Going Public Understanding Motives of Private Equity Firms

Abstract:     
There has been a recent wave of PE firms that have gone public like Blackstone, Fortress, Apollo etc. Moreover, some firms like The Carlyle Group went through the private placement route by selling their shares to sovereign funds (personal wealth) of the people in the Middle East. Using a current set of returns of the PE industry and the returns of the firms that have gone public, the motives of the firms going public has been examined to support or reject the hypothesis that the firms went public as their returns started to peak. The data while confirming the peaking of returns is not convincing enough to negate the actual motives of going public by the PE firms' viz., the competitive scenario, the requirement of permanent capital and alignment of interests of employees and firms.

Number of Pages in PDF File: 15

Keywords: Private Equity, Performance, Current trends, Motives

JEL Classification: G24, G28, G32, G38, K22

working papers series