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Why private equity is going public

Posted by Arun Uday on July 18, 2007

The recent Blackstone IPO and forthcoming KKR IPO has got the whole world speculating on the reasons why PE firms are going public. Various folks have conjured numerous theories, some authentic, some not so authentic. These range from PE firms trying to exploit the liquidity in global equity markets to senior partners cashing on the high valuations that these firms are now able to command etc. Before I share my $0.02 on this, a quick question to the reader – which is the largest well known public principal investor (clue: it is not a fund house)? Answer – Goldman Sachs. This brings us to an important theme which is playing out in the global financial world today, which is the obliteration of the line between the principal and agent, something that has not been as well analyzed by most (in the context of PE firms going public) as it warrants (IMO).
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