That's pretty awkward. In this global economic meltdown, one of the most popular names in the private equity and investment industry is ready to launch an initial public offering. Yes, the Carlyle Group (CARL) filed with the SEC on September 6, 2010, for an IPO to join the ranks of Blackstone (BX) and KKR (KKR).
What do you have to say about the timing? Well, I really don't know what the Carlyle management team has in mind, with releasing the IPO in such a disastrous market, when companies are trying their best to stay afloat and people are leaving no stones unturned to rise above the personal debt level. The consumer confidence index (CCI) is at its very bottom, and the release of an IPO couldn't have worse timing.
Will Carlyle get a proper valuation? According to an article in the Moneycontrol, before the recession in 2007, it was estimated at $20 billion. Where will it stand now? It has filed for a $100 million IPO, but it might as well go up to $1 billion in reality. But what about the current market valuation? I doubt it.
"If Carlyle files in this time frame, in basically a market meltdown, something doesn't seem right," said Scott Sweet, senior managing partner at IPO Boutique. And right he is. Especially when a large number of deals are being postponed during the last month.
The market valuation of BlackRock fell by 24.5% in the last six months, standing at $27.3 billion. The market valuation of Evercore Partners (EVR) fell by 25.6%, standing at $631.6 million, Thomson Reuters (TRI) dropped by 26.6%, standing at $24.18 billion, and American International Group (AIG) fell by 37.6%, standing at $44.26 billion.
Carlyle was founded in 1987 by David Rubenstein, Daniel D'Aniello and William Conway, and it is one of the largest, most diversified global alternative asset management firms that focuses on almost every sector, starting from technology to real estate to healthcare. Since its inception, it has invested over $47 billion in 405 corporate private equity transactions. It currently has around $153 billion of assets, compared to $159 billion for Blackstone.
Carlyle seems to be in an active mood. Whether it's acquiring Brintons Carpets, acquiring a minority stake in Avalon Advisors, investing in Value & Budget Housing Corporation, or investing in Dunkin Brands (DNKN), Carlyle is all over the world.
Though experts show hesitation on the company releasing its IPO at this time, and if all the company needed was to raise funds, I would want to just wait and watch. But once it gains the confidence of investors, it could turn out to be strong contender in the private equity market. The IPO will be underwritten by JP Morgan (JPM), Citigroup (C) and Credit Suisse (CS).
Best said, time will tell.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.