News

News

Houston, TX July 27, 2023

The Sterling Group Joins Ownership Works to Continue Long History of Sharing Economics with Portfolio Companies

The Sterling Group (“Sterling”), a Houston-based, operationally focused middle market private equity firm, is pleased to announce that the Firm is partnering with Ownership Works to continue its long history of sharing economics with portfolio companies. Ownership Works is a nonprofit organization that partners with companies and investors to implement broadbased employee ownership programs.

Sterling believes the pace of progress dramatically increases when Sterling and employees are economically aligned and when employees can participate in a successful investment outcome. Since 1982, Sterling has been widely sharing equity and/or options with employees of portfolio companies. Sterling’s founder, Gordon Cain, wrote a book called “Everyone Wins” detailing his and Sterling’s philosophy on sharing economics, and these principles are still carried by the firm today.

“Over four decades investing in the industrial sector, we have learned that employees are more engaged and more impactful when they have ownership. This “Everybody Wins” philosophy of partnering with our portfolio company employees to create long term value is a founding principle of our firm. We are thrilled to continue sharing economics with portfolio company employees in partnership with Ownership Works to drive better investment outcomes and generate wealth for employees and their families,” said Brad Staller, a Partner at The Sterling Group.

Ownership Works, a new nonprofit organization with a mission to create $20 billion in wealth for workers by 2030, announced 15 new Founding Partners. Building on an unprecedented initial cohort of partners in 2022, this new cohort brings the organization’s groundbreaking consortium to a total of over 75 leaders from the private, public, and nonprofit sectors. Collectively, these firms and individuals are committed to improving financial outcomes for businesses and workers through broad-based employee ownership.

Ownership Works’ Founding Partners include investors, banks, professional services firms, pension funds, labor advocates, nonprofits, and public companies. These partners support the nonprofit’s mission in various ways, including pro bono subject matter expertise and charitable contributions. Of Ownership Works’ investor partners, 23 private equity firms have made industry-leading commitments to provide all full-time employees within at least three of their portfolio companies with a pathway to participate in broad-based employee ownership programs.

“We’re thrilled to see the business community continuing to rally behind broad-based employee ownership. Since our public launch in 2022, 66 companies have implemented shared ownership programs, reaching over 95,000 employees, and over $350 million has been paid out to workers,” said Anna-Lisa Miller, Executive Director of Ownership Works. “With this second cohort of Founding Partners, Ownership Works takes another considerable step forward in our mission to make shared ownership the new norm within corporate America, allowing all workers to benefit from the value they help create.”

As part of Ownership Works’ second cohort of Founding Partners, four leaders and advisors have joined Ownership Works’ Pension Fund Leadership Council, lending their time and expertise to help establish shared ownership as a leading investment strategy that generates both strong financial returns and significant social benefit.

Ownership Works’ new Founding Partners and Pension Fund Leadership Council members include:

Institutional Partners

· Advent International

· Aksia

· AlixPartners

· Ardian

· Building Industry Partners

· Frontenac

· KPMG

· Neuberger Berman

· Prudential Foundation

· The Riverside Company

· The Sterling Group

Pension Fund Leadership Councilmembers

· Scott Hart, Partner & CEO, StepStone Group

· Mike Krems, Partner, Private Equity Portfolio Strategies, Aksia

· Polina Sims, Managing Director, Head of Investment Strategy, Sustainability and Asset Management, Investment Management Corporation of Ontario

· Elizabeth Traxler, Managing Director, Neuberger Berman

Recent Impact¹

Ownership Works has made significant progress since its founding in 2021, recently releasing its first Impact Report. The report includes an overview of the number of shared ownership programs implemented, and the amount of wealth shared, to date. Progress includes:

Programmatic Progress

· 66 companies with board-approved shared ownership plans

· 95K+ employees impacted by shared ownership

Wealth Shared

· $359M – Wealth shared through broad-based employee ownership programs²

· $127M – Wealth shared with low- and moderate-income workers³

· $153M – Wealth shared with workers of color⁴

· $101,710 – Average payout to low- and moderate-income workers⁵

To learn more about the partners that have joined Ownership Works in the movement to establish broad-based employee ownership as the new norm at work, please visit ownershipworks.org/partners/.

About Ownership Works

Ownership Works is a nonprofit organization on a mission to increase prosperity through shared ownership at work. The organization partners with business leaders and investors to provide all employees with the opportunity to become owners at work and participate in the success they help create. To learn more, please visit ownershipworks.org.

About The Sterling Group

Founded in 1982, The Sterling Group is a private equity and private credit investment firm that targets investments in basic manufacturing, distribution, and industrial services companies. Typical enterprise values of these companies at initial formation range from $100 million to $750 million. Sterling has sponsored the buyout of 65 platform companies and numerous add-on acquisitions for a total transaction value of over $14.0 billion. Sterling currently has over $5.9 billion of assets under management. For further information, please visit www.sterling-group.com.

Past performance is no guarantee of future results and all investments are subject to loss. In connection with Sterling’s collaboration with Ownership Works, Sterling has made and will continue to make financial contributions to Ownership Works to support the organization’s  charitable activities.

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¹ This information was provided by Ownership Works as of July 21, 2023 and has not been independently verified by Sterling.

² Sum of total payouts (dividends and exits) to all employees excluding the top five highest payout recipients at companies where data has been provided.

³ Sum of total payouts (dividends and exits) to all employees with incomes less than or equal to $113,675 (i.e., 250% of 2021 U.S. median individual earnings, as based on U.S. Census data: “Earnings Summary Measures by Selected Characteristics: 2020 and 2021.”)

⁴ From companies where employee-level data has been provided and based on total payout data with no exclusions or thresholds.

⁵ Based on available employee-level data for U.S. workers for exit payouts, and assuming employee-level income data shared with O.W. is total annual compensation.

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