What does the term "syndicate" refer to in investment banking?

The term "syndicate" in investment banking refers to a collaborative group of banks underwriting new securities. This arrangement is particularly common during initial public offerings (IPOs) or when issuing large amounts of debt. By forming a syndicate, banks pool their resources and share the risk associated with underwriting the securities.

This collaboration allows them to handle larger deals than they could individually, providing a wider distribution and facilitating greater market reach. Each bank in the syndicate will often take on a specific portion of the total deal, bringing together their expertise, networks, and capital to effectively manage the underwriting process and help ensure the success of the offering.

The other options do not accurately capture the core essence of what a syndicate is in this context. While the concept of competition among banks exists, a syndicate primarily focuses on cooperation rather than competition. A single financial institution managing a large deal wouldn't appropriately fit the definition, as that scenario lacks the collaborative framework central to the concept of a syndicate. Lastly, an informal gathering of investors does not align with the structured and formal nature of how syndicates operate in the investment banking industry.