Trading through the coronavirus pandemic

A survey of private equity backed businesses

In the wake of the coronavirus we saw PE firms investing further in their portfolio companies, as well as making new investments. We wanted to understand what the past 18 months had been like from the businesses perspective and what it was like working with a PE fund through this challenging period. 

In May 2021, RSM surveyed 68 executive board members from a range of private equity (PE) backed portfolio companies. The results from the survey help paint a picture of how private equity firms have supported their portfolio throughout the pandemic and what the future looks like for their relationships. 

We set out to answer the following questions: 

  • Were PE firms good partners through this period or were they passive? 
  • Where they were supportive, how was their support delivered and has the business benefitted overall?

The pandemic had a negative impact on most recipients, but PE has made them more resilient and had a positive impact on future prospects

What effect has your private equity investor had on your business' resilience?

Business resilience


What effect has your private equity investor had on your firm’s future prospects?

Future prospects

As expected, over half of the respondents were hit hard by the pandemic with 59 per cent witnessing a negative or very negative impact across a variety of sectors. Despite this, PE seems to have acted as lifeboat for many. Not only did it make them more resilient and keep their heads above water, but the resources of the fund also helped to make the businesses more robust and management teams felt that their businesses were better positioned for the future.

The pandemic’s effect on trading has been:

Pandemic trading effect

PE has given somewhat more financial support than envisaged pre pandemic and communication has been materially ramped up

As the impact of the pandemic hit businesses, support was needed for many, including those backed by PE investors. As such, communication levels between management and their investors increased, as was found by 68 per cent of our respondents. The majority of our respondents continued to receive financial, strategic and operational assistance. Financial assistance was the most received with a third of businesses receiving more assistance than planned which correlates with the poor financial impact that many found. Additionally, a number of respondents also received both strategic and operational support, underlining the value private equity can bring to a company in a crisis. 

What effect has the pandemic had on the frequency of your communication with your PE investor?

Pandemic communication

Compared to pre-pandemic, was the assistance you received from your private equity investors

Private equity assistance graph

ESG has being pushed up the agenda for a third of the respondents, there's been no change for the rest

Whilst throughout the pandemic the majority of businesses (59 per cent) have seen their ESG strategies remain consistent, almost a third of respondents told us they are increasing their focus. As the link between financial performance and ESG strengthens, and with regulatory intervention on the horizon, these results are encouraging. 

How much has your focus on ESG changed compared to pre-pandemic?

ESG focus



The pandemic created the opportunity for businesses and investors to implement rapid change. ESG is no longer just a box that needs to be ticked. Not only does it fulfil the desire to promote sustainability, but we are also seeing that businesses with a focus on ESG are more valuable.


Overall PE backed businesses have not reduced their appetite for bolt-ons but exits are expected to be delayed

At the beginning of the pandemic, acquisitions were paused whilst companies weathered the storm. However, the deal market bounced back rapidly fuelled by high levels of dry powder. In line with PE having had a positive effect on the majority of businesses resilience, half of our respondents have confirmed they are not altering their acquisition strategy with another 28 per cent increasing their appetite for bolt-ons.

The pandemic has made you more acquisitive


How has the pandemic impacted your time to exit?

Impact on time to exit

With regards to exits, just over half have slowed and is likely linked to the negative impact on trading that the majority of respondents witnessed. PE investors are unlikely to exit without knowing their investment is in a healthy position. Despite negative trading 35 per cent haven’t altered their exit which suggests that they have recovered quickly and exits are on the horizon once again. 

Closing thoughts

Our research indicates that in the majority of instances private equity have been good partners to middle market businesses through the pandemic. They have continued to support and invest in their portfolio companies in a constructive way that has been appreciated and felt by their management teams. Many of our respondents found that, by having a PE backer made them more resilient through Covid and better prepared for the future.