The partners of Leonard Green & Partners have pledged to commit $10 million to an employee-assistance fund, a person close to the firm told me.
The fund will be for employees of Leonard Green portfolio companies adversely impacted by the outbreak of covid-19.
The firm is working out exactly what situations the assistance will target, whether employees with health problems, or any potential lay-offs. Details are being worked out now. Leonard Green, like every other private equity firm, continues to assess the impacts of the outbreak on its portfolio.
Leonard Green is hoping other folks in private equity follow its lead on this, the person close to the firm told Buyouts.
The novel coronavirus outbreak has crashed public markets around the world as business activity slows amid travel restrictions, social distancing and shelter-in-place policies in some cities.
Economic consequences have hit so hard and quick that it’s hard to gauge the extent of the damage, which will continue as long as the outbreak continues to spread unabated, sources told Buyouts.
Treasury Secretary Steven Mnuchin said earlier this week that without strong government actions, unemployment in the U.S. could reach as high as 20 percent. He later walked that estimate back. “But we’re not going to let that happen,” he told CNBC on Wednesday. “We’re going to make sure that companies have money so they can continue to pay their employees.”
Most firms are assessing their portfolios to find the vulnerable companies — initially those with exposure to hospitality, consumer/retail and energy sectors.
Also, high-leveraged companies tied to cyclical industries will be under pressure, sources have told Buyouts.
What this all means for portfolio company layoffs will be felt over time.