The covid-19 pandemic has shaken up the private equity world and shone a light on its weaknesses as well as its strengths.
The most noteworthy: the strength of solidarity in supporting employees, portfolio companies and the most vulnerable in society. More than half a dozen firms and their executives spent well over $100 million to support those hurt by the pandemic.
In April, Partners Group senior executives including co-chief executives André Frei and David Layton, executive chairman Steffen Meister, along with the executive members of the firm’s board of directors relinquished 100 percent of their salaries for at least six months to support the most financially vulnerable employees at Partners Group portfolio companies.
The Swiss firm also set up what it called the Portfolio Employee Support Fund, which raised approximately $10 million. More than 70 percent was used to support stakeholders in the US, where there were “fewer safety nets” than in other investment geographies, Layton said on the firm’s semi-annual results call in September. A “good portion” of the funds was spent on supplementing lost income from furloughed or quarantined employees, and the remainder on supporting housing costs, medical expenses and child and family care.
Executives at Leonard Green & Partners committed to provide $10 million from their own pockets to help employees of the firm’s portfolio companies impacted by coronavirus-related actions or developments, as reported by sister title Buyouts.
KKR in April set up a $50 million relief fund to support those most impacted by the crisis and the resulting economic dislocation. Funding came from commitments from the firm, its leadership and employees. KKR co-founders George Roberts and Henry Kravis and co-presidents Scott Nuttall and Joseph Bae also agreed to forgo any further salary and bonuses in 2020 as part of the relief fund.
Blackstone donated $10 million to New York State and $5 million to organisations providing food delivery to healthcare workers, first responders and other vulnerable populations. Carlyle Group donated $10 million to covid-19 related causes globally; and Apollo Global Management and its nearly 100 portfolio companies made relief efforts worth more than $30 million to healthcare workers and food banks.
CVC Capital Partners and its portfolio companies have committed over €75 million to projects that address the consequences of the pandemic, funding more than 200 community and country initiatives. Among these include funding medical supplies for the Spanish Health Ministry, feeding front-line UK NHS teams and funding Oxford University’s vaccine research.
Eurazeo created a €10 million solidarity fund to buy and donate products and services from its investee companies, to support organisations helping the most vulnerable communities affected by the crisis and to help any employees of Eurazeo and its subsidiaries in urgent need. The firm’s executive board members contributed 10 percent of their annual bonuses for 2019, payable in April 2020, to the solidarity plan.
European firms Tikehau Capital and Investindustrial have made donations to hospitals in Europe to help them cope with the scale of the pandemic. Tikehau made a “large donation” for an undisclosed amount to the Public Hospitals of Paris (Assistance Publique – Hôpitaux de Paris) Research Foundation for coronavirus research, while Investindustrial employees and its portfolio companies donated more than €6.5 million to hospitals in Italy.
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