Independent Sponsor Management Fee Structuring in Insurance Brokerage
When the deal is insurance brokerage and the question is Management Fee Structuring, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
Management Fee Structuring on insurance brokerage deals is one of those workstreams that looks routine on a checklist and decides outcomes in practice.
The typical insurance brokerage platform sits at $10M to $150M EV with EBITDA in the $3M to $25M range. The thesis runs on regional retail agency roll-ups. Producer non-competes are unenforceable in too many states to ignore. Plan retention, not litigation.
How Management Fee Structuring actually gets structured.
Set the fee at 2 percent of invested capital, stepping to 1.5 percent after year three.
Carve out portfolio-company services so add-on diligence is reimbursable.
Allow accrual if cash flow does not support payment, with later cash catch-up.
Make the fee subordinate to debt service, not to LP preferred return.
In insurance brokerage, layer in E&O tail insurance priced and bound as part of the Management Fee Structuring workstream.
Pricing the fee on enterprise value instead of invested capital. EV-based fees punish you on the first add-on.
"The management fee pays for the firm. Underprice it and you will run a hobby, not a platform."Jason Powell · Management Fee Structuring
The deal is one thing. The capital that opens up after close is another.
Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.
Related deal pages.
LOI Negotiation for Insurance Brokerage
The 4 to 8 page agreement that frames the deal economics, exclusivity, and diligence period.
Independent Sponsor Economics for Insurance Brokerage
The package of deal-by-deal carry, management fees, and transaction fees that compensates the independent spo…
Equity Rollover for Insurance Brokerage
The portion of seller proceeds reinvested into the post-close entity, aligning seller with buyer.
Earnout Structures for Insurance Brokerage
Deferred purchase price contingent on post-close performance, used to bridge buyer-seller valuation gaps.
Management Fee Structuring for Healthcare Services
roll-up of physician practices and ancillary service lines
Management Fee Structuring for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
An LOI on the desk, a insurance brokerage target, and a Management Fee Structuring question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.