There’s no more private in 'private equity'

The industry is called private equity, but there’s little that’s private anymore. While publicly traded companies acquired by private equity firms no longer have public shareholders, if syndicated debt is involved, acquisitions may have to contend with credit analysts, 10-Qs, quarterly news releases and conference calls.

Secondly, private equity is covered by hundreds of reporters at business newspapers; PE wire, video and newsletter services; M&A and debt market reporters; and trade publications, ranging from Nation’s Restaurant News to Women’s Wear Daily. Most of these reporters also hunt for scoops on pending deals or terms or how acquisitions are faring, especially if debt prices dive or a deal appears in trouble. While transactions still rule the day, a faltering entity is especially newsworthy.

Lastly, constituencies today typically include a wide range of outside investors, debt holders, credit analysts, industry observers, regulators and legislators, as well as employees and state and local officials.

Thus, a private equity firm’s approach to public relations should be a top priority. Here are seven strategies and tactics to consider:

1. Responding to the media. Don’t let inquiries go unanswered. They should be directed to a single spokesperson. Even if the response is “no comment,” seldom do reporters go away upset, as long as their calls are handled promptly. They understand the legal and competitive restraints that prevent them from getting a statement on the record.

2. Going “off the record”.  Never say anything you would not like to see in print. The same holds for “background” comments. Make sure there will be no attribution by name or as an unidentified company official.

3. Knowing the media. Informal, off-the-record meetings covering general, non-specific topics (the industry, the firm’s investment approach, etc.) can pay off.  Reporters appreciate the insight and usually walk away with a more positive image of the private equity firm. When appropriate, on-the-record interviews on non-specific topics can help show a firm’s “human” face.

4. Announcing transactions. This depends on the firm’s policies. It also depends on the selling executives or owners of prospective portfolio companies, especially smaller ones; for competitive or personal reasons, they might not want to be regarded as selling out.

5. Dealing with crises. These can vary widely – an acquired business gone awry, a facility fire or loss of life, product investigations, a sharp decline in related bond prices, failure to meeting fund raising goals, or layoffs. If the facts are not readily available, tell reporters that they will get a call back, and make certain it happens. Don’t fall behind the story or it will overtake you.

6. Marketing the firm. Private equity firms spend much time seeking new funds, investors or opportunities, all of which makes marketing a major consideration. Effectively implemented, PR can be a key element in how firms are perceived.

7. Developing a PR strategy. While returns are key, so is determining early on how you want your firm to be viewed – as a company builder, turnaround specialist, financial engineer, sector player, or a multi-industry approach.  Also needed is a well stated social agenda.

In today’s more public world of private equity, at stake is a private equity firm’s credibility and reputation, especially with investors, some of whom may be government or quasi- government entities. A well thought out PR approach will help enhance perceptions of your firm and its performance.

Steven Anreder is head of Anreder & Company, a provider of corporate strategic investor relations, public relations and crisis communications services.