Blackstone will give stock to acquired company workers
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
Blackstone, the world's largest alternative asset manager, plans to share equity in its U.S. portfolio companies with most workers in those companies, according to an investor memo obtained by Axios.
Why it matters: It's the right thing to do.
- Portfolio company workers are stakeholders, often with modest personal resources, and no amount of financial modeling or engineering can pay off without their day-do-day contributions.
- It also could help make Blackstone a more appealing buyer for certain companies, plus reduce the employee churn that's common after private equity takeovers.
- Finally, this move could lower some of the regulatory heat on private equity, which often is perceived as a bad boss.
The latest: The "systematic initiative" would apply to all of Blackstone's new large-scale, U.S. control investments.
- Plus around 18,000 employees of Copeland, a St. Louis-based HVAC manufacturer it purchased last year for $14 billion.
- Blasckstone previously had provided worker equity on a one-off basis, including at such companies as Ancestry, Bumble, and Merlin Entertainment.
- Its expanded effort was first reported by the WSJ.
Catch up quick: Blackstone rival KKR kicked off the worker equity trend in 2011, with an initial focus on industrial portfolio companies like C.H.I. Overhead Doors.
- In 2022, KKR and nearly two dozen other groups launched Ownership Works, a nonprofit aimed at helping both public and private companies to expand employee equity.
The bottom line: Blackstone is the world's largest private equity firm, in terms of capital raised. KKR is the second. Other private equity firms should follow the leaders.
