Carlyle drops Euronext effort

Amid concern from LPs and in the wake of the poor post-IPO performances of similar listings from KKR and Apollo, The Carlyle Group has decided to not pursue the raising of capital through a Euronext listing.

The Carlyle Group will no longer pursue a Euronext offering similar to offerings already taken public by Kohlberg Kravis Roberts and Apollo Management, according to sources.

The Washington DC-based private equity giant had been pursuing a listing that would have raised capital to be committed to its global private equity activities, the sources said.

However, discussions with LPs and a review of the post-IPO performance of the offerings from KKR and Apollo have convinced Carlyle’s partners that now is not the right time to proceed with a similar Euronext listing. A source close to the firm noted that Carlyle has not ruled out coming back to the market with a similar vehicle in the future.

The move follows news earlier this month that pan-European private equity firm Doughty Hanson had abandoned plans to list a €1 billion private equity vehicle on the Euronext. Doughty Hanson cited “concerns over the trading performance of similar recent transactions, which trade at discounts of up to 15 percent compared to the IPO price”, exposing investors to a “potential discount”.

Currently, Apollo Management’s Euronext Amsterdam-traded AP Alternative Assets is trading down 10 percent from its IPO price of $20 per share. KKR Private Equity Investors, KKR’s pioneering, $5 billion Euronext vehicle, is roughly 11 percent below its offering price.

Sources did not specify the reservations that Carlyle’s limited partners had to a potential Euronext-listed Carlyle fund. Some of KKR’s limited partners have privately complained that the Euronext fund changes the dynamics of co-investment opportunities for traditional LPs, as well as diverts many secondary investment opportunities to the KKR-controlled vehicle.

In May, Carlyle co-founder David Rubenstein told a private equity conference audience that KKR’s Euronext listing would “dramatically change the face of the private equity world as we know it”.