The Distribution of IPO Holdings Across Institutional Mutual Funds

We examine initial public offering (IPO) holdings in the mutual funds of four large investment banks and five large non-investment banks during the period 1997 through 2002. Investment banks hold IPOs with different characteristics than IPOs held by non-investment banks, and they also tend to hold I...

Full description

Saved in:  
Bibliographic Details
Authors: Johnson, William C. (Author) ; Marietta-Westberg, Jennifer (Author)
Format: Electronic Article
Language:English
Check availability: HBZ Gateway
Journals Online & Print:
Drawer...
Fernleihe:Fernleihe für die Fachinformationsdienste
Published: Springer 2009
In: Journal of business ethics
Year: 2009, Volume: 90, Issue: 2, Pages: 119-128
Further subjects:B institutional holdings
B IPOs
B mutual funds
Online Access: Volltext (lizenzpflichtig)
Description
Summary:We examine initial public offering (IPO) holdings in the mutual funds of four large investment banks and five large non-investment banks during the period 1997 through 2002. Investment banks hold IPOs with different characteristics than IPOs held by non-investment banks, and they also tend to hold IPOs in different types of funds than non-investment banks. We classify holdings as to whether the IPO lies outside or inside the fund’s objective. Investment banks hold IPOs outside the fund objective in 27% of the fund/IPO pairs while non-investment banks hold outside their objective in just 5.4% of fund/IPO pairs. We see significant differences in IPO underpricing for both groups as well. For example, when non-investment banks hold IPOs outside a large capitalization fund objective, they select IPOs with 52% higher underpricing as measured by first-day returns.
ISSN:1573-0697
Contains:Enthalten in: Journal of business ethics
Persistent identifiers:DOI: 10.1007/s10551-010-0379-3