is anyone going to buy Fortress IPO stock?
Hubert asks:
FIG, is anyone interested in this hedge fund going public? How is it still “private” equity if its now Public?
FIG, is anyone interested in this hedge fund going public? How is it still “private” equity if its now Public?
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The Fortress IPO is part of a larger trend of a complete restructuring of corporate governance around the world. The traditional governance structure, where shareholders rely on boards of directors to oversee the managers of the corporation, has often failed. Examples of this are continually poor performing corporations, where the board does nothing. Or companies where the performance is lousy, but the Board gives the CEO a big paycheck. Examples abound.
Having a “private equity firm” as the entity overseeing management is a new way to handle this “agency” issue. The interests of the private equity firm are more fully aligned with shareholders than were the interests of a BOD. This is one of the phenomena that is responsible for the “de-equitization” of the public capital markets (Sarbanes Oxley is another).