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Special Report: Private-Equity Shores Up Covid-19 Defense
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Last month, in Massachusetts we celebrated Patriot’s Day, a statewide holiday that commemorates the battles of Lexington and Concord, which kicked off the American Revolution. Each Patriot’s Day for the past eight years, I have hauled myself out of bed at 4:45 a.m., walked down to the end of my street with my coffee mug, and stood with my neighbors to watch the reenactors dressed in colonial garb as
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they marched past on their way to Concord, Mass., to recreate the historic battle there. Today, we face a very different enemy, one that is invisible, pervasive and incredibly unpredictable. Yet, so many ordinary people again have stepped up to answer the call.
Private-equity executives and their portfolio companies are also helping battle the pandemic in their own ways. Many firms are scrambling to shore up the defenses of portfolio companies that have seen their balance sheets battered by state and local shutdowns. We looked at the many different ways the pandemic is affecting the industry and how general partners and limited partners are responding.
We hope you find this special coverage informative.
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As the coronavirus pandemic intensified across the U.S. in April, private-equity firms have galvanized their teams and resources to try to mitigate fallout and help their portfolio companies weather the crisis. But even as firms confront the potential damage the pandemic is wreaking on their own companies, their executives and portfolio companies are donating money and their resources to help health-care workers and government organizations.
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Technology Portfolio Companies Help Combat Coronavirus
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Private-equity firms are leveraging the abilities of their portfolio companies to help governments and health-care workers mitigate the pandemic’s impact, Preeti Singh and Laura Cooper report.
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‘War Rooms’ Offer Crisis-Management Tips
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Private-equity firms are pooling their resources to set up crisis-management hubs that can help the companies they already own contend with the wide-ranging effects of the coronavirus pandemic, Preeti Singh reports.
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Relief Funds Provide Aid for Employees and Health-Care Workers
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Private-equity executives and their firms are dipping into their own pockets to create funds designed to help portfolio company employees, health-care workers and other communities adversely affected by the coronavirus pandemic, Laura Kreutzer reports.
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$132.2 Billion
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The amount investors pledged to private-equity funds globally during the first quarter of 2019.
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Physician Practice Managers Feel the Pain
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As the coronavirus closes some medical offices offering nonessential care, providers that rely heavily on in-person visits, such as dentists, could be hit hardest. PHOTO: SCOTT TAKUSHI/ASSOCIATED PRESS
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The spread of the new coronavirus could bring more pain than patients to a number of private-equity-backed health-care management companies, despite industry hopes for access to federal relief money, Laura Cooper reports for WSJ Pro.
“There’s a lot of discussion in play as to whether there are certain avenues that could be pursued. I don’t think we’ve found a silver bullet to do that to date,” said Angela Humphreys, co-chair of the health-care private-equity team at law firm Bass Berry & Sims PLC.
Over the past several years, private-equity firms pumped billions of dollars into physician-practice-management companies, which help run the business side of doctors’ offices. Between 2015 and 2020, firms backed at least 378 such deals in the U.S. totaling some $3.44 billion, according to data provider PitchBook Data Inc. Many of those deals attracted big sale prices, fueled by high amounts of leverage.
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How to Manage Teams During the Pandemic
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The rapid spread of the novel coronavirus around the world has
upended the way the private-equity industry operates. Here, several professionals across the industry share their insights into lessons learned from the past and how the pandemic is affecting the way they work.
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Our employees, the fund and company managers in which we invest, and our clients are all working from home. This means we must communicate, and build and maintain trust virtually. —Jeffrey Diehl, Managing Partner, Adams Street Partners
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Act quickly to stay ahead of events as much as possible, but don’t panic. Taking precipitous action without thinking through the repercussions can make the situation worse. —Jim Andersen, Founder and Managing Partner, Clearview Capital
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We are a close-knit group and we typically have a lot of open dialogue in the office. Not being able to brainstorm and bounce ideas off each other in person certainly changes that culture. —Shawn Wooden, Connecticut State Treasurer
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First, don’t panic. As a capital source, the industry is resilient and well positioned to endure a downturn. —William Stoffel, U.S. Private Equity Leader, Ernst & Young LLP
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Ensuring that companies remain client-focused and that they utilize resources available to them to help clients get through this crisis should be a top priority. —Steven Pierson, Managing Partner, Lovell Minnick Partners
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I’ve taken over our family living room and am sharing the space with two dogs that bark at every chipmunk in my yard. So, I’ve had to adjust to a few new sources of distraction.—John Haggerty, Managing Principal, Meketa Investment Group
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While there’s no precedent for a global pandemic, our experience from the 2008-2009 financial crisis has proven invaluable. —Theodore Koenig, President and Chief Executive, Monroe Capital
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Proactively picking up the phone or scheduling impromptu videochats rather than falling back on email dialogue is important. —Bart Molloy, Partner, Monument Group
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