A brokerage mandate is the agreement that puts the desk to work on a deal. It appoints the broker as intermediary — to find and introduce a counterparty and to help carry a transaction through to completion — and sets out the single thing that matters most to both sides: when, and how much, the broker gets paid. On this desk a mandate is documented with the Brokerage Mandate Agreement, and the fee is success-based, on the tiered Lehman scale.
Sell-side or buy-side?
A sell-side mandate appoints the desk to find a buyer (an acquirer) for an asset, concession or operating company the client wants to dispose of. A buy-side mandate appoints the desk to find a target for a client that wants to acquire. The mechanics are mirror images: in both cases the broker introduces a screened counterparty (the “Introduced Party”) and intermediates the deal, and in both cases the success fee is earned on completion. The mandate template lets you pick the side and rewrites the operative wording accordingly.
What the broker actually does
- Assesses the asset and the indicative basis of value before going to market.
- Prepares or reviews an anonymised teaser, so the opportunity can be shown without revealing identity.
- Identifies and approaches prospective counterparties, then screens them — sanctions / OFAC checks, and proof of funds or a buy-side mandate letter where relevant.
- Gates asset-level detail behind an executed NDA.
- Supports negotiation and coordinates information flow through to completion.
The broker is an intermediary, not an adviser. The mandate makes clear the desk does not give legal, tax or investment advice, and that the decision whether to proceed — and on what terms — always rests with the client. Get your own counsel on the deal itself.
Exclusive vs non-exclusive
An exclusive mandate means that, for the mandate period, the client deals only through the desk and refers any inbound enquiry on the asset to the broker. Exclusivity is what justifies the desk investing real effort in marketing and matching. A non-exclusive mandate lets the client run other intermediaries in parallel, but the desk still earns its fee on any deal done with a party it introduced. The template carries both forms and adjusts the clause to match.
When is the fee earned?
The success fee is earned on, and conditional upon, completion of a transaction with an Introduced Party — not on signing the mandate, and not on an introduction that goes nowhere. Crucially, the fee is payable whether the deal completes in the form first contemplated or in a varied form (an asset sale instead of a share sale, a staged acquisition, a joint venture), so a client cannot avoid the fee by re-shaping the same deal. For deferred or contingent consideration (earn-outs), the matching slice of fee falls due as that consideration is received.
The tail
What stops a client from terminating the mandate the day after a useful introduction and then closing fee-free? The tail. For a defined period after the mandate ends (commonly 12–24 months), if the client completes a deal with a party the broker introduced during the mandate, the full success fee is still payable. On termination the broker provides a list of the introduced parties the tail covers, so everyone knows where they stand.
The paper trail
A mandate normally moves through the same documents: the Brokerage Mandate Agreement appoints the desk and fixes the fee; a Deal Teaser Cover fronts the anonymised approach to the market; a one-way NDA gates the detailed disclosure; and a term sheet records headline deal terms once a counterparty is engaged. Each is available as a fillable template in the document engine.