Carlyle will gauge the IPO market tomorrow based on Oaktree's reception and the direction of the stock market. If Oaktree isn't warmly welcomed and the market continues to decline, Carlyle may delay their investor "dog and pony" show.
How long ago did Carlyle conduct road shows on BlueWave Partners (hedge fund) and Carlyle Capital Corporation (publicly traded mortgage credit fund). When sued by investors upset about losing millions on SemGroup, Carlyle claimed puffery as a defense.
Consider the following extreme Oaktree scenarios, neither of which is likely to come true:
Soaktree -- The firm prices at the top of the range, rises at the open and holds above the IPO price for the first day.
Yaktree -- The issuance is withdrawn due to investors getting sick at the prospect of owning the company.
That leaves at least three more options:
Carlyle will be reading the leaves. Carlyle's co-founders assert they won't sell their shares. That's in contrast to numerous quotes from Carlyle's David Rubenstein about his desire to monetize, liquefy his stakeCraptree -- The company prices at the low end of the range, then muddles along
Naptree -- The firm prices in the middle of the range, then dances around its IPO priceTaptree --The firm prices above midrange and closes at the high for the day.
Oaktree lobbied hard to keep PEU preferred "carried interest" taxation. Carlyle did likewise. David Rubenstein personally visited the Capital to lobby against an increase. President Obama seems happy to give Oaktree and Carlyle owners a chance to cash in their founder stakes at carried interest rates. The question is how much will founders ring the register?