Things are changing in the private equity world, thanks to the overturn of an 80-year ban on marketing to the general public back in July.
Although the industry has traditionally relied on intermediaries like JP Morgan to source top talent, this new ability to reach the public directly means firms need to think differently about their marketing approach.
According to Dan Darchuck of Topturn Capital, taking the lead from retail marketing experts like Proctor and Gamble is key to success in this changing marketplace.
"Retailers don't use sex, celebrities, and style for fun," he says. "They didn't just wake up one day and say, 'We're bored, let's use Facebook.' Retail marketers have been forced to rely on these tools as it has proven to be the only way that they can engage consumers. When the email in-boxes of institutional investors fill up, and their mail boxes are full of 100s of Power Point marketing decks, the current way in which people market alternative investments will grind to a halt. Investors are always going to need information, however, the process of engaging those investors is going to change dramatically."
Topturn has been leading the charge on revamped marketing in the Post Jobs act era for the industry. For example, its latest marketing piece features professional surfer Joe Curren, in a trend that Darchuck believes will only continue as managers are forced to re-think how they market.
"As the market for private investments opens to the general public, one can only assume that competition will increase. So we thought it wise to emulate the marketing prowess of brands like BMW, Rolex, and Nike instead of sticking to marketing methodologies that haven't changed much in 80 years," Darchuck adds.
The effect on capital markets is also set to change – while relationships will always be important, the definition of "marketing expert" in this field may alter drastically. And private equity firms may soon start looking for their new marketing execs from P&G – not JP Morgan.
