In private equity, the quality of assets acquired dictates performance. But finding quality targets amid fierce competition and macro uncertainty is an uphill battle. That's why market-leading firms are complementing traditional business development with content marketing programs to drive proprietary deal flow.

This article explores how firms can capitalize on digitization trends to attract off-market opportunities.

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The Importance of Proprietary Deals

A McKinsey research indicates that deals obtained through private sources offer more chances for value creation than auctions, despite their higher entry valuation spreads and the reduction of returns due to elevated entry multiples.

Yet only 38% of respondents in McKinsey's 2021 Private Markets Review sourced >40% of deal flow directly. This leaves gains on the table.

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Content Fuels Proprietary Deal Origination

Proactive outbound business development drives private equity's bread and butter deals. But earned media offers creative firms an edge.

Owned media platforms demonstrating sector expertise establish credibility with founders and management teams. Companies approach potential deal partners that showcase knowledge of their space.

Sharing valuable knowledge also drives unexpected agreements. Information is discovered and shared naturally, establishing a foundation for future possibilities.

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Digital Trends Changing Marketing

Privately-held middle market companies increasingly embrace content marketing. Strategic acquirers in PE can capitalize on this shift by adopting innovative tactics themselves.

Consider that:

• 70% of B2B leaders now prioritize digital marketing
• 61% of PE investors say online presence impacts deals
• 80% plan to maintain or increase content budgets - Demand Metric

In practical terms, this means PE firms should:

• Publish more online articles, guides and videos demonstrating operational and financial acumen to attract potential targets
• Leverage multimedia formats like webinars and podcasts favored by tech-savvy founders
• Cultivate organic search visibility through SEO to get content found by relevant companies
• Engage users through social media by sharing insights and participating in discussions in relevant online communities
• Utilize paid media like promoted posts and targeted ads to expand reach
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Differentiate With High-Value Content

With business models and software enabling media creation by anyone, setting yourself apart with quality and usefulness is essential.

Consider these content areas that provide value-added insights:

Domain Expertise Articles

• Trends impacting specific verticals
• Emerging technologies set to disrupt incumbents
• Market sizing data and growth projections
• Profiles of innovative companies shaking up sectors

Operational Playbooks

• Framework for diagnosing pain points
• ROI analyses of new systems/tech
• Change management best practices
• Culture integration of merged companies

Financial Modeling Guides

• Budgeting and forecasting templates
• Benchmarking industry KPIs
• Dynamic valuation methodologies
• Blueprint for SaaS metrics
• 
  

This thought leadership positions firms as trusted advisors. It seeds relationships with future deal targets and builds quality in-bound deal flow.

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Content Underpins Successful Exits

Crafting quality collateral to showcase assets also unlocks value. Marketing materials like investor decks, company profiles, product demos and case studies help buyers conduct diligence during exits.

Inadequately documented or presented agreements can greatly reduce exit profits.

However, informative material about factors that drive growth captures interest. It also sustains exclusive opportunities for business expansion when utilized in outbound development.

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In Summary

Firms eager for deals and seeking high-quality assets in uncertain times can boost their business development through innovative digital marketing strategies.

Content marketing in private equity builds trust, uncovers potential opportunities, and increases the value at exit. Integrating this inbound method with outbound sourcing and networking initiatives ensures a thorough approach.