Image enhancement

The idea that any publicity is good publicity is not a sentiment most private equity managers share. While private equity’s image problem may seem particularly acute right now, as far back as 2002 the industry was seen in some quarters as a “club for the extremely wealthy”, “secretive and mysterious” and “serving to enrich a lucky few”.

All these criticisms were voiced back then by Abraaj Capital, but rather than complain about the situation from the sidelines, the Dubai-based firm has become one of a growing number of firms being more proactive in the communications battle. Jennifer Harris writes in “Good karma”, Abraaj recently released details about its comprehensive philanthropic and outreach efforts. 

Such efforts include devoting fees and employee time toward charity projects and supporting students and artists in the MENASA region. 

At the same time, Kohlberg Kravis Roberts has also disclosed information on the progress of its Green Programme, which helps portfolio companies evaluate their environmental performance and set goals related to environmental impact. Eight KKR portfolios have participated in the programme, with another four now coming on board. 

KKR has been one of the most active firms lately in the image enhancement campaign, having also last year signed on to a set of socially responsible guidelines – along with mega-firms such as The Carlyle Group, TPG, Permira and The Blackstone Group – that will be used in guiding investments. While its PR focus comes not coincidentally as KKR is preparing to go public, it may also be good for the bottom line: the firm said its environmental programme saved $16.4 million in 2008. 

Good communications is also important in other areas as well, as outlined by “Cracking the code”. Whether coming from a large or small firm, those starting their own alternative asset firm must understand the value of clearly explaining your strategy, timing the announcement of your launch and building on momentum.

As both long-time players and up-and-coming entrants are increasingly finding, image may not be everything, but it counts for a lot nowadays.