Private Equity Marketing: The Complete Guide (2024)
How Private Equity Marketing Can Increase AUM, Improve Brand Awareness
In the past, private equity firms mainly relied on personal connections and networking to gain new investors and improve their brand. However, in today’s competitive global investment environment, many firms have now turned to digital marketing to help educate investors and the public about the unique value they provide.
While private equity is a fast-growing industry, with an estimated $13.1 trillion in assets under management as of mid-2023, it’s increasingly dominated by big players. This means that newer and boutique PE firms may find it increasingly challenging to raise capital efficiently and effectively.
In this article, we’ll review everything you need to know to get started in private equity marketing, whether you’re a GP, CEO, an internal marketer, or an external marketer or agency providing services to private equity firms.
Step 1: Defining Your Ideal Investor(s)
Before diving into digital marketing methods, marketing metrics, and competitor analysis, private equity firms and those who help market them should be clear about what types of investors they’d like to acquire. Then, they can create detailed customer personas to focus branding and marketing efforts better. A firm may wish to target several types of investors, so each of these investor types should be carefully detailed and examined. For example:
Investor Profile 1:
Investor Type: Institutional
Average Age: 35-60
Gender: 70% men, 30% women
Job Position(s): Independent and affiliated RIAs and wealth managers, small and mid-size family offices, and mid-sized pension fund managers.
Risk Profile: Mildly aggressive
Expected IRR: 10-11%
Ideal Holding Period: 5-10 years
Investor Profile 2:
Investor Type: Individual
Average Age: 45-65
Gender: 55% men, 45% women
Job Positions: Doctors, attorneys, tech executives, entrepreneurs, financial and banking professionals
Risk Profile: Moderate to highly aggressive
Expected IRR: 12-14%
Ideal Holding Period: 3-6 years
Digital Marketing Methods for Private Equity Firms
When it comes to marketing methods and marketing channels, PE firms have a variety at their disposal, including:
Paid Ads: Paid ads, often PPC (pay-per-click) ads, can be quite effective for private equity, though different channels may attract different types of investors. For instance, LinkedIn ads may target institutional investors, while Google ads (and even Facebook ads) may be more likely to reach smaller, individual investors.
SEO: While SEO has been around for decades, it’s actually quite rare for private equity firms to conduct successful SEO campaigns. SEO can be a great way to generate high-quality leads, but in general, these leads may trend toward individual rather than institutional investors.
Video: PE firms can use video in various ways, such as posting video ads on social media platforms, embedding it into their websites, or even starting their own podcasts.
Digital Print: While often considered a form of PPC ad and often run through Google’s ad network (though this isn’t always the case), private equity firms may also find success with placing ads into financial websites and newsletters. Consumer news websites may target individual, high-net-worth investors, while business news websites (such as those for wealth managers, RIAs, and bankers) may target a more institutional customer base.
Private Equity Marketing Metrics and KPIs
While private equity may seem, at times, to be radically different than other industries, when it comes to marketing metrics and key performance indicators (KPIs), it’s actually quite similar. Some key metrics for PE companies often include:
Lifetime Customer Value (LCV): This measures the value of a customer to a company over the entire sales cycle (or cycles), and, in PE, is generally calculated by adding up the fund fees and performance fees paid by the average investor.
Cost Per Customer (CPC): The cost per customer, or CPC, sometimes called cost per customer acquisition (CPAC), is the amount of money it takes to acquire a private equity investor.
Cost Per Lead (CPL): This measures the cost to generate one lead and can be specific to a single marketing campaign or a broader metric across all the company’s marketing campaigns.
Conversion Rate: This is the rate at which leads convert to investors.
Brand Equity: Brand equity is the intangible value that a company’s brand carries with it. While essential, brand equity can be difficult to measure. However, this doesn’t mean you shouldn’t try, particularly if you have enough customers to send them surveys for feedback.
Defining Your Investment Thesis and Competitive Advantage
When it comes to private equity, many firms don’t have a clear marketing message other than “invest with us, you’ll make money-- don’t worry how.” Unfortunately, the “how” is a big concern for investors, and defining that comes down to having an easy-to-understand and engaging investment thesis.
In general, PE firms with multiple funds should have both a general investment thesis for the company and a specific investment thesis for each fund.
