Bain’s Steve Pagliuca Talks Private Credit

Summary

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Bloomberg Talks

Episode: Bain’s Steve Pagliuca Talks Private Credit
Date: October 17, 2025
Host: Bloomberg
Guest: Steve Pagliuca, Co-Chairman, Bain Capital

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Episode Overview

This episode features Steve Pagliuca of Bain Capital in a candid conversation about the evolving landscape of private credit, the shifting dynamics of leveraged buyouts, the growing role of private equity globally, and his ventures in the sports industry. The discussion offers insider perspectives on credit markets, the U.S. national debt, sports franchise valuations, and the increasing value of live sports content.

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Key Discussion Points & Insights

1. Evolution of Leveraged Buyouts & Private Credit

Timestamps: 00:23–02:48

• Comparison of Past and Present LBOs:
  • Host draws parallels between the recent Electronic Arts buyout and the historic HCA deal (2006–07), both involving massive leveraged transactions.
  • Pagliuca: The capital structure of LBOs has shifted towards higher equity and comparatively less debt, reflecting changes in market risk appetite and lender strategies.
    • "That buyout was $5 billion equity and $27 billion debt. This buyout is much more equity—kind of $30 billion of equity and $20 billion debt… So the markets have changed to that extent that you can't leverage much." (00:59)
• Quality of Private Credit Markets:
  • Pagliuca expresses confidence in the stability of private lenders and banks (notably JP Morgan and Bank of America), distinguishing private credit’s risks from systemic banking risk.
    • "Private credit is different than credit for banks because if it does go bad, you only write off the equity from people who put the equity in. It doesn't have a systemic multiplier effect." (01:44)

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2. Concerns Over the U.S. National Debt

Timestamps: 01:40–03:38

• Rising Debt and Its Implications:
  • Pagliuca voices concern over the ballooning U.S. national debt and its impact on government spending, especially as low-interest government refinancings mature.
    • "It took 250 years to have $1 trillion of national debt… In the last 40 years, we now have $37 trillion, which is more than the GDP… Our interest from the government now is one of the highest expenditures. It's right up there with defense and healthcare." (02:16)
  • Warns about complacency: each round of debt increases becomes normalized, but the long-term risks accumulate.
    • "In situations like this, it's always okay till it isn't okay…At some point you've got to have some long-term plan to pay that money back." (02:58)
  • Notes that most of the debt is still financed at low rates but will soon need to be refinanced at higher rates, raising interest expense further.

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3. Geopolitics and Private Equity Deals

Timestamps: 03:38–04:11

• Concerns Around Foreign Involvement:
  • The discussion touches on potential political sensitivities regarding foreign (notably Saudi PIF) involvement in large tech buyouts and the perceived role of intermediaries.
  • Pagliuca downplays the risk, citing robust U.S. private equity leadership.
    • "Silver Lake’s a fantastic firm and they're leading the charge there…there’s really going to be no concern because they'll be calling the shots on the deal." (04:04)

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4. Globalization & Capital in Private Equity

Timestamps: 04:11–05:20

• Growth and Diversification:
  • The private equity landscape has globalized and multiplied in size, with a much greater range of players, including sovereign wealth funds and institutional investors partnering with PE shops.
    • "When I started out… there was only three or four firms doing this…Now it's global. Fund sizes are up probably twenty times…so the dry powder is huge." (04:20)
• Opportunities Abound:
  • Despite abundant capital, Pagliuca asserts opportunities for new investments remain robust due to the value-added potential of private equity management.
    • "PE is here to stay. The model has really evolved...and I think there’ll be plenty of opportunities for these folks to invest money." (04:46)

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5. Sports Investment: Atalanta & Beyond

