As the country deals with the coronavirus pandemic, private equity companies have stepped up to provide financial support for their employees and have used their manufacturing facilities to aid in relief efforts.
Independent sponsor Beaconhouse Capital, which focuses on stressed-debt investing in the manufacturing space, has been using its resources to make personal protection equipment (PPE) for Kentucky, according to founder and managing partner Saquib Toor.
“It’ll be a couple hundred thousand units. Beaconhouse is instrumental in working on engineering, prototyping and building up a supply chain to support that PPE effort,” Toor said of the face shields the company is manufacturing. “We’ve been pretty busy.”
Toor, like many, has been balancing running his company with taking care of the responsibilities at home. He lives in Chicago with his wife, their 10-year-old son and eight-year-old daughter, who like millions of other students, are schooling from home.
“It’s a little stressful because the methods of teaching have changed from 30 years ago,” Toor said. “When you’re trying to manage investment activities, operation activities at portfolio companies and also helping at home with elementary homework it’s quite a bit of stress.”
Toor, who was recently celebrating Ramadan, wakes up around 4:30 am, has breakfast, checks the pre-open markets, starts teaching his kids for the school day and then heads out to his office at a warehouse for TPG Plastics, one of its portfolio companies that focuses on manufacturing fuel and water containers. The company also owns plastics compounding company Alterra Holdings.
While many businesses have temporarily shut down because of stay-at-home orders, Beaconhouse’s companies have been deemed essential amid the pandemic.
“In both of our facilities, we have temperature checks for employees that come in. No one is allowed in the facility without a face mask and most importantly with the social distancing, we’ve had all of our non-essential employees working from home,” Toor said. “There are major decisions that need to be made and I feel like I need to be here for that support.”
Toor and his partner Pavel Smyshlyaev are in constant communication with their management teams and bankers who are keeping their eye on distressed debt, in which Beaconhouse sees tremendous opportunity during the coronavirus crisis.
“This is the opportunity that you see twice in your lifetime. This is the 2008 moment for distressed,” Toor previously told Buyouts, referencing the Great Recession.
“When we talk to bankers, I think everyone is in information-gathering mode,” he said. “We hear interesting anecdotes of the bifurcation of how companies are performing in this environment. You’re hearing about interesting companies that are seeing massive increases in production and earnings given the change in consumer behavior in the last several weeks.”
TPG Plastics benefited from that increased demand as people are spending more time at home cutting their lawns and are using plastic gas containers to fill their equipment, according to Toor.
“We’re trying to keep our focus on situations that are very unique, distressed or liquidity driven that should have some strong underlying economic reasons to exist,” he said.