Dealbook brings us this article from FT discussing some of the first public criticisms of private equity shops going public. A rep from “Calstrs” voices concern over short term vs. long term thinking and diminishing manager incentive if their wealth isn’t exlusively tied to fund performance.
I would counsel him not to worry. Life in the public eye will be short lived. The people at Blackstone, KKR, Fortress and the like are arguably some of the smartest minds in business. They know a good deal when they see one. And the deal for going public right now is too good to pass up. Don’t believe the feel good crap about building organizations to outlast their founders etc. That is easily accomplished as a private concern.
The bottom line is the markets are offering these folks a deal they can’t refuse. And remember, they’re BUY OUT specialists. In short order, the day will come when they decide to buy themselves back. Why? I don’t know for sure, but you can bet it happens. My best guess? These guys know just how toxic the RMBS/CDO story really is and don’t like what lies ahead. Just an idea.
In any event, I’ll be surprised if these stubs are public in 5 years time.