I sometimes use this space to slam private equity firms that eschew any sense of corporate responsibility, particularly when it comes to employees at their portfolio companies. So it is my great pleasure this morning to report on the exact opposite: A firm going above and beyond to help vulnerable portfolio company employees and their families.
That firm is Fenway Partners, a middle-market shop with a particular focus on the transportation and logistics sector. It has launched something called The Open Road Foundation, which will provide victim’s assistance for portfolio company drivers impacted by disaster or other “unfortunate personal circumstances.” It also will provide annual educational scholarships to eligible drivers and their dependents.
Fenway’s current driver base is in excess of 13,000, of which around 10,000 are independent contractors. It’s the folks in that latter group that Fenway is particularly concerned about, since they often don’t have the same type of insurance benefits as would official portfolio company employees.
“This is unfortunately a sector that sometimes does have catastrophic losses and fatalities,” says Marc Kramer, who leads Fenway’s transportation and logistics group. “I think we have a greater and growing awareness of the lives these independent contractors have — coupled with a real understanding of their importance to our companies – and we recognized that this was the right thing to do.”
Portfolio company employees will nominate drivers or driver families who they feel are eligible for a Foundation award. If it’s approved by the company’s senior management, it will then be submitted to the Foundation, whose board consists of Kramer and Fenway’s four operating partners on the transportation and logistics team.
Kramer declined to disclose how much money the Foundation is initially endowed with, except to say it will be “seven-figures.” In addition, Fenway has authorized its portfolio companies to match any Foundation contributions to an individual or family.
A cynic may look at this and say it’s an attempt by Fenway to become a less threatening buyer within a closely-held sector. If so, great. May all other firms become similarly less threatening. This is the best of what private equity can be, and of what it should aspire to be. My hope is that we’ll all look back at this column in a year, and realize that it was just the first of many. It’s up to you.