The June issue of Private Equity Manager is filled with commentary on marketing, branding, and image. It is also filled with stark examples of the rewards that those firms with powerful brands can reap.
As has been widely reported, many private equity firms are rushing to file for offerings similar to the one KKR listed on the Euronext Amsterdam exchange. Not all of these will be successful. To raise $5 billion for a pool of cash that will invest in a range of vehicles run by a single private equity firm, that private equity firm needs a powerful brand, and few private equity brands are more powerful than KKR's. (Be sure to read Kelly DePonte's analysis of KKR Private Equity Investors on p. 12).
Branding will even further separate the ?rich? private equity firms from the ?poor? ones with regard to capital raising. As Judy Kuan writes beginning on p. 22 (?Marketing your money?), brand has become a key factor in differentiated deal flow. Sellers have so many private equity buyers to choose from in today's middle market that firms are spending more time on their positioning within their deal ?ecosystems.?
Funds of funds, too, are worrying more about branding and marketing in a maturing industry (see p. 26). Their chief concern, however, is not recognition among GPs, but rather how they appear to the legions of new participants in the private equity asset class. As is well known, there are more funds of funds who claim access to the top quartile than there are spots available in the top quartile available. Clearly, a more nuanced message to LPs is needed.
While private equity hasn't yet reached the brand-consciousness of, say, the consumer products market, even superficial considerations, like a firm's name, deserve attention. Take, for example, the case of Brand Equity Ventures (mentioned on p. 11), which decided to change its name to BEV Capital because its partners got tired of explaining that the firm was not focused solely on branded companies.
Enjoy the issue, and please stay tuned for our July edition, which will explore the increasingly complex issue of tax around the globe.
All the best,
By David SnowDavid.firstname.lastname@example.org