Blackstone IPO: Irony, Not Hypocrisy

One of the big storylines to the (possibly) pending Blackstone IPO is that the private equity giant is being hypocritical. Specifically, it is going public while simultaneously telling other public companies that they’d be better off by going private. What’s good for the goose…

But this analysis leaves out an important addendum to the “go private” argument: It is only a short-term fix. Public companies can gain more flexibility as private entities but, in the end, they will usually have to go public again. After all, the private equity firm needs to get paid.

So while a Blackstone IPO would be a bit ironic, it would not be hypocritical. It also is important to stress that calling Blackstone a “private equity” firm may be a bit of a misnomer. Instead, it is more of a diversified asset management firm with private equity used as a cornerstone platform. Not only does the firm also have large real estate and hedge fund holdings, it has a robust corporate advisory business and even has a placement agency wing that raised private equity funds for other firms.