It's good to talk: PE's communication imperative

The last issue of AVCJ featured a cover story on investor relations and how GPs in Asia are devoting more resources to effective engagement with LPs in response to heavier reporting requirements and a challenging fundraising environment. But proper communication is not only an important issue within the investor relations function: private equity firms must also craft their message for other GPs, governments, businesses, professional advisors, potential targets and the general public.

This is particularly pertinent issue in Asia, where our volatile markets, changing governments and conflicting views put a premium on the timely transfer of accurate information. While there are multiple channels to consider, I want to focus on communicating through the media - which in itself comprises multiple channels - given that is AVCJ's area of expertise.

In general, I have found that the industry's view of engaging with and through the media has changed markedly in recent years, and for the better. With a few notable exceptions, GPs have become more willing to share their views on the market in the pages of this magazine and also to address to market information regarding their portfolio companies. While some prefer not to be quoted, most will respond. Compare that to a decade ago, when GPs really stressed the "private" in private equity.

As one might expect, there has been a similar evolution in attitudes towards speaking at conferences. GPs are increasingly open to participating in public discussions - and not only for marketing purposes when in the midst of fundraising. While many stick to topics specific to their business, others see the value in taking more of a leadership role and addressing issues relevant to the greater industry. This is important because there will likely always be something of a herd mentality to private equity; if leading firms offer insights into their success stories and outline the challenges particular to them and to the broader GP community, it has a trickle-down effect that will benefit all.

Just like many conglomerates, private equity firms compete against for deals - or sell assets to one another - and the larger GPs control not only vast amounts of capital but also thousands of jobs. They are easy targets for public and regulatory criticism in difficult times, especially when those taking the potshots do not have a clear understanding of what private equity is or how it functions. It goes without saying that the industry would benefit from clear and consistent communication, rather than rushing to respond to problems after the fact.

Readers may recall an incident several years ago when I told the story of one institutional investor who believed there was little value for him in attending events run by AVCJ or its competitors in order to listen to GPs speaking on stage. He argued that he was familiar with those already in his portfolio and could reach out in private if further information was required. Since then, that LP, and perhaps others in his organization, have changed their views; he is now a regular at our events.

There are a number of reasons why LPs can benefit from participating in industry events, and perhaps the most compelling one is relevant to GPs as well. AVCJ's forums have never been purely about GPs engaging with each other and with the LP community, although this remains a large part. Government officials, corporate executives, politicians and the media usually number among the delegates, and open forums are the ideal setting for thought leaders to come together and communicate with a wide variety of stakeholders.

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• AVCJ Events