2. â˘!Between 2004 to 2006, employment of PE increased to 1.2m (8% of private sector);
â˘!The Financial Crisis in 2007 was a turning point for the PE industry:
- PE received a lot of negative attention due to the failure to explain what it does;
- PE managers have given the industry the image of âjob-destroying vulturesâ;
- PE funds also received negative publicity of abusing tax loopholes.
Private Equity:
Industry Overview
Monday, 9 September 13
3. Private Equity:
Reputation Management Regulations
According to the regulations imposed by the
BVCA, Private Equity Funds must:
â˘!Disclose their ownership structures, investment
approaches and portfolio;
â˘!Regularly provide data to the BVCA and the
EVCA;
â˘!Effectively communicate with employees in
timely manner during periods of strategic
change.
â˘!Disclose the ďŹnancials and activities of
portfolio companies, including: annual report,
accounts, and a quarterly summary of the
major developments.
Monday, 9 September 13
4. Private Equity:
Importance of Reputation
Stephen
 McGree,
Â
Execu(ve
 Director
Â
ââI
 shouldnât
 have
 to
 spend
Â
so
 much
 (me
 âsellingâ
 private
Â
equity
 to
 business
 owners.
Â
For certain companies,
private equity is clearly
the best solutionâ.
Chris/ne
 Croissant,
Â
Managing
 Director
ââReputa(on
 helps
 see
 more
Â
transac(ons,
 win
 more
 deals,
Â
garner
 more
 investors,
 aCract
Â
and
 retain
 excellent
 employees,
Â
and
 broaden
 its
 pool
 of
Â
Â
Â
partner
 lendersââ.
Mark
 Jones,
Â
Partner
ââFirmâs
 reputa(on
 can
 be
 a
Â
key
 reason
 that
 a
 ďŹrm
 gets
 to
Â
see
 a
 deal
 in
 the
 ďŹrst
 place,is
Â
selected
 to
 come
 meet
Â
management,
 and
 is
Â
chosen
 by
 the
 sellerââ.
Monday, 9 September 13
5. Private Equity:
Current Stance of Reputation
30%
48%
23%
Journalists Opinion
Poor
Fair
Good
Excellent
Source: BackBay Communications, 2013
â˘!Journalists: No journalists believe that PE ďŹrms are excellent communicators;
23% believe their communication is poor;
â˘!Investors: The overall opinion PE ďŹrm is low compared with other industries.
The key issue is the mangerâs lack of integrity around the deal process.
Hellman & Friedman
Advent International
Berkshire Partners
CVC
Carlyle
Apollo
EQT
Blackstone
Bain Capital
Bridgepoint
Cinven
Apax
TPG
Permira
KKR
3i
-50 -37.5 -25 -12.5 0 12.5 25 37.5
Investors Opinion
Source: Gracechurch Consulting, 2013
Monday, 9 September 13
6. Reputation Management:
Main Issues
In crisis situations, PE
do not ready for dialog
with customers and
immediate reaction.
PE funds are unable to
publish timely news
on buyouts and exits.
Timeliness Transparency
PE funds do not clearly
convey their fundâs
approach, investment
criteria, objectives etc.
Expertise
PE do not develop
and publicize industry
insights and trends
regularly.
Team
PE funds do not show
investors the integrity
of the management
team.
Crisis Readiness
Monday, 9 September 13
7. Reputation Management:
Role of Digital Media in PE funds
86%
of investors
say
Online sources such as
social networks and
blogs have become more
important since 2012.
24%
of investors
use
Social media to engage
with private equity funds.
30%
of investors
have
Accounts on Twitter and
12% make investment
decision after reading
Twitter.
Company blogs regularly
and 24% make investment
after reading a blog.
52%
of investors
read
-13%
growth rate
The importance of news
release for reputation has
declined since 2011.
Golz J et al (2012)
Monday, 9 September 13
9. Benchmarking:
PE Funds
The Digital Marketing Benchmark identiďŹes the digital activities of the following 15 funds:
Monday, 9 September 13
10. Benchmarking:
Impact of channels on reputation
20%
25%
27%
28%
Communications activity (28%): number and
frequency of press releases, additional
touchpoints and presence of media contacts;
Website (27%): presence of unique content,
the level of transparency and multi-devices
access;
Social Media Visibility (25%): number of SM
proďŹles and audience size, frequency of
content, engagement rate and coherence of
communications;
Search (20%): correlation between search
queries and SEO optimization.
The channels and activities in consideration are:
* Respective weights are achieved from the combined
opinion of digital marketing and Private Equity Experts, 2013
Monday, 9 September 13
11. Benchmarking:
Results Brief
2.9/5
average score
The Private Equity
industry on the whole
scores only moderately in
terms of digital reputation
management.
The Blackstone Group is
the leader in terms of digital
reputation (DRS: 3.762),
with the use of all social
media such as Facebook,
LinkedIn, Twitter and, in
particular, Youtube. All
content are consistent and
relevant.
Most PE funds are currently
utilising blogs, newsletters,
reports and brochures to
Engage with customers.
However, funds often
neglect to optimise their
search activities, and do not
use PPC.
*The full benchmarking report is conďŹdential to my client and will not be freely available at this stage.
Monday, 9 September 13
13. Digital Reputation Strategy
Branding
Personal
Relations
Consumer
Education
"lear articulation of ďŹrm
strategy, goals, positioning,
investing approach, returns,
team and investee portfolio.
Personal communication
with key partners: LP,
investment banks and
advisors, lenders etc.
Demystify private equity
via multimedia case studies
and other educational
content.
Monday, 9 September 13
14. Channels andTools
Social Media
Website and
Communication
Activity
Search
â˘!Use website as the main
touchpoint and provide
transparent content;
â˘!Uphold strong communin.
activities and optimise
content for newsletters, RSS
feeds and mobile devices.
â˘!Use a variety of different
social media channels;
â˘!Consistent content on social
media and website;
â˘!Use interactive content to
engage and educate key
target audiences.
â˘!Implement SEO by general
industry and brand
keywords to increase trafďŹc;
â˘!Implement SEO by sectorsâ
keywords and use PPC to
attract the attention of
investors.
55% 25% 20%
Monday, 9 September 13
15. â˘!Website: Use a variety of content to educate and promote transparency: case studies,
educational content, press releases, brochures reports etc.;
â˘!Social Media: Content should be consistent with communication, but provides
engaging experience: industry news, forecasts, and interviews with team members.
Content and Engagement
Monday, 9 September 13