Creating Value, Improving Lives, and Building Communities
EMPLOYEE OWNERSHIP, A HIGH-IMPACT INVESTMENT
Wealth inequality is a defining challenge of our time. The top 10% of Americans hold 80% of total wealth, and fully half of American households have little or no wealth. Further, workers are reporting unprecedentedly low levels of workplace engagement, and many Americans are facing an uncertain retirement with little savings. Recent experience with wage inflation and labor shortages only underscores the economic and business imperative to create a new model for employee engagement and incentive structures.
In short, our society is increasingly Unequal, Disengaged, Under-Invested, and Unavailable.
Employee Ownership can address all four of these issues and create more resilient communities and more valuable businesses. By incorporating employee ownership into our investment strategy, we can simultaneously improve individual and community-wide outcomes while unlocking talent and productivity, which ultimately drives better business performance and increased value. The "Silver Tsunami" of retiring business owners creates a once-in-a-generation opportunity to build durable companies that leverage Employee Ownership to create both positive impact and shareholder value.
THE CHALLENGE
Our society is increasingly Unequal, Disengaged, and Under-invested.
(1)
Wealth distribution is increasingly unequal
(2)
Less than 1/4 of employees are "Highly Engaged"
(3)
The median retirement account balance for American workers is...
Sources: (1) National Bureau of Economic Research, (2) AON, (3) Forbes
THE SOLUTION
Employee Ownership can unlock business value and help create a stronger America.
Source: National Center for Employee Ownership
Businesses that are employee owned perform better than peers across a variety of metrics related to value creation and overall employee well-being.
(1)
Business Performance
6x more likely to be a "high-performing" business
3% higher sales and employment growth
(2)
Employment Stability
53% longer median job tenure
3-4x less likely to be laid off in a recession
(3)
Employee Well-being
92% higher median household wealth
33% higher income from wages
Sources: US Department of Labor, National Center for Employee Ownership
INVESTING IN EMPLOYEE OWNERSHIP
Private equity investments in employee-owned businesses have two primary structures, Leveraged Buyouts with Broad-Based Employee Equity and Leveraged Employee Stock Ownership Plans (ESOPs).
(1)
Broad-Based Employee Equity
9M employee owners in the US
6% of workforce
Leading global private equity firms like KKR now incorporate employee ownership into their buyout strategy
(2)
Employee Stock Ownership Plans (ESOPs)
230 new ESOPs per year
6.7k active ESOPs
10.7M participants
$1.4T plan assets
$130k+ average employee equity
Private equity investments that integrate employee ownership are attractive options for ESG investors who are increasingly allocating capital based on both financial and impact performance. Our employee ownership strategy supports many of the United Nations Sustainable Development Goals.
