Beware the Buyer

Private equity group Carlyle is pressing ahead with plans for a stock market float next month but analysts are divided over whether investors should approach with caution or confidence.

One of the world’s largest buyout firms, Carlyle has been working hard to convince Wall Street analysts that investors shouldn’t be wary of a firm that has been traditionally highly secretive even by the standards of the industry.

Suspicion of private equity firms has never been higher. Mitt Romney, former head of Bain Capital, a Boston-based private equity firm, has had a torrid time on the presidential election trail defending himself from ‘vulture capitalism’ charges by rivals for the Republican nomination.

Analysts point to what happened in the wake of Blackstone’s IPO, the first by a private equity firm, as a cautionary tale for anyone thinking of buying Carlyle shares.

Blackstone’s share price fell below its initial $31 within a week, never rebounded and is hovering around $14 a share. The offering though made a lot of money for Blackstone founders – in the case of Stephen Schwarzman, $684million in cash.

Read my full report on the Carlyle IPO in the Daily Mail.


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