PRIVATE EQUITY IN FOCUS: Three Reasons Why Private Equity Firms Should Hire a Strategic Communications Firm
- Bill Haynes
As private equity has become an increasingly larger and more important part of the economy, it has also become much more public. For private equity firms, this is both a challenge and an opportunity. Navigating these more exposed waters calls for a clear communications strategy to steer around dangers as well as to harness opportunities. Keeping one’s head down and hoping to draw only the right kind of attention just doesn’t work anymore. Trying to do it oneself is also not effective as most General Partners do not have the communications strategies, tools, relationships and time to succeed.
"A sustained communications effort will help a firm build a valuable brand. A strong brand aids fundraising, deal sourcing, and hiring."
So what are the main benefits of private equity GPs hiring a communications agency?
- Build brand reputation. Communications agencies can help private equity firms develop and implement a plan to communicate the firm’s focus, successes and ideas through the media and directly with their key audiences including Limited Partners, investment bankers and business brokers, senior management in target industries, and potential employees. A sustained communications effort including announcing new investments, exits, fund closes, and other firm news as well as thought leadership initiatives to share the principals’ expertise, will help a firm build a valuable brand. A strong brand aids fundraising, deal sourcing, and hiring.
- Defend brand reputation. Communications agencies also play an essential role in helping private equity firms defend their brand reputations. A portfolio company blowup, a closed factory, a lawsuit, a manager departure, a scandal. These things can happen to any firm, and the media coverage can be devastating if not handled properly. Part of building and defending a private equity firm brand is knowing how to build a respectful, informative and mutually beneficial relationship with the media. Hiring a communications firm focused on working with the private equity media is essential to success. Your firm can develop a crisis communications plan in advance of any issues. If a crisis occurs, your communications agency will work with you to apply your crisis communications plan to the particular situation, prepare confidential Q&As, create a media statement, potentially serve as spokesperson, acting as a buffer, and providing ongoing guidance as the situation evolves.
- Sustain brand awareness. A communications agency can be your strategic partner, helping build and protect your brand on an ongoing basis. Whether you are a smaller firm that needs help with discreet announcements and initiatives, or a larger firm desirous of an ongoing proactive retainer relationship, your communications agency can provide recommendations for integrated initiatives that deliver the highest ROI. Your agency should help you vet inquiries, pitch news and story angles to journalists, media train spokespeople, vet media inquiries, conduct media tours, and write articles for firm principles. It takes an agency with the private equity experience, knowledge, and relationships to help private equity firms develop and maintain strong brands.
BackBay Communications has deep private equity experience, having worked with more than 40 private equity firms with a total of more than $242 billion AUM, on everything from public relations to branding, message development, websites, marketing plans, marketing collateral, and social media. In 2016, BackBay announced 70 private equity transactions, and was ranked in the top five PR firms for global private equity transaction announcements for Q1 2017 in The Deal’s league tables.