The Washington Post's Allan Sloan rails against the partnership equity structure and the tax structure of Blackstone but is good enough to indicate why he's been paying so much attention to the private equity firm: because they had the nerve to raise their profile with the IPO.
If you're wondering why people like me keep writing about Blackstone Group, the big private-equity player, there's a simple answer: The whale that comes to the surface gets harpooned. And whales don't get much bigger than Blackstone, which lately seems to be bidding on every asset in sight.
When private-equity firms and hedge funds kept low profiles, they were well out of harpoon range. They benefited from an enormous tax loophole that few but the cognoscenti knew about and a nice legal loophole that's familiar to people in the world of partnerships but that I'd never heard of until last week. These things have now emerged into public view, thanks largely to Blackstone's bid to become a publicly traded company. The harpoons are flying -- as well they should be.
That's a refreshingly honest view of the way journalists find their targets, and one that hedge funds and private equity firms considering going public may want to keep in mind. There's a risk of invoking the prating wrath of the chattering classes.
Ahoy, Blackstone, and Ready the Harpoons [Washington Post]