Carlyle falls short of IPO target

The private equity firm priced the 30.5 million shares - or 10% of its enlarged share capital - at $22 apiece, having originally set an indicate price range of $23-25. Underwriters have a 30-day option to buy an additional 4.575 million shares. The stock is due to begin trading on the NASDAQ Global Select Market on Thursday.

"Carlyle's pricing shows a lot about what the average investor believes about private equity and the IPO market in general - it's a general lack of enthusiasm for an industry that has an uncertain future," Jeff Sica, president of SICA Wealth Management, told Reuters.

Carlyle's initial target of up to $762.5 million would have valued the company at $7.6 billion - still less than half the current market capitalization of The Blackstone Group and more than $2 billion behind KKR.

Private equity firms haven't performed well in the public markets. Blackstone has lost about half of its market value since listing in 2007, while Apollo Global Management is trading at around a 25% deficit to its March 2011 opening price. Last month, Oaktree Capital Management raised $387 million in its IPO, 25% less than its target, and the stock declined 1.4% on its trading debut.

Carlyle had about $147 billion in assets under management as of December 31, compared to $166 billion for Blackstone and $82 billion for Oaktree. It returned a record $19 billion to fund investors in 2011 and reported a 152% year-on-year increase in distributable earnings after several funds exited investments.

The firm has sought to diversify its business in recent years as a means of generating more consistent revenue streams. In the last two years it has acquired Claren Road Asset Management, a $4.5 billion credit hedge fund, private equity fund-of-funds AlpInvest Partners, and a 55% stake in Emerging Sovereign Group, a US-based hedge fund manager.

 

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• Topics
• Financials
• North America
• IPO
• The Carlyle Group
• Citigroup
• Apollo Global Management
• The Blackstone Group
• Oaktree Capital
• Financial Services