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Carlyle Remains On Track for 2012 IPO (CG, BX, KKR, ACAS, OZM, FIG, PSP)

Administrator — Wed, 11 Jan 2012 16:44:44 +0000

The Carlyle Group L.P. is still planning to be one of the top private equity initial public offerings of 2012. We even named it as one of the Top 17 IPOs to Watch in 2012. That charge is not due to its size… It is due to the notion that every private equity shop out there may start to value the company based upon what happens in the after-market in the weeks and months after the IPO.

Some of the private equity firms which will be watching this offering closely are The Blackstone Group (NYSE: BX) worth $7.4 billion, Kohlberg Kravis Roberts & Co. (NYSE: KKR) worth $3.1 billion, American Capital, Ltd. (NASDAQ: ACAS) worth almost $2.5 billion, Och-Ziff Capital Management Group LLC (NYSE: OZM) worth about $925 million, and Fortress Investment Group LLC (NYSE: FIG) worth about $665 million. There is also the PowerShares Global Listed Private Equity (NYSE: PSP) ETF that Carlyle will ultimately become a part of when it comes public.

Carlyle is going to list on NASDAQ rather than on the NYSE and it is going to list under the ticker “CG” for its units. No financial terms have been set for the deal. The private equity giant has selected J.P. Morgan, Citigroup, and Credit Suisse as the listed book-runners for this IPO.

It is hard to admit that it was hard to ignore that the founders made a combined $413 million in 2011 ahead of this IPO. The full amended filing is here.

One reason that private equity deals matter to the public right now is because of Mitt Romneys’s roots back to Bain and the current misconceptions about what private equity firms actually do. While layoffs happen at most private equity buyout targets, many of those businesses were failing to generate profits and many may have eventually folded on their own. Who are the largest clients of private equity firms? Usually company and governmental pension funds.

JON C. OGG

Filed under: Banking, Brokerage Firms, Financial Stocks, IPOs, Mergers and Buy Outs, Private Equity Tagged: ACAS, BX, CG, FIG, KKR, OZM, PSP

Carlyle IPO Filing: Making the Billions Even More Liquid

Administrator — Tue, 06 Sep 2011 14:17:22 +0000

Another private equity giant is set to come public in an initial public offering. The Blackstone Group (NYSE: BX), Apollo Global Management, LLC (NYSE: APO), Kohlberg Kravis Roberts & Co. (NYSE: KKR), and Fortress Investment Group LLC (NYSE: FIG) are already public. Now it looks as though The Carlyle Group L.P. will join the private equity brethren as a publicly traded entity.

While financial terms have not been set, it is interesting that this initial public offering is currently for only “up to $100 million” in common units for sale in the filing. The underwriters so far named are J.P. Morgan, Citigroup, and Credit Suisse.

As of June 30, 2011, Carlyle showed roughly $153 billion in assets under management. That was up from $107 billion at the end of 2010, but that gain includes the benefits of the acquisitions of AlpInvest Partners B.V. and Emerging Sovereign Group LLC on July 1, 2011.

Carlyle is one of the most prestigious private equity players on the planet. It is extremely diversified in portfolio companies and in geographies in multiple asset classes and in multiple investment strategies. Its $153 billion in assets under management is spread among 86 funds and 49 fund of funds vehicles. The company itself has over 1,100 employees, which are comprised of over 500 investment professionals, in 34 offices on six continents.

The company noted in the filing that it serves over 1,400 carry fund investors from 73 countries.
The company’s total footprint is shown as being over 200 portfolio companies that employ more than 600,000 people under its Corporate Private Equity and Real Assets segments.

Revenues in the first six months of 2011 have been $1.796 billion and distributable earnings have been $373.2 million. Total segment revenues for all of 2010 were $2.385 billion with distributable earnings coming to $342.5 million.

The FULL SEC FILING is available here.

Keep in mind that investors can actually invest in a private equity ETF if they want to spread the wings out other than just in one firm. There is the PowerShares Listed Private Equity (NYSE: PSP) which tracks the Global Listed Private Equity index with at least 90% of its assets in securities of publicly listed private equity companies, business development companies and other financial institutions or vehicles whose principal business is to invest in and lend capital to privately held companies.

