Acquisition Fees
I know that GP’s ask for 0.5% to 2% on acquisition fees for large institutional deals. Obviously the larger the less the fee but I am looking at a deal where it is purchasable at around $4M. At this level, is it common for GP’s to ask for acq fees? If so what is an appropriate fee? This is my first time potentially buying a deal and wanted to know what people have seem in the past. I know there is no norm in the business world, but wanted to know what was acceptable for a deal that size?
Just be practical about the value you’re providing to your partners in the deal. Consider your track record, and how much work you’re truly putting in. Acq fee should be considered as a payment for your service, and a slight bit of profit. If you gauge your partners it will be viewed pretty poorly.
I've seen between 1-2% pretty frequently. Usually 70/30 split with 8 pref and 1% acq fee, 2% aum fee on capital raised and occasionally dispo fee
Additionally, what are some deal terms for a deal this size? what are your hurdles, if any? Or just keep a simple structure?
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