What is a syndicate in banking?

Syndicate 1 Understanding Syndicates. Syndicates are usually comprised of companies in the same industry. ... 2 Underwriting Syndicates. In an initial public offering (IPO), a number of investment banks and broker-dealers form a syndicate to sell new offerings of stock or debt securities to investors. 3 Syndicates and Insurance Risk. ...

What is an undivided account in a syndicate?

BREAKING DOWN 'Syndicate'. In an investment banking syndicate, for example, an undivided account means that each underwriter in the syndicate is responsible for selling its allotted amount of stock and any excess shares not sold by the syndicate as a whole. An individual member may have to sell far more securities than it was allotted.

What is an example of an underwriting syndicate?

An example of an underwriting syndicate is a group of investment banks that work together to issue new stock to the public. The bank that leads this endeavor is called the syndicate manager. The syndicate breaks up thirty days after the sale is complete, or if the securities cannot be sold at the offering price.

What are the key takeaways of a syndicate?

Key Takeaways. A syndicate is a temporary alliance formed by professionals to handle a large transaction that would be impossible to execute individually. By forming a syndicate, members can pool their resources together, share the risks and potential for attractive returns.