Advisor fees: sell-side vs buy-side
The sell side advisor has the longer process, so I imagine they always get a larger cut (given the buyside advisor doesn’t do a flat fee) want more insight to how these fees can look
The sell side advisor has the longer process, so I imagine they always get a larger cut (given the buyside advisor doesn’t do a flat fee) want more insight to how these fees can look
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Very deal dependent. Sell-side fees are typically structured with a ratchet that (somewhat) exponentially improves the advisor's economics as the EV increases above an agreed-upon base fee. Buy-side engagements are typically structured as a set fee (i.e. the client is not paying the advisor if they somehow achieve a lower EV than expected) and are success based (just like sell-sides), BUT usually include a retention-style component as well given they are higher-beta. In terms of % of EV, I have seen buy-side fees that are larger than the corresponding sell-side advisory fee on the same deal, but that is largely a function of the asset being sold for less than the seller anticipated (and thus, the sell-side banker not getting into their ratchet). In general, sell-side fees tend to be higher.
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