1. Effective reputation management in the digital landscape
PRIVATE EQUITY
N7 CONSULTING GROUP
Monday, 9 September 13

2. •!Between 2004 to 2006, employment of PE increased to 1.2m (8% of private sector);
•!The Financial Crisis in 2007 was a turning point for the PE industry:
- PE received a lot of negative attention due to the failure to explain what it does;
- PE managers have given the industry the image of ‘job-destroying vultures’;
- PE funds also received negative publicity of abusing tax loopholes.
Private Equity:
Industry Overview
Monday, 9 September 13

3. Private Equity:
Reputation Management Regulations
According to the regulations imposed by the
BVCA, Private Equity Funds must:
•!Disclose their ownership structures, investment
approaches and portfolio;
•!Regularly provide data to the BVCA and the
EVCA;
•!Effectively communicate with employees in
timely manner during periods of strategic
change.
•!Disclose the financials and activities of
portfolio companies, including: annual report,
accounts, and a quarterly summary of the
major developments.
Monday, 9 September 13

4. Private Equity:
Importance of Reputation
Stephen
McGree,
Execu(ve
Director
‘’I
shouldn’t
have
to
spend
so
much
(me
‘selling’
private
equity
to
business
owners.
For certain companies,
private equity is clearly
the best solution”.
Chris/ne
Croissant,
Managing
Director
‘’Reputa(on
helps
see
more
transac(ons,
win
more
deals,
garner
more
investors,
aCract
and
retain
excellent
employees,
and
broaden
its
pool
of
partner
lenders’’.
Mark
Jones,
Partner
‘’Firm’s
reputa(on
can
be
a
key
reason
that
a
firm
gets
to
see
a
deal
in
the
first
place,is
selected
to
come
meet
management,
and
is
chosen
by
the
seller’’.
Monday, 9 September 13

5. Private Equity:
Current Stance of Reputation
30%
48%
23%
Journalists Opinion
Poor
Fair
Good
Excellent
Source: BackBay Communications, 2013
•!Journalists: No journalists believe that PE firms are excellent communicators;
23% believe their communication is poor;
•!Investors: The overall opinion PE firm is low compared with other industries.
The key issue is the manger’s lack of integrity around the deal process.
Hellman & Friedman
Advent International
Berkshire Partners
CVC
Carlyle
Apollo
EQT
Blackstone
Bain Capital
Bridgepoint
Cinven
Apax
TPG
Permira
KKR
3i
-50 -37.5 -25 -12.5 0 12.5 25 37.5
Investors Opinion
Source: Gracechurch Consulting, 2013
Monday, 9 September 13

6. Reputation Management:
Main Issues
In crisis situations, PE
do not ready for dialog
with customers and
immediate reaction.
PE funds are unable to
publish timely news
on buyouts and exits.
Timeliness Transparency
PE funds do not clearly
convey their fund’s
approach, investment
criteria, objectives etc.
Expertise
PE do not develop
and publicize industry
insights and trends
regularly.
Team
PE funds do not show
investors the integrity
of the management
team.
Crisis Readiness
Monday, 9 September 13

7. Reputation Management:
Role of Digital Media in PE funds
86%
of investors
say
Online sources such as
social networks and
blogs have become more
important since 2012.
24%
of investors
use
Social media to engage
with private equity funds.
30%
of investors
have
Accounts on Twitter and
12% make investment
decision after reading
Twitter.
Company blogs regularly
and 24% make investment
after reading a blog.
52%
of investors
read
-13%
growth rate
The importance of news
release for reputation has
declined since 2011.
Golz J et al (2012)
Monday, 9 September 13

8. Digital Reputation Benchmark
Monday, 9 September 13

9. Benchmarking:
PE Funds
The Digital Marketing Benchmark identifies the digital activities of the following 15 funds:
Monday, 9 September 13

10. Benchmarking:
Impact of channels on reputation
20%
25%
27%
28%
Communications activity (28%): number and
frequency of press releases, additional
touchpoints and presence of media contacts;
Website (27%): presence of unique content,
the level of transparency and multi-devices
access;
Social Media Visibility (25%): number of SM
profiles and audience size, frequency of
content, engagement rate and coherence of
communications;
Search (20%): correlation between search
queries and SEO optimization.
The channels and activities in consideration are:
* Respective weights are achieved from the combined
opinion of digital marketing and Private Equity Experts, 2013
Monday, 9 September 13

11. Benchmarking:
Results Brief
2.9/5
average score
The Private Equity
industry on the whole
scores only moderately in
terms of digital reputation
management.
The Blackstone Group is
the leader in terms of digital
reputation (DRS: 3.762),
with the use of all social
media such as Facebook,
LinkedIn, Twitter and, in
particular, Youtube. All
content are consistent and
relevant.
Most PE funds are currently
utilising blogs, newsletters,
reports and brochures to
Engage with customers.
However, funds often
neglect to optimise their
search activities, and do not
use PPC.
*The full benchmarking report is confidential to my client and will not be freely available at this stage.
Monday, 9 September 13

12. Strategy Recommendations
Monday, 9 September 13

13. Digital Reputation Strategy
Branding
Personal
Relations
Consumer
Education
"lear articulation of firm
strategy, goals, positioning,
investing approach, returns,
team and investee portfolio.
Personal communication
with key partners: LP,
investment banks and
advisors, lenders etc.
Demystify private equity
via multimedia case studies
and other educational
content.
Monday, 9 September 13

14. Channels andTools
Social Media
Website and
Communication
Activity
Search
•!Use website as the main
touchpoint and provide
transparent content;
•!Uphold strong communin.
activities and optimise
content for newsletters, RSS
feeds and mobile devices.
•!Use a variety of different
social media channels;
•!Consistent content on social
media and website;
•!Use interactive content to
engage and educate key
target audiences.
•!Implement SEO by general
industry and brand
keywords to increase traffic;
•!Implement SEO by sectors’
keywords and use PPC to
attract the attention of
investors.
55% 25% 20%
Monday, 9 September 13

15. •!Website: Use a variety of content to educate and promote transparency: case studies,
educational content, press releases, brochures reports etc.;
•!Social Media: Content should be consistent with communication, but provides
engaging experience: industry news, forecasts, and interviews with team members.
Content and Engagement
Monday, 9 September 13

16. ThankYou!
Monday, 9 September 13