"It's almost a perfect paradigm of one is supposed to do in a global system with money," Schwarzman said. "You're not supposed to hoard it and spend it in your own country. To the extent that you give it to other people who can employ that money productively, that creates an increased living standard."
Private Equity Goes Global
Blackstone is selling units as a master limited partnership, giving shareholders limited voting rights. Existing holders would retain a 78.1% stake, while Beijing would own 9.7% and new unit holders 12.2%, Blackstone said. If the overallotment option were exercised, new unit holders would own 14.1%.
Blackstone said it would use net proceeds from both offerings for investments and expansion, to buy back interests from existing managers, and to pay off debt. The firm has said having public equity allows flexibility in pursuing deals and gives it a variety of financial means to retain employees.
China, the world's fastest growing major economy, is trying to boost returns. Much of its $1.2 trillion of foreign exchange reserves is invested in dollar-denominated bonds.
"The China investment is a sign of how truly international private equity capital has become," Blaydon said.
Blackstone is going public as low debt costs spur a boom in private equity takeovers.
Profit More Than Doubles
Private equity firms buy companies, restructure their businesses, and sell them. Blackstone said profit for the quarter that ended March 31 more than doubled to $1.13 billion from $487.2 million a year earlier.
Rival Fortress Investment Group went public in February in a $635 million IPO, and on Friday had a market value of $11.4 billion. Two investment banks, Lehman Brothers Holdings and Bear Stearns, had respective market values of $38.6 billion and $17.8 billion.
Blackstone said quarterly results benefited as investment gains more than doubled to $3.78 billion from $1.69 billion. Revenue rose to $479.4 million from $221 million. The firm said it had $88.4 billion of assets under management as of May 1.
Blackstone's transactions this year include a $23 billion takeover of Sam Zell's Equity Office Properties Trust, and an agreement to buy business services company Alliance Data Systems for $6.76 billion.
Blackstone plans to list its units on the New York Stock Exchange under the symbol "BX." Citigroup Global Markets and Morgan Stanley are the lead underwriters. Credit Suisse, Deutsche Bank Securities, Lehman and Merrill Lynch are joint book-runners.