Underwriter reputation and aftermarket performance of closed-end funds

I find a positive relation between underwriter reputation and the initial and long-run aftermarket performance of closed-end funds. This relation persists even after controlling for fund characteristics, types, and investment strategies. The positive relation between underwriter reputation and initial returns supports the notion that prestigious investment bankers tend to promote a price run-up in the immediate aftermarket to enhance their reputation with the issuers and the investors. The better long-run performance for funds underwritten by prestigious underwriters suggests that prestigious underwriters protect their reputation by underwriting only high-quality issues that will perform well in the long run.