Wednesday, April 4, 2007

APOLLO...are you cleared for takeoff?

It appears that Blackstone’s proposed IPO and the investment practices of its private equity brethren are now deserving of their own section in the New York Times. Today's edition includes a full Special Section on the DealBook, with a cover story looking at all the cash that is fueling leveraged buyouts. This acknowledgement by the NYTimes that private equity is on the mind of the modern-day average Joe is likely not lost on Blackstone's Stephen Schwarzman or the other "Masters of the Universe" whose business ties are mapped out by A.R. Sorkin's team.

Today's news that Apollo Management, another leading private equity firm based in New York, is exploring going public, only validates concerns that these investment firms are seeking to get out while they still have chips on the table. Private equity firms, like other cohorts in the financial markets, tend to graze in herds and move from grassy knoll to grassy knoll. Fortress kicked off the IPO train and others now feel compelled to get on the tracks. One posible motivator for Apollo Management is worry that investors looking to participate in a private equity IPO will quickly have their appetites satiated by the Blackstone IPO and not want to take another bite of the same apple. If that is the case, we should not be surprised to see other mega-cap private equity firms come out from behind the shed and make their intentions clear. Seems a bit like the political tarmac that continues bringing new presidential candidates to the American voter, or in this case the American investor.

1 comment:

ilanit said...

Los Angeles private equity funds typically position themselves somewhere in between venture capital and IPOs. That is, they invest in companies that have started up but have not gone public. Another big activity of such funds, which is making waves, is taking public companies private. These funds buy out existing investors, including retail shareholders, delist the company, restructure it beyond recognition- and sell it onward or
often take it public all over gain.