Carlyle considers plan to go public

NEW YORK (CNNMoney.com) -- Carlyle Group has been considering a plan to go public, but such a move would present certain challenges, co-founder Daniel D'Aniello said Tuesday.

"We've been studying it for a while and we're very curious as to how this is going to play out," D'Aniello said, referring to recent spate of hedge funds and private equity firms heading to the public markets.

But he expressed some concern about going public. Private equity firms generally turn in volatile results, which may not go over well with public investors who like to see consistent quarterly results, he said.

"Historically [in the public markets], volatility equals a discount on stock values," D'Aniello said at a conference hosted by industry publication Buyouts.

Washington-based Carlyle Group has long been considered a likely candidate for a public listing.

The group has $54 billion in assets under management and operates 42 funds in four main categories: buyout, leveraged finance, venture and real estate.

One of the most diversified private equity firms, Carlyle's strategy involves providing a "full range of risk-return opportunities" to its more than 1,000 investors, D'Aniello said.

The private equity powerhouse has made a big push to establish itself globally and operates offices in 16 countries around the world.

If Carlyle were to go public, it would follow the footsteps of Stephen Schwarzman's Blackstone Group, which filed last month for an initial public offering on the New York Stock Exchange.

The Blackstone offering has caused a stir in financial markets. It would be the first time public investors will have the opportunity to share in the riches generated by buyout funds.

It has also cast the discreet world of private equity deeper into the public spotlight at a time when the take-private deals already face backlash from regulators and public shareholders.

The industry clearly is entering a new era, said D'Aniello, who co-founded Carlyle with Bill Conway and David Rubenstein in 1987. "Private equity is not private any longer," he announced matter-of-factly.

As fundraising has soared, buyout targets have increasingly involved larger, oftentimes household companies. Most recently, on Monday, college loan provider Sallie Mae (Charts) agreed to be bought by a group that included private equity buyers for $25 billion.

Public scrutiny of private equity, however, offers the industry an opportunity to promote greater awareness of the benefits buyout transactions have on the economy and shareholders, D'Aniello said.

He also rallied industry professionals to advocate the merits of private equity. "Ultimately the responsibility for effective communication of the benefits of our industry lies with all of us," he said.

Private equity deals have become powerful players in financial markets - Fortune Magazine recently crowned Blackstone's Schwarzman the "New King of Wall Street."

In the first quarter alone, private equity buyouts accounted for 26 percent of overall U.S. deal activity, according to Thomson Financial.

But some worry the frenzied pace of deals, which has been fueled by massive amounts of cheap debt, can't keep humming along.

Carlyle's D'Aniello suggested that a downturn may be coming. It's naive to presume continued stability in the debt markets, he said. "In the past, there have been periods of calm before the storm."

But a downturn may not necessarily be bad for the industry, he said, noting that the worst three years for the economy has produced the best returns for private equity in the past decade.