Underwriting Group

DEFINITION of 'Underwriting Group'

A temporary association of investment bankers who wish to purchase a new issue of securities from an issuer in order to distribute the issue to investors at a profit. The underwriting group shares the risk and aid in the successful distribution of the new securities issue.


Also called a purchase group, distributing syndicate or syndicate.

BREAKING DOWN 'Underwriting Group'

An underwriting group manages the distribution of a new securities issue. The group purchases the issue from the issuing corporation at a specified price and then resells the issue to investors in order to make a profit. The profit is the difference between the purchase price and the resale price; this is known as the underwriting spread.

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RELATED FAQS
  1. Do underwriters make guarantees to sell an entire IPO issue?

    Underwriters represent the group of representatives from an investment bank whose main responsibility is to complete the ... Read Answer >>
  2. What does the underwriter do in a new stock offering?

    Learn the role an underwriter plays for an initial public offering, and the steps an underwriter takes in preparing for an ... Read Answer >>
  3. How does insurance underwriting differ from investment underwriting?

    Understand the difference between insurance underwriting and investment underwriting, including what types of risks an underwriter ... Read Answer >>
  4. How does an underwriter syndicate work together on an initial public offering (IPO)?

    Learn how underwriting syndicates work together when helping a company undertake an initial public offering, and learn about ... Read Answer >>
  5. What are examples of risks for all underwriter types?

    Learn about the risks faced by different types of underwriting activity. Explore specific examples of risks faced by insurance ... Read Answer >>
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    Learn about the education, training and certification required to become an insurance underwriter as well as the important ... Read Answer >>
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