Publicly traded mega-firms are reporting stronger results and a more robust deal market as the economy struggles to rise out of a two-year slump. Meantime, more buyout shops are lining up for public offerings to take advantage of growing liquidity.
Stephen Schwarzman, the chief executive of
Blackstone’s ability to do larger deals is returning while it also anticipates exiting a number of investments, Reuters, publisher of Buyouts, reported. “A year ago, if you could raise $1 billion… or $1.5 billion of debt, you were pretty much of a hero,” Schwarzman said during the analyst conference call. “That’s dramatically changed. And the pricing of debt has gone down as well, dramatically.”
While large deals weren’t “even vaguely possible a year ago” it could be possible to do deals in the $10 billion or $15 billion range again, he said, while stressing that Blackstone has focused on smaller deals where it saw more value, Reuters reported.
“Our global reach across industries and asset classes positions us to identify a broader array of opportunities that we are working on today,” Bill Sonneborn, the CEO of KFN, said during the company’s earnings call. That means KFN could allocate “incremental capital” into private equity, alongside KKR’s private equity funds and “select private equity opportunities,” he said. KFN focuses primarily on investments that generate cash flow for distributions to shareholders, Sonneborn said. “But we want to, on top of that, provide opportunities for increasing total rates of return with positive skew to the upside.” Sonneborn would not discuss how much of its portfolio KFN would allocate to private equity.
Meantime, investors are looking forward to KKR and
KKR filed documents in March to move its primary stock listing to the United States from the Euronext Amsterdam, listing 204.9 million common units for $2.2 billion, which would represent a 30 percent interest in KKR available to the investing public. The firm’s principals would retain the rest. The company has not disclosed the timing of the offering, after which its shares would trade on the New York Stock Exchange under the ticker symbol KKR.
Apollo, meanwhile, said in a regulatory filing in March that it plans to offer up to $50 million in new stock as it move its shares—currently traded on a private exchange—to the NYSE, Reuters reported. The offering would represent only a small percentage of the overall company, and Apollo’s management team will not sell shares in the offering, the company said. Founder Leon Black has previously said he hoped to be listed on the NYSE by the end of the first quarter.
Buyout and hedge fund manager
Other public offerings of buyout shops may be on the way. In an on-stage interview at the Buyouts West conference last month, Jesse Rogers, the outgoing co-founder of