Three years ago I wrote a piece asking a simple question.
If private equity understands value better than almost anyone, why doesn't it understand the role brand plays in creating it?
I had hunches, not an answer. It nagged at me on enough flights home from enough meetings that I put it out there, half expecting to be told I was being naïve.
Then Benedict Johnson, Ian Whittaker and Rory Sutherland published Goodwill Isn't a Rounding Error. It's the most rigorous account I've read of why brand goes missing from the value creation plan, and it answers the question I couldn't. If you have twenty minutes, read theirs first.
What follows builds on their work, but through the lens of what we've seen inside PE-backed businesses over the last decade.
The asset everyone pays for and nobody manages
Start with their numbers, because they’re hard to argue with.
Intangibles now make up around 92% of S&P 500 market value (Ocean Tomo, 2025). PE is paying record entry multiples, 11.8x EBITDA in 2025 (McKinsey), for businesses whose worth sits mostly in things you can’t touch: trust, reputation, pricing power, the position a business holds in a buyer’s mind. Then, having paid for those assets, almost all the post-deal attention goes to the operational tenth that’s easy to measure.
Whittaker puts the mechanism better than I can. Brand “is not ignored. It is unmodelled.” It lands in the accounts as a cost the year you spend it. The return shows up three to five years later, in pricing power and lower acquisition costs, in places the model doesn’t reach and often after the hold has ended. So the spreadsheet does what spreadsheets do. It rewards the cut that lands this quarter and quietly defers the investment that compounds. Sutherland’s verdict: a category error wearing a spreadsheet.
That’s the gap. And it’s worth real money. Ferrari trades at 25.8x EBITDA. Aston Martin at 2.9x. Same cars, same heritage, same wealthy customers. One held its identity and discipline. The other got sold and rescued more times than is dignified to mention. The market priced the difference, and brand is the variable.
What it looks like from where we sit
We’ve watched this from the inside for over a decade, on more than 10 PE-backed projects.
The pattern barely changes. We’re called in late, with a scope too narrow to fix the actual problem. The business has grown by acquisition, top and bottom line climbing nicely, and every deal bolts on another layer of products, names and stories. The balloon fills with air until it bursts. Sales teams can’t navigate their own portfolio. And if they can’t, the customer has no chance, so the customer goes somewhere easier to deal with.
That’s a business problem, not a comms tidy-up for the data room. A company that’s hard to understand is hard to buy, hard to sell and hard to value. Brand, done properly, is the discipline that keeps a fast-growing business legible: the architecture, the naming, the positioning, the story a buyer can believe. That’s why we keep saying brand strategy is business strategy. We mean it literally. It’s a description of where the value leaks.
One of our own examples
In ten years I can point to one that did. EWOS, the aquaculture nutrition business, ran a brand architecture and naming programme before going to market. Years of decentralised marketing had left a fragmented portfolio, so we consolidated it into a single branded house, simplified the offer and aligned the global teams behind it. In 2015 its private equity owners, Altor and Bain Capital, sold it to Cargill for around $1.5 billion, roughly double its 2013 value. The client’s own view, not ours, was that the clarity contributed meaningfully to that outcome. It made the business easier to understand and easier to buy, and that changed the conversation a strategic buyer was willing to have. Johnson tells the same story on The i newspaper (£24m to £49.6m in three years) and on Refinitiv ($20bn to $27bn). Same data, engineers and customers. The difference sat in how the business was understood.
What to do about it
The fix is simple enough. It’s just earlier than the current playbook allows.
Bring brand in at diligence, not as a coat of paint before exit. Johnson, Whittaker and Sutherland call it brand due diligence, and they’re right. Price what the brand is worth in pricing power and ease of acquisition before the deal closes, and you stop overpaying for an asset that’s already eroding.
Treat brand investment as a capital allocation decision with a projected return, not a marketing line to be trimmed when times are tight.
Track the things that actually signal it through the hold. Realised price against the category. Acquisition cost on branded versus unbranded channels. Whether your own people can explain the portfolio in a sentence. Most portfolio companies could produce those numbers within a quarter. Almost none do.
And build the exit story from day one. The brand a strategic buyer pays a premium for can’t be assembled in the data room. It has to have reached its audience by then.
The point
The trajectory is set during the hold, and the next buyer pays for the trajectory. Brand is the lever that’s been sitting in the room the whole time.
If you’re holding a business that grew by acquisition and is getting harder to explain to its own sales team, that’s not a tidy-up job for later. That’s where the value is leaking now. It’s the kind of thing worth a conversation early, while there’s still time for it to compound.
That’s the conversation we’d like to have.
Further reading
This article builds on Goodwill Isn't a Rounding Error by Benedict Johnson, Ian Whittaker and Rory Sutherland (Aha Partners).
You may also be interested in our earlier article, Why doesn't private equity value brand?, which first explored many of the questions discussed here.