Three Takeaways from the Private Equity International Investor Relations, Marketing & Communications Forum
At this year’s Private Equity International Investor Relations, Marketing & Communications Forum in New York, over 300 of those responsible for elevating their firms’ visibility in pursuit of capital, deals and talent shared their ideas on best practices, with a focus on fundraising in today’s challenging market.
Below are three key themes that emerged from the discussions:
1. Thought leadership that illustrates sector expertise is key.
Investor relations leaders noted that they, and their investment teams, are now spending more time educating limited partners (LPs) about what’s going on in their markets than they ever have in the past to stand out and demonstrate they can be trusted to invest in their target sectors.
While the challenging fundraising environment is top of mind for most, this consideration is equally important to deal sourcing. One panelist shared that by pursuing media coverage in their investment sector trades and sending the coverage in emails to CEOs of target companies, they have been able to capture more deal flow, noting one CEO that replied with, “I received 10 emails from PE firms today, and your email is the only one I’m responding to.”
2. LPs want to know about value creation efforts now more than ever.
Communication regarding value creation capabilities should no longer be limited to a couple slides at annual meetings. Coming off years of strong performance across the industry, LPs are interested in digging into the sources of general partners’ (GPs) outcomes as they try to ascertain who is positioned to continue delivering strong performance through the current environment.
GPs need to show that they are playing active roles in creating value in their portfolios and ultimately driving returns; otherwise, they run the risk of appearing as though they are overly relying on multiple expansion. It’s critical for GPs to be thoughtful in articulating why they have performed well in the past, why their success is repeatable, and why the current environment presents opportunities for their strategy.
3. Firms pursuing retail investors need to calibrate their communications and marketing strategies to the unique demands of this audience.
During the fundraising process, this audience – including both registered investment advisors and the high-net-worth individual investors they represent – requires significant education on private markets investment strategies and their roles in portfolio construction. Post-close, retail investors want far more frequent and detailed portfolio updates than their institutional counterparts, and are seeking color on what’s going on in portfolio companies beyond performance figures.