Timestamps: 05:20–07:37

• Partnership with New Balance & Atalanta:
  • Pagliuca describes a strong, values-driven partnership with New Balance, including stadium naming rights and shared ethos as “fighting brands.”
    • "New Balance is a…fighting brand, growing, taking a lot of share. They really like the Atalanta story because we have the same values…It was kind of a match made in heaven." (05:34)
  • Notes the family-owned nature of Atalanta, New Balance, and other stakeholders, underscoring a collaborative, long-term vision.
• Boom in Sports Valuations:
  • Sports franchises are trading at record valuations due to their unmatched ability to aggregate massive global audiences—a dynamic propelled by technology and media.
    • "Sports is now the only thing left that aggregates huge audiences globally...fans are counted in the billions instead of the tens of thousands." (06:20)
  • Advertisers and broadcasters are driving up values, given the importance of live content.
• Perspectives on Future Sports Investments:
  • Sees significant growth in women’s sports (WNBA, soccer), but also reiterates that NFL remains the premier asset class.
    • "The WNBA is a great opportunity. Women’s sports in general, women’s soccer in the USA and globally is growing. The NFL is the marquee property." (07:07)
  • On potential team acquisition: currently waiting on NBA moves, excited by rising ratings and fan engagement in women’s basketball.
    • "We've kind of stood down for now, and we're going to abide by whatever the NBA wants to do with the [Connecticut] team...The ratings are huge for WNBA." (07:43)

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6. Personal Reflections & The American Dream

Timestamps: 08:09–08:33

• Pagliuca’s Background:
  • Ends on a personal note, reflecting on his immigrant family’s journey and the sense of fulfillment in returning to his roots with Italian club Atalanta.
    • "My grandfather came from Italy on a boat with one suitcase…worked in a shoe factory here in New York in the Bronx for $8 a week. So I would say America is a great place… I love the homecoming. Coming back to Italy with Atalanta, …everyone looks like me there." (08:09)

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Notable Quotes

• On private credit stability:
  "Private credit is different than credit for banks because if it does go bad, you only write off the equity from people who put the equity in. It doesn't have a systemic multiplier effect." — Steve Pagliuca (01:44)

• On national debt risks:
  "It's always okay till it isn't okay. At some point you've got to have some long-term plan to pay that money back and get that deficit down because it's eating up huge amounts of the government budget." — Steve Pagliuca (02:58)

• On the explosion of private equity:
  "When I started out…there was only three or four firms doing this. Now it's global. Fund sizes are up probably twenty times...so the dry powder is huge." — Steve Pagliuca (04:20)

• On sports as a resilient live content asset:
  "Sports is now the only thing left that aggregates huge audiences globally." — Steve Pagliuca (06:20)

• Personal fulfillment:
  "My grandfather came from Italy on a boat with one suitcase…So I would say America is a great place… I love the homecoming. Coming back to Italy with Atalanta." — Steve Pagliuca (08:09)

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Important Timestamps

• 00:59 – Structural changes in leveraged buyouts
• 01:44 – Private credit vs. banking sector risk
• 02:16 – National debt’s historical context
• 02:58 – Debt risks and future concerns
• 04:20 – Globalization of private equity
• 05:34 – Atalanta and New Balance partnership
• 06:20 – Sports franchises' audience and value growth
• 07:07 – Growth of women’s sports and NFL leadership
• 08:09 – Pagliuca reflects on family and heritage

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Tone & Takeaways

Steve Pagliuca blends financial acumen with optimism about America’s opportunities. His tone is pragmatic—sounding alarms about unsustainable debt, candid about market realities, but ultimately upbeat regarding private equity’s evolution and the enduring growth of sports assets. The episode delivers clear context for current financial headlines through the lens of a seasoned industry leader, with relatable personal reflection bringing it home.

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Transcript

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[Interviewer (Bloomberg Host)]

Let's turn to private equity. The consortium Bank Electronic Arts is set to add more than a dozen banks to its underwriting group after JP Morgan put up 20 billion billion of debt to bankroll the leveraged buyout. The banks are in line to share roughly $500 million in fees for arranging the financing. Joining us now a man who knows something about a leveraged buyout, Steve Paluca of Bain Capital. Steve, it's good to see you.

