What Do Private Equity Firms Actually Do?

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Mitt Romney, back in his Bain Capital days.

Mitt Romney, back in his Bain Capital days. David L. Ryan/Boston Globe via Getty Images hide caption

toggle caption David L. Ryan/Boston Globe via Getty Images

Are private-equity firms job-destroying monsters? Or are they knights in shining armor, riding in to fix troubled companies and make the economy work better?

When you have a presidential candidate who used to run a private-equity firm, the arguments tend to shed more heat than light.

So we decided to look at what private equity firms actually do — by telling the stories of two companies purchased by Bain Capital, the private equity firm co-founded by Mitt Romney.

On today's show, we look at a deal gone bad. On a future podcast, we'll look at another deal that turned out differently.

Romney's campaign wouldn't comment on tape for the podcast, but they did send us this statement:

Mitt Romney spent 25 years as a businessman and entrepreneur. ... At Bain Capital, he helped launch and guide a private equity and financial services firm. Bain Capital invested in many businesses; while not every business was successful, the firm had an excellent overall track record and created jobs with well-known companies like Staples, Dominos, and Sports Authority.

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