Carlyle And Oaktree Are Latest Private Equity Firms Expected To Go Public

Blackstone Group chief Stephen Schwarzman, whose private equity firm filed a giant IPO in 2007. More private equity firms are now following suit by going public.

Two more private equity companies are going public, as a once-secretive industry continues to make its way into the sunlight.

Carlyle Group, the third-largest private equity firm in the world, is expected to offer a 10 percent stake in its company as early as next week, according to a Reuters report late Tuesday. The private equity firm, which invests in a wide variety of companies around the world, including everyday consumer brands like Hertz Corporation, is reportedly looking to raise $750 million to $800 million, giving it a total market valuation of up to $8 billion. According to Reuters, JP Morgan Chase, Citigroup and Credit Suisse are leading the 21 financial institutions underwriting the deal.

At the same time, Bloomberg reports that Oaktree Capital Group, the Los Angeles-based private equity firm, is looking to sell $517.5 million of its company in its own public offering this week.

The two firms, among the 20 largest in the world in 2011, according to the research group and trade publication Private Equity International, join a growing list of large private equity operations that have offered stakes to the public in recent years.

In 2007, Fortress Investment Group became the first hedge fund and private equity firm to go public. That was followed a few months later by the Stephen Schwarzman-led Blackstone Group filing a massive IPO. In 2010, private equity giant KKR went public, followed, last March, by Apollo Global Management.

For those who follow the private equity world closely, it's all part of a much larger trend: a mainstreaming of the industry. Traditionally, some in the private equity world have had an uneasy relationship with public scrutiny. Many firms were simply private pools of money investing in private companies, with little need or incentive to interact with the outside world.

Now, though, the biggest PE firms are beginning to look and act like the rest of Wall Street.

"This is part of the trend of private equity becoming a regular industry, not a collection of obscure boutiques," said David Snow, CEO of private equity trade publishing company PrivCap.

Snow pointed out that these private equity firms that turn public often have businesses that stray beyond the traditional private equity model and into territory occupied by Old Wall Street, including offering investment advice and hedge funds.

These firms, Snow said, are almost like "old world merchant banks."

Comments

[olitenup]

05:38 PM on 04/11/2012

G Bush the first has been representing the Carlyle group starting in 1998, and retired in 03. I think. No telling who you are getting in bed with if you are going to invest in that one.

http://www.hereinreality.com/carlyle.html
http://www.bibliotecapleyades.net/sociopolitica/sociopol_carlyle01.htm

[MilesToGo]

03:29 PM on 04/11/2012

Investors should proceed with caution. We might recall when the insurance giant in the UK, Lloyd's of London, decided to let common folks invest. It was merely a way of getting others to absorb huge pending litigation losses from asbestos cases, since executives were easily able to insure themselves against that type of litigation.