[Steve Paluca]

Good to be here.

[Interviewer (Bloomberg Host)]

Good morning. Let's reflect on your time. The largest leveraged buyout ever before this one was HCA back in 2006, 2007. There you were right there in the middle of it. Describe that moment and how it compares to what we're seeing play out now.

[Steve Paluca]

Well, it's really interesting. I think that buyout was 5 billion equity and $27 billion debt. This, this buyout is much more equity, you know, kind of 30 billion of equity and 25, 20 billion debt, maybe 35 billion of equity. So the markets have changed to that extent that you can't leverage much. But the EBITDA is a little less very quality sponsors and JP Morgan is a very quality bank. So they did the deal because of the great growth in gaming and media and entertainment. And I think it's a very solid company.

[Interviewer (Bloomberg Host)]

You did tremendously well out of hca, needs to be very, very clear about that. But the timing of came right at the peak of credit and this is now too. Is that anything to be concerned about?

[Steve Paluca]

You know, I'm less concerned about credit right now in terms of the private credit markets because the private lenders actually are very good. The banks have been very good. J.P. morgan, especially bank of America, well run well capitalized banks. And private credit is different than credit for banks because if it does go bad, you only write off the equity from people who put the equity in. It doesn't have a systemic multiplier effect. So I'm less concerned about private credit. What I'm more concerned about is the size of the national debt and how much interest we're spending on the national debt. It's really interesting if you go back to when I got out of business school, there was a huge sturm and drawing about the national debt passing 1 trillion. That's in 1982. So it took 250 years to have 1 trillion of national debt. In the last 40 years, we now have 37 trillion, which is more than the GDP. GBP is about 30 trillion. So that concerns me more in terms of the impact of the dollar interest rates. Our interest from the government now is one of the highest expenditures. It's right up there with defense and health care. So that concerns me more than private credit.

[Interviewer (Bloomberg Host)]

So Steve, I could probably find you people who were concerned back in the 80s too, and then in the 2000 and as we went through 10 trillion, 20 trillion and kept going higher, they were concerned all the way up, unfortunately. Why is this moment different?

[Steve Paluca]

Well, I think, I think, I don't know if it is different, but in situations like this, it's always okay till it isn't okay. So you get used to you pass a trillion. Everett Dirksen had a board up that was counting it up at that time and it passed a trillion. There was a huge outcry. Now it's 10 trillion, then 20 trillion, then 30 trillion. But at some point you've got to have some long term plan to pay that money back and get that deficit down because it's eating up huge amounts of the government budget. And as, as, as, as the interest rates roll over, you know, a lot of that is still financed in the old really low interest rates. They're going to have to refinance it at 5%, you know, four and a half percent. And then the number goes up again.

[Political/Industry Commentator]

Well, when you see what's going on in Washington, I want to go back to your EA deal. It's not just the size and scope that got a ton of people's attention. There's concern in Washington given some of the players involved. Have you heard from politicians about that?

[Steve Paluca]

I don't think there's been a lot of pushback on that. And the deal, I think will be controlled by Silver Lake, which is an American, you know, fantastic private equ, the.

[Political/Industry Commentator]

Saudi PIF being involved. Some people think Jared Kushner was brought in just to get the Czech government seal of approval.

[Steve Paluca]

You know, again, I think Silver Lake's a fantastic firm and they're leading the charge there. And so I think there's really going to be no concern because they'll be calling the shots on the deal.

[Interviewer (Bloomberg Host)]

Steve, we started this conversation by comparing this deal to HCA in, oh, six, oh seven. Have the pools of capital changed in the last 20 years?

[Steve Paluca]

Yeah, absolutely. You know, when I started out in the industry, there was only three or four firms doing this. I Think in general. And it was mostly USA. Now it's global. The fund sizes are up probably 20 times from, from, from when I started. And also you have sovereigns and bidding institutional players partnering with private equity. So the dry powder is huge.

