Affiliated mutual funds and the allocation of initial public offerings

• 成果类型: Article
• 署名作者: Ritter, Jay R.; Zhang, Donghang
• 署名单位: State University System of Florida; University of Florida; University of South Carolina System; University of South Carolina Columbia
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2006.08.005
• 发表日期: 2007
• 页码: 337-368
• 关键词: initial public offerings; Mutual funds; IPO ALLOCATIONS

摘要

We examine how investment banks use initial public offerings (IPOs) in relation to their affiliated mutual funds. The dumping ground hypothesis predicts that the lead underwriter allocates cold IPOs to its affiliated funds so that more deals can be completed when demand for these IPOs is weak. Affiliated funds could also receive more cold IPOs because the lead underwriter uses allocations of hot IPOs to unaffiliated funds to gain trading commission business. The nepotism hypothesis predicts that the lead underwriter allocates hot IPOs to its affiliated funds to boost their performance and thus attract more money. We find little evidence supporting the dumping ground hypothesis, although some evidence supports the nepotism hypothesis, especially during the internet bubble period of 1999-2000. (c) 2007 Elsevier B.V. All rights reserved.