Blackstone Plan Could Reshape Private Equity - WSJ.com
Listing Would Require
Public Disclosures Likely
To Intensify Scrutiny
By HENNY SENDER
March 19, 2007; Page A1
Blackstone Group's expected decision to seek money from public shareholders will place under scrutiny -- and possibly lead to changes in -- the highly lucrative private-equity business model that has transformed Wall Street in recent years.
Blackstone, which has grown rich taking public companies private, is in the advanced stages of planning an initial public offering of roughly 10% of the firm's core partnership, according to people familiar with the matter.
That prospect worries other private-equity firms. The hefty fees the partnership charges the big investors who supply its buyout funds make it potentially attractive to public shareholders. Taking the partnership at its heart public might oblige Blackstone to disclose how much of those fees it keeps for itself, and other private-equity firms aren't eager for that to happen. Any such disclosures, while they could be good for investors, might expose Blackstone and its rivals to criticism from their investors -- and from lawmakers.