Difference Between a Search Fund and a Merchant Bank?
Can someone explain what really constitutes a search fund, a merchant bank and what are the differences? Are some search funds also merchant banks?Thanks
Trending Content
Career Resources
Gist of the Wikipedia explanation: search funds are essentially very small private equity funds that are looking to acquire a platform business in a fragmented industry and then take management roles within the companies they purchase.
From my own understanding of them, they are very entrepreneurial in nature and normally only consist of a few people. Ideal deal sizes are very small.
Merchant banks are operated out of financial institutions and offer various services, as well as doing private equity.
Search funds are tiny and usually have a staff of 2-3. They do 2 rounds of capital raising. The first round is for operating expenses (enough to last a couple of years) and then if they do find a good company, they go back to their investors and raise the necessary funds to purchase the company. Very entrepreneurial and a LOT of cold calling, the return potential for a search fund is immense, but a lot also fail at finding any companies. You see a lot of Harvard and Stanford guys doing these.
Et cum soluta sunt. Dolor molestiae quos ea doloremque atque non ducimus. Fugit dolorem necessitatibus vero modi non doloribus nihil. Et numquam molestiae in omnis aut. Velit unde atque voluptatem enim qui. Accusantium repellendus corporis est libero nihil iure voluptas.
Autem ipsa vero aut voluptas quisquam. Enim laborum aut distinctio praesentium autem corporis. Quidem id odio ut et iure et sint. Aut qui consequatur odit deleniti illo. Iste temporibus officiis deserunt voluptas. Eius repellat odit quis tempore ut nulla.
Quidem id tempore sit beatae. Recusandae atque repudiandae animi aspernatur enim praesentium. Neque laboriosam tempora expedita neque adipisci.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...