Question about how Principal Investing / Merchant Bank Model works

For banks who do Principal Investing in a merchant bank model or another structure, what are the ways they make money? So for a fund you would get a management fee from your investors + carry when the investment exits. For principal investing, is it done like a private placement where you charge a success fee for raising capital to your company rather than investors? Do you charge the placement fee on the capital from your balance sheet/employees too? Wouldn't there be a conflict of interest if you're finding investors for your client (try to get the company a high valuation) but yet you're investing in them yourself (trying to get a low valuation)? And how is money distributed at exit?

I guess I'm just seeing if someone can explain to me how money flows / the parties involved when principal investments are made. Thanks.