Blackstone IPO: Should Firms That Invest for the Rich Pay Lower Taxes Than Other Businesses?

Currently, the bill calls for a five-year grace period and grandfathers any private equity firm that went public or filed papers to go public before June 14. Blackstone falls into that category.

If it were to pass, the bill could actually end up giving Blackstone an advantage over any competitor that goes public in the future. Others in the industry are watching and waiting to see how Blackstone's IPO goes. Just today, rival fund Kohlberg Kravis Roberts announced that it's taking steps to go public.

It's unclear how this bill, still very far way from becoming law, might affect Blackstone's IPO. Investors buying the stock tonight have no clue what tax changes might happen to Blackstone or any other private equity firms. It could take months to see the outcome of this or any other similar legislation.

Sen. Jim Webb, D-Va., raised "national security" concerns this week about the Chinese government's plan to buy a $3 billion stake in Blackstone. Rep. Henry Waxman, D-Calif., chairman of the House Oversight Committee, asked SEC Chairman Christopher Cox today to delay the Blackstone IPO, stating in a letter that it would expose "investors and the public" to "new and undisclosed risks."

A Big Pay Day

But no one doubts the IPO will make the managers of Blackstone even richer. Chief executive Stephen Schwarzman, who made $400 million in 2006, could cash in as much as $677.2 million of his stake during the IPO. He could still walk away with a 24 percent interest in the company valued at as much as $7.7 billion. That stake would be worth $1.8 billion.

So what are the new titans of Wall Street up to the night before their big day? A book party.

The daughter of Blackstone's co-founder Peter G. Peterson has written a book called "The Manny," about a male nanny working on the Upper East Side of New York. The author, Holly Peterson, who at one time worked at ABC News, just published the book, which taps into the world that private equity lives in. A book party is scheduled tonight at the Four Seasons.

One thing is certain: After everybody goes home and wakes up tomorrow, they will be a lot richer.

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