Private Equity: A Failure to Communicate?

It appears that private equity firms — in both Europe and the U.S. — are suffering from an insufficiency of public relations.

“Private equity has reached a ‘critical point’ in Europe and needs to act fast before Brussels imposes legislation on the industry,” says Jonathan Russell, managing partner and global head of buyouts at 3i Group PLC and the new head of the European Private Equity and Venture Capital Association (EVCA), in a recent interview in the Financial Times.

Private equity firms are facing sharp criticism in Europe, where at least one leading politician has branded them “locusts.” In the U.S., they are loath to publicize returns and fiercely guard the specifics of the companies they own, despite demands from media and political groups for more transparency.

Russell admits that private equity’s own failure to communicate is partly to blame for the political backlash. “We have a fundamental gap here,” he says. “There is an impression of private equity born out of partial knowledge and some prejudice around that, some of which has roots in reality, but a lot doesn’t.”

Several of my clients in New York City are private equity firms. Through strategic PR, we have found a way to bridge the gap between secrecy and transparency to find a happy medium that works for all parties.