Acquisitions Manager compensation

[Tom McDermott]

For those in syndication that have an acquisitions manger, how do you compensate them?

Salary?

Flat fee per closed deal?

Equity?

[John Mazzella]

Is this acquisition manager part of the GP? If so they should be compensated by part of the acquisition fee and then a percentage of the return that the GP shares as part of the investment. 

If they are a W2 employee I would suggest a base salary with a bonus for each deal closed. It is important to not make the base too high or the employee won't feel a need to acquire deals. 

[Tom McDermott]

John, thanks for the insight. How long have you been in syndication? Do you have an acquisition manager? If so, is that person doing you underwriting?