GP trAnsPArEnCy
Open, for business?
Many of Europe’s most prolific later stage investors have some way to go before
they can consider themselves truly transparent, writes Matthew Craig-Greene,
managing principal at IE Consulting
Europe’s private equity firms have set great store in achieving active investors (but more on that next month). With the premise that the
transparency, judging by the efforts they have made in recent years. Perhaps first port of call for any LP, journalist, business owner or intermediary with
fairly criticised in the past for the secrecy with which they conducted their an interest in a particular GP would be its website, we expected to find that
investment activities and their reticence to disclose information, industry most GP websites would provide decent access to information. We were
bodies have worked hard to help their members satisfy the requests, and wrong. Don’t forget that these are the 25 most active European investors…
demands, of governments, regulators, the press and the wider business Of vital importance to any GP that raises capital from institutional investors
community. But the defensive posture taken by the industry in the face of is its relationship with LPs (and not just with those already invested in their
such widespread interest brings with it a risk: are GPs properly grasping the funds). While fewer than half of the GPs investigated provided access to a
opportunities that this new, albeit enforced, openness affords them? Are they dedicated LP site from their homepage, every UK-headquartered GP provided
communicating because they want to or because they have to? And how easy at least some basic information on their funds and the breakdown of current
is it for an interested party to find out what they want to know? investors; more than a third of their continental peers did not (see chart 1).
In a recent study of the most active buyout and growth capital investors Next, we tried to see how accessible GPs had made their investment teams.
(January 2006 to March 2010 inclusive) in Europe, IE Consulting analysts As one would expect, every GP clearly listed their investment executives. But
researched the volume and type of content readily available on GP websites. some seemed to have gone to great pains to make these individuals, having
We looked at the websites of the top 25 investors and we are now looking declared them, inaccessible. Now, clearly, investors have communications
at every individual press release (more than 500 and counting) of the most teams for a reason, so that they can focus on finding and doing deals, but
Chart 1 – Access to fund/LP information Chart 2a -– Investment individuals at continental GPs
Continental GPs with No contact details
dedicated LP site
Contact details
UK GPs with
dedicated LP site
36%
Continental GPs with
basic fund/LP info
64%
UK GPs with
basic fund/LP info
0% 20% 40% 60% 80% 100%
Source: IE Consulting reseacrh Source: IE Consulting research
20 Private Equity Europe / Issue 115 April 10
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GP trAnsPArEnCy
providing some way for interested MBI candidates or business owners to take dedicated external communications teams that serviced their firms. Surely
up direct contact has to make sense. If a direct line (to a PA, perhaps) or even every leading GP must have appointed someone external to the business to
email is too “invasive”, then why not just provide a simple, individual contact execute a communications strategy, even if that strategy is managed in-house,
form for each deal exec (as 3i does)? and why protect them from inbound enquiries? Pleasingly, the vast majority
Two-thirds of UK GPs, almost twice the proportion of those in of GPs did provide details of specialist in-house communications resources,
continental Europe, provided this level of accessibility and I suspect it pays many of them providing more than one named contact (see chart 3).
dividends (see chart 2a, 2b). Next month, we’ll be taking a closer look at the information GPs release to
Remarkably, most GPs didn’t even provide contact information for the press. It makes for interesting reading! n
Chart 2b – Investment individuals at UK GPs Chart 3 – Number of named communications contacts
Continental GPs -
No contact details Internal contacts
Contact details UK GPs -
Internal contacts
36%
Continental GPs-
Agency contacts
64%
UK GPs -
Agency contacts
0% 20% 40% 60% 80% 100%
Multiple contacts
No contacts listed One contact listed listed
Source: IE Consulting research Source: IE Consulting research
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