Jun 27, 2022 - Economy

Private equity's big abortion question

Illustration of a caduceus spearing a map of the United States.

Illustration: Aïda Amer/Axios

Several large private equity firms, including Blackstone and TPG, responded to Friday's Supreme Court decision by pledging to cover any abortion-related travel costs for U.S. employees who live in states where the procedure is outlawed.

What to watch: If these benefits get extended to portfolio company employees.

  • Around 11.7 million Americans are employed by private equity-backed companies, per the industry's top trade group.

The question of covering portfolio company employees isn't a simple one, even for firms that are doing so internally.

  • For starters, private equity rarely likes to be too prescriptive when it comes to portfolio company operations. Both because it creates a heavy-handed reputation (i.e., making it harder to win future deals) and because they feel policies are most effective when originated by company management (i.e., the people charged with implementing said policies).
  • TPG, for example, tells me: "We are offering a forum to share approaches and discuss how best to support them, consistent with how we usually engage with our portfolio companies."
  • Moreover, PE firms based in "blue states" could worry about unintended consequences of insisting on such benefits at portfolio companies based where abortion is outlawed. For example, could it prompt local legislators to ban such benefits — at best sparking a new legal front?
  • Finally, PE firms may worry about imposing blanket portfolio company requirements that are at odds with the beliefs of some of their own employees.

Caveat: Private equity isn't monolithic, and plenty of firms won't choose to cover abortion travel for their own employees. This isn't about them.

The bottom line: All sorts of businesses are scrambling in the wake of Friday's ruling. Where private equity lands will be the most consequential, however, because of its massive scale.

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