Private Equity Finder's Fee Agreement Template for Hong Kong

A Private Equity Finder's Fee Agreement is a specialised contract that governs the relationship between private equity firms and intermediaries who introduce investment opportunities in Hong Kong. This document establishes the terms under which finders are compensated for successfully introducing qualified investment targets, while ensuring compliance with local financial regulations and protecting the interests of all parties involved.

When do you need this document?

You need this agreement when your private equity firm wants to expand its deal pipeline through external networks and intermediaries. It's essential when engaging investment advisors, corporate finance boutiques, or business introduction agencies to source potential acquisition targets or investment opportunities. The document becomes particularly important when working with independent consultants who have industry-specific expertise or geographic reach that complements your firm's capabilities. You should also consider this agreement when establishing relationships with professionals who can provide warm introductions to target companies, especially in sectors where relationship-building is crucial for deal origination.

Key legal considerations

Several critical legal elements must be carefully structured in your finder's fee agreement. The definition of "Successful Transaction" requires precise language to avoid disputes about when fees become payable, typically triggered by completion of investment rather than mere introduction. Fee calculation methods need clear parameters, whether based on transaction value, fixed amounts, or tiered structures. Exclusivity clauses should be balanced to protect your interests without overly restricting the finder's other business activities. Confidentiality provisions are essential given the sensitive nature of investment information shared during the process. You must also address potential conflicts of interest, particularly where finders represent multiple parties or have existing relationships with target companies. Termination clauses should specify how ongoing obligations and accrued fees are handled if the relationship ends before transaction completion.

Legal requirements in Hong Kong

Hong Kong's regulatory framework imposes specific compliance obligations that your agreement must address. Under the Securities and Futures Ordinance, you must determine whether the finder's activities constitute regulated activities requiring Securities and Futures Commission licensing. The agreement should include representations and warranties confirming the finder's regulatory status and compliance capabilities. Anti-Money Laundering and Counter-Terrorist Financing Ordinance requirements necessitate provisions for customer due diligence and record-keeping obligations. Personal Data Privacy Ordinance compliance is essential when sharing confidential information about target companies or investors. The contract must also align with Hong Kong common law principles governing contract formation, ensuring valid consideration, clear offer and acceptance, and enforceable terms. Professional indemnity insurance requirements should be specified to protect against potential negligence claims, while dispute resolution clauses should reference Hong Kong jurisdiction and applicable law.