Albert A. van Daalen & Partners are matchmakers between capital seekers and capital providers worldwide

ABOUT OUR FEES

 

The partners of Albert A. van Daalen operate as fee-only matchmakers. This means they give unbiased, professional advice and support that is always in the best interest of the client.

 

Because there is a need to do a lot of upfront work without any exclusivity, our partners are not providing services based on no cure no pay. For this reason, they invoice their services as agreed with the client.

 

Intermediary Fees: retainers, successes & ancillary expenses

 

Fees are an unavoidable aspect of doing a deal. It is also unfortunate that many a deal-maker is very often cagey about the rate they may charge, why they charge a particular fee and how they relate with one another. Fees vary depending on whether the client have engaged a full-service financial intermediary or not. 

 

Retainer/Engagement Fees

 

Often, and sometimes surprisingly, one of the most hotly debated fees in at least the lower mid-market is the client engagement and retainer fee. This fee can either be charged up front as a standard flat fee or is often drawn-out and invoiced on a monthly basis, with at least some larger portion of the fee due upfront. Depending on the depth of experience of our partners, the size of the transaction and thus the amount of up-front work required to take the opportunity to market, retainer fees may range anywhere from € 15.000 to over € 30.000. Sometimes such fees may be exacted up-front, while some partners may allow for monthly invoicing of say € 5.000 to € 10.000 per month. Some partners may provide a refund of at least part or all of the retainer fee upon successful deal closure, but not all.They will typically never go below € 5.000 for a monthly retainer, regardless of the size of the particular deal in question. Those on the lower end of the size spectrum, typically have more of an issue in taking a retainer fee when doing the deal.

 

The following key points outline some of most compelling reasons for paying a retainer fee:

  • It commits the client to the agreed course of action of the intermediary. It’s a way of committing to make it not too easy to walk to another intermediary business, because there is no exclusivity for the search.
  • It helps to cover the intermediary’s fixed costs. Despite what the client may think, the intermediary typically has his own high fixed costs inherent in prepping and working each deal. Retainers are simply a way of helping to assuage the total costs of running an intermediary business that’s highly human-capital-intensive. Also, because it is not possible for intermediaries to know if there will be a positive outcome of the client due diligence (CDD) by the capital provider.
  • It incentivizes the intermediary. If an intermediary and his/her team were working several deals at the same time, with some paying retainers and others not, then those clients not paying the fee will typically become the “if I have time after I serve my paying clients, then I’ll move over to this pro bono case…” 

 

Other upfront and ancillary expenses may be charged with the retainer fee. In addition, expenses inherent to travel, etc. will typically be invoiced separate from the retainer fees, but everything – of course – is subject to negotiation. 

 

Success Fees

 

The amount paid by the client in a success fee, ranges and typically is most dependent on the volume of the case. In generally, intermediaries expect to pay a standard Lehman formula and, if the volume of the case is small, a double Lehman – to help cover the excess cost. Small volumes requiring more human and capital input to get the deal done. 

 

STANDARD LEHMAN SCALE

Minimum

  5% 

of first 1,000,000

Plus

  4%

of second 1,000,000

Plus

  3%

of third 1,000,000

Plus

  2%

of fourth 1,000,000

Plus

  1%

of remaining

 

DOUBLE LEHMAN SCALE

Minimum

 10% 

of first 1,000,000

Plus

   8%

of second 1,000,000

Plus

   6%

of third 1,000,000

plus

   4%

of fourth 1,000,000

plus

   2%

of remaining