Who holds pen on PE deal funds flow?
- Who typically holds pen on the Funds flow for a PE transaction? Sell-side or PE firm/buy side -banker?
- I assume funds flow starts/happens post Due diligence?
- What happens post diligence in a PE deal, is it just legal docs, funds flow, and some other processes like MIFID, CMA....etc? - is there anything major I'm missing?
Thanks.
On 1. Would the sell side banker ever build any parts of the funds flow model? Or it this solely done by the Buy-side & its advisors.
Yes have had sell side banker do this a couple times
This is one of the 'bigger' differences between UMM / MF vs. MM / LMM - in MM / LMM - PE Associate / Senior Assoc (whatever) ends up doing it with some help from maybe lawyer and tax structuring - although this is from the UK. Although, if its a bolt-on / smaller deal - let management team do it (if they are capable).
That said, I have heard some of the larger funds would not show it to buyside banker even as don't want to let them see cash in to try minimise info disclosed (as sensitive to returns).
Ok interesting cheers. Reason I mention is I’m UK and worked on sell side to an UMM/MF in the last year. Their buy-side was a GS/JPM/MS, but for some reason they were ‘in work debt’ as was the phrase at the time. So we the sell side banker, got asked to basically do half (most of) the funds flow and the ‘top IB’ on the buy-side litterally weren’t even shown this. They still got their stock, massive fee. I’m trying to gauge how to talk about this in upcoming PE interviews, when it seems so rare?
I would not really mention it tbh - you're better suited talking about Completion Accounts and Locked Box, and then just explaining (high level) what a funds flow could look like - I don't think anyone would expect you to know in detail.
Maybe different for others but at an MF and usually for us the senior assoc / assoc owns it as well
Interesting that most here are commenting that it’s the associate / sr associate that handled the funds flow. At my UMM fund it’s normally the VP+ and depending on the deal they are going back and forth with the sell-side bank on top of all the advisers
VP+ would defo be involved - but Associate / Sr Associate would need to learn and this is a way to enable that.
@ArgyleFoF What exactly would these discussions between the VP+ and the sell side bank look like.
I've seen a funds flow, but how it the end goal worked out, and what is normally covered in the discussions?
Cheers
Not Argyle but in my experience, it would typically be around the steps and any tax related considerations (e.g., in the UK stamp duty is applicable, so how that may work) and sometimes around management rollover (i.e., where / how do management invest into the structure)
PE Associate, and then the VP “checking” which means jack shit. Only time our buyside banker was involved was so they could confirm their specific fee for doing nothing was going into the correct account. It felt very weird to be documenting where hundreds of millions of $ was going in an excel file that I knew people weren’t truly looking at. Lmao.
In my experience (~$2M MM Fund) it's the buyside private equity firm, full stop.
So no input from sell side at all?
Of course must be some information provision, but is that it?
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