‘Sell-everything’ call gains currency: Leon Black

By Leslie Picker & Ruth David

NEW YORK: When financier Leon Black said his Apollo Global Management was exiting “everything that’s not nailed down” amid rising valuations, he made headlines.

Two years later, other private equity firms are following suit — dumping stakes into the markets at a record clip.

Firms including Blackstone Group and TPG Capital Management have been capitalising on record stock markets around the world to sell shares, mostly in their companies that have already gone public. Globally, buyout firms conducted 97 stock offerings in the second quarter, more than in any other threemonth period, according to data compiled by Bloomberg.

Since Black made his comments in April 2013, the MSCI World Index has gained 18 percent, stretching valuations even higher. Headwinds that threaten to rattle global equities are everywhere — from the Greek and Puerto Rican debt crises to an eventual increase in US interest rates.

“It’s clear that we are currently in an environment of frothy valuations,” said Lise Buyer, founder of IPO advisory firm Class V Group. “The insiders — those with the most knowledge — are finding this a very good time to take some money off the table.”

This year, private-equity firms sold $73 billion of their buyouts to the public, a record amount over a six month period, Bloomberg data show.

The biggest such deal this year came in May when Blackstone sold 90 million shares, or $2.69 billion worth, of hotel-chain Hilton Worldwide Holdings Inc. in a secondary offering. Blackstone took the company private in 2007 for $26 billion and did an IPO in December 2013, raising $2.7 billion.

After the latest sale, Blackstone's stake in Hilton fell to 46 percent from 82%before the IPO.