Reputation as a commercial asset: lessons from private equity

Private equity has long prided itself on rigour. Every lever of value creation is identified, modelled and measured. The data drives the decision. It is a sector that moves fast, acts decisively and does not tolerate ambiguity about what success looks like.

When Taylor Birchwood, working with Nepean, interviewed communications leaders across a spectrum of private equity firms – from global listed houses to mid-market players – we found a sector that understood the value of reputation in theory, and was failing to capture it in practice.

The numbers tell a clear story

82% of the communications professionals we spoke to said they viewed reputation as a business enabler. Most were expecting their budgets to increase. The case for investing in communications and reputation was not in dispute.

And yet only 12% had a programme in place to measure reputation in any meaningful way. With a single exception across all the firms we researched, there was no measurement connecting the communications function’s activities to the business metrics that actually matter: deal flow, talent retention, cost per hire, capital raised.

The gap between those two data points – 82% believe in reputation’s value; 12% measure it – is not a minor inconsistency. It is a structural problem that limits both the contribution the function can make and its ability to make the case for the resources it needs.

Why reputation matters more in PE than it might appear

Private equity is no longer a private sector in any meaningful sense. The largest firms have expanded far beyond traditional buyout models into private credit, infrastructure, insurance and retail investment. With that expansion has come scrutiny: from regulators, politicians, media, and the management teams of potential portfolio companies who are now in a position to choose their capital partner.

In that environment, reputation has direct commercial consequences. A firm with a strong reputation will be more attractive to institutional investors, given more benefit of the doubt in a crisis, and more likely to win competitive deal processes where the CEO of a target business has a genuine choice. Equally – and this is the talent dimension that many PE firms underestimate – a better reputation gives you an edge in recruiting the people the whole sector is competing for.

The historical problem: communications as defence, not investment

The opacity that has historically characterised private equity’s approach to communications was not accidental. Flying below the radar, shutting down criticism quickly, and keeping the business out of the press were strategies that worked for a long time.

The consequence is that the sector’s narrative has largely been written by others. Stories that do reach public attention tend to revolve around themes that don’t flatter the industry. And even among sophisticated audiences familiar with how private equity operates, perceptions are not consistently positive.

The industry has, by its own admission, significant ground to make up. Our research found communications functions that are a decade behind their equivalents in listed corporate organisations in terms of sophistication, measurement capability, and strategic integration. That gap is closeable, if firms are willing to invest in closing it.

The shift that’s already happening

The good news is that the direction of travel is clearly positive. The calibre of communications professionals entering the private equity communications sector has increased significantly. New hires are arriving with experience from listed corporates, government and blue-chip agencies, and bringing with them an understanding of what mature, strategically integrated communications looks like.

Where the transformation is stalling is in the conditions those professionals are arriving into. In many firms, communications is still perceived as a tactical function – focused on media coverage, seen as a cost rather than an investment, and excluded from the strategic conversations where its contribution would be most valuable. The talent is there; the infrastructure to deploy it isn’t always.

What good looks like: lessons worth applying more broadly

The best-performing communications functions we encountered in our research had a number of things in common and their lessons apply equally to CCOs in listed companies, portfolio businesses and beyond.

They had moved beyond output metrics. Media coverage, social engagement, and website traffic are useful indicators, but they are not evidence of reputational impact. The functions leading the field had begun linking activity back to business outcomes: talent acquisition costs, investor sentiment, regulatory relationships, deal flow.

They had made reputation a formal risk and governance issue. In one firm, communications was required to update the monthly risk committee on the reputations of portfolio companies, the steps taken to mitigate risk, and the resource required to manage a potential crisis. That formality and accountability is what gives reputation the standing it deserves in a risk-conscious organisation.

And they had hired the best people, trusted them, and given them genuine proximity to strategic decision-making. That combination – talent plus access plus organisational credibility – is what enables a communications function to move from protecting reputation to building it.

The opportunity ahead

Private equity has demonstrated, repeatedly, the ability to close performance gaps quickly when it recognises them. The reputation gap is recognised. The talent to close it is arriving. What remains is the organisational will to invest in measurement, to integrate communications into strategic governance, and to treat reputation not as a risk to be managed but as an asset to be maximised.

For the firms that make that shift, the commercial upside is real. A stronger reputation is a magnet for the capital, the talent, and the portfolio relationships that drive long-term returns.

Taylor Birchwood’s Soft Capital report examines the role of reputation in private equity in depth — including what the best-performing firms are doing differently. You can read the report at taylorbirchwood.com.