Essay about Stock Market and Firm
The Blackstone Group (Blackstone) is a private equity firm founded in 1985 by two former employees of Lehman Brothers. In May 2007 the firm had $88.4 billion under management and had grown 41% annually since 2001.
The firm operated in several business groups but distinguished itself from other firms by extensive collaboration across divisions. It was divided into Corporate Private Equity, Real Estate Funds, Marketable Alternative Asset Management, Corporate Debt Funds, and Advisory Services.
In 2007 Blackstone started to evaluate the option of taking the firm public. Reasons why the firm should do an IPO, outlined by the firm’s internal project group, included:
• Permanent pool of inexpensive capital and a wider group …show more content…
In addition, there are a few things that I am worried about as a limited partner despite the measures the firm has taken. The fact that the firm is a public firm is probably more prestigious for the managers than being private. Therefore I am afraid that the focus will gradually turn towards the interest of the shareholders. The firm does not want to have an underperforming or fluctuating stock in the long run and, if this seems to be the case, I am afraid that the limited partners long-term interest may be down prioritized. Another thing that is also worrying is the risk of losing competent people due to the changed compensation package.
3. Would you rather be a unit-holder in Blackstone or a limited partner?
Everything taken into account I would rather be a limited partner in Blackstone. If the structure turns out to work the way that Blackstone