Silver Lake Sells — Who’s Next?

It’s been about 12 hours since we learned that Silver Lake Partners has sold a piece of itself to CalPERS. So who’s next? Here’s my stab at playing oddsmaker:

2-1. “The most likely firm to sell an ownership stake is always going to be the firm closest to going public,” says someone who helps arrange such deals. So that would be KKR, even though we can all agree that the IPO is a disaster-in-waiting (never buy stock when the prospectus’ use of proceeds section says: “To prove mine is bigger”).

3-1. Biggest, baddest brand left on the board. It also has a leader smart enough to hold his ostentatious parties in Vegas, where every party is ostentatious. No other firm on this list has had more buzz about a possible ownership stake sale, or had more pre-credit-crunch IPO predictions. Oh, and it’s finally the right time to have a venture capital arm.

Bain Capital
6-1. This one has most of the right ingredients, but it just doesn’t feel like a go. Maybe if the Celtics had drafted Yi Jianlian and Romney still had a chance of being elected president. Plus, why sell a piece when you’re getting 30% carry?

Warburg Pincus
10-1. The most idiosyncratic of private equity firms, with a single fund to do billion dollar buyouts and few million dollar startups. It works for them, but kind of hard for an outsider to get his head around. Walks to the beat of its own drummer, and these odds are all about following the crowd. Of course, there once were these three drummers: The Brown Brothers and Old Man Harriman.

First Reserve Corp.
16-1. Last week, I would have told you that the energy-only focus was a detriment. But then tech-only Silver Lake sells a piece, and industry diversification doesn’t seem as important. Plus, First Reserve’s performance is strong enough to make grown LPs cry.

Madison Dearborn Capital Partners
16-1. Chicago-based firm known for investing in basic industries? Just lacks the sex appeal that seems to drive decision-makers in Dubai and Sacramento. Plus, carried interest at MDCP is broadly distributed, with no one individual receiving double-digit points (out of 100). Does that sound like a particularly greedy bunch to you?

Thomas H. Lee Partners
20-1. A lot of these deals are done to help senior managers recognize brand equity, but that isn’t really in play at THL. The firm bought out namesake Tom Lee back in 1999, and its current top dogs are still relative pups.

Apollo Management
Leon Black now needs to turn his attentions to something new, with Chris Dodd falling out of the presidential race. And this is a firm that still very much wants to go public. The sale last year to Abu Dhabi may just be an appetizer.

The Carlyle Group
They’ve done this twice already — first with CalPERS, and then with Abu Dhabi. Never trust an addict.

Blackstone Group
Never say never with Blackstone, which probably walked down the road a bit with other suitors before settling on China. The goods here are damaged and depleted, but not beyond repair.

Silver Lake Partners
That was it. Silver Lake isn’t yet big enough to justify another sale, nor are its senior partners old enough. Good to get the institutional seal-of-approval, though.

Goldman Sachs Capital Partners
Off the board, since it never really owned itself to begin with. Its parent bank, however, can be found on a board around the corner.