these parties would have been better off being the ones who pushed it into bankruptcy, because they would have gotten more out of the bankruptcy if they were the ones who asserted their claim first. So he had to have everyone sit still and convince them that they’d be better off sitting still. In the end, he was able to inspire enough trust and confidence in all of these warring factions that he was going to get the job done. Even though a lot of smart people thought it was hopeless, he wound up making it work.”

Not long after returning to Bain Capital following the restructuring of Bain & Co., Romney took a much larger lateral step away from the firm. In 1994, he campaigned for the Senate seat of Ted Kennedy. “He gave a little consideration as to what would happen if he got elected,” says Rehnert. “There were some contingency plans made for governance and ownership in the event that he got elected.”

Bekenstein credits the collaborative decision-making process encouraged by Romney for preparing the firm for a post-Mitt world. “When he ran for the Senate in 1994, he was gone for about nine months, and we continued to run the firm and make decisions as we had when Mitt was around,” says Bekenstein.

Romney was not successful at winning Ted Kennedy’s seat. In the wake of this defeat, however, he set his sights on bigger prizes, and sought to give himself greater visibility on a national stage. In 1999, with the 2002 Salt Lake Olympics approaching, Mitt made himself available to clean up yet another mess, this one related to a bribery scandal embroiling the Olympic committee. In 2001, to dispel any doubts as to his ongoing connection with Bain Capital, Romney said at a press conference that he had agreed to transfer his ownership of Bain Capital to his partners, and to do so “without financial consideration”.

While indicating he would continue to be involved as a limited partner with Bain Capital, Romney said at the press conference: “I didn’t want [Bain Capital managing directors] to wonder whether I [was] going to be coming back to take over again . . . I didn’t want them to wonder whether .. . I was going to show up at the front door and say,

‘O.K. everybody, move over one office, I’m here again.’”

Last month, the Romney campaign filed a financial disclosure form that described Romney’s separation from Bain Capital as such: “As part of his retirement from Bain Capital, he entered into a non-compete, non-hire agreement running through February 11, 2009 which provides him with a passive, declining profit share that is fixed by contract in certain Bain Capital entities, and the right to make passive investments in certain

Bain Capital investments.”

A source says this arrangement refers to Romney’s share of the carried interest in Bain Capital entities. (It is unclear what is identified in a footnote to the Romney financial disclosure, which says that the “Ann D.

Romney Blind Trust” has a right to receive profits until February 2009 from an entity called “Bain Capital”).

The campaign announcement took pains to note that the former governor has since 2003 not had “any control over the assets acquired or disposed of”.

Certainly, Romney has continued to benefit from his passive affiliation with Bain Capital. But he left money on the table. Allowing that, until fairly recently, the management company of a private equity firm was

not deemed to be a thing of great value, had Romney retained ownership of Bain Capital until today, this asset could have been worth $10 billion or more, using the current (albeit fluctuating) valuations of Fortress and Blackstone as proxies. The Romney campaign has disclosed that the candidate’s net worth is somewhere between $190 million and $250 million.

Romney’s decision to transfer the firm’s management company to its employees stands in contrast to the many other examples of founders now seeking to monetise their respective franchises. “Mitt could have

kept that,” says a former colleague. “Maybe he could have put it in a trust, but he chose the. . . approach to pass it on to the generation of people who are producing, and not the entrepreneurial ‘I founded it and therefore I deserve $7 billion’” approach.

“He chose to go away with hundreds of millions of dollars,” adds the former colleague. “Could he have had billions? Sure.”

Although all at Bain Capital expected less involvement from Romney because of his leadership in the Olympics, his departure from the firm was not expected by all within the broader Bain network, according to a

source in close contact with the firm at the time. While there was acknowledgement among LPs that the firm’s partners would continue to build the firm, there was also some anxiety expressed that the “glue” of the firm, Romney, was no longer in place.

A person who attended Bain Capital’s May 2000 annual general meeting describes a somewhat emotional gathering of LPs, Bain professionals and the next generation of leadership, at which senior partners spoke with pride about their 15 years together, and their determination to make the firm thrive going forward.

The firm has certainly thrived post-Mitt, growing to $50 billion under management across multiple asset classes. In private equity, the firm has among the largest platforms in the world. Bain is reportedly raising as

much as $15 billion for its next fund. From a governance perspective, Romneyesque zeal for consensusdriven decision-making continues. The 51 managing directors delegate authority to numerous committees. No individual partner has stepped forward to replace Romney as the leader of Bain Capital.

Romney’s final departure from the firm went smoothly. But his charismatic presence was evidently a harder thing to unwind. A person who frequently visited the Bain offices in Boston during the 2000 period noted

that Romney’s office remained fully furnished and untouched for months following his move to Salt Lake City. On the walls hung large individual portraits of his family members. Romney was no longer boss, but the challenge of boxing up and clearing out the founders’ belongings was perhaps more complex than might have been the case at a firm with a different history. [1]

Saturday, February 2, 2008

Our Fun Group

We had a couple formal nights, one on Sunday evening, and one on Thursday. It was fun to get all dressed up (although my dress was NOT fancy in any way!). These were the fun friends/family we went with. We had such a great time together! We all got along so well and had so many funny moments.

