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Papers by KATRIN MIGLIORATI
Investment Analysts Journal, 2014
ABSTRACT IPOs underperform on average. Nevertheless, the skewed distribution of returns offers th... more ABSTRACT IPOs underperform on average. Nevertheless, the skewed distribution of returns offers the chance to gain extremely high rewards (e.g., identifying the “next Microsoft“, as discussed by Loughran and Ritter, 1995). Hinging on this argument, this paper proposes a new method to help investors screen IPOs for the high-performing tail of the returns distribution. Using a straightforward definition of “winner IPOs” based on buy-and-hold abnormal returns, this study employs logistic regression to forecast whether a firm is still a top performer 1, 2 or 3 years after listing, relying only on publicly available information. Investors using our forecasting model would always have an adjusted rate of successful predictions higher compared to a naïvely classification that consider all IPOs as “winners”.
Journal of the American College of Cardiology, 2015
Journal of Banking & Finance, 2014
This paper investigates the increase in underwriting fees for UK SEOs since the beginning of the ... more This paper investigates the increase in underwriting fees for UK SEOs since the beginning of the financial crisis in mid-2007. We develop and test a number of hypotheses related to the role of institutional shareholders and underwriters involved in the issuing process. We find that the rise in fees is related to the strengthening of the relative negotiating position of a specific underwriter in comparison to a specific issuer and to the growing influence of institutional shareholders with short-term investment horizons. Our evidence suggests that there may be reasonable grounds for considering potential conflicts of interest due to the dual role of institutional shareholders as investors and sub-underwriters. On the other hand, the ownership size of large shareholders and the reputation of underwriters have a moderating effect on fees, while the nationality of the institutional shareholders, the concentration of the investment bank industry and the experience of corporate issuers are not related to underwriting fees.
European Financial Management, 2014
Reputational capital is a valuable asset for underwriters in IPO markets. Existing measures of th... more Reputational capital is a valuable asset for underwriters in IPO markets. Existing measures of their reputation are tailored to the US market, where the same established investment banks typically handle IPOs on both the NYSE and NASDAQ. The widely used Carter-Manaster rankings do not grade the reputations of underwriters of 67.5% of IPOs in Europe. The European IPO market is a series of domestic markets, where most underwriters operate almost entirely in a single country. This paper presents European-based rankings of 260 underwriters of 3,776 IPOs in France, Italy, Germany, and the UK from 1995 to 2010, with the number of IPOs underwritten and the amount of capital raised.
Handbook of Research on IPOs
This paper provides new evidence on the determinants of underwriting fees by re-examining the eff... more This paper provides new evidence on the determinants of underwriting fees by re-examining the effectiveness of traditional drivers in the light of the recent financial crisis. Some insights arise on potential conflicts of interest between institutional investors and investment banks. We posit that institutional investors, beside information production role, may cover twin roles as both investors and sub-underwriters in the raising equity capital process as well. We shed some lights on the puzzling evidence of both underwriter reputation and discount variables on fees, finding that the discount of the top five prestigious investment banks increases gross underwriter fees during the turmoil period while an opposite effect is shown before the 2007 crisis. Our results are robust after accounting for the possibility that discount and gross underwriting fees may be endogenously correlated.
Extending back at least to McDonald and Fisher (1973), the importance of a prestigious underwrite... more Extending back at least to McDonald and Fisher (1973), the importance of a prestigious underwriter has attracted the attention of researchers in trying to empirically measure reputation. Most of this literature, however, relies on measures tailored on the US case. Nonetheless, Europe has been attracting attention in comparative terms to the US. Moreover, the number of cross-countries studies in Europe yields to an increased demand for measures as proxy of the reputation of underwriters, even out of the corporate finance field. Along with the empirical literature, underwriters have come under the attention of the public debate. With the beginning of the financial crisis in 2007/2008, financial markets were put under severe pressure. In this context, there has been an increasing attention on the payments charged by underwriters on issuers for the services provided to them. A series of reports by regulatory bodies criticizes the surge in underwriting fees and highlight many issues, wit...
This paper questions whether the segmentation in the European IPO market plays a role in determin... more This paper questions whether the segmentation in the European IPO market plays a role in determining the cost of going public. Precisely, we compare the commissions charged by underwriters to firms listing on the stock markets of the four largest European economies. Coherently with previous results, we document the existence of a non-linear relationship between the cost-variables and the amount of capital raised with a different effect depending on the item cost considered. We find that the market structure affects the level of underwriter commissions and the prestige of the underwriter. We also investigate whether underwriters who charge high spreads are also able to leave more money on the table. Results are robust for endogeneity between underwriter commission and underpricing.
