More financial firms going public

We've been talking a lot of about more hedge funds going public in the wake of Fortress Investments' offering. It appears to be a reality. We're likely to see more hedge funds go public before more private equity funds make the move. According to an AP update, Souren Ouzounian, banker at Merrill Lynch, said at a conference that six of his hedge-fund clients are mulling IPOs. A Lehman Brothers banker said four clients are going to file in "the fairly near term." But you have to wonder if the thought processes have been complicated a bit by the lure of the private placements market, which is more active than the IPO market these days. Oaktree Capital Management last week placed securities privately in its management company.

Our take on the news: Once again, an idea brought to the public marketplace's attention a decade ago by smart money people, only now deciding to go public. What will happen to these funds when the bottom falls out of the market and the hedge fund industry goes in the tank? Everyone will lose their shirts because greed always comes first on Wall Street. Had a decade ago the equity and hedge funds entered the marketplace, the system would of worked better, now everyone is a genious on Wall Street and the idea of going public will collapse like all other great ideas.