What Sports Teach Us About Private Equity AGMs
At annual general meetings (AGM), there are strategies that work, and strategies that do not.
These meetings have become more than simply fiduciary, evolving into one of the most important marketing tools and client entertainment platforms that private equity firms have. And, as the asset class stands on the brink of breaking into the wider retail investor world, this platform deserves an update.
The firms that take steps to modernise now will be those who stand to capitalise, blending fiduciary responsibility with engaging experiences that speak to the brand of the hosting firm.
As a frequent AGM attendee, one thing has become abundantly clear: rare are the private equity AGMs that truly set a firm apart. This AGM season is a prime moment for firms to get ahead, leveraging their AGMs as more than just a box-checking exercise, but rather a differentiating, brand building opportunity.
The importance of adapting to shorter attention spans
The changing world of professional sports offers an important lesson: attention spans are shrinking.
There is a clear realisation that our world is accustomed to quick-exchange content, making a succession of long-winded, monotonous, presentations not only unenjoyable, but unfruitful from an investor and firm perspective.
Not unlike our sports clients looking to modernise some of the platforms they invest in (to retain and attract fans), private equity firms are slowly realising that time-poor investors, as ‘consumers’ of AGMs, aspire to more dynamic and entertaining events.
New media platforms have transformed the way in which we consume information and events – subconsciously, our brains today are wired to expect ‘short, short, short’ and ‘quick, quick, quick’. And, while finance remains a world of detail, disclosure and Excel spreadsheets, the shorter and more engaging the presentation, the better.
It is much easier to digest a handful of short presentations, intertwined with videos, activities and networking breaks, than a long day of back-to-back, 20-minute-long presentations.
My personal view on performance figures? They can go into the appendix.
Create unique and engaging content that your audiences will want to consume
If you ask our clients why they are excited about investing in sports, they will highlight the quality of the content, the ever-increasing demand for entertainment and, frankly, the limited supply.
Within reason, private equity could learn a thing or two from sports here too. To engage your fans (investors), and to win their support (capital and confidence), your content must be dynamic.
This is, of course, easier to do in sports than in finance. That said, an AGM provides an opportunity to be bold: invite engaging external speakers (think laterally – not just economists), introduce alternate content forms, create interactive sessions (surveys, perhaps), present your portfolio products in an intriguing way (exhibit products and organise on-site visits), host a dinner you would actually enjoy attending and invite your investors to side events (tennis, football, shows, you name it).
At Prosek, it has become clear that the options for our clients are endless – it may just take a bit of boldness.
You also need to market your product – create teaser videos building up to the event, post summary reels and distribute merchandise that far outlasts event day.
AGMs are a fundamental tool in your marketing suite; if you are not creating content from the meeting and amplifying it on your LinkedIn and website afterwards, you are most definitely missing a trick.
Memories matter and there is nothing more memorable than a great venue
AGMs might never fill a stadium in a way a sports team might – but that does not mean there is not room for diversifying your AGM venue roster.
Why organise your event in a dim hotel ballroom likely void of windows, daylight and cellular service, when you could choose to do it somewhere iconic and perhaps more representative of your brand?
Think conference room within a famous stadium, a legendary cinema theatre or prestigious auction house. You could even do it at a portfolio company venue you are seeking to highlight.
There is so much more that can be done to make private equity AGMs more enticing – and importantly, brand differentiating. It says a lot about a firm if it can offer something new and memorable – rather than bland and repetitive. Your AGM is likely not your investors’ only AGM – so make yours is the one they remember.
That said, in a world where costs are being monitored and environmental considerations are rightfully front-and-centre – we urge a sense of reasonable practicality.
While a remote European city sounds dynamic and enticing, it is increasingly hard to justify hosting 100+ investors from all over the world in a location for multiple days which is sometimes flight(s) away.
A hybrid format offers alternatives; as does hosting two or three smaller events near where your investors are located, instead of one collective event convenient to your headquarters. While more time-consuming, it guarantees more engagement, gives you and your investors deeper access to each other, and encourages meaningful interaction and connection that is tied back to your company and brand.
This post covers the cosmetics of AGMs which are only part of the broader strategy that Prosek is often engaged to devise for our private markets clients. But in today’s world, cosmetics matter almost just as much as content.
What you actually say in your ‘state of play’ and ‘portfolio company’ presentations is the reason for gathering, and the most effective presentations are those that are concise and to the point. And, not unlike any other speech, much better is something short and effective than a long missive which could have as easily been sent in writing.
If you are investing in gathering your investor communities, the best way to guarantee your return on investment is to make an event that mattered, seamlessly blending your fiduciary updates with engaging experiences.
Investors who walk away from your AGM feeling glad they took the time are those you stand to gain the most from.