GPs websites could be limiting deal flow

Potential target companies cannot find useful information about GPs and their staff online, research claims.

GPs’ websites lack critical information making it difficult for potential portfolio company management teams to initiate a relationship, according to a new study from UK-based marketing consultancy Pivot Partners.

Pivot analyzed 300 firms’ websites, a third in North America, a third in continental Europe and a third in the UK & Ireland – to check the openness of GPs’ online communications.

The study criticized GPs for not consistently providing contact information for investment staff, which the study says could hurt a GPs dealflow. The US was the poorest performing region, with only 38 percent of GPs publishing investment staff’s contact details online. Europe and the UK & Ireland scored 46 percent and 55 percent respectively.

Another barrier to deal flow is that more than a quarter of GPs studied don’t clearly explain the types of businesses they prefer to invest in, according to the study.

“Many PE investors seem to take a ‘come to me’ approach – whereas they need to be out in the market, explaining what projects they are interested in,” said one corporate financier based in Southern Europe, who was surveyed for the study.

The study also revealed that only a quarter of GPs provide contact details for any investor relations staff. Only 19 percent of US firms have investor relations contact details available online, compared to 22 percent in Europe and 35 percent in the UK & Ireland.

“Given the consistent need for a GP to diversify its investment base, it is strange that GPs do not make it easier for LPs to initiate a relationship,” the study said.