Transaction fees for private equity transactions apply for fundraising as well. Our fees follow clear market standards, while we try to be flexible in terms for our clients to find a solution that works for both sides. The base of our offered fees is always the so called “Modern Lehman Formula” or “Modern Lehman Scale”. It is simple to calculate:
- 10% of the first EUR 1 million, plus
- 9% of the second EUR 1 million, plus
- 8% of the third EUR 1 million, plus
- 7% of the fourth EUR 1 million, plus
- 6% of the fifth EUR 1 million, plus
- 5% of the sixth EUR 1 million, plus
- 4% of the seventh EUR 1 million, plus
- 3% of the eighth EUR 1 million and everything above.
Note: This scale resulted in an 3x adjustment to the original formula (from the 70’s), vs 6x for inflation and implies that transaction services actually became almost 50% cheaper over time, which makes hiring of transaction service provider (like us) more attractive today.
Depending on the complexity, transaction size and naturally stage of the companies, we arrange retainers between EUR 2,500 to EUR 15,000 per month, for an average of 6 months, where all payed fees will be deducted from the final success-fee which is usually based on the total transaction value. On fully success-based deals a premium to Modern Lehman Scale will be agreed.
An average percentage – based on the formula above – may be agreed for a specific target fundraising size.