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.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 
jgrisham:
Hmm.... these are some pretty shrewd investors....do they see a top coming in the market????
People use that argument a lot, it was thrown out regarding Glencore and a commodity bubble as well. I don't think it's that, I think it has more to do with senior partners wanting a liquidity event so that they can monetize the value of the firms they've built.
There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 
Kenny_Powers_CFA:
jgrisham:
Hmm.... these are some pretty shrewd investors....do they see a top coming in the market????
People use that argument a lot, it was thrown out regarding Glencore and a commodity bubble as well. I don't think it's that, I think it has more to do with senior partners wanting a liquidity event so that they can monetize the value of the firms they've built.
PE firms spend the majority of their time looking to generate exits and here they have the opportunity for an exit. Simples.
 
Best Response
samoanboy:
Kenny_Powers_CFA:
jgrisham:
Hmm.... these are some pretty shrewd investors....do they see a top coming in the market????
People use that argument a lot, it was thrown out regarding Glencore and a commodity bubble as well. I don't think it's that, I think it has more to do with senior partners wanting a liquidity event so that they can monetize the value of the firms they've built.
PE firms spend the majority of their time looking to generate exits and here they have the opportunity for an exit. Simples.

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.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

IPO is for this one reason only. It's time to get paid....for the most senior people.

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee WSO is not your personal search function.
 

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.

Metal. Music. Life. www.headofmetal.com
 
Pfalzer:
A company wouldn't go public unless it needed more capital.
Not always true. Companies go public so founders can cash out all the time. Alternative asset managers don't finance their own investment capital and PE firms don't have capex needs in the usual sense, so what would they need additional capital for?
There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

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.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

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[quote=patternfinder]Of course, I would just buy in scales. [/quote] See my WSO Blog | my AMA

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