What's up with all these IPO's by private equity, and even possibly hedge funds (Pershing)? is there something going on in the industry/in capital markets that's made private capital difficult to raise? Redemptions?
Love to hear all of your input
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from what I've read, some hedge funds are looking at IPOs in order to gain a more stable source of capital that is less likely to flee when the market slumps.
Also to allow new partners to buy stock, specially in shops whose ownership is very concentrated.
are there any other benefits to a PE IPO other than the GPs cashing out? Do PE firms want to diversify and model themselves to become the blackstones and kkrs (doing IB, capital markets and prop trading) and need public markets for capital access...? i agree that a 100mm float for Oaktree or a 1bn float for carlyle are small compared to their overall size however...
But arent the market ( stock holders) the most fickle bunch of investors compared to Institutionals and Wealthy Folks. They average joe is probably going to duck out when he hears the fund dropped 20% in one day due to a strategy going sideways whereas more knowledgeable investors will stick it out a little longer. I believe these guys are out to get cheap quick money with no strings attached afterall its not the firm that is being IPO just a subset (individual fund)in which the have no say whatsoever in strategy or tactics.
Like Mr. T says I PITY THE FOOL.......
Even if they are "fickle", selling the stock doesn't take capital out of the fund's hands. Ownership of the stock transfers from one person to another. By going public, they are raising capital for themselves (to probably diversify their product offerings).
The proceeds of the IPO are not being used to provide investment capital, but rather to pay the current partners of the firm. When BX's price drops, that doesn't mean its AUM changes.
all PE firms are trying to diversify their revenue streams... a la KKR with its cap markets and asset management trading group... apollo and its own cap markets/distressed fund. same with blackstone and the acquisition of GSO..
it makes sense. this way they can as flexible as possible in any market.
How negatively do the IPOs impact the future prospects of peons who aren't Partners yet? I.e. does it substantially reduce the upside of PE?
How negatively do the IPOs impact the future prospects of peons who aren't Partners yet? I.e. does it substantially reduce the upside of PE?
from their S-1:
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