Blackstone is going public

The speed of Blackstone's decision is surprising and may reflect the belief of Stephen Schwarzman, Blackstone's co-founder and chief executive officer, that market conditions are worsening. Both Mr. Schwarzman and Blackstone President Tony James have in recent weeks been privately and publicly warning about a turn in financial conditions, especially in terms of their own firm's ability to finance acquisitions via cheap and ever-plentiful financing offered by Wall Street banks. The frenzied demand for the Fortress listing showed investors are willing to pay up to tap into the magic of alternative investment firms. At the same time, though, when markets are volatile, the advantage of going first may be considerable. Blackstone, Carlyle and TPG learned this lesson last year when Blackstone's arch rival, KKR, listed a fund in Europe that would invest in its deals. Demand was so strong that KKR expanded the offer from $1.5 billion to $5 billion. That left little demand for anything that followed, to the frustration of rivals which then abandoned plans to launch similar units.