Difference Between a Search Fund and a Merchant Bank?
Can someone explain what really constitutes a search fund, a merchant bank and what are the differences? Are some search funds also merchant banks?Thanks
Can someone explain what really constitutes a search fund, a merchant bank and what are the differences? Are some search funds also merchant banks?Thanks
+109 | Big 4 Hate Propaganda | 39 | 1h | |
+64 | CVP partners making 8 figures??? | 42 | 1d | |
+60 | How is working 50/60 hours a week considered relaxed? | 14 | 2h | |
+34 | Intern hours | 10 | 1d | |
+30 | Pros and cons of “low prestige” banks? | 8 | 1d | |
+27 | Is CB the best "exit" for a career banker | 27 | 1h | |
+26 | Feels like I forget everything | 4 | 3s | |
+21 | Beef between Lazard and PWP | 4 | 4d | |
+21 | Is it time to give up - B4 | 12 | 2s | |
+19 | How should SBC be handled in a DCF | 9 | 19h |
Career Resources
Gist of the Wikipedia explanation: search funds are essentially very small private equity funds that are looking to acquire a platform business in a fragmented industry and then take management roles within the companies they purchase.
From my own understanding of them, they are very entrepreneurial in nature and normally only consist of a few people. Ideal deal sizes are very small.
Merchant banks are operated out of financial institutions and offer various services, as well as doing private equity.
Search funds are tiny and usually have a staff of 2-3. They do 2 rounds of capital raising. The first round is for operating expenses (enough to last a couple of years) and then if they do find a good company, they go back to their investors and raise the necessary funds to purchase the company. Very entrepreneurial and a LOT of cold calling, the return potential for a search fund is immense, but a lot also fail at finding any companies. You see a lot of Harvard and Stanford guys doing these.
Mollitia suscipit ut et quidem distinctio aliquam. Laborum ut sit tempora commodi. Provident est debitis quia animi natus ex. Ab iste odio assumenda dolores qui nam dolore laudantium. Magnam sit repellendus quibusdam est cumque totam laborum consequuntur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...