It was a big deal when Blackstone Group’s $4 billion IPO prospectus did not include two of the largest underwriters in the world–Goldman Sachs and JPMorgan. The two later garnered minor roles in the offering. 
    
History seems to be repeating itself–Goldman and JPMorgan were shut out of KKR’s $1.25 billion IPO filing as well. Citigroup and Morgan Stanley, the same underwriters that led the Blackstone IPO, are leading KKR’s too. 

When Goldman and JPMorgan were snubbed for Blackstone’s float, some sources familiar with the situation said that it may have been because they were working with another private equity firm on an IPO. A non-compete agreement of some kind may have come into play.

Is that at issue here, too? It’s hard to say but there may also be other reasons why KKR didn’t choose the two. To see a chart on top KKR bond underwriters click here.

JPMorgan does not have a private equity effort big enough to rival KKR, but Henry Kravis may have another beef with the bank. Reuters reported  in April that Henry Kravis and crew were fuming at the way JPMorgan handled its proposed takeover of  First Data Corp. Long story short, JPMorgan owns a majority stake in a First Data joint venture. KKR tried to reassure JPMorgan that the JV was not under threat, but JPMorgan pushed back, offering to buy out First Data’s 49 percent stake in the venture or dissolve the partnership altogether, sources told Reuters. That didn’t sit well with Kravis, sources say. 

Goldman does have a large private equity arm, and is a competitor to KKR and Blackstone, even though they have partnered on several deals. The largest private equity fund ever raised is Goldman’s more than $20 billion buyout fund. At the end of the day, Goldman is a rival to other mega-buyout firms. 

Goldman and JPMorgan declined to comment. 
    

(Photo: Henry Kravis, Forbes)