We analyze 1.56 million account allocations in a sample of 265 initial public offerings (IPOs) to investigate the importance of on-going relationships between investors and underwriters. We find a sizable set of both institutional and retail investors who receive frequent allocations in IPOs. However, regular institutional investors receive more frequent allocations in hot IPOs compared to regular retail investors, suggesting that institutions provide more than just a dependable capital source

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... o underwriters. We also develop measures of the reliance on regular investors in IPOs and find no relationship between these measures and underpricing of IPOs.