PE vs PR

For the most part, the private equity era has not been too unkind for PR agencies. Over the past decade, we have seen an explosion of private equity funding of communications consultancies — reaching a peak in 2023, according to available research.

It was not always easy to understand PE's interest in the PR sector. This is an asset-light industry in which sales cycles and growth patterns can be difficult to discern. The slash-and-burn approach that sometimes characterises private equity investment was never going to work in a business that prizes people as its primary source of revenue. The idea of rolling up separate firms for a short-term sale at an inflated multiple also attracted a similar measure of bemusement.

Any initial aversion has, largely, proved unfounded. PE firms, many of them at the smaller end of the spectrum, have built significant holdings across the communications sector. In this, they have been significantly boosted by the steady exit of traditional agency buyers — namely, the major holding groups — from the agency acquisition game.

But they have also been helped by a relatively thoughtful model that has prioritised long-term investment over short-term gains, one that has developed a credible understanding of how successful PR firms can build for the future. The likes of Real Chemistry, APCO, SEC Newgate and Team Farner have turbocharged their growth thanks to strong private equity partnerships — reflecting the best of the PE/PR model.