Marketing to private equity

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Let’s face it, having a few great private equity firms in your stable of lending relationships is beyond fantastic. In fact, many of the larger ABL players are originating half of their business or more from sponsors and really carries the load for them. And this trend is likely to increase with private equity coming off a record year of fundraising in 2014 and lenders are seeking volume growth in a risk adjusted way so as to avoid amnesia of the loose structures that put us all in a tough spot in 08 and 09. So this leaves ABL providers with one universal question:

How do we gain broader penetration of private equity?

Relying exclusively on sales relationships is a downhill breaking putt. Private Equity Investment managers are getting more and more calls from lenders soliciting them, but the most common complaint of our PEG clients is that the lenders all sound the same. That they talk too much about finance structures and too little about how the lender is a good and consistent long term match for their firm. Interesting, huh. So our recommendations for the basics of a private equity marketing strategy follows:

You have to be able to tell a unique story. You guys sound and look way too much alike. As such you need to craft a messaging strategy that differentiates you from the competition and is compelling to the PEG audience. A unitranche or second lien structure is no longer an truly innovative thing, so focus less on “products” and more on your firm’s experience and track record. In addition make sure your messaging is unique and demonstrated your knowledge of the challenges private equity firms face in the market.

  1. Get in the game. Go to take a tour of many top ABL player’s websites. You’ll notice that VERY few actually speak directly to deal sponsors, their needs and challenges. This makes absolutely no sense to us. If 50-60% of my volume came from a particular audience, you bet I’d tattoo my understanding of them on my forehead if I had to. This is an easy step and really costing you opportunity.
  2. Track record. Tombstones, tombstones and more tombstones. Press releases of deal announcements, case studies, industry expertise and when you are finished with that…send more tombstones. Consistent, stable deal activity through the cycles is a HUGE selling point to private equity.
  3. Let them know you’re smart. Thought leadership content is absolutely critical. And no we are not referring to an economic outlook…they get that from a ton of resources. We are talking about items like:
    1. Legal considerations for foreign receivables in a complex international acquisition
    2. The rise of the unitranche deal: Is right for your next deal?
    3. The end of generational ownership: best practices in leveraging debt to acquire a complex equity structure
    4. The near perfect alignment of asset based lending and private equity investment

Use email to deliver the goods (at least once per month, but probably twice). A strong website to be the validation of your effort, read the lead information and watch your penetration of the market grow. We know these foundational tactics work in targeting private equity and if you ever wanna chat about it, give us a holler.

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