Universal Banking, Asset Management, and Stock Underwriting

44 Pages Posted: 25 Mar 2005

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

Multiple version iconThere are 2 versions of this paper

Date Written: December 2005

Abstract

This paper examines a group of IPO underwriters that also manage institutional funds from 1993 through 1998. We find that there is a statistical difference between the average fund holdings (1.24% of shares outstanding) of IPOs for institutions that underwrite a particular IPO and the fund holdings (0.92%) of institutions that do not underwrite the same IPO. We provide evidence that underwriters use their institutional funds as vehicles to help them earn more equity underwriting business. We also show that IPO underwriters use their superior information to earn annualized excess returns 7.6% above non underwriters, benefiting their institutional investors.

Keywords: universal banking, IPOs, asset management, underwriter

Suggested Citation

Johnson, William C. and Marietta-Westberg, Jennifer, Universal Banking, Asset Management, and Stock Underwriting (December 2005). Available at SSRN: https://ssrn.com/abstract=687172 or http://dx.doi.org/10.2139/ssrn.687172

William C. Johnson

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

One University Avenue
Lowell, MA 01854
United States

Jennifer Marietta-Westberg (Contact Author)

U.S. Securities and Exchange Commission ( email )

100 F St NE
Washington, DC 20549
United States

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