Blackstone Files IPO

Updated from 4:06 p.m. EDT

Just days after news reports of its imminent debut roiled Wall Street, private equity titan Blackstone filed Thursday for an initial public offering that would raise $4 billion.

The news comes amid frenzied dealmaking led by private equity firms such as Blackstone, Kohlberg Kravis Roberts and Apollo. Blackstone this year led a $39 billion buyout of office tower titan Equity Office Properties, while KKR is leading a $32 billion buyout of energy giant TXU (TXU Quote).

Given the outsize returns these firms have generated and the vast amounts of money chasing deals, observers say it only makes sense that some private equity names want to cash in on their strong position. In its filing, Blackstone reports 2006 adjusted cash flow from operations -- a measure of liquidity and amounts available to be distributed to shareholders -- of $1.68 billion.

Still, the filing marks a departure from the privacy that has shrouded many players in the industry.

"Seems like some of the larger funds are expecting the market to turn at some point and the big thing for them is access to capital and locking that in," says Charles Davidson, a senior analyst at Standard & Poor's who focuses on alternative investments such as hedge funds and private equity.

"One of the questions to unearth is where is the value being created for investors?" says Andrea Cohen, attorney at law Nixon Peabody in San Francisco, whose purview includes private equity firms and hedge funds. The attorney had not fully perused the 360-page preliminary prospectus.