Friday, July 13, 2007
House: Tighten Rules for Private Equity I.P.O.'s
House hearings on regulating private equity investments moved forward this week with Rep. Dennis Kucinich blaming the Securities and Exchange Commission Wednesday for failing to classify the Blackstone Group as an investment company prior to Blackstone’s initial public offering. As a growing number of private equity firms contemplate going public, Mr. Kucinich seeks to tighten regulations so private equity stocks are treated more like mutual funds, required to disclose more information about their holdings, empower independent boards of directors and to cap debt loads. Blackstone’s public offering last month raised $4 billion while critics, including organized labor, argued that the company failed to allow sufficient transparency. Several other private equity firms, including Kohlberg Kravis Roberts & Co. and Och-Ziff Capital Management LLP are preparing to go public later this year.