Private equity as an industry has seemingly gained more exposure in recent years, how does this affect your business?
We participate in the small buyout market (investing in companies with less than $100 million in enterprise value), which as you can imagine receives far less publicity than the mega funds and less than even the middle market. But compared to 10 years ago we probably have to spend less time with companies explaining who we are and what we do, which helps when we’re cold calling companies. You could say the exposure that the industry has received recently has helped educate the market.
Is there pressure at all to get your name out there as a private equity firm?
We don’t view publicity as a way to source a transaction directly. We don’t view it as a core competitency in our industry. But we have acquired a lot companies in the Southeast the last few years and because of that and our networking we have built up a brand that helps us get our foot in the door, but we still don’t view publicity as a core means to building that brand.
What are some of the ways you look to build your brand?
I can’t speak for other private equity firms, but I think the most important thing in building a brand is to have a consistent and focused strategy that defines your firm. At Carousel we’ve been very consistent in focusing on the Southeast and in sending a consistent message to the market since our inception. In the end, that has helped us get our message through to companies.
What are some of the negative effects that this increased awareness of the private equity industry or has had on private equity?
There’s a reason they call it private equity. Many of the companies we deal with are small, family-owned and prefer to stay outside of the limelight. This is particularly true in the Southeast, which is made up of a lot of small communities. These companies are generally looking to do things privately and do not want to read about it in the paper the next day.
Bain Capital recently made news all over the continent with its proposal to buy the NHL proposal. Could the fact that the industry has now been featured on SportsCenter be a sign that private equity is becoming overexposed?
The Bain bid was a fascinating idea and ceratainly has drawn a lot of attention in the media. I think it demonstates to the public the overall force in the economy that private equity has become. Again, I think that it probably does serve a purpose in continuing to educate people on the industry and that will make it easier in the future to ensure private equity is a viewed as a credible alternative for companies of all types.