[Interviewer (Bloomberg Host)]

Are there enough opportunities to go around?

[Steve Paluca]

You know, you know, I got asked that question in 1989, and I feel like a broken record. It. Private equity, I think, is here to stay. The model has really evolved, so it really is huge value added to transform companies, make them better, globalize them, build new products and in an environment where you don't have to worry about quarterly earnings. So. So the model is a very good model. And it's only expanded, it's only gotten bigger. And I think it'll. It'll meet. There'll be plenty of opportunities for these folks to invest money.

[Interviewer (Bloomberg Host)]

Well, let's talk about the opportunities now for you and how your sport franchises are going, starting with Atalanta. Steve walked into the room with some Atlanta sneakers, with the. The sponsor, New Balance. On the relationship between you and New Balance, can you just describe what that's like at the moment?

[Steve Paluca]

Fantastic. New Balance is a. Is kind of a fighting brand, growing, taking a lot of share. They really like the Atalanta story because we have the same values. You know, we're kind of a fighting brand against your. The wanted AC1 team that you support. And, and so it was kind of a match made in heaven. The New Balance is very excited about it. We're excited about it. We've just named our stadium New Balance Arena. I think it's the first arena that New Balance is named. And we're very proud to be associated with New Balance. It's a family company. You know, the Pax Group is a family company and the Precast in Italy are family companies. So the three families have come together and hopefully take Atalanta to, to the next level.

[Interviewer (Bloomberg Host)]

You've done a tremendous job with the team of the franchise. Can you just describe the opportunities now that still exist in the sports world at a time when some people are pushing back against valuations?

[Steve Paluca]

Well, no question. Valuations are at record levels. Why is that? Is because sports is now the only thing left that aggregates huge audiences globally. And there's been a technology change where. You know, when I lived in Holland in the 1970s, you would only get sports scores three days later from an International Herald Tribune. You couldn't watch anything. Now you can watch any team globally. So fans are counted in the billions instead of the tens of thousands. What they used to be 30 years ago. So I think sports still has upside because advertisers, you know, want to reach the globe, and that's the way to do it.

[Interviewer (Bloomberg Host)]

As you look at the sports world and it's pretty broad, where do you see the best opportunity right now? Because your name's been linked to a team in the wnba? I know you wanted to bring a team up to Boston. Is that where you're looking still, or is it elsewhere?

[Steve Paluca]

Well, we're looking at many opportunities, I think. I think the WNBA is a great opportunity. Women's sports in general, women's soccer in the USA and global is growing. The NFL is the marquee properties. I think they had record ratings and record advertising on the NFL. So again, I think sports as a category is really a growth asset. And as, as you have this battle between old media and new media, it's existential for them, and they're battling over these properties that get all the eyeballs in. So I think that bodes well for all the leagues.

[Political/Industry Commentator]

John mentioned the Connecticut team. Do you think that there potentially could be a future for you and that.

[Steve Paluca]

Team and something clear? We've, we've kind of stood down for now, and, and we're going to abide by whatever the NBA wants to do with the team. I think it's, it's very exciting. The ratings are huge for wnba, and I think it's great that all, all Americans are following that sport now. And it's going to, it's going to really take off. And the NBA's done a great job with that.

[Interviewer (Bloomberg Host)]

You've done a great job, Steve. It's always good to catch up with you. What a career. It feels like you're having the best of times now.

[Steve Paluca]

You know, I've been very fortunate. You know, come. My grandfather came from Italy on a boat with one suitcase and worked in a shoe factory here in New York in the Bronx for $8 a week. So I would say America is a great place. Coming, coming from, from that and, and I love the homecoming. Coming back to Italy with Atalanta. I get off the plane and I love it because everyone looks like me there. We've talked about lost my Italian heritage.

[Interviewer (Bloomberg Host)]

We've talked extensively about this in the past together offline. And I'm very proud of you and everything you've done. Steve, thank you. So thank you. Steve Paducah of Bain Capital, Bloomberg.

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