PE firms scramble to organize virtual annual meetings as virus spreads

It’s the era of the elbow bump and the virtual meeting. Business must get done, but no one wants to travel to do it because of spreading coronavirus.

Happily, most private equity firms today are equipped to tackle meetings with portfolio companies, bankers and limited partners virtually.

Many private equity firms have moved to virtual annual meetings to accommodate limited partners as the coronavirus outbreak spreads around the world, restricting professionals’ ability to travel, sources told sister publication Buyouts. 

And in something of a surprise, many LPs have found they like annual meetings organized in the ether, rather than in person. “I had one this week, I think it was really successful,” one LP told Buyouts about a virtual annual meeting. “I think we’ll see a lot more of that.”

Apax Partners is one of the firms to recently hold its annual meeting digitally. The move could have been a logistical nightmare as Apax moved from a live event to a webcast in a few days, but the firm pulled it off, sources said. 

Apax thought it was important to hold the meeting rather than cancel or reschedule, a person with knowledge of the situation said. 

The meeting lasted about four hours, and included detailed presentations from Apax executives regarding performance of the funds and portfolio companies, a spokesman for the firm told Buyouts. 

“Apax’s decision was taken as a precautionary measure to help investors avoid any unnecessary travel following the outbreak of coronavirus,” the firm said in an emailed statement. 

One Apax LP said the meeting was smooth and informative. A second LP said they missed the news about the change and still traveled to the site of the live meeting, which had been canceled. 

“We’ve heard of tons of canceled meetings,” the second LP said. “Basically I think most everything is expected to be going virtual.”

Maurice Gordon, head of private equity at Guardian Life Insurance of America, said almost all of the sponsor annual meetings coming up have gone virtual. Gordon called it “cocooning.”

“Elbow bumps are here. No more shaking hands,” Gordon said, describing the practice of a GP he works with. 

Many firms have established travel restrictions since the outbreak of coronavirus, which started to expand beyond China in February. LPs also have been canceling fundraising meetings, or listening to fund pitches over computers rather than live. 

The logistical challenges that come with travel restrictions could cause fundraising to slow, both in private equity and even venture capital, sources said. 

“Based upon conversations with our clients, we are preparing for venture fundraising to be impacted the most,” said Michael Von Bevern, co-founder and partner of fund administrator Socium Fund Services. 

“Given the amount of travel involved in raising a VC fund and the number of in-person meetings required, I think by the end of the year there will be a noticeable drop in new launches, if the coronavirus is not under control soon.”

A third LP who has canceled his fundraising trips and is holding them over video said the change has been welcome. 

“It’s not ideal, but now that I’m doing it, it’s sort of making me think twice about all the travel we do every year,” the LP said. “Videos aren’t great, but they’re so efficient.”

This article first appeared in sister publication Buyouts