Securing capital is an ongoing challenge for many private equity firms. Typically, capital infusions come from institutional investments such as pension funds, sovereign wealth funds and endowments. These investors, known as limited partners (LPs), tend to invest their money in private equity funds in the hopes of receiving a larger, quicker return on their investments compared to other options—such as the stock market. Unlike with traditional investing, LPs are not directly involved with the daily maintenance of managing the fund.
Non-traditional private equity investors are those who deviate from the conventional institutional investor persona, such as high-net-worth individuals and family offices seeking alternative investments. These non-traditional investors have diverse perspectives and unique motivations, which call for a highly strategic, personalized marketing effort to attract them to your firm.
1. Define Your Ideal Non-Traditional Investor Persona
Many personas make up your target audiences, such as founders, traditional investors, financial and business media, and other key stakeholders. If you’re wondering how to find non-traditional private equity investors, the best place to start is by defining exactly who you’re looking to attract to your firm so you can create marketing campaigns specifically tailored to their preferences.
Consider these questions when defining your ideal non-traditional investor persona:
What is the investment minimum? Most private equity funds require a considerable minimum investment, typically ranging from $250,000 to $25 million. This alone significantly narrows your audience and the channels through which you can reach them.
What is the investment timeline? A fund’s investment period is dependent on variable factors such as economic and industry conditions, the strategic goals of the partnership, and the level of growth that can be attained year over year. Typically, private equity firms hold investments for three to five years, but it can be as long as 10 years. Define your projected investment timeline to further shape your non-traditional investor persona. Keep in mind that the sales process for securing investments can take months or even years. Working with high-net-worth individuals is especially delicate since reallocating a huge amount of personal funds is a complex decision for which they’ll likely need to consult with their financial advisor. Factor the sales and decision-making period into your marketing calendar and business plan to manage expectations appropriately.
What motivates these investors? Understanding the unique motivations and goals of non-traditional investors is crucial to your ability to successfully market to them. Extremely high-net-worth individuals are usually savvy business people with complex identities. They’re not necessarily motivated by money alone, so marketing to them is not as simple as lumping them into a box and serving them a campaign with the message that they can multiply their earnings. They have very different goals for their investments than the average person saving for retirement and won’t be susceptible to generic marketing.
To reach these elusive individuals and family networks, you must recognize the importance of market research as well as be willing to commit time and resources to learn about their motivations and discover why your firm in particular is a good home for their investment.
This may involve conducting demographic research, surveys or even one-on-one discussions to identify what unique value propositions resonate with this investor segment. There’s no one-size-fits-all answer to what motivates non-traditional investors because they are so dynamic, as are the investment opportunities that different private equity firms offer.
2. Personalize Investor Outreach & Communication
Private equity firms aren’t the only ones interested in reaching non-traditional investors. You’re competing for their attention against countless other businesses and causes, so personalized communication with your leads is absolutely necessary to make your opportunity stand out.
Your content and interactions should use tailored messaging that speaks to the specific preferences and priorities of non-traditional investors. Highlight aspects of your firm's strategy, values or performance that align with their investment objectives and criteria.
Here are a few examples of how to personalize your communication with non-traditional investors:
One-on-one discussions: There’s nothing more personalized than taking the time to talk with a potential investor one-on-one. If you’re able to have a conversation, prioritize learning everything you can about their interests, existing investments, line of work, motivations and future plans. Then, you can discuss the investment opportunities available at your firm with a focus on how it would directly benefit their situations based on what you learned.
Dynamic LinkedIn ads: Dynamic LinkedIn ads are an incredible tool for personalizing digital outreach. These ads offer the ability to get granular with your targeting by pulling in individual LinkedIn users’ profile data, such as their photo, company name, job title and more to customize the ad experience. Unlike using a general campaign, you can target specific LinkedIn users with a message that was literally built for them and nobody else, allowing your firm to foster a deeper connection.
Email journeys: Many private equity firms already have some sort of email automation in place, yet fail to deliver messages that are tailored to resonate with non-traditional investors. Going the extra mile to personalize email journeys not only improves open and click-through rates, but also strengthens the overall impact of your investor marketing efforts.
You can personalize emails by incorporating recipients’ names, relevant preferences and past interactions with your firm. For example, if a potential investor previously mentioned being highly interested in funds that support medical startups, you can make a point to incorporate content that showcases your capabilities in this space.
Or, if they visited the section of your website about your investment philosophy, you could elaborate on those values in an email to extend the impact of that touchpoint. Leveraging personalized email journeys ensures that each touchpoint feels intentional, ultimately increasing the likelihood that the potential investor will continue to engage with your brand.
3. Engage Your Brand in Non-Traditional Events
Being affiliated with private equity-related associations and events is a great way to connect with founders and traditional LPs and can only help your overall marketing efforts. However, you will be much more likely to find non-traditional private equity investors at functions and within networks that fall outside the usual investment circles.
Make an effort to engage your brand in specialized events that are likely to attract more affluent individuals, such as philanthropic benefits, golf outings and elite conferences. This provides opportunities for direct engagement, relationship-building and networking with individuals or entities outside the typical private equity sphere.
Marketing to non-traditional private equity investors requires a strategic and personalized approach to effectively capture their attention and interest. Defining your ideal investor persona, understanding their motivations and tailoring outreach efforts based on their unique preferences are essential steps in crafting targeted investor marketing campaigns. By dedicating resources to market research and personalized communication strategies, your private equity firm can successfully expand your investor base.