Private Equity Pivots to Productivity with Increased Investment in Digital, Video and Virtual Platforms

Jen Prosek's byline in BuyoutsAfter a few weeks of adjusting, many firms did a quick “pivot to productivity,” looking for new ways to operate in the virtual world and making big investments in digital.

Fundraising deal making and communicating with investors has changed dramatically in the virtual world and private equity firms have invested heavily in digital, video and virtual live streaming since COVID sent teams and investors to work from home.

After just a few weeks of adjusting, many firms did a quick “pivot to productivity,” looking for new ways to operate short and long term in the virtual world and making big investments in digital. The following are some trends and spends by the private equity industry we have observed.

  1. Investor Meetings Go Virtual in 2020 and Beyond: Annual investor meetings planned for fall, winter and spring are going to be largely virtual with heavy spending on video, live streaming and new platforms to bring the offline online. Increasingly, firms are communicating directly with LPs and investors through pre-recorded webinars and LinkedIn “Live” events, leveraging social platforms and email marketing to secure high-level attendees wary of travel.
  2. Deal Makers Need to Remain Visible: Deal makers are improving their online visibility with increased spending on content and social programs on platforms like LinkedIn, Twitter and YouTube. Firms that once let their deals do the talking, now recognize the commercial importance of proactive thought leadership, social content programs and search engine marketing to ensure their messages reach critical founder and investor audiences.
  3. Web Sites and Search Engine Optimization Programs are Being Overhauled: In a virtual world, how you look online is everything and firms are taking control of their digital narrative by investing heavily in upgrades to website architecture and user experience, as well as ensuring information on authoritative third-party platforms (including CrunchBase, Bloomberg, Wikidata) is accurate.
  4. Audio and Video Are Being Used to Court New Investors: Podcaster Ted Seides who runs the Capital Allocators podcast has launched a “first meeting” audio session, aimed at allowing institutions to listen to the story of a fund and its investment process versus relying on a pitch deck. Firms are also using video as a way to showcase their portfolio managers and investment talent to investors in a world with no travel, investing in executive thought leadership programs to showcase specific PMs and other leaders on their own social profiles as well as on enterprise social handles and websites.
  5. An Increasingly Savvy and Vocal Market Poses New Risks – And New Rewards: Investors, founders and the public at large are more educated about private equity’s impact on the economy and more vocal than ever. Simultaneously, use of social media platforms has skyrocketed as the world has shifted to its new remote reality. More than 37,000 tweets about private equity were published in April and May, reflecting a 47% increase in conversation relative to the same time period in 2019, according to Spredfast. This social spike demands a new approach to reputation management. It’s critical that firms are aware of what’s being said about them on social – and by whom.
  6. Virtual fundraising is the Name of the Game: New and interesting platforms are popping up to inspire virtual fundraising. To that end, the largest virtual cap intro event in the world pairing GPs and LPs for fundraising kicked off in June (www.funds4food.com). All proceeds go to charity.
  7. The Old School Is Fully Converted: Even the most “old school” founders and bosses have discovered the efficiency and cost savings of video meetings and working from home. Firms are upgrading their platforms and investing in technology to ensure working from home is seamless in a world where the office is being fully re-invested.

Jennifer Prosek is the founder and CEO of Prosek Partners, an international public relations and financial communications consultancy with offices in New York, London, Los Angeles, Boston and Connecticut.