In the highly competitive market for private deals, once-overlooked branding has emerged as a key differentiator and dependable value driver for firms of all shapes, sizes, and strategies.

For most of the PE industry’s history—going back to the first LBO—branding was a tool discussed only in the context of portfolio companies, and even then, it was sparse. Today, forward thinking firms have connected the dots between great branding (and marketing) and value creation. They realized that portfolio companies need to look and sound ​“cool” to prospective buyers, either to strategics or other sponsors up the food chain. Those same firms have also led the charge in recognizing the power of branding for the fund itself.

To be clear, the financial services industry at large is still a vast landscape of poorly executed and under-managed brands, but that is changing rapidly. The fight for deals, fundraising dollars, and top level talent has never been more fierce. Well branded and adeptly managed brands are winning the fight and are putting the rest of the industry on notice. 

That was the first wave, and it has shown that branding is no longer a tool reserved for consumer-facing businesses. A successful brand is more than a memorable logo or a tagline. It’s a strategic asset that establishes a firm’s differentiated presence in the market, engages target audiences across multiple channels, and creates lasting value.

Even without a physical product, private equity funds are pitching a value proposition to increasingly sophisticated and knowledgeable sellers (who are now universally represented by M&A advisors across the spectrum, but that’s an entirely different article). Suffice it to say, sellers have choices and a PE firm’s reputation matters. Whether the old guard wants to admit it or not, PE firms have digital storefronts in the form of websites and email campaigns and marketing collateral. 

Private equity branding is evolving

Breakout Studio was founded 10 years ago by seasoned investment professionals who had experience working with large agencies to brand their firms. At that time, the alternatives space was a wasteland of bad brands. Founders’ access to capital was more limited, deal processes were less competitive, and digitally native brands weren’t as abundant as they are today. 

We understood the inherent power of branding for the financial services sector, and we knew that traditional agencies did not have the niche industry knowledge necessary to maximize their impact in this space. So, we formed Breakout Studio around a straightforward thesis.

Our thesis
As the financial services space becomes increasingly saturated, differentiating a firm via strong brand fundamentals will accelerate the acquisition of more deals, dollars, and talent.

How branding creates value beyond returns

Private equity firms have historically operated behind closed doors, measuring their success solely by financial returns. Don’t get me wrong, if you’re not delivering alpha, a dynamite brand isn’t going to save you. But brand positioning has become increasingly crucial for value creation beyond returns. Here are a few ways we’ve seen strategic branding add value time and again: 

1. Credibility and credentialing: A strong brand and a well-designed web presence establish trust and credibility with key stakeholders. An eye-opening study out of the University of Arizona concluded that, when presented with the same information in two web formats, users felt significantly more confident about the credibility of information presented on a site with memorable design, ease of use, and a consistent identity. In other words, people trust good design, even subconsciously.
   
   In the financial sector, where relationships are paramount, a well-crafted brand and online presence signal stability, trusted performance, and a commitment to ethical practices. This credibility can help attract and retain LPs, potential sellers, and top talent. 
   
   Plus, whether or not you direct stakeholders to your website personally, 89%+ of them will check out your online presence in their own search for information. An established identity across all channels—in person, online, and in print—puts your strongest foot forward.
    
2. Differentiation: Private equity is a competitive field with numerous firms vying for the same opportunities. A distinct brand identity sets a firm apart through voice and visual language. A strong brand story, conveyed through strategic messaging and a consistent visual identity, can resonate with target audiences and create an emotional connection that supports financial metrics.
    
3. Deal flow: A recognized brand can not only help you in deal processes, but it can also open doors to proprietary deal flow. Sellers are more likely to engage with reputable firms, and potential investment targets may be more willing to consider partnership opportunities with a trusted brand.
    
4. Talent: Top-tier professionals are drawn to firms with strong brands. In private equity, word-of-mouth has traditionally guided not only deal flow but also the talent pipeline. Even as you continue to rely on reputation and an internal network to identify new talent, successful branding can position you to secure that talent. 
   
   Again, it can be easy to relegate branding to the world of consumer goods and social media, but consider this: not only do early career recruits (digital natives) make decisions based on a company’s digital presence, but even mid- and senior-level professionals in their 30s and early 40s have relied primarily on digital sources of information for their entire careers. 
   
   We know that 94% of web users determine their first impressions of a business based on their online brand and web presence. You want top talent to determine that you are established, reliable, and a home for their level of skill. A robust brand image can provide a competitive edge in recruiting and retaining industry experts.
    
5. Exit readiness: A well-known brand can facilitate the exit process by enhancing the perceived value of portfolio companies. Over a third of respondents to a 2020 Deloitte survey reported that undervaluation of assets is the primary barrier to a successful exit. 

Buyers often pay a premium for assets associated with a reputable private equity firm. A powerful brand presence can establish that sense of reliability and contribute to more favorable valuation prior to exit. 

Strategies for effective branding in private equity

To harness the full potential of branding within private equity, firms should adopt a multi-faceted, strategic approach. In our extensive work with private equity firms, we have found the following elements to be the foundation for effective branding in the space.

• Define your brand identity: Start by defining your firm’s unique value proposition and mission. Consider what sets you apart, how you are currently perceived, and how you want to be perceived in the market. The right branding agency with sector knowledge can be a helpful guide through this process.
• Invest in thought leadership: Establish your firm as an industry thought leader by producing high-quality content and participating in industry events. Share insights and research to build credibility and showcase your expertise. Both search engines and your stakeholders value insightful, informative content.
• Consistency across every touchpoint: Many clients will say ​“Why does my website matter? All people care about are our pitchbooks.” The reality is that while potential investors and sellers do glean information from your fund collateral, their impression of your authority and reliability is formed by several factors—many of which are happening subconsciously. Ensure brand consistency across all touchpoints, from your website and marketing materials to client interactions in order to foster trust. 
• Tell compelling stories: Craft compelling narratives that convey your firm’s journey, values, and impact. A critical, often overlooked component of storytelling is consistency of voice. In establishing your brand identity, be sure to consider the way you want to sound and how you want your audience(s) to feel when interacting with your marketing materials and your website. If you want to learn more about how the Breakout brand strategy team identifies brand voice and why we believe it matters so much, dive a little deeper here. Storytelling is a powerful tool for humanizing your brand and connecting with stakeholders on an emotional level. 
• Apply brand tools to fund collateral: From pitch decks to one-pagers and tear sheets to marketing email campaigns to branded event displays, consistency is critical for defining your presence online, in person, and in print. A successful branding process will result in a suite of collateral to support your fundraising and other marketing needs. It should also include a polished brand toolkit that contains easy-to-use guidelines for logos, typefaces, color palettes, messaging, and writing conventions to ensure that all existing and future collateral meets your brand standards. 
• Monitor and adapt: Continuously monitor your brand’s performance and adapt to changing market dynamics. This typically involves a number of digital and analogue methods, including digging into your analytics platforms for web and email, soliciting feedback from stakeholders, implementing an SEO strategy, and performing periodic competitor audits to understand how you’re perceived in the market and to refine your branding strategies based on real data.

Conclusion

Branding is a powerful, under-utilized tool for private equity, and it has become increasingly critical not only for portfolio companies but for firms themselves. A strategic brand process can establish authority, attract talent, impact deal flow, and directly influence the perceived value of a firm and its portfolio companies. 

As you make a plan for moving your brand forward, consider choosing an agency partner with the industry knowledge, experience, and a body of work that will help you meet your near- and long-term goals. 

Check out some of our work for private equity partners here.