What’s a solid transaction volume for debt placement shop?
Joining a team that’s on track to do 2.5 B this year and I’m not sure if that’s solid or if there’s teams doing 10x that. It’s not a brokerage btw. They are affiliated with a bank. Thanks!
Sorry updated: misread the topic, regardless thats a pretty good size.
That's solid
100% depends on the broker and staff headcount. Assuming an average % fee of 35bps that's ~$9MM of revenue. Most large brokerages (JLL/CBRE/C&W) take a 50% cut off the top which leaves ~$4.4MM of revenue for the brokers. If it's 1 - 4 guys that's pretty good but if there are like 10 broker mouths to feed that's not great. You really have to look at it from $ / broker basis. You also have to look at staff count / broker to get a sense on how much fat is left over as analyst bonuses.
You also have to look at average transaction size. If they're doing an average deal size of $50-$100MM the fee is going to be 25-50bps; however if they're mostly closing smaller deals the average fee will be closer to 75 - 100bps.
This is all spot on^. I would add that if a majority of that $2.5B is Agency business the average fee might be a little higher.
Of that 50% the company takes, do they use that to pay the analyst, associates, etc? Or does the $4.5M in this instance the broker received to be his support team?
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