Measuring the risk and reward of establishing a public profile.

OPEN up, or keep mum? It's never been a big consideration for private investment firm Century Park Capital Partners.

When Marry Jelenko and Marry Sarafa, its co-founders, launched their first fund in 1999, they didn't hire marketing experts to raise the $170 million needed for its coffers; instead they tapped a coterie of former investors and investment banking clients. When it came time to make a formal announcement, they simply issued a press release and did a couple of interviews with some private equity trade publications.

Not much has changed.

"You're a private entity and you deal with private entities," said Jelenko. "You have to be circumspect when dealing with the press. And the kind of investors you want will throw a blind brochure into the trash. So publicity and marketing takes on a different meaning."

Garnering attention of any kind is a mixed bag for private equity firms. Publicizing a big deal or an investment in a well-known firm can help a new or obscure operation boost its profile and expand its "dealflow" pool of potential targets.

Gores' Technology Group's 2001 acquisition of the floundering Learning Co. from Mattel Inc. helped bolster its cachet as a major player in the world of distressed tech buyouts.

But Clayton, Dubilier & Rice, lionized during the 1990s thanks to the successful turnaround of printer-maker Lexmark, later felt the sting of bad press from a string of poor-performing investments in Kinko's Inc. and the now-defunct U.S. Office Products.

Weighing the potential rewards of publicity against the risks it presents has left many private equity firms choosing "no comment" when the spotlight is shone on them.

Among L.A. firms known for their tightlipped manner: Canyon Capital, whose assets include downtown's Transamerica Center, and Robert Bass protege Tom Barrack's Colony Capital, the distressed real estate investor.

Picking spots

"My advice to clients has always been that if there is no good reason to reach out to the public, they shouldn't," said Owen Blicksilver, whose Long Island, N.Y., public relations firm represents Colony. "Their limited partners aren't going to pay attention anyway because they're more concerned about returns than about press clips."

Yet marketing and public relations isn't totally off their plates.

A subsector of the PR industry has emerged to get the word out to those outlets that carry weight in the industry, including investor trade publications such as The Daily Deal and Buyouts.

Besides Blicksilver, that group includes Citigate Sard Verbinnen, which represents Forstmann Little, and Broadgate Consultants, which does work for Clayton, Dubilier and others.

Communicating with other dealmakers and potential acquisition targets is a different matter altogether. Working old contacts remains the coin of the realm, but poor performance among institutional investors' existing private equity investments, over-allocation of pension fund investments in private equity and the collapse of the dot-com bubble have made fund raising a tough proposition, forcing the old boys net work to add a few new tricks.

Private equity and venture capital firms raised just $44 billion last year, compared with $59 billion in 2002 according to Private Equity Analyst, a publication of Thomson Financial. To reach out to potential deep pockets, a cottage industry of professional fund-raisers has emerged to lend a helping hand.

Such firms, including divisions of investment banks like Credit Suisse First Boston and New York-based independent Probitas Partners, will make calls on behalf of these firms for a fee, sometimes a percentage of future profits, or carried interest.

Some fund managers have opted to bring that function in house.

Cold calling

Using marketing to position a firm so that it's known in the investment community has increased in importance, as competition among private equity firms for a limited pool of deals becomes keener.

Calling the investment banks, usually the gatekeepers on deals, is the first order of business. Other marketing components are attending industry trade shows or serving on panels at conferences, such as those held by the Association for Corporate Growth, a group whose membership includes a large contingent of coveted family businesses.

For firms already targeted, private equity firms will often trot out executives from their portfolio of companies. Occasionally, fund investors will make themselves available for testimonials.

Then there are those press releases.

Jelenko said he was introduced to one firm, agricultural operation Becket-Underwood, after its investment bankers found a copy of Century Park Capital's first press release. After a couple of meetings, topped off with talk about Big 12 college football (Iowa State University is in Ames, Becker-Underwood's headquarters city), Century Park struck a deal to buy a minority stake in the company.

"Press releases do work, sometimes," said Jelenko.