Private Equity Finder's Fee Agreement Template for England and Wales

A Private Equity Finder's Fee Agreement is a critical legal document that governs the relationship between private equity firms and individuals or entities who introduce potential investment opportunities. Under England and Wales law, this agreement establishes clear terms for success-based compensation while ensuring compliance with stringent financial services regulations.

When do you need this document?

You need this agreement whenever engaging external parties to source private equity investment opportunities. This includes scenarios where investment advisors, business brokers, or industry contacts introduce potential portfolio companies or co-investment opportunities. The document is essential when establishing relationships with professional introducers who expect compensation for successful deals, particularly in sectors like technology, healthcare, or manufacturing where specialized knowledge is valuable. You also need this agreement when formalizing arrangements with former executives, consultants, or other intermediaries who leverage their networks to identify investment targets. Given the regulated nature of financial services in the UK, having a compliant agreement protects both parties from regulatory scrutiny while ensuring clear fee structures.

Key legal considerations

The agreement must carefully define the scope of finder services to avoid triggering regulated activity requirements under the Financial Services and Markets Act 2000. Key provisions include detailed fee calculation methods, typically structured as percentages of transaction value or fixed amounts upon deal completion. Confidentiality clauses are crucial given the sensitive nature of investment information shared during due diligence processes. The agreement should include robust termination provisions, addressing scenarios where deals fail, parties withdraw, or relationships deteriorate. Success metrics must be clearly defined, specifying what constitutes a completed transaction worthy of fee payment. Additionally, the agreement should address potential conflicts of interest, exclusivity arrangements, and the finder's obligations regarding anti-money laundering compliance under the Money Laundering Regulations 2017.

Legal requirements in England and Wales

Under England and Wales law, finder's fee agreements must comply with the Financial Services and Markets Act 2000 and FCA regulations. The agreement must ensure that finders do not engage in regulated activities without proper authorization, limiting their role to pure introductions without advisory services. Compliance with the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 is essential when discussing investment opportunities. The document must include appropriate disclaimers and risk warnings where required. Due diligence obligations under the Money Laundering Regulations 2017 must be clearly allocated between parties. The agreement should reference FCA Handbook requirements, particularly the Conduct of Business Sourcebook provisions regarding client treatment and conflict management. Payment terms must comply with commercial law principles, including clear invoicing procedures and dispute resolution mechanisms. Finally, the agreement must ensure that all parties understand their respective regulatory obligations and maintain appropriate professional indemnity insurance where required.