Agathon Research Partners vs. Investment Banks and Buy-Side Brokers: A Practical Comparison on Deal Sourcing and Cost

When private equity firms think about sourcing M&A opportunities, the usual path is through investment banks or buy-side brokers. These intermediaries play a valuable role, especially in managing transactions. But when it comes to cost-effective and proprietary deal sourcing, they may not always be the best fit.

That’s where Agathon Research Partners comes in. Here’s how Agathon compares to traditional intermediaries when it comes to both deal sourcing and cost.

Investment Banks & Buy-Side Brokers: The Intermediary Model

Investment banks and brokers specialize in facilitating transactions. They help source and screen targets, manage negotiations, and see deals through to close. For many PE firms, that’s an essential service.

However, working with intermediaries comes with both financial and informational limitations.

The Cost Structure

Most intermediaries charge a success fee, usually between 1% to 3% of the total transaction value. But that’s rarely the only cost involved.

It is common for firms to pay a non-refundable retainer or work fee upfront, which can range anywhere from $25,000 to over $100,000 just to engage the intermediary. In some cases, intermediaries also charge ongoing monthly fees, especially for extended or more complex searches.

This setup can be particularly expensive for small to mid-sized private equity funds, especially those operating in the lower middle market. When deal sizes are inherently smaller, paying a hefty retainer plus a success fee can disproportionately impact the economics of a deal. For these funds, every dollar spent on sourcing eats into potential returns.

As a result, lower mid-market funds often need to be more deliberate about how they allocate sourcing budgets, especially if their strategy hinges on proprietary deal flow or founder-led businesses that aren’t already on an intermediary’s radar.

The Information Limitation

Intermediaries tend to rely heavily on their existing relationships and networks. They will bring you the deals they can access, which often means businesses that are already being marketed or shopped around.

As a result, private equity firms are rarely seeing the entire landscape. They’re seeing what the intermediary has access to, not necessarily the full scope of potential targets in the market.

How Agathon Research Partners is Different

Agathon is not an intermediary. There are no success fees, no retainer fees, and no transaction support. Instead, Agathon provides:

·      A custom-built M&A target list or market map tailored to the client’s investment criteria.

·      Exclusive, perpetual rights to use the research. The deliverable belongs solely to the client and is never resold or recycled.

·      A fixed, transparent fee.

What you’re paying for is a deeper, structured understanding of the market, with verified company details and ownership information that equips your firm to take action directly.

With Agathon’s research, PE firms can:

·      Run their own proprietary outreach with confidence.

·      Sharpen conversations with intermediaries, asking them to bring companies that aren’t already mapped.

·      Guide expert networks to find relevant executives within specific companies based on a comprehensive market view.

When Agathon is the Better Fit

Agathon is designed for private equity firms that want to take ownership of their sourcing efforts. It’s a better fit when firms want to:

·      Source proprietary or off-market deals directly, especially founder-led or family-owned businesses.

·      Get a comprehensive view of a fragmented market before engaging intermediaries.

·      Avoid hefty success fees and instead invest in custom intelligence upfront.

·      Equip themselves with sharper insights to guide conversations with investment banks, brokers, and expert networks.

Agathon complements intermediaries rather than replaces them. The research serves as a strategic starting point for firms that want to deepen their understanding of a market before committing to transaction processes.

Final Thoughts

Investment banks and brokers will always have a role in M&A, particularly when transaction execution is the priority. But for firms looking to enhance their sourcing strategy and reduce dependence on intermediaries, building a clear and exclusive market view is just as important.

Agathon Research Partners exists to give private equity firms that informational edge, at a fraction of the cost of traditional intermediaries.

If that’s the kind of advantage your firm is looking for, I’d be happy to connect. yash@agathonrp.com