What Is Bulge Bracket?
“Bulge bracket” is a slang term that describes the company or companies in an underwriting syndicate that issued the largest number of securities on a new issue. The bulge bracket is usually the first group listed on the tombstone—a print advertisem*nt of a new issue.
Bulge bracket is also a catchall term for the most profitable multinational investment banks in the world, whose banking clients are normally large institutions, corporations, and governments. Then there areboutique banks—smaller, younger banks that specialize in certain areas of investment banking and handle smaller deals.
Key Takeaways
- Bulge bracket is the major company (or companies) involved in an underwriting syndicate for a new issue of securities.
- The bulge bracket is usually the first name (or group of names) on the print advertisem*nt of the new issue and may also be the manager of the underwriter syndicate.
- The term can also refer to the top investment banks in the industry, such as JPMorgan Chase and Goldman Sachs.
Understanding Bulge Bracket
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.
The term “bulge bracket” as a catchall for investment banks is less used since the financial crisis, being replaced with the terms “tier one,” “tier two,” or “tier three.”
Being in the Bulge Bracket
Beyond firms being involved in underwriting syndicates, bulge bracket may also refer to major investment banks. Bulge bracket investment banks usually provide both financing and advisory banking services, in addition to market making, sales, and research for various financial products.
The bulge bracket is usually the book-running manager or the bank that controls the allocation of securities to investors. It is listed in the larger print above all others and on the prospectus cover.
Example of Bulge Bracket
As a catchall term for this class of large global investment bank, “bulge bracket” commonly refers to Bank of America Merrill Lynch, Goldman Sachs, Barclays Capital, Credit Suisse, Deutsche Bank, JPMorgan Chase, Citigroup, Morgan Stanley, and UBS. As massive multinational banks, these investment banks offer all kinds of services to clients, and many also run retail banking operations.
Since the global financial crisis of 2008, “bulge bracket” as a catchall 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 JPMorgan Chase because it ranks first or second globally across most product areas. 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.
Being a bulge bracket bank does not necessarily mean it is rock solid. Bear Stearns and Lehman Brothers were once bulge bracket banks, and both famously went under during the 2008–09 financial crisis.
How Many Bulge Bracket Banks Are There?
There are around a dozen bulge bracket banks today, including:
- Bank of America Merrill Lynch
- Barclays
- Blackstone
- Citi
- Credit Suisse
- Deutsche Bank
- Goldman Sachs
- HSBC
- JPMorgan Chase
- Morgan Stanley
- UBS
Which Is the Biggest Bulge Bracket Bank?
The largest bulge bracket investment bank, by market capitalization, is JPMorgan Chase (JPM), with a market value of around $600 billion as of July 2024. Bank of America (BAC) comes in second, at around a $320 billion market cap.
Which Is the Oldest Bulge Bracket Bank?
JPMorgan Chase is the oldest investment bank still in operation, founded in New York City in 1799 by John Pierpont Morgan.
The Bottom Line
Bulge bracket firms are the major underwriters (or bankers) of a securities issue and the managers of the underwriter syndicate. These include the biggest and most well-known companies in the investment banking world.
While there is increasing competition from smaller, boutique investment banks, the bulge bracket remains the dominant force in helping companies issue new securities.
FAQs
What Is Bulge Bracket? “Bulge bracket” is a slang term that describes the company or companies in an underwriting syndicate that issued the largest number of securities on a new issue. The bulge bracket is usually the first group listed on the tombstone—a print advertisem*nt of a new issue.
What do bulge brackets do? ›
Bulge bracket banks are multinational, brand-name banks that regularly handle billion-dollar transactions and employ thousands of people in financial centers around the world. Then there are boutique banks—smaller, younger banks that specialize in certain areas of investment banking and handle smaller deals.
How hard is it to get a job at a bulge bracket? ›
It's harder to win offers at the BB banks, and you need more upfront preparation and an early start in university (or a top-tier MBA). In some regions, the bulge brackets are not the best because domestic banks are stronger.
