“The Association for Corporate Growth (ACG), the premier authority on corporate growth, corporate development and mergers and acquisitions, [hosted] the European Capital Tour in Paris, Amsterdam and Frankfurt [October 8, 9 and 10, 2012]. The tour, ACG’s first in Europe, [focused on developing] conversations between US private equity and dealmakers in the European middle market. It [built] on ACG’s established Intergrowth event held annually in the US”, as EU-based middle market advisory firm Majunke Consulting has reported on their blog.
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Distance creates challenges
As continental Europe and America are more than a few time zones away, it is imperative for US private equity investors to consider three options for securing more deal flow out of Europe – to help bridge the Atlantic.
Establish an EU-focused proactive social media initiative
Establish and maintain a comprehensive social media initiative focused on your target audience: The European Middle Market. The centerpiece of this engagement, should be relevant, up to date content via blogging.
Seventy-six percent of [corporate general counsels] say they attribute some level of importance to a lawyer’s blo when deciding which law firms to retain, as Kevin O’Keefe, CEO and Publisher of LexBlog, Inc., a Seattle-based company providing blogging services to over 6,000 lawyers and legal sector professionals, reported recently. This figure is important for middle market investment banks and private equity groups as well. Those corporate general counsels and other senior management of middle market companies are now increasingly turning to blogs and other social media sources for news and information about issues of importance to them, including where to secure sources of equity, debt, sell-side and buy-side advisory assistance, valuation and restructuring services, and more. The distance between the US and the EU makes this effort even more attractive an option.
American middle market investment bankers already blogging include Allegiance Capital Corporation of Dallas, Texas, and Corporate Finance Associates of Laguna Hills, California. Among private equity groups, New York’s Health Point Capital actively blogs.
Establish an EU-specific proprietary deal origination effort
David Teten, a partner with ff Venture Capital, outlined the Five Best Practices In Sourcing Investments in Business Insider last year. Among his recommendations are: Build specialized outbound origination programs [using] customer relationship management (CRM) systems to efficiently manage prospecting. There are a number of excellent proprietary databases which provide detailed information on EU companies broken down by geography, revenue, ownership structure, sector – and which provide contact information for corporate management teams.
Putting in place a system to directly contact these companies instead of just relying on referrals from overseas, will place you in greater control of the volume and quality of deal flow you will secure from Europe. Importantly, this effort can be operated from your North American headquarters – or remotely, by deal origination professionals retained by your firm. Again, the digital economy has made these effots easier and more cost-efficient.
Establish an EU deal origination presence
By establishing a representative presence on the ground in the EU you will ensure that you will be maximizing your other efforts and contacts developed among EU-based middle market advisors and other deal flow sources. This effort is a cost effective and efficient means by which to secure deal flow without establishing a branch office in Europe. A single deal origination professional working remotely, will be in a position to secure significantly more proprietary deal flow from Europe that you would not have been exposed to without that presence. I have written about this concept as it applies to law firms, and the same principle applies to middle market advisors.
Bridge the Atlantic
Implementing all three or just one of the initiatives which I have outlined above will provide your firm with a competitive advantage as you seek to secure EU deal flow from from your North American headquarters. They are both cost efficient and effective — and if implemented properly, will yield a greater quantity and quality of deal flow from the EU that you would not have secured were it nor for these efforts.
Filed under: DealOrigination, European Union, Funds & IBanks, Social Media Image may be NSFW.
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Image may be NSFW.Clik here to view.
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Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
