This article was first published on benjaminball.com.
Does your Private Equity Pitch Book make prospective LPs sit up or switch off? LPs tell us they want to see simple, clear and brief pitch books, but many they see are the exact opposite.
When we work with clients on their investor communications, there are six questions (amongst others) we ask to test the effectiveness of their pitch book so that we can get them investor-ready.
Score your own Private Equity Pitch Book by answering yes or no to these six questions:
1. Does your Private Equity Pitch Book grab attention on the first two pages?
A strong start engages the LP and sets expectations high. It immediately demonstrates your ability to communicate key facts concisely and get to the heart of the matter quickly, all of which shows respect for the LP’s time and attention.
2. Does a strong narrative run through your Private Equity Pitch Book?
Do you share your journey with prospective investors, to show how your fund’s strategy has evolved over time? Perhaps you no longer invest in a certain sector, have chosen to focus on just a few core sectors or are expanding to additional sectors. However your strategy has changed, crafting a simple yet strong narrative helps LPs understand what you do, why it works and how you’re uniquely positioned today.
“If a GP has been around for a while and has changed their strategy and/or organisation, then I don’t want them to skip over that bit. It’s really important for us to understand the starting point of the GP and how their strategy and organisation have evolved.”
David Punda, Director of Private Equity Investments at Nippon Life Global Investors Americas.
3. Does your Private Equity Pitch Book show, rather than tell?
Do you use news reports, awards, data, imagery, testimonials and case studies to present your fund’s strengths?
So many GPs claim record-breaking past performance and market-beating future forecasts that LPs have become immune to these boasts. Independently-verifiable, objective and third-party sources show your fund’s strengths in a more credible way than if you simply tell investors about them in your own words.
4. Does your Private Equity Pitch Book make it obvious why this investor should choose your team to manage their money?
Your pitch book should make it clear why this investor should pick you out of the hundreds of GPs they hear from each year. What unique trait does your team have that enables you to consistently drive above-average returns? And how does your fund’s strategy align with this LP’s investment mandate?
“Funds need to prove that amongst the managers and the players there is something that makes this team and this opportunity more attractive and transactable.”
Paul Manias, Managing Director at OMERS Platform Investments
5. Does your Private Equity Pitch Book have a clear and compelling Takeaway Message?
Imagine that a colleague asks a prospective LP what your fund is about. The LP has just looked through your pitch book; what do you hope they will say? We call this your Takeaway Message. An effective Takeaway Message sums up your value proposition in a memorable and succinct way. This message should be repeated or restated several times in your pitch book, including at the very end.
6. Is your Private Equity Pitch Book as easy to read as a newspaper?
Strong, active headlines, regular sub-headings and supportive, relevant imagery make your pitch book more appealing to read. If it’s easy on the eye, LPs will give it more time and attention.
Just like a news story, it also needs to be succinct. It’s far too easy to pack in potentially useful information, whether or not it’s relevant for this stage in the process. Instead, identify the key messages you want to get across, and leave everything else out. Remember that an investor pitch book is a marketing document that shows what the opportunity is. It is not intended to be a comprehensive analysis.
“Keep your pitch books light. Leave the detail to be discussed in the second or third meeting.”
Lucian Wu, Previously Managing Director and Head of Asia at Paul Capital Partners
How does your Private Equity Pitch Book score?
If you answered ‘yes’ to all six questions, then congratulations: you are well on the way to having an effective pitch book which will stand out with investors.
These questions also feature in Benjamin Ball's exclusive guide for Private Equity Funds & VC Firms: How to Stand Out with Investors. This free ebook will help you make immediate improvements to your investor pitches and meetings.