Brand Building More Important Than Ever for Private Equity Firms
As competition for deals, LP dollars and talent continues to increase, PE Firms indicate need for integrated marketing strategies to help articulate their value proposition, communicate their differentiators and demonstrate their expertise
BOSTON and LONDON – Developing a strong private equity brand is essential for fundraising, deal sourcing and recruiting, according to a new study by financial services communications agency BackBay Communications and PitchBook, a capital markets financial data and software company.
According to the survey of 45 private equity firms, 70% of respondents say having a strong brand is very important, and 30% say it is somewhat important. Ninety-one percent say the need for a strong brand has increased over the last two years, driven by competition for deals (56%), an increase in the number of private equity firms (19%) and competition for fundraising (19%). The goals of increased brand building are generating awareness among CEOs and management teams (50%), limited partners (33%), and investment bankers (11%).
The firm attributes that contribute most to a strong brand are investment returns (79%), management team (63%) and clearly articulated firm positioning (53%), followed by content that demonstrates a firm’s expertise (47%) and firm culture (47%).
To succeed in today’s competitive marketplace, 42% of private equity firms are taking steps to increase their visibility, and 58% are increasing their marketing budgets.
“There is consensus among private equity firms that building a strong brand is essential for deal sourcing, fundraising and recruiting, and it is encouraging to see private equity firms embrace the need for differentiated firm positioning and ongoing integrated communications programs that positions them as experts,” said Bill Haynes President & CEO, BackBay Communications. “Just as there is competition for new deals and limited partner funding, there is competition for mindshare among limited partners, investment bankers, business brokers and management teams, and forward-thinking private equity firms are making a commitment to clearly convey the reasons investors, advisors and companies should work with them.”
Strong investment returns (79%), investment discipline (63%) and building a cohesive firm culture (58%) are the most effective means for private equity firms to build a strong brand. These attributes can be best leveraged through personal meetings (63%), conference speaking (58%) and marketing materials (47%), media interviews (32%), websites (37%) and white papers that demonstrate a firm’s expertise (37%).
In this competitive and dynamic market, 32% of private equity firm respondents have changed their strategy in the last year, 16% have experienced a crisis at their firm, and 21% have experienced a portfolio company crisis. Many private equity firms have experienced difficulty with their media relations efforts, with 21% failing to capitalize on their firm’s news, 16% experiencing incorrect or misleading media coverage, and 11% not answering media inquiries.
“It is essential for private equity firms today to have a professional approach to media relations – whether residing in-house or outsourced to an agency – to manage and protect their reputations and that of their portfolio companies, as well as to capitalize on positive news and demonstrate their expertise,” said Mr. Haynes.
Nearly one third (32%) of private equity firms say social media is a necessary channel to distribute firm news and views. While 26% say they are considering using social media in the future, 26% don’t see social media as necessary for private equity.
"Private equity firm branding, marketing and public relations have become much more sophisticated over the last decade as private equity firms professionalize their operations,” said Garrett Black, Manager of Custom Research, PitchBook. “With private equity firms of all sizes needing to compete for dollars and deals, and with more team members spinning off to start their own firms, clearly articulating a firm’s positioning and then raising awareness through complementary tools and tactics in on an ongoing campaign is more important than ever.”
About BackBay Communications
BackBay Communications is a strategic integrated communications firm focused on the financial services sector, with particularly deep experience working with private equity, fintech, and asset management firms. BackBay has represented more than 50 private equity firms in addition to leading private equity associations and business schools’ private equity conferences. BackBay’s services include marketing strategy, public relations, branding, website development, marketing materials, videos, advertising and social media. BackBay is highly regarded for its thought leadership initiatives and relationships with the major business media. With offices in Boston and London, and international agency partnerships, BackBay serves companies around the world. For more information, please visit: www.backbaycommunications.com
PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. The company collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. PitchBook’s data and analysis is available through its powerful software products, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, New York and London and serves more than 12,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary. For more information, please visit: www.PitchBook.com.
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