One thing we’re kind of tired of is the question “if they’re selling, are you a buyer?” It’s getting thrown around a lot these days with respect to private equity and hedge fund public offerings. The idea is that if these financial big-wigs are selling, it must be a sign of a market top. It’s tired, misleading and we’ve had enough of it. (And we're still hearing from our younger brother who is angry he listened to this kind of thing when he had the chance to buy into the Goldman IPO.)
But it’s probably not going away. It’s certainly been one of the dominant reactions to the news that Carlyle is in “monitoring mode”—considering a public offering and waiting to see how Blackstone’s public offering pans out.
Carlyle founder David Rubenstein told the Washington Post that Carlyle is “a natural candidate to go public.”
“Today we are not working on an IPO. But…if our competitors all go public and all of them seem to be stronger than they were before, obviously we would have to take a look at the situation,” Rubenstein says.
[Editor’s Note: How’s that for bold, market leadership?]
Roger Ehrenberg, who writes the Information Arbitrage blog, approves of the idea of Carlyle going public.
The fact of the matter is that Carlyle is a great candidate to go pubilc - it has a portfolio diversified by geography, industry, and size, involves multiple levels of the capital structure and will soon have a hedge fund offering as well. While not as diversified as Blackstone, which has both an advisory component and a significant fund-of-funds business (via BAAM), it has a stellar track record and a roster of managers that is the envy of the industry.
FT Alphaville is a bit more skeptical.
But, in the Post story, one telling remark is Rubenstein’s overall take on the industry’s fad for listing. “These guys who built these private-equity firms: You can say many things about them, but one thing you can’t say it they’re stupid, or they are not an alpha male,” says Rubenstein. “These guys are going to be fairly forthright about getting what they think they earned for building these firms.”
In case you missed this subtle point, FTAlphaville adds, “Which begs the question: if they’re selling, are you a buyer?”
Yeah. We’d probably better just get used to this.
Private-Equity Firms Face Public Future [Washington Post]
A Carlyle IPO: David Says it Like it Is [Information Arbitrage]
Carlyle - next for the market? [FT Alphaville]