Exclusive with Bain Capital's John Connaughton on headwinds facing private equity and why his firm is staying private.

Bain Capital, with $160 billion in AUM, is the largest private, private equity firm. We sat down with John Connaughton in an exclusive interview for this week's Delivering Alpha Newsletter. 

VIEW IN BROWSER | SUBSCRIBE In This Issue PE giant Bain Capital, with $160 billion in AUM, is staying private SPAC sponsors are getting desperate to beat the clock Interactive Brokers' Peterffy sees the market dropping another 15% from here Register to attend CNBC's Delivering Alpha conference Sept. 28 in New York City The Sharpe Angle Interview: John Connaughton Why remaining private is a competitive advantage for Bain Capital with $160 billion WATCH THE INTERVIEW One of the key tenants of private equity investing is deciding when a company is best-served staying private or going public. Perhaps the same can be said among the largest firms, which have increasingly taken the step to go public.    Take TPG, for example, which had a well-timed IPO on Jan. 13 of this year. The S&P 500 has slumped 12% since then (TPG has declined 16%).    But not all firms are enticed by the liquidity of riches that the public markets can bring. Bain Capital, with $160 billion in assets, is one of the largest private, private equity firms. We sat down with John Connaughton in an exclusive interview for this week's Delivering Alpha Newsletter.    He said, for them, it's not a "competitive advantage being public,"..."because we don't give away our economics to public shareholders; it's fully retained inside the firm."    Connaughton believes that there's a mismatch in that public investors want their firms to be more "short-term oriented," while his goal is to be "long-term accountable to our investors" (limited partners).  Connaughton is focused on the long-term for deal-making as well.    We spoke with him about the recent market volatility and what it means for buyout multiples. He says in every cycle, it takes time for valuations to settle lower and even longer for sellers to be willing to transact at those lower levels. He sees that happening in about a year, enabling buyout firms, like Bain, to be opportunistic.    And despite the recent fundraising blitz across the private-equity landscape, Connaughton does not see the industry contracting from here. In fact, he believes it will grow "significantly," thanks to global expansion and the size of the equity check required to get deals done these days.    In other words, just because firms like Bain aren't public, doesn't mean they're disappearing. Quite the opposite. Leslie Picker | Reporter, CNBC

@LesliePicker

This SPAC is merging with an already-public company as sponsors get creative before time runs out SPACs are known to be a roundabout investment vehicle to take private companies public. Not this one.   Bull Horn Holdings is merging with biotech Coeptis Therapeutics, a public company traded over the counter. The SPAC sponsors told CNBC they went for a public company partly because of greater transparency via a past performance record, which addresses some of the criticisms levelled against blank-check deals.   "We love this deal because it'd already spent some time in the minor leagues and it was ready to move forward. We've created a model that should be looked at by everybody," Bull Horn CFO Chris Calise said in an interview.   "There are a lot of sponsors right now and the bell is going to ring pretty quickly. I think they are looking for anything unique to make a deal happen," Calise said. His SPAC was originally targeting a company in the sports and entertainment industry.   This particular deal highlighted the peril many sponsors face as they race the clock to find a target amid a regulatory crackdown and waning enthusiasm. There are nearly 600 blank-check firms hunting for deals right now, most of which launched in 2020 and 2021, according to SPAC Research. SPACs typically have a two-year deadline to merge with a company, and they would have to return capital to investors if a deal fails to come to fruition. It remains to be seen if other sponsors would replicate Bull Horn's model. It is not uncommon for a stock traded over-the-counter to have a public offering and call it an IPO, according to Jay Ritter, a finance professor at University of Florida who studies IPOs and SPACs.   Ritter noted that Coeptis is currently trading at $2.72 per share in the OTC market, below the price the shares should trade at if they are going to be converted into $175 million of shares in the new company at $10 each (there are 38.99 million Coeptis shares outstanding.)   "The market is skeptical about the ability of the SPAC to complete the merger without massive redemptions," Ritter said.   The SPAC market took a sharp turn for the worse this year as fears of rising rates dented the appeal for growth-oriented companies. Some high-profile transactions have also fallen apart, including SeatGeek's $1.3 billion deal with Billy Beane's RedBall Acquisition Corp. as well as Forbes' $630 million deal with former Point72 executive Jonathan Lin-led SPAC Magnum Opus.

Yun Li | CNBC Markets and Investing Reporter @YunLi626

Delivering Alpha Headlines Big thoughts from the big money

Thomas Peterffy says stocks have a lot more to fall Interactive Brokers Chair Thomas Peterffy said the stock market has a lot more to lose in the near term as the Federal Reserve struggles to tame inflation by rate hikes. "I am negative on the market because of the geopolitical situation and I don't believe that the Fed will be able to raise rates as high as they need to in order to quiet the inflation," Peterffy told CNBC. The market veteran said the S&P 500 will fall another 15% from here as surging inflation puts a damper on corporate profit outlooks.

Cathie Wood has been buying the dip in Tesla Ark Invest's Cathie Wood has been adding shares of Tesla in her various funds after the electric vehicle maker's 40% pullback from its record high. The closely followed innovation investor bought at least 50,000 shares of Tesla over the past two weeks for her flagship Ark Innovation ETF, Ark Autonomous Technology and Robotics ETF and Ark Next Generation Internet ETF. Before the recent buying spree, Wood had been trimming her Tesla stake despite being a longtime bull. Tiger Global is down more than 50% this year after a tough May Chase Coleman's Tiger Global Management suffered huge losses in May amid a tech-driven sell-off, making the hedge fund's tough 2022 even worse. The growth-focused flagship fund at Tiger Global tumbled 14.3% in May, bringing its 2022 losses to over 50%. "Our recent public fund performance is deeply frustrating. Our business is set up with duration to weather storms when they arise," Tiger Global said in an investor letter.

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