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This article (the “Article”) is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any investment or any securities. This Article does not constitute investment advice and is not intended to be relied upon as the basis for an investment decision, and is not, and should not be assumed to be, complete. Readers should make their own investigations and evaluations of the information contained herein. The information contained herein does not take into account the particular investment objectives or financial circumstances of any specific person or entity who may receive it. Each reader should consult its own attorney, business adviser and tax adviser as to legal, business, tax and related matters concerning the information contained herein.  Except where otherwise indicated herein, the information provided herein is based on matters as they exist as of the date of preparation and not as of any future date and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date of preparation. Certain information contained in this Article constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,”  “target,” “project,” “estimate,” “intend,” “continue” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. Readers should not rely on these forward-looking statements.  Certain information reflects subjective determinations which may prove to be incorrect. There can be no assurance that the estimates or projections will be accurate or that historical trends will continue. In considering the prior performance information contained herein, readers should bear in mind past performance is not necessarily indicative of future results. All rights reserved. The material may not be reproduced or distributed, in whole or in part, without the prior written permission of PrimeAlpha LLC.

    • Dec 17, 2020

Do You Need a Placement Agent? And How to Vet One.

As this crazy year comes to an end, we look forward to the road ahead and find it will still be unknown territory.

Deserted road

We have been thinking about the coming year and paving the way, and maybe you are too. Lately, we have been getting many questions about placement agents and if they are worth the money, time, and effort. Here are our thoughts.


Placement agents, or third-party marketers, provide a service to managers that can range in price and delivery. It is essential to take note of many factors before you consider hiring:



Do your diligence.


Check the firm's background, check their references, google them, look at their LinkedIn, and check their reputation. On top of this, extend your check and look at their Broker-Dealer. Do they have the proper licenses and regulatory affiliations?



Check their marketing & sales strategy.

  • How will they tell your story? Do they have a good understanding of your product? Ask to hear the pitch of your firm.

  • Learn about their process and have them walk you through it. Find out how involved you will have to be in the sales process.

  • What is their marketing strategy? Is it traditional or virtual, or both?

  • Are their metrics in line with your goals?


Find out how they attract investors.

  • It is way more than just a Rolodex. Can they find you the RIGHT investors?

  • Do they use key metrics? Do they have organized data?

  • Are there overlaps or conflicts of interest?

  • What segment of the market is their audience; institutions, investment advisors, UHNW, family offices, and do they know how to market to those investor types?


Qualify the contract and have a well defined SOW (statement of work).


The range of placement agents' capabilities varies significantly from just introductions to providing value-added services (e.g., preparing marketing material, strategy, roadshows, pitch coaching, etc.). One must consider what level of services are needed and make sure the fee structure is in line with the services provided.

  • What level of engagement will you receive?

  • How many clients do they serve?

  • Will there be retainer fees or exclusivity fees?

  • Take a look at the length of the contract, what benchmarks they have set up, and most importantly, ask what success looks like to them? There should be transparency.


Lastly, remember nothing is free.


Some managers we have spoken to believe that hiring a placement agent is a "free option" as they assume they get paid only on success.


Remember that the placement agent will be representing YOU. This will be your front end billboard, and they have to tell your story correctly and to the correct audience. They should be building market collateral. This is everything.


If you work with the wrong third-party marketer, it can burn you. You can lose valuable time and waste a lot of money. If you find the right person/team to help you navigate the road ahead, it can be a game-changer.


Many managers ask us about the state of retailer fees. Unlike in the past, the zero retainer fee is almost dead. I think the most significant contributor is the lengthening investment timeframe. We typically see a range of $5,000 to $15,000 per month. We strongly believe in a retainer model as it better aligns interest; however, managers have to manage metrics and KPI to ensure success like all other vendors. Keep your vendors accountable.

In-House and Outsource balance

There are many options for marketing and sales, therefore finding the right combination of outsourced and in-house resources is critical.


PrimeAlpha has been paving the way for Managers and Investors for years. Our success speaks volumes. Learn more about how we can help you make the correct turns on the road ahead.

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