The Opportunity
A private equity firm with eight portfolio companies had no consistent strategy for employee benefits. Each company negotiated independently, limiting the fund's buying power and creating unnecessary complexity every time a new acquisition was added. At the same time, the portfolio's diverse industries and employee populations meant a one-size-fits-all approach wasn't realistic.
The Strategy
Rather than forcing every portfolio company into the same benefits program, Virtus built a framework that balanced scale with flexibility.
For ancillary benefits—including dental, vision, and disability—the fund negotiated as a single group. By combining more than $3.4 million in premiums under one carrier, the portfolio secured pricing that individual companies couldn't achieve on their own.
Medical benefits were standardized differently. Instead of requiring one carrier or plan, Virtus established consistent plan tiers and employer contribution strategies while allowing each company to choose the network and carrier that best fit its employees. The result was a repeatable benefits framework that could be applied across the portfolio without sacrificing flexibility.
The Results
The new strategy delivered far more than lower premiums. Ancillary benefit costs fell by roughly 20%, generating approximately $680,000 in annual savings across the portfolio. Just as importantly, the fund replaced a fragmented benefits process with a documented playbook, reducing integration time for new acquisitions from 90 days to 30 days and creating a scalable model for future growth.
