We suppose it was inevitable, but post-KKR-IPO, there's a bit of bandwagoning, despite the fact that KKR performance has been less than stellar so far. From the WSJ:
Weeks after Kohlberg Kravis Roberts & Co. raised $5 billion in a European public stock offering, Apollo Management LP is following suit, with a planned $1.5 billion offering, and other private-equity firms are making similar plans.
The Journal notes that investors in the public entity aren't likely to get the returns limited partners get because LPs only write checks on capital calls:
Investors in the publicly listed fund will be earning far lower returns than those that private-equity firms generally promise their investors, because traditional investors write checks only when the firms are ready to invest the money in actual deals, while the public investors provide their cash at the time of the offering.
Apollo's solution: invest the money faster!
To entice investors, though, Apollo's fund promises to invest its money on a tight timetable.
We get the logic, but in our experience faster deals are sloppier deals. (But then we assume, perhaps wrongly, that many of the people putting money into the KKR IPO couldn't get into the original funds or comparable funds as LPs and are less sophisticated investors anyway.)
But re: LP advantages: our favorite private equity anonyblogger, GoingPrivate (who is fending off extortion threats at the moment), pointed us to KKR's offering memorandum (downloadable here) a few days ago. One counterintuitive risk disclosure: KKR warns prospective investors that they'll be receiving less information than LPs (p. 34/35.) All the downside of investing in public equities and none of the reporting benefits, apparently.
Apollo Will List Fund in Europe [WSJ]