Any number of McMedia types have emerged from their lairs to decry (or, more likely, scoff pretentiously at) the great "irony" of Blackstone's IPO. Amusing, perhaps, if you are writing for one McBusiness paper or another, and content to study the surface of the water rather than dive deep and understand the bigger picture. And, of course, the irony tag line "makes for good copy," a particular circumstance that seems to override any hint journalism which might have, by some unfortunate oversight in the accounting department, actually have been left in the financial journalist. Sadly, even the Wall Street Journal seems to have succumb (subscription required) to the trend, though, thankfully, they limited themselves to commenting thus in their editorial pages and through the guise of "Breaking Views." A Google search of "Blackstone and ipo and irony" returns 79,300 hits (for whatever that is worth given that a search for "financial and journalist and moron" returns 289,000 hits).
So should we be surprised that Blackstone, "Going Private" advocate of distinction, should resort to the public capital markets? Not really.
If we view, as I believe we should, the boom in private equity markets as a mandate on the suitability of public markets for fostering long-term growth, and, in particular, their myopic, short-term focus on quarterly earnings, the regulatory burdens of the beloved section 404 and the inability of the investing public to sufficiently reward rational risk taking by management teams of publicly held firms, then using Blackstone as a conduit, a proxy if you will, for public capital markets inflows without imposing the value destroying constructs of the public markets on Blackstone's daughter firms, then there doesn't seem much ironic at all about Blackstone's decision. Quite the reverse, dear reader.
It seems, especially given the valuation Blackstone has commanded, that even the public markets know that the public markets are badly broken. There, dear friends, is the real irony. The markets, and the retail investors that froth therein, themselves thirst for a construct to escape the tyranny of the quarterlies, a construct that has been denied most of them by the Securities and Exchange Commission via the irritating and expanding Rule 501 of Regulation D and the (3)(c)(1) regulations, until the recent float of a number of private equity type vehicles.
Actually, the joke is on you, public markets.
