With an increasing number of emerging private equity trading platforms worldwide, it has become obvious that professional investor relations is not just for publicly listed companies. Even though transparency requirements for private companies are still much lower than those for listed companies, there are challenges ahead. While previously targeting a relatively small group of specialized private equity investors, private companies are now facing a very heterogenous audience of private (and, often times, anonymous) investors with very little knowledge about specific industy sectors and business models. Germany´s latest private equity market place, fianc, was launched earlier this week and follows the route of established players in the U.S. like SecondMarket and SharesPost.
It remains to be seen whether the new private equity trading platforms will eventually trigger more stricter regulatory and communication requirements – which, in turn, could mean that being a private company loses its charm. On the other hand, it is an excellent opportunity for private companies to broaden their shareholder base and attract additional capital. According to IR Magazine´s newsletter Inside Investor Relations, some analysts have started to focus entirely on this new market segment. That said, it is obvious that private companies need to re-think and adapt their communication strategies and resources if they want to position themselves successfully on the new trading platforms. Feel free to contact us if you need advice on trading your company´s shares on the private market.