What kind of roles do lead manager and bookrunner play in a deal?

Please note that this thread focuses on the equity issuance process.

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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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 didnt have anything to do with the underwriting process.

The syndicate is the network of banks that finds buyers for the sale of stock. During anIPOor 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.

The book runner is the main underwriter or lead manager in the issuance of newequity,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.?

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.

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Being the lead manager in a deal means that you are structuring the deal. They dont want clients at other banks knowing this, but most of the profits from the deal can be gotten by what they call the skim (at least at my banks). Its basically the amount they can sell to the institutional public above the price they underwrote it for for the company. The lead manager makes all the decisions about price, timing, how to run the roadshow, what type of auction they will pursue, who gets stock, etc. The bookrunner is usually the lead manager but doesnt have to be. They are basically in charge of keeping the book which simply means keeping record of who bought shares for how much. Every bank wants to be the lead manager, because that means they get the best price for themselves and their customers, meaning fatter comissions.

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.

Being the lead manager in a deal means that you are structuring the deal. They dont want clients at other banks knowing this, but most of the profits from the deal can be gotten by what they call the skim (at least at my banks). Its basically the amount they can sell to the institutional public above the price they underwrote it for for the company. The lead manager makes all the decisions about price, timing, how to run the roadshow, what type of auction they will pursue, who gets stock, etc. The bookrunner is usually the lead manager but doesnt have to be. They are basically in charge of keeping the book which simply means keeping record of who bought shares for how much. Every bank wants to be the lead manager, because that means they get the best price for themselves and their customers, meaning fatter comissions.

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.

I am pretty sure this only applies to I-Grade deals these days. Pretty much every HY issue has been best efforts meaning the bookrunners (lead and one to 3 co-books) share the majority of the execution and diligence with several co-managers helping to syndicate. In a typical HY deal with 200 bps in fees, the bookrunner will split at least 150bps with the 4-5 other comanagers just getting a small piece of the 50 bps.

Good point, I cant speak for high yield as I was working in investment grade.

IPO underwriter vs. bookrunner vs. lead manager(Originally Posted: 11/08/2009)

underwriter, bookrunner, lead manager and global coordinator?

Underwriters include all of the banks that sell the IPO shares to institutions. Typically underwriters are segregated into bookrunners and co-managers. Bookrunners do the majority of the work and collect the largest % of fees. Co-managers play a more passive role in the deal execution but usually initiate research coverage on the company afterwards.

Some equity deals will add additional titles and responsibilities to these roles so that fees are split a certain way or so one bank gets more promotional credit. I think this is what a global coordinator is: just a way for the lead bookrunner to further separate themselves from the others. Probably means that bank will coordinate all of the roadshow, lead discussions with the company, etc.

I havent really heard of a lead manager position for equity deals.

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sole bookrunner vs. joint lead manager?(Originally Posted: 06/03/2010)

JPMorgan Securities, a division of JPMorgan Chase & Co. (NYSE: JPM : ) will be the sole book running manager and Wells Fargo Securities, a division of Wells Fargo & Company (NYSE: WFC : ) will act as the joint lead manager to the issue.

This may be dumb but what is the difference in the roles of JPM and WFC here?

JPMorgan has a lead role and will take a higher fee. in charge of distribution

Basically… JPM will coordinate everything, work on the roadshow presentation, and take care of all the clients requests and needs (basically all the real work for the IBD side), and also underwrite the largest portion of shares (thus get the highest economics), while Wells will just underwrite a larger portion of the shares than the rest of the managers and thus get higher economics.

Pretty much being a manager on an equity offering sucks balls, because the only work you really do is internal/admin-type stuff.

How does a CEO of a media/tech company go about selecting the most appropriate bookrunner for their SPAC IPO? Is there any published information or books out there or is it really solely about relying upon the advice of people-in-the-know?

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