Are Equity research analysts relevant in an IPO process?
When a bulgebracket bank underwrites an IPO as a book runner, does the equity research division of that bank typically play any role at all in the process (such as a supporting role)?
No. There are several restrictions placed on the research analysts including a blackouts of their firm is the lead
I want your suggestion. As my uni is not a UK target (because of which HR may filter it out before it gets reviewed by a banker), do you think it is a good idea to move the work experience to the top and move education to a lower part of the CV in order to make my banking experience the first thing that is seen on the CV? Or is it safer to stick to the conventional format of listing the education first. This is the full CV
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Arguably plays the biggest role. Even though there are walls in place, EOD investors call up research analysts pre IPO or once public and good analysts have good reps. There are cases where the bank literally gets lead for analyst or if analyst is being negative during intro meetings (separately), bank will drop down. You can have a great distribution arm, but if you don’t have a good analyst covering the sector - you won’t get a meaningful role. Similarly - smaller guys (William Blair, Cowen) moves up or have decent economics because they have good analysts.
This is correct. ER analysts are critical.
I want your suggestion. As my uni is not a UK target (because of which HR may filter it out before it gets reviewed by a banker), do you think it is a good idea to move the work experience to the top and move education to a lower part of the CV in order to make my banking experience the first thing that is seen on the CV? Or is it safer to stick to the conventional format of listing the education first. This is the full CV
Yes move school to the bottom
The main tradeoff is that by executing capital transactions (IPO / Follow-On) for certain clients through their IB arms, banks can win favor with clients who will then bestow them the privilege of letting their research Analysts cover said company.
Legally, you can't technically cross-sell. So nobody can say straight up "Hey bucko, if we do this IPO for you, you better let our Analysts sell research of your stock" but it's more wink wink. "Oh suuuuure, we can IPO your company. Of course, we also have a Research Analyst who has been wanting to cover your company. Would be nice if you would let us cover you."
Then the Big Banks make billions from their Research Coverage, pay their low-income employees like shit, and pay a buncha dividends out to Blackrock. And that, is the modern financial system in the nutshell.
I think in most cases, it’s company wanting more research coverage, not the other way around.
ditto, I've seen companies asking bankers to get them research coverage from the same bank but the Research Analyst didn't want to. The banker ended up explaining to the company management that Research and IB operate independently and there's nothing he can do
Research Analysts don't need approval from the company to cover the stock. If any Analysts "has been wanting to cover" any company, they can do so no matter which bank underwrites the IPO
For some banks at least, when Research Analysts are submitting a report for internal pre-screening (called SA / Supervisory Analysts in some banks), they have to pledge that the publication of such report is not subject to any approval from any company mentioned in that report
Yup equity research analysts are important during proposals when choosing banks like the director said but also during the process where before management roadshow they have PDIE ("Pre-Deal Investor Eduaction") which the syndicate analysts use their distributed research as a basis for discussing the issuer with potential investors and to answer questions on the issuer and its potential valuation drivers ahead of the setting of the price range and management commencing the roadshow.
Though the above is timeline for EMEA IPOs, maybe the US one is slightly different.
I want your suggestion. As my uni is not a UK target (because of which HR may filter it out before it gets reviewed by a banker), do you think it is a good idea to move the work experience to the top and move education to a lower part of the CV in order to make my banking experience the first thing that is seen on the CV? Or is it safer to stick to the conventional format of listing the education first. This is the full CV
Many companies ask that banks submit who the analyst will be as part of their pitch materials to be on the IPO. The selection process is run independently of the investment bank, so if the research arm comes back with a shitty or constantly bearish analyst, it can affect the bank's attractiveness.
They are absolutely relevant, especially for the banks running the IPO. My bank was one of the lead bookrunners and got kicked off the IPO because our research analyst put a sell rating on the company... LOL. He ended up being right, the company has been doing terribly. That MD ended up leaving because the research analyst hated most the companies this guy covered and put sell ratings on most of them so the companies wouldn't hire us.
ahahahahhaahha
I want your suggestion. As my uni is not a UK target (because of which HR may filter it out before it gets reviewed by a banker), do you think it is a good idea to move the work experience to the top and move education to a lower part of the CV in order to make my banking experience the first thing that is seen on the CV? Or is it safer to stick to the conventional format of listing the education first. This is the full CV
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