With its long-anticipated public offering, The Carlyle Group had its coming out on Wall Street yesterday and the reception was decidedly lukewarm, with its stock closing at $22.05, a nickel above its opening price. The company was compelled to reduce its offering to $22 per share after failing to reach its $23 to $25 target range.
The blah day-one results are the latest in what is becoming a trend in private equity as public investors continue to cast an indifferent eye to the industry. Oaktree Capital, which went public last month, is trading below its $43 offering that brought in some $380 million, more than a quarter less than expected. Last year, Apollo Global Management priced at the top of its offering range, only to see its stock slump after opening. Two of the first alternative investment houses to go public in recent years, Blackstone Group and Fortress Investment Group, have had their shares drop more than 60% and nearly 85%, respectively, since their 2007 IPOs.
Not to say they knew what was coming, but executives of Carlyle bucked what has become a tradition for companies debuting on the market and did not ring the opening bell at the NASDAQ on Thursday. Instead they let a bunch of kids from Junior Achievement handle the honors (in their defense, Carlyle co-founders David Rubenstein, William Conway, and Daniel D’Aniello have always been a close-to-the-vest lot). Don’t cry for them, though. It is estimated their new holdings in the company’s stock are now worth $1 billion apiece, and Carlyle raked in some $670 million in the stock sale. Not bad for a day’s work, I suppose.