Universal Banking, Asset Management, and Stock Underwriting

30 Pages Posted: 8 Oct 2009

See all articles by William C. Johnson

William C. Johnson

University of Massachusetts Lowell - The Robert J. Manning School of Business

Jennifer Marietta-Westberg

U.S. Securities and Exchange Commission

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Abstract

This paper examines institutions that underwrite IPOs and have asset management divisions from 1993 through 1998. We provide evidence that these firms use asset management funds as vehicles to help them earn more equity underwriting business. We also show that asset managers affiliated with IPO underwriters use their superior information about their own institution's IPOs to earn annualised market adjusted returns 7.6% above asset managers of firms who did not underwrite the IPO. Superior future returns by asset managers who trade affiliated IPOs are dependent on the information environment for the IPO and the underwriter reputation rank.

Suggested Citation

Johnson, William C. and Marietta-Westberg, Jennifer, Universal Banking, Asset Management, and Stock Underwriting. European Financial Management, Vol. 15, Issue 4, pp. 703-732, September 2009, Available at SSRN: https://ssrn.com/abstract=1485118 or http://dx.doi.org/10.1111/j.1468-036X.2008.00475.x

William C. Johnson (Contact Author)

University of Massachusetts Lowell - The Robert J. Manning School of Business ( email )

One University Avenue
Lowell, MA 01854
United States

Jennifer Marietta-Westberg

U.S. Securities and Exchange Commission ( email )

100 F St NE
Washington, DC 20549
United States

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