Blackstone prices IPO at $31 a share

NEW YORK (CNNMoney.com) -- Blackstone Group, one of the world's largest private equity investment firms, is set to begin trading Friday on the New York Stock Exchange.

Blackstone priced 133.3 million common units at $31 to raise $4.13 billion, the company said Thursday. That is the high end of the $29 to $31 target range for the offering.

Stephen Schwarzman, CEO of Blackstone.

Blackstone will let underwriters, led by Morgan Stanley and Citigroup Inc., sell an additional 20 million shares to meet any excess demand.

That would boost the total offering to $4.75 billion, making it the largest U.S. IPO of the year and the sixth largest ever.

The IPO valued Chief Executive Stephen Schwarzman's stake at $7.74 billion, according to Reuters.

Schwarzman, who co-founded the firm 22 years ago, will also get a one-time payout of up to $677.2 million. Senior Chairman and co-founder Peter Peterson's stake was valued at $1.35 billion, Reuters said.

Blackstone (Charts) intends to list its shares under the symbol "BX."

When Blackstone shares start trading, retail investors will have a chance to buy into the management company of Blackstone, which has raked in massive fees and profits by engineering some of the biggest deals in the buyout boom. It made headlines when it paid $38.9 billion for Equity Office Partners in February - at the time the largest private equity buyout ever.

But Blackstone is going public at the same time that lawmakers are taking an unprecedented interest in private equity firms, and big players such as New York-based Blackstone could feel the brunt of the crackdown.

Still, Blackstone may not be alone in the public market. Another big star of private equity, Kohlberg Kravis Roberts, is also considering an IPO, the Wall Street Journal's online edition reported late Thursday.

The report said KKR was watching the Blackstone IPO, but cited a person close to the firm as saying it could still decide against an offering.

A KKR spokeswoman declined comment to CNN.

Loose lending conditions and the wide availability of cheap debt have created some of the most favorable conditions for buyout firms in years - helping spur an explosion in deals.

Private equity firms buy companies with mostly borrowed money and restructure or overhaul them. Then they take the businesses public or sell them to other buyers, often raking in big profits.