Industry reputation failing to improve in eyes of LPs

A survey conducted by Pivot Partners has found that 86% of LPs believe the industry's reputation is not good, while 62% say there has been no improvement in private equity since 2008.

The research highlighted how secretive the industry still is, with 80% of LPs unable to find useful, relevant information about private equity firms and their team members online. However, only 6% of GPs admit to difficulties in finding information publicly.

Private equity's online communication and general openness to the public remains limited, with only 46% of firms providing contact details for investment staff, while 30% do not provide any information on their investment strategy.

The verdict is even more dire from companies that are being targeted by private equity: a worrying 96% of business owners said that private equity firms need to improve their communications.

When it comes to social media, the survey highlighted the growing importance of this medium for communicating effectively. The survey found that 82% of business owners looking to raise finance use LinkedIn to research buyout houses. In the LP community, 72% of investors use LinkedIn to find out more about GPs and their team members. For private equity firms, 30% have no idea that social media is being used as a research tool, while only 32% of GP houses have an up-to-date social media strategy in place.

The research investigated 300 private equity firms and found that only 181 have a LinkedIn account, and only 25% link to it from their own websites. Firms with a link from their website to LinkedIn have on average 1,484 followers, while those that do not have an average of 915.

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