Castries, St. Lucia (Day 5)

Once again, sorry if this is too much information, but remember I gave a disclaimer...this is more for me than any of you (:

On Wednesday the 23rd (Day 5) we went to Castries, St. Lucia. This was our least favorite place. It was way beautiful, but we drove way too much. We spent about 90% of the day in the car with a grumpy old tour guide (tough to beat Mison or our guide in St. Thomas). It was obvious we drove him nuts. We had a lot of questions for him, and he wasn’t too obliged to answer them. This island was so lush and green. It was a rain forest jungle. The roads were much more narrow and windy here than in St. Maarten, so we were very grateful to have a local drive us around! We wondered how many cars and lost control, or lost their brakes on these steep hills, never to be heard or seen again. The forest is so thick; you’d never know a car had driven off. That was one question we asked him (Do a lot of people crash, or loose their brakes) I don’t remember getting an answer. We saw a local on our drive with a gigantic snake wrapped around his neck. It freaked me out. He wouldn't let us take a picture without a "donation" but I was able to sneak one in. It looks like he may have noticed...isn't he scary?

We stopped at a lookout point of the famous Pitons. They were incredible. They are about 2,000 feet high. We asked if people climb them, and we were told that a lot of people climb them. They look like they are next to each other, but we were told they are a few miles apart.

We also went to a waterfall, and the beach of course to do more body surfing. We were looking for huge waves, so we asked our driver to take us to a beach with big waves. The waves were disappointing, but we still had a great time and got a little more sun.

These pictures I took just to remember how 3rd world these places are. You can see a woman doing laundry in a river in the picture above. As we drove to the Pitons, we went through a little village that was incredibly poor and run down. It's amazing how small some of these shacks are. We were told (not by our guide) that parts of Pirates of the Caribbean were filmed on this island. I wish our guide could have pointed out a few spots where shots were filmed.

St. John's Antigua

I don't have many pictures of this day. We went snorkeling and kayaking, so all of our pictures are on a waterproof camera. It was such a fun day though. We hopped on a tour bus with our driver "Mison." He was 70+ years old, and just like a cute little grandpa. He had 11 children. He said in his time they didn't have a TV, so he spent half his life with his pants down. He had this cute little hat on, and Julie asked "that's a cool hat Mison, where did you get it?" He said "The store." He drove a small bus and had a microphone and would tell us about the island as we drove to our kayaking trip. It was funny though, some of the time he’d forget to use the microphone, or else he was too busy steering/shifting to do all three so he’d be talking and talking, and then use the microphone once a hand was free to finish his last thought and would say something like “seven.” Matt and I were like, “what the heck is he talking about?” Good thing Eddy was in the passenger seat next to Mison, so we got all the info needed. He was a great guide, and told us all about the people, the island, the hospitals, the government, etc. It was fun.

Our kayaking trip was so awesome. I wish it would have been longer. Matt and I were reminded of our days guiding The Snake River. We kayaked around several little islands and then took a boat ride to a small island for more beautiful scenery and a brief history lesson. We went snorkeling here. There wasn’t much to see. I saw a lot of corral and a few fish. Nothing too exciting. I was proud of myself not getting sea sick. Our last snorkeling experience I was throwing up like crazy. The fish loved it, so that made Matt love it too because the fish swarmed us. Anyway, the boat ride back was fun. Our boat driver was a maniac and we drove so fast! It was a blast though. I think he thought our group was all wasted, because we were yelling and shouting and laughing out of control the whole ride. He would look at us and just shake his head. We made it back to our tour guides house and were welcomed with juice, bread, and towels to dry off. They were so generous, and so fun to be acquainted with for the day. They had this parrot that was very friendly and posed for a few pictures.

Philipsburg, St. Maarten

Day 3, St. Maarten. We started out the day eating way too much (we had to get stuffed so it'd last through out the day...). We woke up early so that we could get off the boat and to the nearest beach. We rented a car this day, which was so fun, and so cheap! Matt and I soon realized we didn't bring enough cash. The first two days we had spent most of it on taxi's and tour guides, so renting a car was awesome. It was $20 a couple, so I was pumped. Matt was the driver. I think all of us (except Matt) aged a little bit that day. He drove like a mad man. The roads are so narrow and hilly. He'd be driving so dang fast around blind corners or sharp turns. It was way scarier than any of the cab driving experiences. We went to three difference beaches that day. Each were beautiful. One of beaches we went to was totally private. So private in fact, that on a little stroll down the beach Matt, Aaron and Eddy found a couple sun bathing in the nude. What fun.

As we were leaving the last beach, we all piled in the mini van and Matt started to back up (way too quickly I might add). I look out my side view mirror and saw another car and yelled "MATT!" At that same moment, there was the loudest "CRUNCH" sound. He had hit the car behind us. I was so freaked out. Here I was so pumped about saving a few bucks on our own transportation, and here we just wrecked two cars. I was way ticked off, and I didn't want to see the damage. To everyone surprise, the car we hit wasn't damaged at all! Not even a scratch! Our car had only a little tiny dent in the bumper.

What a relief. Thanks to Mike's strong muscles, he was able to push the dent out, and the car was returned good as new.

We stopped to take one last look at the beautiful island and snap some photos. A dog ran up to our car and lifted it's leg (you can't see it really well from this picture).

Way funny! What a day this has been! We loved it all. The beaches were really so much fun, great waves! We got tossed around in the ocean like crazy. I still have sand in my ears!