Here is an example of a general thesis for a private equity company:
“X Capital invests in high-growth, middle-market companies across the United States valued at between $50 million and $250 million, focusing on logistics and manufacturing firms. Via upgrading management and instituting cost controls, we boost corporate profit margins and reinvest capital effectively to build strong companies and increase the probability of high investor returns.”
Here is one example of a thesis for a specific fund:
“X Capital’s Hybrid Real Estate Fund invests in high-grade, U.S-based real estate equity and debt. Approximately half of our allocation includes high-quality, value-added multifamily real estate in fast-growing markets across the United States. In contrast, the other half comprises high-interest, low-leverage private loans offered to experienced U.S.-based multifamily real estate investment firms.”
It could also go further to say: “The Fund's equity portfolio utilizes long-term, government-sponsored debt to fund multifamily purchases, not exceeding 60% LTV. In contrast, the Fund’s debt portfolio aims to originate or purchase multifamily loans from high-credit institutional borrowers not exceeding 50% LTV.”
Private Equity Branding Materials and Top Examples
The current logo of The Blackstone Group, the world’s largest private equity firm and alternative asset manager by AUM (as of 2024). Source: Wikipedia.
Logos/Graphics: While private equity companies may not be flashy, it is key to ensure that the logos, graphics, and overall brand design align with the company’s marketing objectives.
Slogans: Slogans may not appear important for PE firms, but they still can have an impact, particularly when a firm wants to target a new market. For example, in early 2023, The Blackstone Group, the world’s largest private equity firm and alternative asset manager, decided to rebrand itself to go over non-institutional investors. In doing so, it created a new slogan, “Build With Blackstone,” and, while it’s a bit too early to determine whether or not this has been a success, it does show that even the big players understand the need to shift their branding when targeting a new demographic.
Part of the homepage for The Carlyle Group, the world’s fourth-largest private equity firm by AUM (as of 2024). Source: The Carlyle Group.
Web Design: While existing clients and customers already know a firm by name, for new customers, the first touchpoint is often the company’s home page, so aligning this with brand objectives is also key. It’s also important to ensure the website branding is consistent with the branding across other platforms, like social media.
Example screenshot from Relevant Equity Works, a popular private equity investment portal platform. Source: Relevant Equity Works.
Investor Portal: Getting investment statements in the mail a few times a year is a thing of the past. Today’s private equity investors want to know the status of their investments 24/7. While around-the-clock updates may not always be possible, allowing investors to access a regularly updated portal, 24/7 goes a long way to improve confidence, especially for newer investors or investors placing their capital with a firm for the first time. While an investor portal might not be the highlight of a marketing campaign, reassuring investors that they can get updated investment data can be an extremely helpful component of an integrated campaign.
PPM: A private placement memorandum (PPM) is a legal requirement for private equity offerings and acts much like a prospectus for publicly traded companies. While it may seem boring, improving your private equity, PPM can also be a marketing opportunity, especially if making design and copy changes can increase investor conversion rates. Core sections like the executive summary, investor suitability, and risk factors should all be as easy to read and understand as possible and, within reason, should avoid complex legal or financial jargon.
Private Equity Marketing Competitor Analysis
When marketing private equity firms and funds, understanding the competition is essential. A small, family-run private equity firm won’t compete with KKR and Blackstone. Instead, will be competing with other, smaller, boutique PE firms, so it’s important to know how these companies are marketing themselves. If you want to get a good handle on the competition, try to find 3-5 relatively successful PE firms within your specific niche and review all the marketing channels that publicly use, such as their website, social media presence, PPC ads, and any sponsored placements, such as email advertising in financial newsletters or other financial media.
First, consider analyzing their general branding, competitive advantages, CTAs, potential target audiences, and design elements. Then, you’ll want to break down any metrics you can find, such as relevant website traffic (using software like AHRefs, SEMRush, or Ubersuggest), the estimated CPC (cost per click) of any Google Ads they may be running, and any other hard data you can find.
Finally, use this data to help construct a new data-driven marketing plan for your private equity business (or your client if you’re an outside marketer) that also incorporates qualitative factors, such as building customer trust via brand consistency, testimonials, and transparency about past performance (when possible and legally allowed).
