Who is On the Other Side

This morning the Blackstone Group, a well known and respected private equity firm, went public. The shares are currently trading up 16% from the IPO price. I don't think I can improve on what the Daily Reckoning has to say about it, so here it is:

"On the surface, it makes no sense. Why would the smartest investors on the planet want to share their gains with the unwashed multitudes? If they can make so much money in private equity why would they want to go public? The only reasonable answer is the obvious one: The Masters of the Universe believe their own shares are overpriced.

Even more remarkable, here are the same schleps whom Blackstone commonly outsmarts lining up to be suckered again. Today's FT tells us that the IPO is already six times oversubscribed, despite Senate action that threatens to double the firm's tax bill beginning in 2012. The poor boobs think they are going to put one over on Blackstone. For isn't that the real nature of this transaction? The world's most successful insiders are on one side of the table; the world's most naïve public market investors are on the other. Who's going to get the better end of the bargain?"