NEW YORK - Blackstone Group LP debuts Friday on the New York Stock Exchange in the most talked-about IPO to sweep Wall Street since Google.

The path to the public market was not an easy one, though. It had to dodge multiple attempts by powerful members of Congress to delay or block the deal amid heavy scrutiny of the lavish lifestyles of top executives.

The New York-based buyout shop, which controls names like Universal Studios Florida and real estate powerhouse Equity Office Properties Trust, finalized terms late Thursday that value the newly public company at $33 billion.
Selling a 12.3 percent stake in its management division raised $4.13 billion - making it the biggest U.S. IPO in at least five years.

The highly anticipated offering represents the growing power of private equity firms, and the escalating clout of the executives who run them. As Blackstone prepares to trade for the first time, there were reports that rival Kohlberg Kravis Roberts & Co. hired its own bankers to pursue an initial public offering.

The big appeal of the IPO was that it gave investors a chance to participate in the booming private equity industry, where firms buy companies, turn them around, and seek to sell them at a profit. And investor appetite was strong to buy a part of Blackstone, even though the stake in its management business has little voting power or any direct connection to its portfolio of companies.

Demand was unabated despite concerns about the firm's tax burden. Blackstone acknowledged Thursday that it could face much higher taxes as early as next year if it is taxed as a corporation instead of as a partnership, as a new bill in the U.S. House of Representatives proposes to do.

But analysts contend that investing in the IPO has more to do with buying into Blackstone's cachet. It gives them some involvement in private equity, which until now only the most wealthy of investors have been invited to sink money into.

"Floating the management side is giving access to people who until now did not have access," said Craig Asche, executive director of the CAIA Association, an industry organization that represents private equity funds and other alternative investment vehicles. "And, for Blackstone, this becomes a new source to raise capital for potential deals. The industry has just taken a big step."
 

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