Now Appearing on the Private Investment Side
A perspective from Brookland Group & Partners Limited, Dubai
The “10/10” compensation model—approximately 10 per cent. cash success fee plus a 10 per cent. equity or profits-interest kicker—has long been a feature of capital raising for operating companies, especially private and early-stage public issuers. What is notable in the current environment is that the same hybrid structure is being applied, with only modest adaptation, by private investment firms themselves when they hire brokers and placement agents to raise fund capital.
Brookland Group & Partners Limited transacts as a principal in structured securities finance across Asia-Pacific listed markets, and therefore encounters these arrangements from the other side of the table—as the counterparty to intermediaries whose compensation has been assembled in precisely this way. The observations below are offered from that vantage point.
The Classic Structure Refreshed
In its traditional form, a placement agent receives 10 per cent. of the gross proceeds in cash at closing and warrants (or equivalent coverage) equal to roughly 10 per cent. of the securities sold. The cash pays for the immediate work of sourcing and closing investors; the equity component aligns the intermediary with longer-term outcomes. SEC filings from the mid-2000s through the 2010s contain numerous examples of exactly this language in engagement letters for biotech, technology, and other growth companies.
The economic logic remains unchanged when the client is a private investment firm rather than an operating company. A new or expanding private equity, growth equity, or venture firm that needs to accelerate fundraising beyond its existing limited-partner base can offer brokers a comparable package: a meaningful cash fee on committed capital plus a residual claim on the economics generated by those specific investors. In fund terms this residual is usually documented as a profits interest or a slice of the carried interest attributable to the broker-sourced capital, but the substance is identical—cash now, upside later.
A Contemporary Illustration
Consider a mid-market private investment firm currently in the market with a new fund. Facing slower commitments from traditional institutions, the firm has engaged specialised brokers under terms that mirror the classic 10/10. The agreement provides for a 10 per cent. cash success fee on new capital introduced and closed by the brokers, together with a 10 per cent. participation in the carried interest (or an equivalent profits interest) generated by those limited partners over the life of the fund. Vesting, clawbacks, and caps are negotiated, yet the headline economics remain recognisably “10 and 10”.
This is not an aberration. When fundraising timelines compress or traditional channels tighten, private investment firms sometimes reach for the same incentive tools once used primarily by operating companies. The brokers receive immediate compensation for delivering scarce capital; the firm preserves more of its own cash and management-fee stream in the near term while sharing a defined portion of future performance.
Advantages and Trade-offs
The hybrid model still solves a real problem. Pure cash fees of 8–10 per cent. (or higher on smaller tickets) can be punishing to a fund’s early economics. Converting part of the compensation into a residual interest reduces the immediate cash outflow and gives the intermediary a reason to source high-quality, long-duration capital rather than the easiest money available.
Yet the costs are equally real. The cash fee is earned regardless of ultimate fund performance. The equity kicker, once granted, sits in the waterfall and can transfer meaningful value if the fund succeeds. Limited partners who later discover that a material slice of carry has been allocated to placement agents may question alignment. And because these arrangements are negotiated privately, they rarely receive the same public scrutiny as the SEC-filed examples from the operating-company world.
The View from the Principal Side
Brookland Group & Partners Limited operates a book rather than a fund: non-recourse share-backed lending, convertible note subscriptions and block equity purchases across listed markets in Greater China, Southeast Asia and Australia. Seen from that position, the migration of 10/10 terms into the private investment world looks less like innovation than like a calibration error waiting to be discovered. The structure was designed around equity proceeds. It does not survive contact with a spread.
The arithmetic is unforgiving. A growth fund paying 10 per cent. in cash at closing is spending a slice of capital that is expected to compound at some multiple of cost. A credit book earning a low-to-mid teens coupon plus two or three points of origination on a twelve-month tenor is spending close to a full year of gross yield before a single impairment has been recognised. The residual leg travels considerably better than the cash leg: a participation in performance economics on agent-sourced capital preserves alignment at no immediate cost, whereas a double-digit cash fee simply relocates the first year’s return. And in any lending strategy that residual has to be struck net of impairments and enforcement outcomes—otherwise the intermediary is paid for volume while the principal alone carries collateral quality.
Assessment
The appearance of 10/10-style terms on the private-investment side is less a revolution than a migration of an existing tool. It remains rational for firms that need speed and are willing to share upside. It remains expensive for those that can raise capital through stronger existing relationships or more competitive processes. The decisive factor is always bargaining power: the weaker the firm’s position in the fundraising market, the more likely it is to accept (or propose) a structure that looks remarkably like the old 10 per cent. cash plus 10 per cent. equity coverage.
For any private investment firm considering such terms today, the same disciplines apply that sophisticated operating companies learned years ago. Model the fully loaded cost under multiple performance scenarios. Negotiate precise vesting, forfeiture, and definition of “sourced capital”. And recognise that once the equity kicker is granted, it is difficult to unwind. The 10/10 is still a workable solution in constrained markets—but it is never a free one.
Working with Brookland
Brookland’s own position is straightforward: origination talent is scarce, and scarce talent should be paid what it commands. Dealmakers who source transactions the firm executes are compensated on a cash-plus-residual basis—the 10/10 logic, applied to the deal rather than to a fund. Cash on completion, and a continuing participation in what the transaction actually earns over its life.
That is a deliberate choice rather than a concession. A flat introduction fee pays for a name and an email; a residual pays for judgement about which transactions are worth doing and which counterparties are worth backing. The firm would rather share the outcome with the person who found it.
Experienced originators and appropriately licensed intermediaries are invited to make contact. Terms are negotiated individually and are subject to the regulatory requirements of the relevant jurisdiction.
ABOUT BROOKLAND GROUP & PARTNERS LIMITED
Brookland Group & Partners Limited is a Dubai-based structured securities finance firm. It transacts as a principal in non-recourse share-backed lending, convertible note subscriptions and block equity purchases, with a focus on listed issuers and substantial shareholders across Greater China, Southeast Asia and Australia.
CONTACT
Brookland Group & Partners Limited
Level 3, One Central, Dubai World Trade Centre, Sheikh Zayed Road, Dubai, UAE
Email: info@brooklandgroupltd.com
Web: www.brooklandgroupltd.com
This document is issued by Brookland Group & Partners Limited for general information and discussion purposes only. It does not constitute investment, legal, tax or regulatory advice, nor an offer or solicitation to buy or sell any security or to enter into any transaction. Recipients should take their own professional advice before acting on any matter described herein.
