Long term trends of PE shops?
I’ve heard from somewhere that many PE shops will go public sooner or later, and the reason stems from the basic theory we know in finance. The notion is, if we look the risks through the eyes from the marginal investors, we have to worry about not only non-diversifiable risk, but also firm-specific risk. Thus, from the perspective of the investors they have a clear advantage putting their money at Blackstone rather than KKR. Does this make sense? The thing I’m concerned about is that, if many PE shops go public then they will be regulated by the SEC, and will the investors and SEC still allow the guys get huge bonuses? That sucks.
Anybody who works in PE shops will be thankful to give their opinions or facts about the situation.
wow dude i don't think you have a clue.
That makes absolutely no sense and by default, the worst reasoning I've ever heard... I don't think you really understand how PE shops make money..
The reason they can go public is because investors invested in the high risk / high return funds that generate fees and carried interest which provide revenue for the general Blackstone management company... publice and private equity are completely different asset classes, managed and for diversification purposes, essential,..
The reason they go public is to acquire cash for the founders and in the case of Blackstone make acquisitions like GSO...
dude i can go on for a day for why they invest in PE over common equity... I wouldnt be surprised if blackstone and kkr have similar investors in each fund...
read your basics... http://en.wikipedia.org/wiki/Private_equity_fund
is so that their founders/majority shareholders have a chance to cash out.
access to additional sources of capital, broad base of investors, etc.
remember the tech ipos, paternot - millionaires overnight.
The world has changed. And we must change with it.
ok, so i see you revised your post...
still the same issue, the firm, kkr or blackstone only has a GP interest in the fund, a limited partnership. As such, this Limited Partnership is not regulated by the SEC. There is no risk by the fund as KKR and Blackstone just have management interests in the fund, i.e. investment advisor control, management fees and carried interest.
Now imagine KKR or Blackstone has 60 of these funds generating fees. you roll those fees up into a revenue line and that's where you get you 10-k figures.... it is really irrelevant from the LPs interest who the GP is, whether public or private... your concern is the quality of such sponsor and the reutrns they're able to provide based on their network...
get it? recheck that wikipedia post on how a fund is structured...
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