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July 2025
In a well-researched and insightful piece, Delta Fund exposes the private equity strategy of "equity washing" and gives insights into how not everything labeled as “shared" or "equitable ownership" truly delivers what it promises. Using the case of private equity giant KKR’s acquisition and sale of CHI Overhead Doors, the article shows that "shared ownership" with employee payouts don’t necessarily translate into an actual difference on the ownership level and substantial, durable stakes or real governance rights.
💡 Key takeaway: ownership matters. It’s essential to look beyond flashy public messaging and examine the actual ownership structures – who really holds power and benefits from wealth created.
Some findings that stood out to us:
🔹 The concept of equity-washing used in private equity – "using the language of employee ownership" to boost a firm’s reputation and increase employee motivation, while stopping deliberately short of granting real power or equitable wealth.
🔹 The KKR/CHI case meticulously avoided any transfer of control but was designed “to make employees feel like owners so they act like owners, all without giving them the rights of an owner.”
🔹 The division of value creation and benefitting from value created: "The people who created the long-term value received a short-term reward. The temporary owners kept the long-term wealth.”
🔹 The multi-level tax avoidance scheme built into the private equity deal.
🌱 Looking at this through the lens of corporate ownership and steward-ownership, the article showcases beautifully how much confusion and misunderstandings there still are around (corporate) ownership in general and non-conventional ownership models specifically. Like employee ownership, the term steward-ownership is often thrown around in the context of company structures that only scratch the surface of actual steward-ownership model. So this article serves as a reminder to all of us to take look closer.