How Brand Strategy Can Position Private Equity Firms as Optimal Company Owners

How Brand Strategy Can Position Private Equity Firms as Optimal Company Owners

Private equity firms currently have around $1trillion of capital that they have raised in funds from investors but have not yet used toacquire companies. In the industry, this money is called‘dry powder.’ Private equity firms are always meticulous and follow a regimented process of due diligence when they select companies to purchase through a leveraged buyout, so it is understandable that it takes a while to effectively deploy all the capital that they have committed in their fund.

However, having too much undeployed capital is a problem because the fund needs to earn their expected rate of return on invested capital within a reasonable amount of time. Typically, the length of a fund isten years. That means they need to deploy the capital they raise to purchase companies.

Additionally, a lot of private equity firms now compete in an auction process, and theleadershipteam of the company that is seeking private equity investment often does not understand the differentiation and unique strengths of each firm that might buy them. Since success in this industry is dependent upon a productive working relationship between the private equity firms and the leadership of the company they purchase, it is important for these firms to communicate their worth. Like most important activities in corporate branding, there is a strategy to this.

Here are three ways that private equity firms can use principles of brand strategy to position themselves as a premiere strategic partner, and how a brand strategy firm can help achieve this.

1. Brand Audit: The Secret to Understanding Customer Perception

It is especially important to understand customers’ perception of brands when a private equity firm is acquiring multiple small companies in the same market, also called a rollup. Since the reason for the rollup is primarily to increase economies of scale, it is important that all of the companies under one brand benefit from the time, effort, and resources spent to build that brand.

In the same line of thinking, it is important for private equity firms to know how potential companies may perceive them. For instance, if you are a private equity firm who is a leader in finding healthcare companies with great missions and helping them grow so they can achieve their missions at a larger scale, then it is important to know whether that is how companies perceive you. Likewise, if you have a process that puts genomics companies on a trajectory of increased success, that could be interesting for both the companies you acquire and the private equity firms who may be looking to purchase firms after you have helped them grow to a specific revenue or EBITDA number.

2. Public Relations: An Integral Part of Brand Strategy

There are an incredible number of companies in the healthcare space. This is great, because it advances innovation in health. However, the larger the number of companies in a sector, the lower the signal to noise ratio for each individual company. Strategic healthcare public relations is a great way to help differentiate a company from the pack. The right medical marketing agency can help close the gap between your achievements and recognition.

3. Moving Forward: An Actionable Approach to Private Equity Brand Strategy

How do you know when to take the next step in engaging a health care marketing agency? Ask yourself how recently you received an objective, third party view of your company’s brand. Similarly, think about how long it has been since you had the time to conduct a deep dive on your closest competitor. What do you have that they don’t? A lot. The more important question is: do the right people know your strengths?

Quaintise has over 15 years of experience helping healthcare companies succeed by providing medical marketing, public relations and branding strategies. If you are ready to achieve the next goal in your company’s path to increased success.