Ok, we’ve all had about 18 hours to digest the Blackstone IPO filing – and I accelerated the process last night with a few Red Stripes. So, what have we learned?
Not much, except that Goldman Sachs didn’t have the inside track it had been reported to have.
Almost all of the information in Blackstone’s S-1 filing contained information we either already knew, or thought that we already knew. Yes, it clarified a lot of the specific numbers (including some deal-specific data), but was there really any doubt that Blackstone was generating more in management fees than it was spending in expenses? Or that its assets under management have sky-rocketed in the last few years? Or that its collective IRR is higher than industry benchmarks? Or that Pete Peterson plans to retire? Or that Blackstone would be savvy enough to address the alleged hypocrisy of going public while simultaneously counseling public company CEOs to go private?
If you answered “yes” to any of those rhetorical questions, I’ve posted a lot of the specifics and the actual S-1 filing here. If not, I’d suggest that the ultimate takeaway will not be found in the initial filing, but rather in the actual offering once priced. If you subscribe to the notion (as I do) that Blackstone was prompted to act by Fortress, then other private equity firms likely will be compelled to act by Blackstone… But only if Blackstone replicates Fortress’ success and, arguably, far surpasses it (which is a near-certainty).
So what happens in the meantime? Other interested firms will file vague S-1s, but not rush to roadshow until Blackstone actually proves it can perform on the Big Board. This is the historical pattern for such firms, whether the security was a business development company (BDC) or European special purpose vehicle offering (i.e., KKR in Amsterdam). Also expect at least a couple of mega-firms to abstain, and promote such abstention to limited partners (“We’re dedicated to looking out for you, not for ourselves…”)