Private Equity Is Helping Drive the Economic Recovery During COVID-19
Washington, D.C. – The American Investment Council today released a new report detailing how private equity is helping drive the economic recovery as the nation continues to combat the COVID-19 crisis. The report, compiled with data from Pitchbook, covers private equity’s role in providing needed capital to businesses during an unprecedented economic downturn. This year, private equity has raised $450 billion to support existing investments, private investments in public entities, and other growth investments, with $14 billion invested in companies in bankruptcy or facing severe distress. The report includes examples of investors backing companies in hard-hit sectors such as restaurants, travel, education, and beauty salons.
“Private equity continues to invest in communities across America and support workers, businesses, and public servants impacted by COVID,” said Drew Maloney, President and CEO of the American Investment Council. “The latest job numbers from the Department of Labor show how much more work needs to be done to strengthen businesses and spur economic growth. Private equity firms look forward to working with the new Administration and Congress to support struggling businesses across the country and help fuel the post-COVID economic recovery.”
The new report details how private equity’s turnaround playbook is unique for this moment, just as it was following the last financial crisis. Private equity investors apply their industry expertise and willingness to invest in and rejuvenate companies. The industry has already been a major part of the solution in this recovery, helping save countless jobs and keeping businesses afloat in the process. Overall, private equity supports 5% of the country’s GDP and has a total economic impact above $1.1 trillion, directly employing 8.8 million Americans across all 50 states.
For example, Hair Cuttery, which is headquartered in Vienna, VA, was struggling like many beauty salons due to COVID-19 restrictions. Today’s report explains how Tacit Salon Holdings invested in Hair Cuttery in June 2020, helping the company retain pre-COVID employees during a difficult economic moment and safely reopen salons across the country.
Read the full report here.