Header image

Placement agents: Perfect partners?

Once a private equity firm selects a placement agent, they might be working hand in glove on a fundraise for the next two years. A strong mutual understanding increases the chances of a favorable outcome

For one placement agent, the secret weapon is a Snickers bar. When a North American fund manager’s roster of LP meetings stretches deep into the Beijing afternoon, and low blood sugar threatens to impede his pitching performance, chocolate serves as a restorative and a reminder of home. It is one of many small acts that can keep the placement agent-GP relationship on an even keel during protracted fundraising processes.

“The smaller the issue, the bigger the irritation for many GPs. Is the car waiting for you in the right spot when you’ve finished the meeting or is it parked around the corner? Was there a better flight that could have been booked? Is the hotel satisfactory? Is the breakfast good?” the agent explains. “It’s never just one problem, more a bunch of smaller things – that aren’t directly related to fundraising – nagging away.”

Facilitating a private equity fundraise can be a thankless task. If it goes badly, the placement agent is a natural scapegoat; if it goes well, the manager tends to claim all the credit. Whatever the outcome, there might be some residual bitterness on the part of the GP as to how much the agent gets paid.

Create a free account

  • email Get exclusive content from our leading private markets events and journalists.
  • play_arrow Watch sessions again, download reports and get exclusive data.
  • perm_contact_calendar Connect with an international community of LPs and GPs via our event networking app (event attendees only).