Good morning, dealmakers. MK Flynn here with today’s Wire. Let’s start by looking at some long-term labor trends. And before you go, please take a few minutes to fill out our subscriber survey. Out sick. Lack of employees is the biggest obstacle to growing companies these days, many private equity investors have told PE Hub over the last year. A study out this morning confirms what many of us have known anecdotally – that the impact of covid on the labor pool is long term and not going away. “We show that Covid-19 illnesses persistently reduce labor supply,” wrote economists Gopi Shah Goda of Stanford University and Evan J. Soltas of MIT. “Using an event study, we estimate that workers with week-long Covid-19 work absences are 7 percentage points less likely to be in the labor force one year later compared to otherwise-similar workers who do not miss a week of work for health reasons. Our estimates suggest Covid-19 illnesses have reduced the U.S. labor force by approximately 500,000 people (0.2 percent of adults) and imply an average forgone earnings per Covid-19 absence of at least $9,000, about 90 percent of which reflects lost labor supply beyond the initial absence week.” For many PE firms, the labor force challenges also spell opportunity. This year, PE Hub has seen many PE firms invest in companies that aim to help recruit, retain and train employees. Halifax, HCAP, Infinedi, Littlejohn and TA Associates are among the recent buyers. Read Iris Dorbian’s roundup of recent PE-backed deals involved in staffing. Growth fund. “Even as the market turns on tech-focused growth deals struck at skyhigh valuations over the past year, growth shops flush with capital are eyeing potential valuation and prices that have been available for years,” wrote Buyouts’ Chris Witkowsky. “In this environment, Thoma Bravo, in recent years a fundraising machine, is eyeing a final close on its debut growth pool on at least $2 billion, sources told Buyouts. The fund had raised about $1.5 billion as of December, according to a Form D fundraising document.” The tech-focused firm – which has offices in San Francisco, Chicago, Miami and recently opened one in London – was extremely active in dealmaking last month, as PE Hub reported. In August, Thoma Bravo: • agreed to sell Frontline Education, a provider of administration software for K-12 educators, to Roper Technologies, in an all-cash transaction for $3.7 billion • agreed to buy Nearmap, an Australian mapping company, for $730 million • announced a $130 million minority growth investment in Alma, a New York-based network that helps mental healthcare providers accept insurance and build private practices • completed its acquisition of SailPoint Technologies, an Austin-based provider of enterprise identity security, in an all-cash deal valued at about $6.9 billion • wrapped up its sale of Barracuda Networks, a Campbell, California-based cybersecurity provider for small and medium sized enterprises, to KKR for a reported $4 billion • closed the purchase of Mercell, a European provider of e-tendering and procurement systems based in Oslo For more on the firm’s blockbuster August, see my earlier story. Old pros, new firm. Josh Harris, who co-founded Apollo Global Management, has formally launched his new firm, 26North Partners. Harris has teamed up with former executives from Brookfield Asset Management and Goldman Sachs Asset Management executives, as Private Equity International reports. 26North Partners will initially focus on private equity, credit and insurance, and will launch with at least $5 billion in AUM, according to a statement. Reader feedback. PE Hub just launched a new reader survey, and we’d love to hear from you. Let us know how we’re doing at the survey here. And, as always, you can reach out to me at [email protected] I’ll be back with more tomorrow. Happy dealmaking until then, MK Read the full wire commentary on PE Hub ... | 