Deal Success Fees (New Platform)
In practice, how often are these types of fees implemented by sponsors upon the closing of a new platform investment? Typical structure / size of this fee? What are proceeds typically used for by the GP? Common limitations in the LPA / Credit Agreement / Management Advisory Agreement / other docs that would restrict their use?
Any feedback or perspectives on the above would be appreciated.
Bump
Bump bump - no perspectives from the community on the prevalence of taking a deal completion fee when a transaction closes?
I guess you are referring to upfront syndication fees? Like a deal is 100m, you put 25m in your fund and create an SPV to manage the balance for co-investors? Then yes, pretty common to charge an upfront fee to co-investors. Debate able if you charge it to your LPs or not.
Usually they're in the range of 0.5-1% of commitment.
That is helpful and in-line with what I would have imagined.
Interesting distinction you draw between fund capital and co investment dollars - is there typically a provision in the LPA that specifies that a sponsor cannot take this upfront fee? Friends and colleagues have indicated firms like Sun and Platinum (among others) often have a fee like this in the closing funds flow.
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