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Asian Review of Financial Research, Vol., No..
pp.2038~2086
pp.2038~2086
The Quality and Price of Investment Banks¡¯ Service : Evidence from the PIPE Market
Na Dai Anderson School of Management University of New Mexico Albuquerque, NM 87131
Hoje Jo Leavey School of Business Santa Clara University Santa Clara, CA 95020
John Schatzberg Anderson School of Management University of New Mexico Albuquerque, NM 87131
We investigate the market structure and the pricing by placement agents of private investments in public equities (PIPEs). Our findings indicate that more reputable agents associate with larger offers and with firms possessing lower risks. Agent reputation is positively associated with lower discounts and an enhanced post-PIPE trading environment. We also observe support for the hypothesis that issuers pay a dollar fee premium for these benefits. The evidence suggests that it is the quality of the issuing firm, in conjunction with the pricing and reputational concern of the placement agent, that drive the equilibrium in the PIPE market.
Na Dai
Hoje Jo
John Schatzberg
We investigate the market structure and the pricing by placement agents of private investments in public equities (PIPEs). Our findings indicate that more reputable agents associate with larger offers and with firms possessing lower risks. Agent reputation is positively associated with lower discounts and an enhanced post-PIPE trading environment. We also observe support for the hypothesis that issuers pay a dollar fee premium for these benefits. The evidence suggests that it is the quality of the issuing firm, in conjunction with the pricing and reputational concern of the placement agent, that drive the equilibrium in the PIPE market.
Investment bank,Agent fees,Private investments in public equity (PIPE)
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