There is historic momentum around employee ownership in North America, with a diverse and growing base of support. One especially exciting source of support is private capital investment, as more fund managers are integrating employee ownership into how they deploy capital and align talent.

1. Capital for majority employee-owned companies (e.g. ESOPs)

Private credit investors are increasingly providing senior, unitranche or mezzanine financing to support employee-owned businesses, particularly the formation of employee stock ownership plans (ESOPs). Companies typically pursue private credit to increase upfront liquidity for selling shareholders, or to provide the company with additional flexibility.

A notable example is Taylor Guitars’ transition to 100% employee ownership that was completed in 2020. This was financed with a flexible, long-term debt facility led by the Healthcare of Ontario Pension Plan (HOOPP) alongside Social Capital Partners and the company’s founders. This landmark deal is widely recognized as the first time a pension fund directly financed an ESOP conversion, aligning long-term capital with long-term ownership.

Beyond credit, a new generation of fund managers focuses exclusively on employee ownership using structured equity—a hybrid debt and equity instrument designed to give selling owners comparable cash at closing to a traditional sale while enabling broad-based ownership. Apis & Heritage Capital Partners’ model is illustrative. In January, Apis & Heritage, alongside BMO, financed the conversion of B and B Maintenance, Inc., a leading national provider of janitorial services with a legacy spanning more than 40 years, into a 100% S corporation ESOP.

The structure positions the business for tax-advantaged growth, enhanced employee engagement, and long-term resilience. It demonstrates how purpose-driven capital, when paired with experienced operators and aligned financial partners, can unlock value for founders, employees, and the communities they serve.

Private equity investors can also provide growth capital to existing employee-owned companies. TowerBrook Capital Partners’ 2019 minority investment in KeHE Distributors (which maintained its majority ESOP structure) brought scale capital to an employee-owned, B corp-certified distributor, demonstrating how values-aligned investors can fuel expansion without compromising ownership.

These examples underpin a trend showing the availability of robust capital markets for ESOP-owned companies.

2. Broad-based ownership in traditional private equity

Employee ownership is also growing in the traditional private equity (PE) market. PE firms have long aligned executives through management incentive plans, but they have more recently begun extending equity participation to all employees to drive outcomes, strengthen culture, and share value creation. Beginning in 2011, Pete Stavros, KKR’s Co-Head of Global Private Equity, piloted these broad-based ownership programs in their investments. Their success led to Stavros founding Ownership Works, which aims to make shared ownership the new norm at work. Today, more than 100 organizations have signed on—including large institutions such as BMO and 45 private equity investors—combining programmatic support, philanthropic commitments, and implementation guidance. As a result, 186 companies have launched shared ownership programs, creating over $14 billion in expected payouts for over 268,000 employees outside the C-suite.

One example of a PE-backed company using employee ownership is BMO client Pye-Barker, the largest fully integrated and full-service fire protection, life safety and security services provider in the U.S. In August 2025 the company introduced its “ALL In” ownership program, granting significant incentive awards to every eligible full-time team member at no cost. The ALL In program was fully supported by its lead investors Leonard Green & Partners and Altas Partners and was developed in consultation with Ownership Works. The program makes Pye-Barker the largest company in the fire and life safety industry powered by employee ownership.

Growing support for employee ownership in the asset management industry creates exciting possibilities. These fund managers have both significant capital and an increasingly large portfolio of companies under their control. If employee ownership can become the norm, it would not only build a stronger and more resilient economy overall, but it would also make a meaningful financial impact of the lives of working families across North America.