“Adrian Private Equity? Who's Adrian?” That was the response of one PE Manager staffer (who shall remain anonymous) after seeing the press release about Ardian, the new identity of AXA Private Equity following its long-awaited spin-out.
OK, so this was more a reflection of their inability to speed-read. But it also serves as a useful reminder of just how many issues firms need to think about when deciding on a new name.
To select its new title, Ardian conducted market research, solicited pitches from staff and hired a branding consultant to come up with over 50 suitable names to choose from. That list was whittled down to three before senior management made the final call on Ardian – a word that has its roots in an old European word meaning strength, durability and boldness.
From our conversations with a range of industry sources about choosing a new name, there are two very good reasons why it’s important to make the right choice.
For one, although the markets (and LPs specifically) give relatively little weight to a firm’s name when making investment decisions, it’s also true that the wrong name can “make investors wonder”, as one placement agent put it.
This calculus probably helps to explain the rather dull, risk-free names of many private equity shops. A substantial percentage of GPs are named either after their founders (Warburg Pincus, Clayton, Dubilier & Rice, Blackstone (indirectly)) or their geography (Lone Star Funds, Golden Gate Capital). It’s rare to come across a firm name that really ‘sticks out’ or deviates significantly in style and tone from the crowd.
For firms with any sort of international ambitions, that’s a perfectly rational outcome. A simple three-letter name, for instance, has less chance of being misinterpreted across different cultures and languages. And while it may seem old-fashioned to name a firm after the founders, the alternative path is fraught with danger too.
“The journey from ‘impersonal’ to ‘forgettable’ is a short one,” says industry public relations specialist Ross Butler. “Even acronyms of long-retired founders feel more personal than bastardized Greco-Latin fabrications. Compare KKR or KPMG with Accenture or Cognetas.” (You can read more on Butler’s take on branding in the November edition of PEM, by the way.)
Ardian obviously pondered these same questions when it selected its own title. But it turns out the driving factor behind its eventual choice was another factor: how the name syncs with the culture the firm is trying to achieve. A firm’s choice of name inevitably says something – both to the broader market but also, particularly, to its own staff – about what kind of firm it wants to be.
It’s not going to make or break your reputation, unless you get it so badly wrong that you choose a name “that makes investors wonder”. But as far as your employees and potential partners are concerned, it’s a great opportunity to create a very specific identity as a firm – one that you hope will eventually contribute to that reputation.