Is JP Morgan a bulge bracket? ›
Example of Bulge Bracket
The BBs are generally considered to be the most well-known, largest, and most established banks in the world. Some of these firms are: Goldman Sachs. J.P. Morgan.
What banks are ranked in the bulge bracket? ›
Table of contents
- #1 - Blackstone.
- #2 - Goldman Sachs.
- #3 - Morgan Stanley.
- #4 - J.P. Morgan.
- #5 - Bank of America.
- #6 - Credit Suisse.
- #7 - Citigroup.
- #8 - Deutsche Bank.
Overview. There are two main categories of investment banks: elite boutiques and bulge brackets. Elite boutiques are smaller organizations that focus solely on investment banking, while bulge brackets are large firms that provide many different corporate finance solutions.
How do you break into a bulge bracket? ›
To do this you must make your CV stand out and be finance-oriented. Generally, bulge banks will only deem your application to be worthy when you have satisfied at least two characteristics academic excellence, interest in finance/investment banking and relevant experience.
How much do bulge bracket banks pay? ›
Salaries and bonuses at bulge bracket banks in New York
| Title | Base Compensation |
|---|
| Investment Banking Analyst | $105,000-$150,000 |
| Investment Banking Associate | $175,000-$250,000 |
| Investment Banking Vice President | $275,000-$300,000 |
| Investment Banking Director | $300,000-$350,000 |
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Most bulge bracket investment banks offer a suite of services which are anchored around corporate banking or lending, therefore the potential for conflicts of interest arises if hired as restructuring advisors.
Is Morgan Stanley a Tier 1 bank? ›
The top three–Morgan Stanley, Goldman Sachs, and JP Morgan–have separated from the crowd and typically perform better than the best. Now, it is more common to sort bulge bracket banks into three different tiers. Tier 1 includes the "big three" listed above. Tier 2 includes Credit Suisse, Barclays, and Deutsche Bank.
“Bulge bracket” is a slang term that describes the company or companies in an underwriting syndicate that issued the largest number of securities on a new issue. The bulge bracket is usually the first group listed on the tombstone—a print advertisem*nt of a new issue.
What is the most prestigious bank to work for? ›
Goldman Sachs & Co.
Another US institution that's a global leader in financial services, Vault ranks Goldman Sachs & Co. as the most prestigious bank to work for. Goldman works with clients ranging from individuals to governments and is a leader in investment banking, securities, and investment management services.
Is Wells Fargo middle market or bulge bracket? ›
Despite being a very reputed and established firm in the market, Wells Fargo is an in-between-a-bank, in other words, a middle-market firm. It falls between a bulge bracket and a boutique bank. However, given its position, it is expected to climb up the ladder soon.
What bank do most billionaires use? ›
The Most Popular Banks for Millionaires
- JP Morgan Private Bank. “J.P. Morgan Private Bank is known for its investment services, which makes them a great option for those with millionaire status,” Kullberg said. “ ...
- Bank of America Private Bank. ...
- Citi Private Bank. ...
- Chase Private Client.
Bulge bracket banks offer a wide range of financial services and have a significant global reach, which can be an advantage for employees who are looking for exposure to a wide range of clients and financial transactions.
What is the most financially stable bank in America? ›
JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.
What is the difference between MM and bulge bracket? ›
Boutique firms typically have a smaller client base, while bulge bracket banks handle huge corporate clients, and middle-market banks operate between the two.
What do the bands on the brackets do? ›
Rubber bands act like bridges, bringing your teeth closer together. Aligning the Jaw: Sometimes, it's not just about the teeth. Rubber bands adjust the jaw position for a better bite and a comfy placement.
Why bulge bracket interview question? ›
Example answer: 'I intend to become a bulge bracket investment banker as I believe that this role provides a good opportunity to take on further responsibilities. As a junior investment banker, I currently research market trends for clients so that they can make informed investment decisions.
