How does an IPO roadshow work?

A few questions on the IPO process:

  • Who goes on the roadshow? The ECM team or the IB Coverage group? Are analysts usually brought along? Is it really as fancy as people make it out to be, with private jets etc?
  • If there are 3 lead bookrunners do they all do a different roadshow and pitch to different investors?
  • What's the role of the Coverage group vs ECM team? Who prepares the pitches and prospectuses?

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Comments (5)

May 15, 2018

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May 15, 2018

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Most Helpful
May 17, 2018

Key management (CEO, CFO, COO) and depending on the firm sometimes a really senior banker goes, but more typically it's an analyst or associate. The lead-left bookrunner and maybe one or two other 'active' bookrunners (if you have 5 bookrunners, chances are two to three are active and the others are passive) set and host the meetings. Usually a salesperson from the firm who set the meeting and handles the account you are visiting will attend as well. Almost always it's an industry coverage banker who goes on the road. Coverage does the heavy lifting, ECM handles updates, IPO / ECM market analysis, and the interaction between sales, research and the coverage/client team (this is really handled by the syndicate desk).

Fanciness depends on the client, the banks, and the size / willingness to incur expense of the issuer. I've done a lot of private jet flying back in my roadshow days, but the types of jets ranged from G4s to tiny little turbo-props.

Like going to a bachelor party in Vegas, roadshows are fun for about a day and a half and then get really old, really quick.

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May 15, 2018

Thanks. That's very helpful. Can you shed some light on the difference between a bookrunner and coordinator?

Also, from what I understand companies hire more banks as advisors so that they can spread all the shares between them and diversify/reach all potential interested investors. Why would a company only want to have 1 or 2 IPO advisors instead of 5/6 then? Surely it doesn't cost them more in fees?

Lastly, you mentioned it's rarely a senior banker going on the roadshow, why is that? Why would they send an analyst/associate and not an MD?

May 18, 2018
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