One by one, the big companies of the alternative investment industry are selling - but this may well be a trend to sit out, says Matthew Lynn in his Bloomberg column.
Blackstone, which has spent $160bn taking companies private in the past two decades, has just announced its initial public offering. Fortress Investment Group, which manages hedge and private-equity funds, listed its shares in February and the stock almost doubled on the first day it was traded.
In Europe, booming hedge funds are queueing up to go public. Polar Capital Holdings did so last month, and Marshall Wace raised €1.5bn through an IPO for one of its hedge funds late last year.
Yet if Blackstone, Fortress and other alternative-investment managers are selling their shares, should you be buying?
Probably not.
The alternative investment industry isn’t about to vanish. Yet it may be entering a period of restrained growth. In that case, many of the IPOs will soon look overpriced. Indeed, that already seems to be the case. Fortress’s shares dropped from $31 in February to $24 this month. Polar shares declined from 261 pence to 231 pence over a few weeks.
Better to sit out these IPOs, wait for the share prices to drop and then buy them.
