The placement agent acts as an intermediary between those seeking to raise money and those who may be interested in investing. They are typically mandated by fund managers. A few placement agents are structured as groups within large investment banking firms, but more frequently as separate boutique investment banks, sometimes captive to an Alternative Asset management group or specialist fund marketer.
Placement agents are most often compensated through fees based on the amount of money raised (success fee) or supported by the fund or company they are actively representing (retainer fee).
Functions
Within the context of fund managers, placement agents can serve several functions:
Raise investor commitments to new private equity funds – which might include targeting specific investors all the way down to a full service (advisory and marketing services).
Other services such as:
Strategic advisory
Marketing: creating marketing materials such as investor decks, coordinating roadshows and meetings with investors, answering due diligence questionnaires (DDQs) and request for proposals (RFPs)
