You’re only as strong as your brand name

This is a far cry from our first visits to New York, when most institutional investors could only identify a handful of global funds with activities in Asia. This year, it seemed that the LPs (40% of the audience) knew just as much about private equity in the region as the investment professionals who had come from Asia to tell them about it.

Could this be another sign of the rising power of the Asian private equity? Every LP in the room was interested in knowing more about China and how to participate in its growth. That said, while institutional investors are clearly trying to expand their knowledge of the region, many continue to stick with a select group of tried and tested GPs that have strong brand names.

There is no doubt that firms such as Affinity, Baring and Navis come to LPs’ mind just as readily as the Asian operations of KKR, TPG and Bain Capital. Brand names are also particularly prevalent in country funds – Vogo Fund has become synonymous with South Korea and much the same could be said of Hony in China.

What are the benefits of a brand name besides being recognized by LPs who attend AVCJ conferences? Well, a good brand helps GPs raise funds more easily (try getting a meeting with a US pension fund manager whose never heard of your firm), attract asset sellers more readily (given most shareholders want to participate in the future growth of the company) and recruit high quality professionals.

First and foremost, a brand is built on performance – but it doesn’t stop there. Firms viewed with awe in private equity not only boast upper quartile returns, but also strong working relationships and trust with the institutional investors who back them, the CEOs and entrepreneurs (and workforce) of the companies they invest in, and the legions of lawyers, bankers and media they deal with on day-to-day basis.

The senior executives of these firms (have you seen the line up for our Hong Kong conference, by the way?) should also be seen as leaders by the rest of the industry, helping it solidify its image in the eyes of the public and regulators. Private equity is an industry that thrives on secrecy, but now it is at a crossroads: The industry has its own brand name and it should stand for more than just short-term financial gain.

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• Topics
• LPs
• North America
• People
• Navis Management
• TPG Capital
• KKR
• Affinity Equity Partners
• Baring Private Equity Asia
• Bain Capital Asia