The bulge bracket refers to investment firms in an underwriting syndicate that place the largest number of issues, leading to free advertising and enhanced reputation. Being part of the bulge bracket can attract new customers and retain current ones.
The bulging brackets have to do with the subscription process. In essence, the bulge bracket is a collective term used to identify investment firms in an underwriting syndicate that manage to place the largest number of issues with various investors. This ability to place more stocks and shares in a given campaign is greatly appreciated and can lead to great publicity for the companies involved.
There are many benefits to being part of a bulge bracket. One of the immediate benefits is gaining a prominent place on the details of the security issue. An accepted tradition within the investment process is to list investment syndicate members for an issue in the advertisement announcing the completion of transactions. Billed as the tombstone of the issue, this ad will highlight companies that have earned the right to be included in the Bulge Band by getting their names first in the ad detail. The headstone can be a valuable means of securing publicity for the company within the investment community, without the additional cost of advertising by high-end companies.
Along with free advertising, businesses included in the bulge bracket also earn the right to incorporate the result into their advertising efforts. Since the honor of being included in a bulge band implies that the company is aggressive about securing investors for an issue, including this detail in promotional brochures, media advertisements, and presentations to prospective clients is a sound business move. Recognition as a high-end firm will enhance the underwriter’s reputation and open doors that may have been closed under different circumstances.
While being there as part of a bulge bracket for an issue is an accomplishment, it’s important to keep the momentum going. As an underwriting firm continues to be at the high end for a variety of different issues, the firm’s ability to attract new customers, as well as retain current customers, will continue to grow. The better reputation and business connections that come with status will ultimately serve not only the best interests of the company, but also the company’s customers.
Smart Asset.
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