For Rich Lawson, co-founder and CEO of HGGC, life did not hit the pause button when the world went remote. Between the firm’s annual meeting and college admissions for his daughter, a rising high school senior, the investor had plenty of work on his plate.
In fact, Lawson said, the new normal has created new avenues for communicating with LPs, managing the firm’s employees and giving back to the community.
One example is HGGC’s annual global meeting that it hosts every spring in Palo Alto for its LPs. Two-thirds of the firm’s LP base is located outside the US, so the AGM traditionally brings many international visitors, Lawson said.
This year, the firm held the AGM as planned during the second week of May, reformatting it as a virtual event. While most PE firms postponed their annual meetings until the fall, HGGC decided to stick to the schedule and bring people together via Zoom, Lawson said.
“We felt that it is super important to over-communicate the impact of covid-19 on our portfolio,” Lawson said. “It was a high-stakes decision. How many people have ever tried to put hundreds if not a thousand people on the recurring virtual annual global meeting?”
That said, the meeting attracted more participants than normal due to its virtual nature. While firms typically send one-to-two employees to an international event, the online format provided access to every interested employee.
“In a way, this allowed us to reach even more people as we were trying to communicate in real time,” the investor said. “Quite frankly, we will do [a virtual format] in the future along with our in-person annual meeting.”
One important takeaway from the meeting, Lawson said, was viewers’ appreciation of honest, adjusted guidance on HGGC’s portfolio based upon the new economic conditions.
“April and May is the time when most companies came out with reports based on the year-end figures. But year-end is not very representative of reality of today,” Lawson. “We thought it was super important to provide the real time view of covid-19 impacts to each of our portfolio businesses in Q1.”
For Lawson, one other important life event turned virtual.
As a long-time supporter of Wasatch Adaptive Sports, a non-profit organization for winter and adaptive summer sports at Snowbird, Utah, HGGC also had to find a new way to give back.
HGGC and its co-founders, Lawson and Steve Young, the former quarterback of the San Francisco 49ers, traditionally help WAS throw a winter ski race. The race has participation of celebrities, athletes and people with adaptive abilities, including children in wheelchairs and veterans. The race is followed by a fundraiser to support the organization financially.
“When the pandemic happened, it wasn’t just people out of work, but it was these organizations that give back and do good that now all of the sudden have to shut down and they can’t even support these people,” Lawson said.
When covid-19 hit, the winter race and the fundraising event were canceled, and that meant a huge hole in the organization’s operating budget, forcing it to shut down for the year, the investor explained.
Adjusting to the unforeseen situation, HGGC decided to create a virtual event, and “we broke the 100 percent goal,” Lawson said.
The organization now has an opportunity to make it through the downturn and keep its members engaged, Lawson said.
On the investment front, HGGC remains open for new business. In April, the firm told PE Hub that it is looking for dislocated opportunities in the public markets as well as win-win partnership transactions.
HGGC in early April acquired PCF Insurance, which provides risk management and employee benefits solutions to more than 40,000 customers.
Action Item: See PE Hub’s story on HGGC’s M&A plans during covid-19.