Blackstone Rocks Wall Street

"If I am an investor in private equity, I'd prefer to see these guys private," he says, "but the public markets are paying a high price."

That could mean some eye-popping numbers. No documents have yet been filed, but CNBC Friday morning pegged Blackstone's potential value at more than $20 billion. A deal priced accordingly would value Schwarzman's stake alone at about $8 billion. The Journal reported Saturday that the planned deal would conservatively value all of Blackstone at $40 billion.

Those kinds of dollars naturally must be turning heads elsewhere in private equity land. A move by Blackstone could spur similar moves by private equity shops such as KKR and Texas Pacific Group, which are attempting a $45 billion buyout of TXU (TXU Quote).

Meanwhile, the private equity players could be viewing now as a good time to sell, given some of the currents in the market and in Washington.

Private equity has been much maligned by some critics as destructive to job growth. Congress is weighing a tax bill that could eat into returns.

"There's the mentality that these companies don't need to become public," says Menlow, "but if they don't, they might lose some of their panache in the marketplace."

A public offering might also generate some goodwill in the public eye. For one thing, a Blackstone IPO could finally throw off the veil of secrecy that has shrouded the business.