Private placement agent

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Private placement agencies or placement agents are companies that assist fund managers in an alternative asset class (eg private equity, infrastructure, real estate, hedge funds) or self-employed/such as new companies, growth capital companies) that seek to increase private financing through so-called private placements.

Video Private placement agent

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The placement agent acts as an intermediary between those seeking to raise money and various investors who may be interested in investing in a fund-raising company. However, they are usually mandated by fund managers. Some placement agencies are structured as a group in large investment banking firms (eg, HSBC, Credit Suisse, Lazard, UBS Investment Bank) and more often as separate boutique investment banks (eg Asante Capital Group, Campbell Lutyens, Eaton Partners, Stonehaven, Probitas Partners, Rede Partners, Sixpoint Partners), sometimes captured by Alternative Assets management groups or specialist fund marketers (eg OpenCap Global and others).

The placement agent will regularly seek capital from various institutional investors (eg, pension funds, insurance companies, endowments, funding, state wealth funds) as well as family offices and high-value individuals. Some placement agencies have an exclusive focus on the types of institutional investors (eg US Pension Adviser for corporate and public pension funds).

Placement agencies are often compensated through costing arrangements based on the amount of money earned (the cost of success) and backed by funds or companies they are actively representing (retainer fees).

Maps Private placement agent

Function

In the context of fund managers, placement agencies can serve several functions:

• Increase investor commitment to new private equity funds - which may include targeting specific investors completely to full service (consulting and marketing services)
• Other services such as: strategic advisors or secondary market sales of the interests of private equity funds of investors for such placement agents with special secondary market advisory practices.

In the context of private companies, placement agencies typically focus on upgrading the following sources of financing:

• Equity financing for new and emerging companies
• Mezzanine capital
• Specialist financing such as Government loans

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Bibliography

• Wilmerding, Alex. Transaction Terms ISBNÃ, 1-58762-208-4

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References

Source of the article : Wikipedia