Carlyle Group stock made meager gains on its first day of trading Thursday, after setting its IPO price more modestly than other publicly traded alternative investment firms.
Carlyle, listed on the Nasdaq Stock Market under the symbol CG, rose 0.32% to close at $22.05 per share Thursday.
In Wednesday’s IPO, Carlyle sold 30.5 million shares at $22 each to raise $671 million, the firm said in a statement. That price valued the private equity firm around $6.7 billion.
Carlyle sold only 10% of the firm on the public market. Carlyle co-founders David Rubenstein, William Conway and Daniel D’Aniello did not sell any of their interests in the firm.
Based on Thursday’s closing price, the $234.3 billion California Public Employees’ Retirement System’s 12.7 million shares in Carlyle is worth about $280 million.
Sacramento-based CalPERS has no restrictions on its ability to transfer the partnership units it holds into stock, but it has to wait 180 days from the date of the IPO to sell its Carlyle stock.
Leon Black, co-founder of Apollo Global Management, welcomed Carlyle to the publicly traded alternative investments firm club. Apollo went public in March 2011. “I think it’s great. The more the merrier,” he said during a panel discussion Tuesday at the Milken Institute Global Conference in Beverly Hills, Calif.
He noted other alternative investments firms that have gone public have struggled with lower stock prices because financial analysts don’t understand incentive fees.
Since Carlyle only sold 10% of the firm, it makes the company less sensitive to its stock price, added Jonathan Sokoloff, managing partner of private equity firm Leonard Green & Partners, a privately held firm.
If more multistrategy alternative investment firms go public in the next five to 10 years, it will provide a market for private equity-only firms to go public, Mr. Sokoloff said.