Since last year, the world of private equity – and alternatives in general – has seen the appeal and potential of the retail wealth landscape. The influx of players ranging from major firms to niche entrants seeking to enter these markets brings with it another influx: value propositions, messaging, and product pitches besieging financial advisors and their clients.
This dynamic brings with it both cautionary tales and opportunities. Below, we seek to unpack how private equity brand strategy needs to be tuned for the retail wealth landscape.
The Market Has Changed. Most Alts Brands Have Not.
Multiple dynamics have pushed private equity firms (and more broadly, private markets providers) to reconsider their brand over the past several years:
- Rising Interest in Retail Wealth Markets: As institutional markets become increasingly saturated, private equity firms need to look to new markets to achieve their growth aspirations. Front and center are HNW investors being served by retail wealth advisors. As private equity firms seek to serve a new cadre of financial advisors and investors, they need to think specifically about how their message can appeal to this group while reinforcing a strong brand, brand equity, and a clear investment philosophy.
- Distribution Partnerships: Building a true retail distribution network requires tens (if not hundreds) of millions of dollars, a different kind of technology stack, and a rewiring of the “brain” of an institutionally-oriented organization. Rather than invest in such a grand undertaking, the other option is to partner with retail distribution partners who already have the infrastructure and foothold in the space. The challenge? PE firms now have their brand intertwined with another brand. Not to mention, an entirely separate company may be delivering the PE firm’s value proposition to advisors through its external messaging, digital presence, and investor materials.
- Increased Competition: Entering the retail markets doesn’t just bring distribution challenges: It puts PE firms head-to-head with incredibly talented retail players. Not only that, financial advisors are already over-marketed and sold to; they don’t want another person in their office or inbox pitching them products. Breaking through to an already harried and busy audience that is constantly besieged by marketing brings a whole new challenge for private equity companies trying to build trust and confidence.
Access Is Necessary. It Is Not Sufficient
The reflex of nearly the entire industry has been the same: An almost universal promise that “we’re opening up access to private markets.” (Additional buzzword: “Democratization”.) That message then follows with a story about how private markets have usually only been available to institutional investors, but now, you can have access too.
Not only is this story completely overused, it lacks credibility and any actual differentiation. The question is: What should you do about it?
Today’s investors and advisors expect more: strategic insight, a clearly articulated investment philosophy, and a compelling explanation of how a firm creates value across its portfolio companies.
Without that, even firms with strong performance risk blending into the noise.
What Brand Strategy Actually Means for a PE Firm
Below are some of the keys to articulating a powerfully differentiating, highly resonant private equity brand strategy for the retail wealth sector:
- Flip the script: Focus on sophistication and exclusivity instead of access. Just because you’re now accessible in retail doesn’t mean you shouldn’t take all the cache of institutional marketing and apply it to retail. We hear frequently from financial advisors during our Advisor Roundtables that one of the most appealing aspects of private markets is offering their clients an entry point into an opportunity set that’s highly sought after. You want your retail brand to embody this heightened sense of getting their hands on something special. One advisor put it to us best: “Give my clients something they can brag about at cocktail parties.” If your retail brand does that, now you’ve got something special.
- Nothing spells success like storytelling. It can be easy to get mired in a heavy, highly technical brand story that institutional investors demand. But nothing brings a brand to life like real-world examples of the types of companies you’ve invested in, the steps you’ve taken to improve them, and the value delivered back to investors in the process as part of a broader value creation plan. For an example, look at some of the stories Blackstone is telling on its private equity overview – crisp, clear, and recognizable.
- Go beneath the surface and dig into details. How do you go beyond portfolio companies? One way is to bring to life aspects of your offering in more narrow and tangible ways. A recent example came up in an interview with an advisor who parroted back to us Blackstone’s use of AI to drive operational improvements across their portfolio companies. Another example is to take your approach to thematic investing and bring a given theme to life and how it has delivered value back to investors through strategic insight, due diligence, and a differentiated business strategy.
- Offset the “barbarians at the gates effect.” For many retail investors, there can be a reflexive feeling that “PE ruins jobs and lives.” You need to intentionally consider how to offset this feeling and create comfort with the brand. Although likely not done for this purpose since it also makes for good business enhancement, KKR has done this brilliantly with its emphasis on employee ownership, which instills the brand with a sense of impact on everyday lives. This is further cultivated by an emphasis on citizenship in their brand story and helps foster customer loyalty among investors, employees, and customers alike.
- Don’t forget legitimacy. While your name may be well known in institutional circles, you’re probably a stranger to the retail wealth landscape. That means that – while it is indeed table stakes – you shouldn’t forget that assets, longevity, and industry recognition do, in fact, matter. Check out Golub to see how they’ve successfully brought this to life on their website to enhance credibility and build trust.
