Blackstone Group LP, dodging political scrutiny on the eve of its landmark initial public offering, on Thursday received overwhelming demand from investors seeking a piece of the biggest IPO in at least five years.

The nation's second-biggest buyout fund, which controls names like Universal Studios Florida and real estate powerhouse Equity Office Properties Trust, plans to raise as much as $4.14 billion when it lists Friday on the New York Stock Exchange.

Even as underwriters worked through the evening to nail down the final details of the offering, analysts tracking the deal said demand was strong. Investors in Asia, the Middle East, and Europe were said to be the most interested in buying into what is expected to be the sixth-largest IPO in U.S. history.

Investor appetite to own a piece of the private equity industry - where firms buy companies, turn them around, and seek to sell them at a profit - comes despite a flood of negative attention in the past few days. The IPO has been scrutinized for the huge payout it will provide top executives, and attempts by lawmakers to change the tax status of Blackstone and similar firms.

It will be closely watched by other buyout funds thinking about their own public flotations. Kohlberg Kravis Roberts & Co., Carlyle Group, and a list of other big private equity players are said to be considering their own IPOs.

There had been some speculation that Blackstone would nix its offering because of a threat Congress will impose higher taxes on them. The firm acknowledged Thursday that it could face much higher taxes as early as next year if it was taxed as a corporation, as a new bill in the U.S. House of Representatives proposes to do.

But the offering was said to be seven times oversubscribed, indicating that those interested in buying a stake in Blackstone brushed off worries about possible tax changes.

The IPO gives investors a rare chance to invest in private equity, which previously was restricted to billionaires looking for a place to park their cash.

"For most investors that get in on the IPO, it is giving exposure to a segment of Wall Street that you wouldn't be able to get into. The demand is large," said Craig Asche, executive director of the CAIA Association, an industry organization that represents private equity funds and other alternative investment vehicles.

 

Appeared in:

• Forbes.com
• The San Francisco Chronicle
• Houston Chronicle
• Yahoo!Finance