Gauging the Election Landscape and Helping Portfolio Companies Through Uncertain Times—Day 2 of the ACG Member Summit
Sessions on Day 2 of the Member Summit explained the factors playing into the 2020 presidential elections, and the strategies private equity firms are using to help their portfolio companies.
ACG’s Member Summit continued for a second day with individual meetings and live-broadcast panel discussions focused on the U.S. political outlook and how investors are helping portfolio companies get through the COVID-19 pandemic.
Trump’s Uphill Reelection and Biden’s VP Pick Weigh on Experts’ Minds
President Donald Trump faces an uphill battle for reelection, according to analysis from two political experts, while speculation mounts about who Joe Biden will select as his running mate.
Trump stood a good chance of reelection at the end of 2019 as the economy boomed and Democrats stumbled into a contentious primary season, said veteran Politico reporters Jake Sherman and Anna Palmer, speaking during the day’s first panel, sponsored by global law firm Dentons.
But mounting criticism over Trump’s handling of the coronavirus outbreak, a historic economic decline, and social unrest sparked by the killing of George Floyd by a Minneapolis police officer have eroded the president’s chances for an easy victory, Sherman and Palmer agreed.
“This entire climate has just been shaken like a snow globe, and we don’t know what’s up and what’s down,” said Sherman, who also co-authors the popular “Politico Playbook” daily newsletter with Palmer.
The reporters mentioned a poll released by The New York Times earlier in the day that showed a 14-point lead for Biden over the president.
However, attitudes could shift before November, Sherman said. “If we talked two months from now and then right before the election, the mood of the country could probably change pretty dramatically.”
Both reporters said the likelihood of Trump’s reelection depends on the state of the economy leading up to the November vote.
Meanwhile, Democrats eagerly await the news of who Joe Biden will select to run alongside him.
“This entire climate has just been shaken like a snow globe, and we don’t know what’s up and what’s down.”
Jake Sherman
Senior Writer, Politico
Biden hasn’t indicated who he’s considering for the White House’s No. 2 position, but he faces growing calls to choose a woman of color, Palmer said.
Sherman said he expects Biden to select former Democratic presidential nominee Kamala Harris, based on her credentials serving in elected office, most recently as U.S. senator representing California. He also said Biden, 77, could benefit from having a younger running mate like Harris, who is 55.
Asked to name a lesser-known candidate who stands a good chance of being selected by Biden, Palmer settled on Val Demings, a member of the House of Representatives from Florida—an important swing state.
Palmer noted that the Biden campaign is likely evaluating several mayors for the vice-presidential post, including Atlanta Mayor Keisha Lance Bottoms, and Washington, D.C.’s Muriel Bowser.
Sherman picked Karen Bass, a seasoned member of the U.S. House from California and chairwoman of the Congressional Black Caucus, as his long-shot candidate, but he stressed that Harris has the best chance.
Helping Portfolio Companies in Unprecedented Times
During the day’s second discussion, sponsored by Plante Moran, panelists described ways that private equity firms are helping their portfolio companies get through the COVID-19 crisis.
Hadley Mullin, a senior partner at private equity firm TSG Consumer, says her firm is supporting companies by identifying digital outlets for their products.
The firm’s health and fitness holdings, which include Corepower Yoga and Planet Fitness, were massively impacted by the virus but began offering workout classes online.
Meanwhile, TSG’s beauty holdings are shifting their focus from products like lipstick, which will be needed less as faces are covered by masks. Instead, they’re turning to products like mascara that are still effective, even with a face covering, and that make people “look good on camera” during video conference calls, Mullin said. The firm is also aggressively developing online outlets for its products as retailers struggle.
Mark Sotir, president of Equity Group Investors, a family office that focuses on long-term investments, discussed the challenges facing hospitals in his firm’s portfolio.
A lack of elective surgeries led to a wave of furloughs of health care workers at a 43-hospital chain owned by the firm.
“This is a high fixed-cost business,” he said. “And we’re going to have to adjust that.”
Some solutions involve reconfiguring hospitals to scale their capacity based on patient demand and adopting more flexible supply chains.
Gabe Mesanza, a partner at Huron Capital, brought up its Michigan-based window installation company. Previously, the company relied on in-person lead generation for its sales teams, but in recent months it has shifted its focus to IT infrastructure and virtual sales, which helped recover revenue.
The company is now considering an expansion.
“Once we figured out that we were going to survive, we’re trying to push [them] to full offense as much as we can,” Mesanza said.
More than 2,100 ACG members registered for the Summit, which continues on Thursday with two live broadcast sessions, one-on-one meetings scheduled through ACG Access, and virtual networking opportunities.
Benjamin Glick is Middle Market Growth’s associate editor.
