Why do private equity guys need banks for advice on LBOs

Following lol 

They still need bankers to run process

Banks do the “grunt work”

Plus, they need debt/financing commitment. Banks risk $ from their BS to syndicate to institutionals

My guess is that the bankers are gonna do grunt work, help structure more complex deals, ensure proper credit, financing, risk mitigation, etc. while the PE firm works on the actual deal.

So they can pass blame to someone else if things go badly

they are too busy with more important tasks so like to make the bankers do all the grunt work they dont want to do

also helps pass off blame if the investment goes poorly (from their board and LPs)

also helps to build goodwill with the banks for when they need the dealflow access to sellsides they are running and MOST importantly...access to their balance sheet for financing

they arent paying for advice that is for sure (sorry MDs that view themselves are a "strategic advisor", you are really just a process monkey/window dressing to a pe firms lps)

they don’t. they need financing and banks will just claim M&A credit

Maybe it’s not so relevant at deal time but I think I saw a media/blog entry on Apollo’s website that when a new associate was tasked with learning about a new industry he called in the heads of every major banking group in that industry to give him the 101 on the industry. Given that it seems like PE guys appreciate that bankers can have some industry expertise since they have the time/ability to really focus in very well on a niche industry and get to know all the companies and players in that industry front and back. Like I doubt any PE guy knows much about the order-cash BPO industry, but likely there are more than one investment bankers who have been covering that space somehow for a few years if not decades plus and know the companies, CEOs and history and can help with some industry specific stuff if a PE firm wants to invest, maybe at least at the start 

They are ex-analysts, which is a fundamentally different job than being a senior banker. Analysts are monkeys that just run model and turn senior bankers comments / ideas to presentations and numbers. 
 

Senior bankers will have better sense of deal dynamics, other potential bidders, tactics etc. Senior bankers are also constantly meeting with emerging companies and have a sense of the pipeline for deals coming to the market that a sponsor might want to know about. Additionally, on a sell side engagement, senior bankers usually have a significant say who gets invited to the first round, second round, management access, etc. 

In short, PE firms hire IB firms to throw senior bankers a fee for continued deal access and because they use the banks for financing. Bankers can also do some of the grunt work. 
 

When I was on sponsor buyside, we were really just there to provide financing and color on dynamics. 

I mean the answer is they don't really need advice and you're right, they are quite capable of working out what they want to pay. There's much less for bankers to do for sponsors on the buyside, especially if the target is a private company. More of a role to play if it's a public market LBO. Definitely fewer people out there that have experience executing public M&A and there's more scope for value add with relationships (esp. on the board)

Lol PE guys don't need "advice" on how to do an LBO or how to make charts pretty on a presentation.

What they need is for senior bankers to act as a go-between, to outsource work they don't want to do, to manage the lawyers, run DD meetings etc so they can concentrate on the buy side equation such as convincing their investors, selling idea to IC etc. At a junior sell-down level the work output (eg pitchbooks and an LBO model) is certainly just a feed source into some random presentation and a talking point, that's about it.

When I buy a property, you think I need a real estate agent to tell me what the house is worth? But I don't deal with the conveyancing etc