What is Bulge Bracket

Bulge bracket is a slang term that describes the company or companies in an underwriting syndicate that issued the largest amount of securities on a new issue. The bulge bracket is usually the first group listed on the tombstone, a print advertisement of a new issue. Bulge bracket is also a catch-all term for the most profitable multi-national investment banks in the world, whose banking clients are normally huge institutions, corporations and governments.


As the largest firm in an underwriting syndicate, a bulge bracket may also act as the manager or co-manager of the underwriter syndicate. In the investment banking industry, syndicates are formed so that underwriting companies can share the risks and profits associated with a new security issue with other firms. The larger the new issue, the more firms are likely to take part in the new issue through syndication.

Bulge Bracket Investment Banks

Bulge bracket investment banks usually provide both financing and advisory banking services, in addition to market making, sales and research for a large range of financial products, such as credit, equities, commodities and derivatives. They may also be involved in creating new types of financial products like mortgage backed securities, carbon emission trading, credit default swaps and insurance products. They can also be primary U.S. treasuries dealers.

The bulge bracket is usually the bookrunning manager, or the bank that controls allocation of securities to investors. It is listed in larger print above all others and on the prospectus cover.

As a catch-all term for this class of large global investment bank, "bulge bracket" commonly refers to Goldman Sachs, Barclays Capital, Credit Suisse, Deutsche Bank, JPMorgan Chase, Citigroup, Morgan Stanley and UBS. As massive multinational juggernauts, these investment banks offer all kinds of services to clients and many also run retail banking operations. The type of work, positions available and compensation are very similar across all of the banks.

Since the global financial crisis of 2008, "bulge bracket" as a catch-all term has been somewhat outmoded by the practice of referring to investment banks as "tier one," "tier two" or "tier three" investment banks. The only "tier one" investment bank might be J.P. Morgan Chase because it ranks first or second globally across all product areas (except credit and municipal finance). J.P. Morgan Chase is also strong across markets in the U.S., Europe and EMEA. "Tier two" would be Goldman Sachs, Barclays Capital, Credit Suisse, Deutsche Bank and Citigroup. Examples of "tier three" would be UBS, BNP Paribas and SocGen.