- Think in terms of change management. Private equity branding isn’t just about messaging and visual identity; it’s also about change. Given that private equity firms have most often been built in the institutional space, the transition to retail can be a shock to the culture. Your brand therefore needs to consider how everyone inside the firm is going to reorient themselves around a new channel and a new message. A well-honed internal rollout strategy paired with executive sponsorship, inspirational materials, and clear talking points and training is critical to driving the necessary change to make your brand a reality through internal alignment and a strategic approach to branding.
What a Real Brand Strategy Looks Like for Private Equity Firms
The following are the components we recommend when devising a brand strategy:
- Discovery Process to Drive Organizational Buy-In: The process you employ to develop a brand strategy isn’t just an input and fact-finding expedition; it’s a way to make sure people feel heard and understood throughout the process. Gaining input via an in-depth discovery process is critical to driving the eventual change needed as part of a private equity brand strategy development project and can generate valuable insights through market research and stakeholder conversations.
- Messaging Components: Development of anything from a succinct value proposition statement (2-3 sentences), to supporting messages and proof points, to a one-word descriptor that everything ties back to. In addition, we like to include an inspirational “manifesto” as part of every branding project, which acts as an inspirational rallying cry that gets everyone bought in on the strategy while creating clarity around what the brand stands for.
- Visual Identity: A full visual overhaul or visual refresh that helps bring the brand strategy to life can ensure that the brand positioning of the firm is reflected across its visual expression as well. In addition, a fresh new look can excite internal stakeholders and help them embrace some of the important changes a private equity brand strategy is intended to deliver.
- Rollout Materials: Private equity firms need to think deliberately about how their new brand strategy rolls out into the marketplace. A firm-wide rollout complete with anything from a presentation, to FAQs, to talking points and training materials is essential to unifying the firm; externally, it should be supported by consistent messaging across all channels.
Private equity firms truly have massive potential when it comes to the next era of growth. But tapping into new markets requires a new approach to branding, go-to-market strategy, and everything in between.
Build a Stronger Private Equity Brand
If your firm is entering new markets, refining its brand identity, or looking to strengthen its digital presence, Substance can help. We work with private equity firms to create clarity, sharpen strategic positioning, and build brands that support long-term growth.
Frequently Asked Questions
What is private equity brand strategy?
Private equity brand strategy is a holistic, overarching approach to defining a private equity firm’s value proposition in the marketplace. Importantly, while it starts with a message, it extends much more deeply into everything the firm does: From its belief system, to sales pitches, to visual identity and design. It is increasingly important as firms seek to move beyond institutional markets into the retail wealth sector.
Why does branding matter for PE firms?
As private equity firms have recognized the opportunity in the retail wealth markets, they’re faced with challenges on multiple fronts: an incredibly competitive landscape paired with an audience (financial advisors) that is busy and overwhelmed with the amount of marketing they receive. Branding, when done right, offers private equity firms a “shortcut” to building trust and engagement with advisors and their clients.
How is branding for alts firms different from other financial services branding?
The primary difference is in orientation: Most alternatives providers started their business with an institutional lens. As a result, they have an encoded “muscle” memory when speaking about themselves: Usually, it’s highly technical, densely worded, and speaking in inaccessible, almost “foreign” language to advisors and their clients. Private equity branding therefore needs to not just consider message, visual identity and look and feel, but also drive change throughout an organization to get everyone speaking about the brand differently in the marketplace.
What does a brand strategy engagement look like for a private equity firm?
The process most often involves first getting engaged at the executive leadership level to help facilitate a conversation about how to evolve the brand and its messaging. This usually involves in-depth discussions either 1-on-1 or in a group setting with management teams. The process also involves interviews with financial advisors to gauge their perception of the firm and what resonates about its offering. All of that research is supplemented with an audit of the competitive landscape and secondary research. From there, anything from positioning to messaging is drafted, socialized internally, and tested with financial advisors before bringing the message to life in the form of internal and external rollouts, sales and training materials, new design elements, and a creative campaign to bring the brand to life in the marketplace.
What are the differences between private equity branding and hedge fund branding?
Private equity branding focuses on long-term value creation through active ownership and operational improvements in portfolio companies, targeting limited partners and founders. Hedge fund branding emphasizes short-to-medium-term market returns through trading and market analysis, targeting institutional and retail investors. Both require clear brand identity and strong digital presence, but private equity emphasizes ownership and operational excellence while hedge funds emphasize market expertise and trading discipline.
