tailieunhanh - Vault Career Guide to Investment Banking Part 6

CHAPTER 11 What does the syndicate department at an investment bank do? Syndicate usually sits on the trading floor, but syndicate employees don’t trade securities or sell them to clients. Neither do they bring in clients for corporate finance. | Syndicate The Go-betweens CHAPTER 11 What does the syndicate department at an investment bank do Syndicate usually sits on the trading floor but syndicate employees don t trade securities or sell them to clients. Neither do they bring in clients for corporate finance. What syndicate does is provide a vital role in placing stock or bond offerings with buy-siders and truly aim to find the right offering price that satisfies both the company the salespeople the investors and the corporate finance bankers working the deal. Syndicate and public offerings In any public offering syndicate gets involved once the prospectus is filed with the SEC. At that point syndicate associates begin to contact other investment banks interested in being underwriters in the deal. Before we continue with our discussion of the syndicate s role we should first understand the difference between managers and underwriters and how fees earned through security offerings are allocated. Managers The managers of an IPO get involved from the beginning. These are the I-banks attending all the meetings and generally slaving away to complete the deal. Managers get paid a substantial portion of the total fee - called underwriting discounts and commissions on the cover of a prospectus and known as the spread in the industry. In an IPO the spread is usually percent unless the deal is huge which often means that the offering company can negotiate a slightly lower fee. For a follow-on offering typical fees start at percent and again decrease as the deal-size increases. As discussed previously in this guide deals typically have between two and five managers. To further confuse the situation managers are often called managing underwriters as all managers are underwriters but not all underwriters are managers. Confused Keep reading. Visit the Vault Finance Career Channel at finance - with insider firm profiles message boards the Vault Finance Job Board and more. CAREER V ULI LIBRARY 137 .