The Comprehensive Guide to

Passive Income Investing

SIGN UP FOR PAUL’S NEWSLETTER

Learn the secrets of how Paul Tracy generates over $XXX,XXX per month in passive income!

How to Become Financially Independent Through Passive Income Investing

What is a Syndicate?

A syndicate is a group of lenders or underwriters that come together to share or participate in a specific loan or investment.

How Does a Syndicate Work?

A project may require too large of financial investment for a single lender or require a special type of investor or lender with expertise in a particular asset class. For example, a transportation project, such as a high speed rail, may involve a group of investors and lenders, each specializing in a portion of the project, such as rail lines, cars, bridges and tunnels, and signal and control technologies. This whole group is referred to as a syndicate.

Not only do the various lenders or investors bring their own expertise to the project, they also spread the risk among themselves, especially among very large, complicated projects. In addition, they enable lenders to handle projects that may exceed their individual capital base.

A banking syndicate, for example, is not a permanent entity. It is formed solely for a specific project.

Why Does a Syndicate Matter?

A syndicate is formed by an investment banker who, understanding the complexity and scale of a project, helps bring together several lenders who can participate in the project. While each project is negotiated individually, investment bankers may rely on a small group of specialized lenders to participate in syndicates.

Ask an Expert about Syndicate

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Syndicate.

Be the first to ask a question

If you have a question about Syndicate, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.