Placement agents occupy a unique position within the private equity community, as few other individuals ? and these firms are very much made up of individuals ? spend so much time talking to both LPs and GPs. And this creates the interesting situation of having two clients in any one project: both the fund manager and the prospective investor in that fund. One thing that this three-way relationship requires from the agent is independence, something the teams at the investment banks have to work especially hard at.
Why? Because other divisions in the banks salivate at the prospect of getting to know some of the most prolific groups of dealmakers around. As one agent commented, a back of the envelope estimate saw every $1bn of funds raised by a placement team translating into $200m in fee revenue from M&A, IPOs, restructurings etc. And in these tough times anyone will pay attention to those kind of numbers ? something other agents are cottoning on to as they grow their own corporate finance services.
Agents are an interesting, and increasingly important, part of the private equity community: read all about them in our cover story.
Philip BorelManaging Editor