Carlyle’s Public Dilemma

Everyone knows Carlyle Group eventually wants to go public, but it may have an added hurdle.

One of Blackstone and KKR’s major arguments was that they needed public currency to better expand their asset management platform beyond private equity (hedge funds, etc.). Carlyle would likely make that case also, but investors may be a bit concerned about such expansion into public securities given the collapse of CCC and pending liquidation of Blue Wave.

In other words: Carlyle has already demonstrated difficulty in straying from its private knitting, but would be asking for new capital to do that very thing. Could be tough for public investors to swallow…

This certainly isn’t to say that Carlyle couldn’t make a persuasive case, and would certainly argue that their problems were more a cause of timing that competence. Moreover, the firm would claim that its private securities knitting has been regularly marked with public security stitches, so such expansion isn’t actually that much of a stretch.

But it’s a case Carlyle will have to make. Blackstone didn’t have to because it didn’t have the blowups, and KKR didn’t have to because it’s not actually selling any new shares. If only CCC still existed, so that Carlyle could just go public without anyone of import asking questions…