Assistance funds to public donations: How PE firms are doing good under covid-19

As the coronavirus pandemic places additional strain on businesses of all kind, some private equity and venture capital firms are walking the walk when it comes to being responsible owners of companies.

KKR hired an infectious disease expert with experience at the Centers for Disease Control and Prevention and the US Food and Drug Administration to help advise its companies on covid-19-related issues. A spokesman from the buyout giant told sister title Private Equity International it was also connecting its companies and sharing best practices, including leveraging guidance from healthcare portfolio businesses such as first responders.

When the disease broke out in China, KKR made contributions to two global non-profit organisations that support frontline health workers and institutions responding to the crisis: Give2Asia and Direct Relief. KKR teams in Beijing, Shanghai and Hong Kong have also made monetary donations to the Hanchuan People’s Hospital, located in the second-hardest hit city in Hubei province, according to a statement from the firm.

Carlyle Group portfolio company HireVue, which provides video-interviewing solutions, is offering three months’ free access to Carlyle’s portfolio companies to ensure they are able to continue interviewing and hiring people through the crisis if necessary, according to a source familiar with the matter.

BlackRock, according to a statement, committed $50 million to those immediately impacted by the virus, of which the first $18 million has been deployed to food banks and community organisations across the US and Europe that are working directly with vulnerable populations. The firm will phase its funding and support frontline responders in the US and globally.

US buyout shop Leonard Green & Partners has created a $10 million employee-assistance fund for portfolio companies that will be significantly affected by the virus. The firm is working out exactly what situations the assistance will target, whether supporting employees with health problems or covering the wages of any potential layoffs, as sister title Buyouts reported.

California-based tech-focused firm K1 Investment Management, meanwhile, has given all employees of its portfolio companies a $150 gift card, which can be used to purchase medical supplies and household expenses.

B2B-focused MiddleGround Capital has pledged to pay the wages for any of the roughly 3,000 employees of its portfolio companies who test positive for the flu or covid-19 until they are cleared of the infection, John Stewart, a co-founder of the firm, told Buyouts. Employees would continue to be paid during treatment periods, which would not be subject to the conditions that accompany sick leave. In addition, the Kentucky-based firm had each of its portfolio companies reach out to healthcare facilities to identify procedures for employees with suspected infections. It will pay for testing for those employees, Stewart said.

A trio of venture firms – San Francisco-headquartered 500 Startups, and the Singapore-based Openspace Ventures and Cocoon Capital – have set up #supportstartups to extend assistance to the venture capital community in South-East Asia. The investors are building a website to host offers, promos and discounts to drive traffic to start-ups’ websites. According to its website, #supportstartups received more than 250 requests within 24 hours of launching on March 19.

European firms Tikehau Capital and Investindustrial have made donations to hospitals to help them cope with the scale of the pandemic. Tikehau made a “large donation” to the Public Hospitals of Paris (Assistance Publique – Hôpitaux de Paris) Research Foundation for coronavirus research, it said in mid-March. It also pledged to pay part of the management fees of its mutual funds for the next three months to the foundation.

Investindustrial employees and its portfolio companies donated more than €6.5 million to hospitals in need primarily in southern Europe, including ASST Fatebenefratelli Sacco, San Raffaele and Humanitas in Milan. The money collected will “support the departments most exposed to the current health emergency,” the firm said in a statement on March 19.

Investindustrial expects the collection of funds for the effort to continue over the coming weeks.

Asked whether PE firms should step up their response to the crisis and do more, Drew Maloney, president and chief executive of industry body the American Investment Council, told PEI that its member firms are speaking almost daily with portfolio company leadership teams to ensure they have more information and resources in real time.

This includes helping with employee management, business continuity planning, technical support, supply chain management and liquidity considerations.

Firms are “working around the clock to support portfolio company leadership, employees, and supply chains,” he said.