JON C. OGG

Filed under: Brokerage Firms, Financial Stocks, IPOs, Mergers and Buy Outs, Private Equity Tagged: APO, BX, FIG, KKR, PSP

Blackstone Earnings & Private Equity Outlook (BX, PSP)

247wallst — Sat, 08 Mar 2008 10:09:52 +0000

Shares of The Blackstone Group, L.P. (NYSE: BX) have seen their share of pain since coming public in 2007. The private equity giant will report earnings Monday, and this may further set the tone for at least the public anticipation of private equity firms for the months ahead. Much of that should already be known as the days of the giant club-deals are dead and as many private equity firms have had to focus on smaller deals that are in-line with more historic trends of deals being in the hundreds-of-millions of dollars or in the few-Billion dollar range. Much of the current climate has also revolved around vulture activities and buying assets that are deemed distressed in market pricing that in reality may not be as weak as the prices would indicate. Funds are still being raised.

There are just not many public comparisons to base a history on, so we’d urge traders and investors alike to use any formal estimates as a sort of moving target that might not be as set in stone as most other established companies. First Call had estimates pegged at $0.19 EPS and $434.6 million in revenues on last look. If any guidance is offered, next quarter estimates appear to be $0.26 EPS on $549.8 million in revenues. Once again, use those as a vague moving target as the crowd of analysts making formal numbers is rather small.

Options traders appear to be braced for a move of at least $1.00 in either direction. The chart here has been of little use as the stock’s price has just gone lower and lower. Shares closed down some 3% at $14.58 Friday after putting in a new intraday low of $14.16. Its post-IPO high was $38.00.

Private equity is not dead. But the excesses of 2006 and 2007 are proving to look very similar to the excesses seen in the consumer credit bubble. Blackstone was one of the only private equity firms that made it to a huge public IPO last year, but we have noted how there are in essence many more public private equity firms, hedge funds, and others that act similar to private equity firms. There is even an ETF called the PowerShares Listed Private Equity (AMEX:PSP), and another exchange traded note recently launched.

This may be heresy, but there is at least one thing to consider: if the share prices post the same performance ahead as they have seen since an IPO, it would be very conceivable that Steve Schwarzman and other officers decide its time to go private again.

Jon C. Ogg
March 8, 2008

An ETF Launch For Private Equity, Actually An ETN (PPE, PSP)

247wallst — Thu, 21 Feb 2008 15:51:20 +0000

Today was the launch of the Lehman Brothers’ first exchange traded note with the initial listing of the "Opta S&P Private Equity ETN" on NYSE Arca. This ETN will trade under the ticker "PPE" on NYSE, or go by (NYSE: PPE).

The Opta S&P Private Equity ETN is set up to mimic and track the performance of 30 leading private equity companies that are included in the S&P Listed Private Equity Index Net Return Index.

Here was a list of the constituent stocks on last look straight from the S&P website.

There is a competing ETF called the PowerShares Listed Private Equity (AMEX:PSP), and you can at least see the performance for a comparison.

Jon C. Ogg
February 21, 2008

Nintendo Guidance Shows More Muscle

247wallst — Thu, 05 Apr 2007 07:26:41 +0000

Nintendo raised its guidance again for the year ended March 31. It won’t post the actual results until the end of April, but its Wii and DS systems have been hits for the company. It mostly attributed the DS handheld system for the success. The sales are being estimated now at 966 Billion Yen (US$8.1 Billion) compared to previous forecasts of 900 Billion Yen and estimates of 930 Billion Yen. Back in January it already forecast that profits would be a record.

Separately, Sony (SNE-NYSE/ADR) is feeling some handheld envy and hasannounced $30 price cuts to $170 per unit for its PSP handheld unit.That is still $20 higher than most of the DS units and $40 higher thanthe DS Lite.

Nintendo has sold more than twice the Wii consolesin Japan as in the US, but said it has likely reached its target ofselling 6 million units so far.

Nintendo shares areunfortunately relegated to the pink sheets in the US, but in Japan theyclosed up 2.1%. With recent Sony price cuts on the PSP and the PS3 andthe new revved-up Xbox360 from Microsoft (MSFT) that was recentlyannounced, the console wars are just getting going. This could alsotake a different turn in calendar Q4 because of the release of Halo 3and the new Grand Theft Auto titles being released.

So far, it is no wonder that Satoru Iwata, Nintendo’s CEO, made it to Barron’s top 30 CEO’s.

Jon C. Ogg
April 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.