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Shareholder beware! Carlyle comes with baggage fees

Thursday, May 03, 2012 - 03:51

May 4 - Recently launched Carlyle Group comes with political risk and high travel costs which investors will have to foot, according to PE Hub Editor Jonathan Marino.

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Okay. How -- rising slightly on its debut on the NASDAQ. This after the 671. Million dollars in its IPO. KKR so there's no rush. Well John why should investors hold off from buying Carlisle now. I think that's a pretty good time to be holding off when you factor in the IPO performance of competitors like Blackstone KKR and most recently oak tree. Now all of them have not only performed into the red but have also one of four major benchmarks obstacle to the rest were the risks involved Carl. For specifically I would say that some of the risks of their face are actually political this point we really don't know whether we're going to see any kind of increase in the capital or rather to be carried interest tax rate. On top of that that private equity firms also face specific risks in the lending market -- and their ability to draw revenue which was released from investors but a succession the group sees -- heading for -- Actually. As a matter of fact their IPO was kind of part of their succession -- in -- way it's going to be really difficult for any private equity firm to retain talent if they can't. Offers some liquidity options to the executives beneath the CEOs David Rubin -- And his he's co-founder -- so they're going to hold onto there 15% -- stakes may mean that as of right now they're all billionaires just based on Thursday Carla alone. What we don't know is exactly whether executives are going to -- and also how well they're going to do. You know that he had business hasn't done laws and there's the stock market those companies went public why so what's turning -- investors. I think there are a number of factors that are kind of spooking investors first is obviously carried interest rate. I'm on top of that I would probably say the really -- a lot of bad PO right now it's probably for the next seven. Six months or so the Obama administration might be tarring and -- in the private equity industry but what they're expensive you know people he talked about those jets and travel. What are investors getting them. Right well when your mind to KKR and your -- Carlo heroes of -- a little piece of private jet expenses -- this isn't something that I guess the -- tech IPO investor would have to concern themselves as much. Both KKR and -- -- -- -- ones that -- executives use private planes and specifically David Rubenstein has traveled outside of DC for I think about 250 times over the course of the last year one -- Now also if you take into consideration maybe shareholders might perform like private equity executives and take away CEOs planes. Second trip for both crabs and the shareholders aren't paying for the planes themselves on I don't know enough. -- -- by the CEOs. Like Kravis but when mr. Conway. Standing now. But during business hours as taxpayers expense like coach thinks that's what -- -- yes maintenance Thomas -- Four Carlyle for a three year period there are travel fees including private planes -- -- -- about seventeen million. Boy alive. Carla CEO -- -- he says that his firm is different from others other piece of its adult groups as a whole. Is it him. I would say now that there was that absolutely not they're going to perform my guess based on the same market swings his KKR anybody else -- -- that Carlos would like. FaceBook you know and that's expected to go public later this month. Why so absolutely comes back to the succession planning and in Wales and comes back to awarding the executives who have been yours for so long it's not just. It's not just about the founders. In in Facebook's case just like Carlos Mark Zuckerberg isn't -- Indians cash out of the company he's not putting anything on the table it's a few times keeping everything for himself. It -- all of us session thanks I appreciate -- Our thanks to John Marino PE com I'm Fred -- fail and this is what.

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Shareholder beware! Carlyle comes with baggage fees

Thursday, May 03, 2012 - 03:51