CommPRO.biz Editorial Staff

Private Equity firms are finding that developing a strong brand is essential for fundraising, deal sourcing and recruiting.

According to a survey by BackBay Communications and PitchBook, 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 attributes that contribute most to a strong brand are:

• investment returns
• management team
• clearly articulated firm positioning
• content that demonstrates a firm’s expertise
• firm culture

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.”

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.”