Carlyle Group is set to join the growing ranks of publicly traded private equity firms, filing an initial public offering worth up to $100 million, although the amount of the offering is likely to change before the company's stock actually prices.
In a press release, the Washington firm said it will use the proceeds to repay indebtedness and for general corporate purposes, including general operational needs, growth initiatives, acquisitions and strategic investments and to fund capital commitments to, and other investments in and alongside of, its funds.
Carlyle said its economic net income for the six months ended June 30 was $770.2 million, compared with a little more than $1 billion in the prior-year period, according to a filing with the Securities and Exchange Commission. The firm's assets under management totaled approximately $153 billion at June 30, including assets managed by AlpInvest Partners, a fund of funds group that Carlyle acquired earlier this year. The firm's private equity unit manages $55 billion in assets or approximately 36% of its total assets, according to the filing.
Total revenues across three of Carlyle 's four business units were about $1.8 billion as of June 30.
In June, Carlyle chose J.P. Morgan Chase & Co., Citigroup Inc. and Credit Suisse Group as the lead underwriters for its IPO.
Blackstone Group and Fortress Investment Group went public in 2007. Kohlberg Kravis Roberts & Co. began trading on the NYSE in July 2010 following a merger with a European-listed affiliate. Apollo Global Management went public in March. In June, Oaktree Capital Management filed for an IPO of up to $100 million.
Proponents of the public firm model say it enables firms to handle generational management transition in a more smooth and transparent fashion. Being public also provides firms with a permanent source of capital, allowing them to expand using the public stock currency. Critics have cited the potential misalignment of interests with limited partners, as public firms move to enter additional asset classes in pursuit of fee income to please shareholders.
Even after August's stock market turmoil, Carlyle planned to move ahead with its IPO, The Wall Street Journal reported. Senior executives of the firm, including co-founders David Rubenstein and William Conway, spoke with investors to informally pitch them on the company. In a late July due-diligence meeting, Carlyle executives said their firm has a greater global footprint than rivals have, including the largest private equity presence in China, and said Carlyle plans to pay a healthy dividend.
