Advisory Fees
What percentage of the deal's value do banks usually take in advisory fees? I've read that it's anywhere from .1-1%...does anyone have any insight?
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I think .1% is pretty low... All depends on the size. I've read that capital raise (IPO, secondary, etc) are 3-8%. The bigger the deal, the lower the percentage. I think 1% is a rough estimate for deals 200m and above.
So a $10 billion dollar deal would rack up about $100 million in fees? Does that sound reasonable?
Well on a $10B deal - equity or debt - there'd probably be at least 4-5 banks if not more. At 0.5%, that's $50 million, so ~$10M per bank on average...not so unreasonable. I think $100M is sort of unheard of....unless we're talking LEH ch. 11.
Thanks. This is off-topic, but how do the logistics tend to work on a deal where there are 4-5 banks working on the same thing?
M&A advisor fees are between 3~5%, and a common way of pricing the fees is called the Lehman rule... or Lehman Rule x 5 these days
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