Carlyle Group going public... Thoughts?
What are your thought?
Business as usual without the benefit of being private...
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I don't like the idea of publicly-traded alternative asset managers. Too much of the value of the firm is tied up in reputation/human capital that is concentrated in a few people who are largely cashing out via these IPOs and too much of the revenue is already "spoken for" to compensate employees who will jump ship in a heartbeat. That really eats into the ability of the shareholders to benefit from that 2&20-BX had compensation expense>revenue for the past 3 years, including huge total comp to top execs who had big paydays in the IPO. The longevity of a top PE fund post-founders' exit hasn't really been tested, either.
Hmm.... these are some pretty shrewd investors....do they see a top coming in the market????
Fair enough, certainly no one expects that professional investors would choose a time to exit they thought was BAD, but I don't know if I buy this as a sign of a bubble. The trend had already started before the crisis (Fortress, BX, KKR's partial Dutch listing, plus Oaktree and either Ares or Apollo having some float on Goldman's private exchange) and is now just continuing apace now that IPO markets have reopened.
^ THIS THIS THIS
IPO is for this one reason only. It's time to get paid....for the most senior people.
A company wouldn't go public unless it needed more capital. Blackstone and KKR stock haven't performed very well since their offerings, but that's probably more due to terrible timing than anything else. And with Schwarzman and Kravis still hanging in there and not getting any younger, it could be a while before we're able to test PE longevity if a founder leaves.
^^^ agreed. the BX IPO for example didn't have anything to do with a need to raise capital. It had a lot to do with senior partner liquidity and a little to do with paving the way for increased business in China.
Remember too that many of the really big PE shops have outside investors, especially SWFs-Kuwait and Singapore for TPG, CalPERS for Carlyle, China's SWF for BX, etc etc. These guys have a long-term outlook but sooner or later they're going to want to be able to exit.
no one mentioned the transparency issue? but yes, i read BX ar, pretty much nothing in it regarding its portfolio composition.
Dimon went in-person yesterday to give JPM's pitch for the job
Oaktree's officially jumping on the IPO bandwagon too: http://www.sec.gov/Archives/edgar/data/1403528/000119312511167852/ds1.h…
It'll be interesting to see how a distressed manager is valued relative to the other shops that have gone public, since their returns would be counter cyclical.
I'm hearing JPM, Goldman, and Citi as leads
JPM lead left
Pretty solid article on Oaktree from Bloomberg:
http://www.bloomberg.com/news/2011-06-17/biggest-distressed-debt-invest…
[quote=Kenny_Powers_CFA]Pretty solid article on Oaktree from Bloomberg:
http://www.bloomberg.com/news/2011-06-17/biggest-distressed-debt-invest…]
thanks, great article
Oaktree sucks. High yield bond fund run by two people... next
Rubinstein is one stubborn bastard
I've always thought that publicly traded PE firms were a bad idea
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