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More On The Blackstone IPO Party

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There are a lot of rumors flying surrounding the possible Blackstone IPO and the latest one is that apparently Goldman is less involved than some would have us believe. Sources tell the ‘Breaker that despite a report by CNBC’s David Faber this morning stating that Goldman Sachs is “hard at work on a prospectus,” the bank is denying that they have anything to do with the deal—preliminary or otherwise. “Goldman hasn’t even been approached by Blackstone,” our source said. “And if they’re going to go to Citi, they’re insane-- hello Vonage IPO! Lehman could maybe get it done, considering the [Peter] Peterson connection.”
We’ve also been pointed to an alternative theory as to why this whole thing is happening, other than the go-to answers of “money” and “because Fortress did it.” The explanation surrounds the fact that Congress has been discussing what seems like it would be a small tax change but could actually have “massively negative consequences for partners of PE firms” (which the partners have already voiced some considerable grumbling over, reported by Andrew Ross Sorkin last weekend). As it stands, PE partners like Schwarzman can choose to defer compensation, which, arising from long-term capital gains on underlying investments, gets treated as LT capital gains when it comes back onshore. If Congress changes the tax law, it would plug the “loophole” so that PE deferred compensation is dealt with like regular income and therefore taxed at much higher rates. If the loophole is closed, monetization via IPO makes more sense (to those who like money).
(That was kind of heavy on the facts, light on the fun, huh? Here’s my favorite clip from Arrested Development as a thank you for your time. The connection between this and the Blackstone business is that...oh, wait, there is none. Or! The connection is that the above, while perhaps useful, makes me want to kill myself and this is the only salve I could find on short notice. Either/or. Enjoy.)