Underwriting IPO
- What is the percentage split nowadays between best effort vs firm commitment IPOs and why?
- How is it determined which underwriter gets to sell to which institutional investor if the same investors has relations with multiple banks?
- Is it the client or the bookrunner that decides the underwriting split between the syndicate?
- To clarify, in best effort, the underwriting bank effectively makes money on the gross spread as well as the market spread if it buys a portion of the shares. If it is firm commitment, then the underwriting bank makes money solely on the market spread.
Thanks!
q1: 3+ 1%, more or less, it heavily depends on the clients
q3: client decides what banks get the % of total fee
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