Friday, March 23, 2007


"Beware the Jabberwock, my son!
The jaws that bite, the claws that catch!
Beware the Jubjub bird, and shun
The frumious Bandersnatch!"
— Lewis Carroll

Well, that's a relief.

Blackstone finally filed the initial registration statement for its IPO yesterday, and the financial and mainstream media are frantically earning their keep by turning the shiny object over in their hands as fast as they can. I will not provide any links to articles about the filing, Dear Reader, because you would have to be fly fishing in Kazakhstan with Blackstone #2 Tony James and TPG honcho David Bonderman (q.v. the WSJ, page C1) to have missed it. (No offense to my loyal readers in Kazakhstan.)

The statement itself (courtesy of peHub) can be interesting reading, if you like having your head swathed in cotton gauze and bacon grease and being pushed through a warehouse full of foam packing peanuts. I would expect no less from my friends at Simpson Thacher and Skadden Arps. I imagine that it has been some time since so many downloaded a weblink with such fevered anticipation—soft music, candlelight, and personal lubricant at the ready—only to be completely frustrated. The Victoria's Secret Fashion Show web video comes to mind.

The juicy tidbits I am sure you already know, courtesy of the Peanut Gallery (aka the financial press), so I will not bore you with them here. We have learned some interesting things, however.

First, Steve Schwarzman is surprisingly not rich, unlike our and everyody's prior impression. The poor fellow will only collect a salary of $350,000 going forward, which we all know won't even pay the monthly maintenance charge on his co-op at 740 Park Avenue. And, where we expected to find evidence of his purported great wealth—his current ownership position in Blackstone—the table is completely blank. The poor man: we thought he was loaded. I guess that 60th birthday bash at the Park Avenue Armory really wiped him out.

Second, outside of the two co-founders, whose immigrant parents graced them with the unremarkable names Steve and Pete, it appears that you have to have a seriously weird name to be a senior partner at Blackstone. Hamilton E. "Tony" James? J. Tomilson "Tom" Hill? The next thing you know we'll hear that The Artist Formerly Known as Prince ("Form?") is joing the firm as Chief Technology Officer. Maybe it's not too late for me to join. I can fly fish, too. T. Epicurean "Pick" Dealmaker?

Finally, we have learned that Blackstone is selling limited partnership units in its management company, as this author (and many others) recently speculated. For those of you readers unfamiliar with MLP offerings, in simplest terms it is a security which allows you to send all your money to Blackstone in exchange for the right to have their senior management bugger you senseless. And for you to like it, too. This new entity's governance structure and practices should make the Robert Nardelli-era Home Depot look like a beacon of shareholder rights.

I knew there were a lot of desperate masochists in New York City, but apparently I underestimated their numbers and financial wherewithal. Four billion clams (before the underwriters' overallotment option) buys a lot of soap to pick up in the shower.

It just goes to prove the truth of that old saying, "Be careful what you wish for." It also proves the old saw from the poker table: if you can't tell who the mark is, it's you.

"It's a Snark!" was the sound that first came to their ears,
And seemed almost too good to be true.
Then followed a torrent of laughter and cheers:
The the ominous words "It's a Boo—"

Then, silence. Some fancied they heard in the air
A weary and wandering sigh
That sounded like "—jum!" but the others declare
It was only a breeze that went by.

They hunted till darkness came on, but they found
Not a button, or feather, or mark,
By which they could tell that they stood on the ground
Where the Baker had met with the Snark.

In the midst of the word he was trying to say
In the midst of his laughter and glee,
He had softly and suddenly vanished away—
For the Snark
was a Boojum, you see.1

In light of the importance of this issue to all concerned, Dear Readers, I have decided to break with my usual policy and issue an investment opinion on the Blackstone IPO:

Whatever you do, do not

1 Lewis Carroll, "The Hunting of the Snark: An Agony in Eight Fits," Chatto & Windus Ltd., 1981, p. 46.

© 2007 The Epicurean Dealmaker. All rights reserved.