What kind of roles do lead manager and bookrunner play in a deal?
Please note that this thread focuses on the equity issuance process.
What is an underwriter?
Put simply - underwriters are the banks that sell IPO shares to institutions.
They include all of the banks that sell the IPO shares to institutions. Typically underwriters are segregated into bookrunners and co-managers.
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What is a Lead Manager? What is a co-manager?
The lead manager is the "lead left" manager of the initial public offering process. For reference, "to place" a portion of the deal means to find buyers for a chunk of the stock offering. The lead manager found the majority of the deal and placed it.
Co-managers are listed after lead manager. They assisted in placing the deal but not as much as the lead manager and are not as significant. The small names listed are syndicate members who placed correspondingly smaller parts of the deal but didn't have anything to do with the underwriting process.
What is the syndicate?
The syndicate is the network of banks that finds buyers for the sale of stock. During an IPO or follow on the process there could be as many as 12 syndicate banks.
Usually to get to the most customers there are as many as twelve other syndicate banks, who buy blocks of stock to sell to their clients for higher prices than they bought it for. But they are kind of along for the ride.
What is a Bookrunner?
The book runner is the main underwriter or lead manager in the issuance of new equity, debt or securities instruments. In investment banking, the book runner is the underwriting firm that runs, or who is in charge of, the books. These firms are responsible for tracking the parties interested in purchasing the IPO in order to help determine demand and price.
Bookrunners do the majority of the work and collect the largest percentage of fees. Co-managers play a more passive role in the deal execution but usually initiate research coverage on the company afterward.
A joint bookrunner is when there is more than one bank acting as the bookrunner/manager.?
What is an Arranger?
An arranger is the lead bank in the syndicate process for debt. This bank will typically put up a larger portion of the loan and perform administrative duties.
Read More About The IPO Process On WSO
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