Saturday, August 6, 2011

Will IPO Exit Door Slam on Carlyle Group?

Bloomberg reported:

Blackstone Group LP (BX) and KKR & Co. both had their worst one-day declines in more than a year yesterday on concern that a falling stock market will hinder the buyout firms’ ability to sell companies.

Apollo Global Management LLC, which began trading on March 30, suffered its worst day and closed at its lowest price.  
The article focused on affiliates of private equity underwriters (PEU's).

HCA Holdings, the hospital chain partly owned by KKR and Bain Capital LLC, raised $4.4 billion in March in the biggest-ever private equity-backed U.S. IPO, according to Preqin. The company declined 24 percent from its debut through yesterday. 

Bloomberg's concerns could apply to The Carlyle Group's looming IPO.  Will they execute it in time? What will the third and fourth quarters hold for Carlyle, which hoped to file an S-1 and sell $750 million to $1.2 billion in equity by the end of the year.

Experts expect Carlyle to "be valued in line with its biggest competitors, KKR and Blackstone Group LP."  They are on their way down.  Carlyle saw its Blue Wave Partners Hedge Fund implode in eight short months in 2008.  What will the next five months hold?

Update 8-13-11:  Reuters picked up on this theme.  Their article stated "The Carlyle Group, a major competitor to Apollo, is even more sensitive to the closing IPO door since it was hoping to file for its own public offering in the third quarter."