In this video, you’ll learn about bookrunners and their role in carrying out IPOs and debt issuances.
#bookrunner #ipo #wallstreetmojo #underwriter #investmentbank
Chapters:
00:00 – Introduction
00:37 – Who is a bookrunner?
01:34 – What does a bookrunner do?
02:42 – Example
04:13 – Conclusion
Who is a bookrunner?
Companies deciding to go for an IPO or issue debt would appoint an investment bank to act as underwriters or bookrunners.
It may happen that an underwriter delegates some of its work to other investment banks if the workload is too much or if the latter has more experience and expertise in the work.
In such cases, the former becomes the principal underwriter or the bookrunner and would be responsible for ensuring that the entire process happens properly and smoothly.
What does a bookrunner do?
The primary function of a bookrunner is to carry out their role as underwriters and see to it that everything happens properly. If there are multiple underwriters, the bookrunner’s role is to coordinate with everyone and maintain coherence and efficiency.
A bookrunner is also responsible for maintaining the books of the companies or investors. They must ensure everything is in place and up to the code. This is a responsible task as any false information could lead to legal issues.
Finally, the bookrunner’s role is to represent the syndicate of investors or borrowers that are the bookrunner’s clients. So they have to represent them, put the client’s interests over their interests, and ensure they protect their clients from as much risk as possible.
Example
A company going for an IPO would appoint an investment bank. The investment bank would act as an underwriter or as a bookrunner.
Their first job is ensuring the company’s books are in order. The SEC would then scrutinize this.
The bookrunner’s role is to represent the syndicate of investors or borrowers that are the bookrunner’s clients. So they have to represent them, put the client’s interests over their interests, and ensure they protect their clients from as much risk as possible.
(Explained in detail in the video)
This was all about bookrunners. We regularly upload such content on finance, so subscribe to the channel. Also, don’t forget to like the video.
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