Sell-side mandates run a process to maximise transaction value or certainty for the seller. Buy-side mandates source, evaluate, and execute acquisitions for the buyer. The economics of advice differ accordingly.
Sell-Side: Running a Process
Sell-side advisory means representing the seller — designing and running the auction or bilateral process, preparing materials, managing diligence, qualifying bidders, negotiating SPA, and closing.
The success metric is transaction value, certainty of close, and seller-friendly terms (low warranty exposure, clean post-closing). Fees are typically a percentage of transaction value, with a meaningful success-fee component.
Buy-Side: Sourcing and Acquiring
Buy-side advisory means representing the acquirer — defining the strategic thesis, screening targets, originating proprietary opportunities, evaluating bids, structuring offers, and managing the transaction to close.
The success metric is acquiring the right asset at a defensible price on terms the buyer can live with. Fees are often a mix of retainer and success — but the success metric on the buy side is closing, which can create the wrong incentive: a buy-side advisor paid to close is not paid to walk away.
Why Independent Advice Matters on Both Sides
On the sell side, an independent advisor sanity-checks the banker's process and prevents seller drift toward whatever closes. On the buy side, an independent advisor provides the discipline to walk away — and the technical scrutiny that buy-side bankers, paid on close, structurally cannot.
The pattern is the same: independence is the hedge against incentive misalignment, and the value of independence scales with deal complexity.