Foley & Lardner LLP partner Gustavo Resendiz assessed the marketing boom in the private equity industry in the Mergers & Acquisitions article, “Private Equity’s New Media Makeover.”
Resendiz cautioned that the risks of making the wrong move in a new communications medium could outweigh the potential benefits. “Generally, we advise our clients to stay away from public statements around fundraising because the consequences of getting this wrong can be so dire,” he continued. “One of the consequences could be rescission, which means you have to pay the money back. The offering could be invalidated.”
He highlighted that brand building through leveraging the latest social media trends works well for retail brands, but private equity requires a different approach. Resendiz noted though that there is value in newer mediums and marketing platforms for the industry, particularly around raising awareness and promoting deal flow.
“It’s one thing to say, ‘Hey, look at our performance. It’s good times all around,’ and another thing to say, ‘We’re looking for great opportunities in these specific sectors. Here’s why we think these sectors are interesting and if you’re an entrepreneur or management team in these sectors, please reach out,’” he added.
