Results for investors who buy the shares of private-equity companies have been mixed. KKR has gained 63 percent since it shifted its listing to New York last year from Amsterdam, where its publicly traded European entity had lost more than half its value since 2006. While Blackstone has gained 55 percent in the past 12 months, its shares are still 45 percent below the IPO price. Apollo, which this year moved its listing to the New York Stock Exchange from a private exchange run by Goldman Sachs, is down 4.3 percent since March.
Still, most Wall Street analysts favor the companies, with a cumulative tally of 26 "buy" recommendations, 6 "holds" and no "sell" recommendations as of last week.
Private-equity executives will have to persuade public investors that a more stable stream of earnings with lower margins is worth a higher multiple. Their track record of buying low and selling high makes investors such as Harold Bradley skeptical.
"When the smart money is selling, I'm not convinced investors should be paying up," said Bradley, chief investment officer of the Ewing Marion Kauffman Foundation in Kansas City, Missouri, which promotes entrepreneurship. "In the late 1990s, all the boutique investment banks sold, knowing it was a bubble. Now the private-equity firms that couldn't get public during the peak are trying."