Private Equity Marketing Success Story: Moonfare
One of the most interesting private equity marketing campaigns in recent years has come from Moonfare. Moonfare isn’t a traditional private equity company, as it doesn’t issue its funds. Instead, it’s a service that allows individual accredited investors to pool their funds to invest in top private equity offerings, including those from Apax, The Carlyle Group, and KKR. Despite this non-traditional focus, the firm has apparently been quite successful. As of Apr. 2024, the firm reported 61,000 members/investors and about $3 billion of assets under management, spread throughout 110 funds in 22 countries.
Google search traffic data for Moonfare.com, Apr. 2022 to Mar. 2024. Source: Ubersuggest.
Following Blackstone’s trend of targeting individual investors with smaller amounts of capital to invest, Moonfare began a relatively large SEO campaign in 2021 and began populating its website with in-depth, easy-to-read articles about a variety of private equity topics.
According to the SEO analysis tool Ubersuggest, in April 2022, the site had approximately 6,800 monthly visitors. In contrast, by March 2024, that number had ballooned to more than 51,000 per month, likely generating a significant number of accredited investor leads while improving Moonfare’s brand profile.
Google search traffic data by page for Moonfare.com, Mar. 2024. Source: Ubersuggest.
In addition, Moonfare has run a significant Google Ads campaign, both for branded and non-branded keywords.
Google search ad for Moonfare (search term: Moonfare), Apr. 2024. Source: Google.
Finally, Moonfare’s website is professional, easy to read, and approachable, and, in many ways, is much more inviting than most other PE sites.
Moonfare website homepage, Apr. 2024. Source: Moonfare.
Private Equity Portfolio Company Marketing
In addition to promoting their general company and specific funds, PE firms that invest in individual businesses (and even, in some situations, real estate properties) may wish to focus a significant amount of their marketing efforts on marketing portfolio companies in addition to marketing themselves.
Regulatory Concerns for Private Equity Marketing
While private equity firms should strive to become more accessible to potential investors, they should also ensure they’re legally protected. Generally, this means having an internal or external counsel review all advertising copy and content before releasing it.
One major issue can be targeting non-accredited investors, which (in most cases) cannot participate in PE offerings, and selling PE funds to these investors may result in serious legal problems.
Therefore, websites and sales copy should be clear that offerings are only for accredited investors and should attempt to dissuade non-accredited investors from falsely claiming to be accredited.
In addition, sharing past performance may also present regulatory issues in some situations, so firms may or may not be able to compliantly share historical performance data publicly. This is generally less of a problem when communicating privately with accredited investors via phone, email, or newsletter, but firms should still be careful not to take undue risks.
Finally, while this may be obvious, like all investment marketing materials, private equity websites and ads also need carefully worded legal disclaimers, typically reminding potential investors that private equity investments can carry a significant amount of risk, that investors can lose all of their funds, that PE investments may not be suitable for all investors, and that past performance is not an indicator of future performance.
In Conclusion: PE Marketing Is Evolving Rapidly, and Opportunities Abound
As the examples in this article have evidenced, PE marketing has evolved rapidly in recent years. Some important changes include:
Digital Marketing: Gone are the days when PE firms only did private, backdoor deals with other institutions, and now, firms are increasing their focus on paid ads, SEO, and other marketing efforts.
Consumer-Facing Brands: Over the last few years, private equity firms have become a lot less private, with many changing their branding to be more welcoming.
Individual Investor Focus: While PE firms used to mainly target institutional investors, many have realized that the could be missing out on trillions of dollars of capital from high net worth and ultra-high net worth individuals, who may have less to invest individually, but collectively, represent an extremely fast-growing market.
Technology and Reporting: As previously mentioned, the former “unsaid contract” between private equity GPs and LPs has been “trust me, I’ll make you money.” However, with so many investment options out there, investors now want an easy and tech-focused onboarding process, regular performance reporting, and other perks that only technology can provide.
While all these changes may seem intimidating at first, they actually represent a massive opportunity for private equity firms to step up, gather new audiences, and even become aspirational, public-facing brands. Those who succeed in this will raise more capital at a lower cost, allowing them to expand their AUM and fund offerings rapidly-- while those who don’t could see slower growth and, even worse, a flight of capital to companies with superior marketing strategies.
