From Private to Public: Why do Alternative Asset Managers go Public?

Abstract

The global alternative asset management industry has witnessed a significant trend of firms going public since the IPO of Blackstone in 2007, and the trend has come back recently. Since 2022, firms like PAG, Tiantu Capital, and CVC Capital Partners have announced or completed their plans to go public. This study summarizes the post-2000 waves of alternative asset managers going public, including their different pathways and post-IPO developments.

Utilizing a multi-case analysis method with public information, this study examines the motives, benefits, and costs associated with alternative asset managers’ decisions to go public. Four primary motives and benefits of alternative asset managers going public are identified: (1) enabling founders and strategic investors to liquidate their holdings, (2) incentivizing employees through equity-based compensation, (3) providing permanent capital to fund organic growth and external acquisitions, and (4) enhancing brand and reputation. Although this study acknowledges the costs and potential disadvantages associated with going public, they are deemed less significant compared to the benefits.