Investment Analysts Journal, 2014
ABSTRACT IPOs underperform on average. Nevertheless, the skewed distribution of returns offers th... more ABSTRACT IPOs underperform on average. Nevertheless, the skewed distribution of returns offers the chance to gain extremely high rewards (e.g., identifying the “next Microsoft“, as discussed by Loughran and Ritter, 1995). Hinging on this argument, this paper proposes a new method to help investors screen IPOs for the high-performing tail of the returns distribution. Using a straightforward definition of “winner IPOs” based on buy-and-hold abnormal returns, this study employs logistic regression to forecast whether a firm is still a top performer 1, 2 or 3 years after listing, relying only on publicly available information. Investors using our forecasting model would always have an adjusted rate of successful predictions higher compared to a naïvely classification that consider all IPOs as “winners”.
Journal of the American College of Cardiology, 2015
Journal of Banking & Finance, 2014
This paper investigates the increase in underwriting fees for UK SEOs since the beginning of the ... more This paper investigates the increase in underwriting fees for UK SEOs since the beginning of the financial crisis in mid-2007. We develop and test a number of hypotheses related to the role of institutional shareholders and underwriters involved in the issuing process. We find that the rise in fees is related to the strengthening of the relative negotiating position of a specific underwriter in comparison to a specific issuer and to the growing influence of institutional shareholders with short-term investment horizons. Our evidence suggests that there may be reasonable grounds for considering potential conflicts of interest due to the dual role of institutional shareholders as investors and sub-underwriters. On the other hand, the ownership size of large shareholders and the reputation of underwriters have a moderating effect on fees, while the nationality of the institutional shareholders, the concentration of the investment bank industry and the experience of corporate issuers are not related to underwriting fees.
European Financial Management, 2014
Reputational capital is a valuable asset for underwriters in IPO markets. Existing measures of th... more Reputational capital is a valuable asset for underwriters in IPO markets. Existing measures of their reputation are tailored to the US market, where the same established investment banks typically handle IPOs on both the NYSE and NASDAQ. The widely used Carter-Manaster rankings do not grade the reputations of underwriters of 67.5% of IPOs in Europe. The European IPO market is a series of domestic markets, where most underwriters operate almost entirely in a single country. This paper presents European-based rankings of 260 underwriters of 3,776 IPOs in France, Italy, Germany, and the UK from 1995 to 2010, with the number of IPOs underwritten and the amount of capital raised.
Handbook of Research on IPOs
This paper provides new evidence on the determinants of underwriting fees by re-examining the eff... more This paper provides new evidence on the determinants of underwriting fees by re-examining the effectiveness of traditional drivers in the light of the recent financial crisis. Some insights arise on potential conflicts of interest between institutional investors and investment banks. We posit that institutional investors, beside information production role, may cover twin roles as both investors and sub-underwriters in the raising equity capital process as well. We shed some lights on the puzzling evidence of both underwriter reputation and discount variables on fees, finding that the discount of the top five prestigious investment banks increases gross underwriter fees during the turmoil period while an opposite effect is shown before the 2007 crisis. Our results are robust after accounting for the possibility that discount and gross underwriting fees may be endogenously correlated.
Extending back at least to McDonald and Fisher (1973), the importance of a prestigious underwrite... more Extending back at least to McDonald and Fisher (1973), the importance of a prestigious underwriter has attracted the attention of researchers in trying to empirically measure reputation. Most of this literature, however, relies on measures tailored on the US case. Nonetheless, Europe has been attracting attention in comparative terms to the US. Moreover, the number of cross-countries studies in Europe yields to an increased demand for measures as proxy of the reputation of underwriters, even out of the corporate finance field. Along with the empirical literature, underwriters have come under the attention of the public debate. With the beginning of the financial crisis in 2007/2008, financial markets were put under severe pressure. In this context, there has been an increasing attention on the payments charged by underwriters on issuers for the services provided to them. A series of reports by regulatory bodies criticizes the surge in underwriting fees and highlight many issues, wit...
This paper questions whether the segmentation in the European IPO market plays a role in determin... more This paper questions whether the segmentation in the European IPO market plays a role in determining the cost of going public. Precisely, we compare the commissions charged by underwriters to firms listing on the stock markets of the four largest European economies. Coherently with previous results, we document the existence of a non-linear relationship between the cost-variables and the amount of capital raised with a different effect depending on the item cost considered. We find that the market structure affects the level of underwriter commissions and the prestige of the underwriter. We also investigate whether underwriters who charge high spreads are also able to leave more money on the table. Results are robust for endogeneity between underwriter commission and underpricing.