What will 2008 be the year of? Recession; housing slump; emerging market strength; western weakness; sovereign wealth funds taking over the globe?
Or hedge fund IPOs? Guffaw, guffaw. That must have slipped in there from last year’s list. Stuff from a bygone era.
But not if you’re Citadel. Ken Griffin’s outfit was always mentioned in the same breath as any hedge fund listing - as one that was waiting and watching to see if it should be headed for the public markets. The Chicago-based fund opened its gates to the outside world back in late 2006, issuing 360 pages of detailed information to investors in a bid to raise debt, widely seen as a precursor to a listing.
The precedents have not proved favourable. Fortress is down by about 50 per cent since its February 2007 offering. Och-Ziff, which cut its proposed valuation by 40 per cent to get its offer away, has also struggled since its October listing.
But perhaps if you’re Citadel, which has proved adept at making money out of others’ misfortune, anything is possible.
Business Week reports that a Citdel IPO in 2008 is not just possible, but likely. They claim that Griffin will take the plunge, and quote CFO Gerald Beeson saying that:
An IPO is something we’d consider. It would be a byproduct of our wanting to expand our firm to create an even more diverse and permanent institution.
Business Week (and Dealbook) think a listing could top what has been a great 2007 for Griffin - and would play right with his counter-intuitive, opportunistic style.
As Lex commented at the time of the Och-Ziff public outing, if anyone is going to take a confident stance amid roiling markets, it should be a big hedge fund.
And with Citadel’s vulture-esque M.O. - snapping up Amaranth’s positions with JPMorgan in 2006, buying Sowood’s credit portfolio and its latest rescue mission at E-Trade - Citadel looks better positioned than most in the current environment.
The year to come is unlikely to find them short of troubled targets.
