NEW YORK (Bloomberg) — Blackstone Group LP, the leveraged buyout firm that has spent the past two decades taking companies private, plans to raise as much as $4 billion by going public.The firm, founded in 1985 by former Lehman Brothers bankers Stephen Schwarzman and Pete Peterson, will sell units in a holding partnership that its management will control. The offering will give New York-based Blackstone permanent capital for leveraged buyouts, as well as units that can be used to retain and attract employees, according to a filing yesterday with the US Securities and Exchange Commission.

Blackstone, whose funds own companies with $83 billion in revenue and 375,000 employees, is going public at a time when the lowest borrowing costs in 10 years have allowed LBO firms to make deals at a record pace. Blackstone’s net income climbed 71 percent last year to $2.27 billion.

“These guys are kings of the world right now,” said Martin Fridson, chief executive officer of high-yield research firm FridsonVision LLC in New York. “If you’re ever going to do it, it’s hard to imagine more bullishness about the private- equity market than exists right now.”

Blackstone’s revenue was $1.12 billion, while investment income added another $7.59 billion. The firm didn’t disclose the number of units and the price range for the sale in the filing.

Shareholders of the publicly traded company, which will be controlled by a general partner, will have limited voting rights, and Blackstone’s senior management will have control of the voting power.

Those restrictions are similar to terms of Fortress Investment Group LLC’s $643.3 million initial public offering on February 8, the first by a US manager of private equity and hedge funds. The shares, priced at $18.50, soared 68 percent to $31 the first day of trading. They have since fallen back to $27.96.

Morgan Stanley and Citigroup Inc. are leading the sale with assistance from Merrill Lynch & Co., Credit Suisse Group, Lehman Brothers Holdings Inc. and Deutsche Bank AG. The firm plans to list on the New York Stock Exchange. No ticker was given.

Closely held LBO firms use a mix of cash from investors plus their own funds and debt secured on the target they buy to finance their deals. They typically seek to expand companies or improve performance before selling them within five years to other funds or investors in initial public offerings.

Schwarzman, who does not have a severance package, will receive only a salary of $350,000. He will own a “significant portion” of the interest from Blackstone’s funds.

Blackstone said each member of its 710-person staff under the senior managing directors will get a stake in the company when it goes public. The offering may help Schwarzman eventually step aside by allowing him to convert the value of the firm into riches for himself and his successors.

“There’s a chance to monetize and reward people for having built a terrific business,” said Erik Hirsch, chief investment officer of Hamilton Lane Advisors LLC, the world’s biggest investor of private equity. The firm, based in Bala Cynwyd, Pennsylvania, committed $7.5 billion to 24 private-equity funds in 2005.

Blackstone will use $150 million in units to set up a charitable foundation.

The buyout business has changed since Schwarzman, 60, and Peterson, 80, set up shop 22 years ago, when buyout firms focused mostly on companies or divisions that were struggling. Private-equity firms raised a record $432 billion last year.