How Private Equity Firms Can Stand Out in a Crowded Fundraising Market

May 26, 2021

4 min read

Amid an increasingly competitive fundraising environment, IR professionals at private markets firms need to find an edge to differentiate themselves in their communications with LPs and the public at large, writes Josh Clarkson, a senior vice president at Prosek Partners.

+ Josh Clarkson is a Senior Vice President at Prosek Partners where he focuses on advising leading alternative asset managers on strategic communications, positioning and stakeholder engagement and can be reached at

For large alternative asset managers, size is a natural differentiator. Limited partners may be more inclined to allocate towards a manager they already invest with that offers a variety of strategies within private markets, which facilitates LPs’ deployment of capital. Members of that club still need to ensure their brand and profile are communicated effectively through thoughtful message development, regular stakeholder engagement (e.g. media interviews as well as investor and consultant meetings), and multifaceted campaigns to enhance and protect their franchise, but may need their heaviest lifting in terms of raising awareness of their differentiators to be related to new strategies or offerings. In these situations, it is worth engaging across IR, communications and business teams to develop comprehensive rollout campaigns that draw on the full suite of tactics available spanning traditional announcements and letters to tools such as LinkedIn and videos.

For smaller managers, which can often still be quite sizable firms but just not among the industry behemoths, it is especially vital to get out on the front foot and find a way to stand out because the markets for capital, deals and talent will all be more competitive. They should focus on showcasing their specialized expertise, team, relationships and the like. Managers of all sizes can benefit from highlighting how specific strategies benefit from the firm’s overall platform, focus and historical strengths.

To do so effectively, firms need to take a step back and distill precisely what their differentiators are and how to position them for maximum business impact. In many cases, especially where it is a sector or geographic specialization, GPs should educate allocators about the specific strategy they are an expert in and explain why it is an attractive one to allocate to. They should also delve into why the firm has a unique set of expertise in this sector that allows them to capture value in a way that others can’t. The message to LPs needs to revolve around why they should invest behind this differentiator and why this GP in particular is in the best position to pursue it.

Additionally, to the extent the firm operates across investment types, geographies or sectors telling a cohesive story about the synergies of their specialization or historical strengths to all the areas it invests in is beneficial. For example, if a firm with a historic focus on credit is now moving into public equities, explaining how the insights it gleans from its credit business, both about specific companies as well as broader market trends, will help to convince LPs of the merits of the new strategy. This will be even more effective if it is articulated with tangible, interesting examples across through owned and earned channels.

Can ESG Be a Point of Differentiation?

Pursuing an ESG-focused or impact strategy can certainly be a way to stand out. If it’s front and center for a GP, it becomes a leading topic in the conversation and makes the firm an expert in the field. LPs may recognize that and be attracted to it. However, that needs to be driven by a true business focus on ESG investing, which can present challenges and may limit the opportunity set.

At the same time, there are certain expectations from LPs that all fund managers need to be able to articulate how ESG gets integrated in their investment process through a sound ESG policy. The key is to be able to produce metrics and messaging around ESG that is tailored to a firm, the ESG factors and issues that are material to its investments, and that reflects its approach to investing. Then the firm needs to present that narrative effectively for all audiences, whether investors, consultants, counterparties, or the market at large, and in many cases tailor the presentation and emphasis to suit specific audiences. For example, a PE firm focused on industrial companies will need to focus more on environmental impacts than a technology-focused firm where data security may be more material, but in both cases a public pension may be especially focused on how portfolio companies manage their human capital and their views on unionization efforts.

How to Communicate Those Differences

Communication with LPs shouldn’t be limited to the pitchbook and meeting LPs on the road. Other tools should include engaging with the media, creating digital media videos, producing content for the firm’s website, and building LinkedIn media campaigns aimed at investors. Fund managers need to participate and speak at events and conferences and maximize that participation through both earned and owned channels. Fund managers must make sure they are coming at it from all angles and on a regular basis while staying mindful of compliance constraints.

Making the Most Out of Created Content

If GPs opt for producing their own videos, they can hire a video production company, an outside communications advisor or use their retainer communications firm, if they possess that capability. One approach is to create a 10- to 15-minute video specifically aimed at LPs that can go into the data room. To make the most of it, they would then also make a 90-second version of the video for their website, and slice it even thinner by producing a shorter clip for social media purposes. The message can be further amplified by creating thought leadership articles on similar topics that can live on a firm’s website, go out in marketing campaigns or be placed into relevant publications. Podcasts are also popular tools these days in conveying authority on a specific sector or for profile raising.

Whichever message a fund manager decides to convey to stand out of the crowd and whichever mediums it opts for, the message needs to remain consistent while evolving with the firm and should be communicated through a steady, strategic cadence of engagement.