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When The Blackstone Group (NYSE: BX) went public, many observers -- myself included -- were concerned by the total lack of corporate governance checks and balances.
But at the time, the private equity industry was so hot that Blackstone could do no wrong, and no one cared enough to complain. But now that KKR is mulling a plan to list on the New York Stock Exchange, things could be different. The wheels have come off the industry, at least for now, and the arrogant attitude of "We'll tell you what we feel like telling you and you'll like it" may not play so well.
John Jannarone opines in The Wall Street Journal (subscription required) that "If Henry Kravis does manage to list KKR in New York, investors should insist on a more shareholder-friendly and transparent structure than the Blackstone-style version KKR proposed last time it tried."
He's exactly right. And now that it's a buyer's market for private equity shares, the corporate governance hawks just might get their way.
The one good outcome of bursting bubbles is that corporate titans are blown off their pedestals, and ambitious investors can demand strong corporate governance reforms. If KKR lists in New York with a convoluted share structure that deprives minority shareholders of a say in the company's future, it will be clear: the lessons of the bubble have not been learned.
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