New Report Suggests Private Capital Firm Brands Remain in Early Stage of Development
As private markets firms ramp up efforts to pursue individual investors and their advisors, marketing and communications firm Prosek Partners has released a report exploring the progress the industry is making in its marketing and communications efforts to tap the retail channel and where it still needs to adapt.
“Reaching for Retail: The State of Marketing and Communications in the Democratization of Alternatives,” examines how media is covering the democratisation of private markets over the past 15 months and where private capital brands are breaking through. The report also provides insights from Prosek itself.
“There is a seismic shift taking place in the way private capital firms market themselves to support their pursuit of individual investors and their advisors – and it’s just beginning,” said Jen Prosek, Founder and Managing Partner of Prosek Partners. “The industry is upleveling its brand-building propensity to rival traditional asset management powerhouses that have long benefitted from significant and sustained investments in paid, owned and earned media to garner recognition and preference from individual investors and the advisor community.”
Prosek’s report suggests that education is still the name of the game. Of all media coverage the democratization of private investing has received, nearly two-thirds has shown up in specialist publications aimed at wealth advisors and RIAs.
Risk is covered as much as reward. Media coverage is bifurcated between illustrating the attractiveness of private capital, given the superior returns, and those that focus on potential downsides. Forty-eight percent of articles continue to cite potential sources of risk, with illiquidity cited most frequently, underscoring the importance of educating investors and advisors about the role private asset classes play in portfolio construction.
Traditional asset managers continue to market better, spending more than 5 times their private capital counterparts in brand marketing and communications. They also dominate the advertising space. Furthermore, traditional asset managers are 3.4 times more likely to receive media mentions across all media compared to their alternative asset manager counterparts.
The report shows key considerations for those involved in marketing and promoting private markets firms to the retail channel. Among them are the importance of asset class education as a cornerstone of marketing programs, the need to widen the aperture beyond the advisor community and take marketing programs mainstream as well as the vital role paid social and mainstream advertising channels play in providing the frequency of messaging and impressions required to supplement media relations programs.
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