The role of a placement agent in a private raise

The work starts before any investor sees a document. A good agent tests the business case, the amount being raised and the proposed structure against what investors in the target market will accept. That often involves frank conversations about valuation, use of proceeds and governance. Sometimes the right advice is to raise less, raise later or change the structure, and an agent who never gives that advice is worth questioning.

The materials need to stand up to diligence. A typical set includes a short anonymised teaser, an information memorandum that explains the business, its market and its plans, a financial model whose assumptions can be traced, and a data room holding contracts, accounts, corporate documents and policies. The aim is a consistent story. An investor who finds one figure in the deck and a different one in the model will start to question everything else, so the agent's job includes checking that every document agrees with every other.

Investor selection is where a placement agent earns its keep. Rather than circulating a deck widely, an experienced agent builds a tiered list of investors whose mandate, ticket size and sector appetite fit the deal, then approaches them in a deliberate order under confidentiality. In the Gulf this step matters even more. UBS's Global Family Office Report 2026 found that only 31% of family offices globally have a formal process for selecting external providers, so introductions and reputation carry real weight. An agent with established relationships can secure a serious hearing where a cold approach would struggle.

Knowing the investor types is part of the job. In the Gulf, a sovereign fund, a family office and a private investor from the same city may want quite different things. Family offices typically commit smaller tickets than sovereign funds and expect a closer relationship with management. Some investors will only consider Shariah-compliant structures. Many will ask for co-investment rights or board observation. Investors in Riyadh, Abu Dhabi, Dubai, Doha and Kuwait also have their own habits and networks. A good agent tailors the approach to each, and tells the company in advance what each is likely to ask.

During the process the agent coordinates management meetings, handles investor questions, keeps the data room in order and maintains momentum so that several investors move at a similar pace. When term sheets arrive, the agent helps compare them beyond the headline valuation: control rights, liquidation preferences, covenants, reporting obligations and the investor's capacity to support future rounds. The agent then works with lawyers on both sides through documentation and closing. Throughout, capital should move directly from investor to company. A reputable agent never takes custody of investor money.

The questions investors ask. A placement agent should prepare management for them well before the first meeting. Investors want to know why the business needs this capital now and exactly how it will be spent. They ask how the valuation was reached and what comparable businesses have achieved. They ask about the management team's own investment, about customer concentration, about the downside case and about how they might eventually sell their stake. Gulf investors often add questions about who else is investing, how long the company intends the relationship to last and why it is approaching their region specifically.

A worked example. Consider a hypothetical London business raising EUR 10 million, with a strong domestic investor base but no Gulf relationships. Working alone, its finance director might send the deck to every contact who has heard of a Gulf family office. Working with an agent, the company would agree a list of perhaps a dozen suitable investors, meet the most likely ones first, refine the materials after each round of questions and arrive at term sheets from several investors at once. The agent cannot make any investor commit, but a disciplined sequence gives the company a fairer chance of competitive terms.

When hiring one makes sense. A placement agent tends to add most value in four situations. The first is when the business is raising from investors it does not already know, especially in another region, such as a Western business seeking capital from Gulf family offices. The second is when management time is scarce and a raise would otherwise pull the leadership away from running the company. The third is when the structure is complex, for instance a mix of equity and debt or a need for Shariah-compliant terms. The fourth is when competition between investors would materially improve the terms.

When it may not. If a business already has a committed lead investor on agreed terms, or is raising a small amount from existing shareholders, an agent may add little. Most agents also need a raise of meaningful size to justify a full process. An agent cannot rescue a business that investors fundamentally do not want to back, and no honest adviser will promise that a raise will close. Be wary of anyone who guarantees an outcome, a valuation or a timetable.

What the company still owns. An agent runs the process, but it cannot replace management. The chief executive and finance director remain responsible for the numbers, the plan and the relationships that follow closing. They will need to be available for meetings, sometimes at short notice and sometimes in the Gulf, and to answer diligence questions accurately and promptly. The company also decides which investor to accept and on what terms. A good agent advises on that choice and makes the trade-offs clear, then leaves the decision with the board.

Common mistakes when working with an agent. Companies sometimes hand over the process and step back, then find that investors expect to meet the chief executive and finance director in person, several times. Others withhold difficult information until diligence, when it does the most damage. Some approach investors independently in parallel with the agent, which confuses investors and can breach the engagement letter. The most effective raises treat the agent as an extension of the finance team, with one agreed list and one agreed story.

Choosing an agent. Ask who will work on the mandate day to day, which investors they have closed transactions with recently, how and when they are paid, and which authorised entity handles any regulated activity. Ask for references from companies they have advised. By way of example, Wrotham Partners recently acted as exclusive placement agent and financial adviser to CDN Homes, a London residential property operator, on an AED 40 million growth capital raise from family offices in Riyadh and across the Gulf. Specific, checkable answers to each of these questions are a good sign. Vague ones are worth probing.