"broker" fee at close and ongoing management fees

searcher profile

September 12, 2022

by a searcher from University of Pennsylvania - The Wharton School in Indianapolis, IN, USA

When closing acquisitions, I know some US-based PE shops that will pay themselves a "broker" fee funded from deal proceeds and then continue to pay an ongoing management fee.

As a searcher or even small PE shop in the US, is it a common practice to pay yourself a "broker" or "finder" fee out of the closing proceeds and is that paid out of financing proceeds?

If so, what's a common range for said fee, how is it structured and accounted for in sources and uses, and do banks/financing sources generally push back on it or bat an eye?

Cheers!

0
0
96
Replies
0
Join the discussion