Fund investors call out private equity houses with substandard marketing materials, photography and websites, with three quarters of LPs advocating corporate videos
A significant 88% of Limited Partners (LPs) surveyed in the Brackendale Private Equity Corporate Identity LP Sentiment Survey H2 2021, produced in association with Piranha Photography, said that even if a private equity fund was producing strong returns, it would matter to them if it had badly designed or poorly written investor marketing materials.
A lack of professionalism in wording and design suggests the GPs are not focused on their investors, makes it hard to understand their uniqueness and competitive advantages, and speaks of incompetence or arrogance, according to some of the comments made by LP fund investors.
A hefty 94% of LP respondents expressed a preference to see quality photographs of teams managing private equity funds. “We want to see who is managing our money,” one LP said. Substandard or a lack of photos led an LP to remark; “The fund manager is unlikely to be of institutional calibre,” and another “It is unprofessional and unhelpful. This is a people business!”
Some 69% of LPs declared they would be somewhat discouraged from making an investment in a private equity fund if it had a substandard website. Of this 69%, nearly a fifth went as far as to say they would be entirely discouraged.
Exactly three quarters of LPs surveyed deemed it was worthwhile and interesting when private equity fund managers produced corporate videos, as a way of showcasing their activities. LPs advocated seeing very short videos with updates on investments and some expressed preference for having the ability to watch in their own time, and over again if necessary.
LP respondents hail from across Europe and the US, and include a mix of pension funds, insurance companies, family offices and fund-of-funds.
Fay Margo, CEO, Brackendale Consulting: “It was reassuring to see that LPs do genuinely care about the quality of the information they receive from existing and potential investors. Financial numbers alone don’t count – if funds cannot be bothered with their approach it speaks volumes about their investment ethics.”
Douglas Fry, CEO, Piranha Photography: “Piranha Photography has been working as corporate photographers and videographers in London and for Private Equity firms in particular for 20 years now. The report confirms the increased sensitivity and awareness have we have seen over the past two years by GPs to their public face. We now live in a very visual world and many subliminal decisions are made when looking at websites and marketing materials.”