PE Firms Act to Save Portfolio Companies From Coronavirus Troubles
March 20 2020 - 5:59AM
Dow Jones News
By Ted Bunker
Private-equity firms are taking steps to help their portfolio
companies survive the coronavirus onslaught of forced closures,
scattered workforces and upended markets.
From providing millions of dollars in emergency aid to more
mundane things like phone calls designed to boost managers' morale,
professionals in buyout shops around the U.S. are trying to ensure
the new coronavirus doesn't bring down their investments.
Platinum Equity is "working assertively to keep them all in
business," a person familiar with the matter said, referring to the
firm's portfolio companies.
At buyout shop Apollo Global Management Inc., professionals are
holding conference calls every other day with portfolio company
managers and have created an information-sharing portal online that
can serve as a resource to them all, said a person familiar with
the situation.
KKR & Co. Inc. went so far as to hire an infectious disease
expert to advise the firm's companies on issues related to the
coronavirus pandemic, said a person familiar with what is being
done there. The firm also has connected its medical portfolio
companies and other businesses to help supply guidance on dealing
with situations that arise. Some KKR companies also have donated
supplies such as surgical masks to other portfolio companies in
need.
In one of the biggest efforts so far, executives at Los
Angeles-based Leonard Green & Partners agreed to contribute $10
million of their own money to provide emergency cash to employees
of the firm's portfolio companies that are affected by the
virus.
"We want to support them and share the pain," said Managing
Partner John Danhakl.
Mr. Danhakl said the firm would disperse the money through
emergency relief funds and other initiatives set up by the
portfolio companies to assist employees.
"They should view us as a force multiplier for the things that
they are doing on behalf of impacted employees," he said.
One Leonard Green company, Union Square Hospitality Group, laid
off 80% of its staff after the New York restaurant chain had to
shut down most operations in accordance with government orders. The
company's chief executive, Danny Meyer, set up a relief fund to
assist those who have been affected and said he would divert his
salary into the fund.
In one of the earliest public actions to help battle the
coronavirus outbreak in China, Blackstone Group Inc. in January
pledged $1 million to help local authorities in Wuhan, where the
pandemic began. The firm also is halting evictions from apartments
it owns in New York City, along with other members of the Real
Estate Board of New York that control about 150,000 residential
units.
Carlyle Group Inc. in Washington, D.C., has also stepped up to
assist communities in China, providing 3 million yuan ($422,024) in
cash and medical supplies to front-line medical and support staff
there, according to a person familiar with the matter.
The firm is also bringing together the resources of portfolio
companies that can be used to support operations of those that have
been affected by the virus.
In one example cited by the person, Carlyle's HireVue Inc., a
provider of video interviewing systems, is giving three months of
free access to its technology to other portfolio companies so they
can interview job candidates and hire through the crisis, if
necessary. The move was particularly welcomed by those trying to
recruit for tech and business services jobs and can't conduct
on-campus and in-person spring interviews.
Laura Kreutzer and Preeti Singh contributed to this article.
Write to Ted Bunker at ted.bunker@wsj.com
(END) Dow Jones Newswires
March 20, 2020 05:44 ET (09:44 GMT)
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