Permian | Marketing
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Marketing

MARKETING

These terms are explained from a general financial point of view, but also with a more particular relationship to the private equity fund industry.

Data Room

Data room is a secure location, these days normally online, used for sharing of confidential information. It is an important part of the marketing process for new funds, but is used in most transactions to document information sharing.

 

In the data room, the manager presents the company and team information in more detail, track record break-downs is important and the fund marketing documentation is also available. Having signed an NDA, potential investors log in to find documentation for their initial table top due diligence.

 

The online data rooms typically offers functionality which makes it possible for the “owner” of the data room, typically the supplier of information, to decide whether or not documents may be downloaded or printed, and the owner will also be able to see by who and when documents have been used.

Fund Raising

Fund raising is the process of marketing the fund towards potential investors and obtaining commitments.

(see Placement agent)

National Private Placement Regulation

The term National Private Placement Regulation is a reference to the regulation in place in every country – regardless of the AIFMD.

 

As an example, as long as Guernsey has not been approved for the Passfort for Marketing under the AIFM Directive, marketing a Guernsey fund in Germany requires a separate application to the German regulatory authorities. If you want to market in Denmark, you must apply to the Danish authorities and so on.

 

The plan is to create a unified regulatory regime throughout the EEA and to make the National Private Placement Regulation obsolete. If so, a fund would either be allowed marketing access throughout the EEA or not at all.

Passport for Marketing

Following the introduction of AIFMD, EU fund managers licensed in their home countries may, by following a simple notification procedure to their national financial supervisory authority and receiving confirmation, market to professional investors in the European Economic Area (EEA).

 

As Norway is yet to implement the full extent of the directive and the EuVECA, Norwegian fund managers can not yet request the use of the marketing passport.

 

The EU is planning to extend the marketing passport to non-EU fund managers. The jurisdictions of USA, Hong Kong, Singapore, Switzerland, Guernsey and Jersey have already been assessed by ESMA, and in July 2015 Guernsey and Jersey were recommended by ESMA for extension of the passport mechanism. Final approval is still uncertain.

 

Placement Agent

In order to expand market presence and to quality assure the fund raising process and marketing material, fund managers may use Placement Agents for assistance through the fund raising period. These companies specialise in raising funds for various types of investments and develop and nurture a large network of potential investors. Placement agents are normally compensated through a mix of fixed fees and a percentage of the committed capital they assist in raising for the fund.

 

Use of placement agents is expensive, but the best offer an inroad into new markets and introductions to new potential investors. They will also offer up to date assistance in the developing and presentation of marketing material to investors.

 

It is common that the fund manager in cooperation with the Placement Agent establish a list of potential investors, or geographical areas, which will not be part of the basis for fees for the placement agent. A Norwegian manager may for example say that Norwegian investors shall not be included. Normally also, repeat investors are kept out of the fee calculation.

 


 

Team

A common reference to the investment professionals working for the fund manager.

Track Record

Track record refers to past performance. Ideally perhaps, the track record of a team which has worked together before. Because people change jobs, it is also common to show the performance of individual team members.

 

Being able to document previous success, is important when raising new funds. Investors always want to review a fund manager- or an investment manager’s track record before making commitments to a new fund.

20151023 - Permian track record