NEW YORK (Reuters) — Blackstone Group LP yesterday said it planned to raise as much as $7.75 billion from selling stakes to the public and to China, in perhaps the year's most eagerly awaited US initial public offering.In a filing with the US Securities and Exchange Commission, the private equity firm said it plans to offer 133.3 million common units at $29 and $31 each, for proceeds of $3.87 billion to $4.13 billion. The IPO may grow to $4.75 billion if another 20 million units are sold to meet demand.

The IPO would rank among the top 10 US IPOs, according to Dealogic, and be the largest by a private equity firm. It could value Blackstone at $33.6 billion, based on an equivalent 1.085 billion units outstanding after the offerings, the firm said. It was not immediately clear when the IPO might take place.

"Valuations of private equity firms have got to be higher than they have ever been," said Colin Blaydon, a professor at Dartmouth College's Tuck School of Business and director of the Center for Private Equity and Entrepreneurship. "If things are not at a top, it's certainly a very attractive time for them to go to investors, or to the public."

Blackstone announced the IPO terms one day after saying China would take a $3 billion stake at a 4.5 percent discount. Beijing would hold its stake at least four years. Founded in 1985 by Stephen Schwarzman and former Lehman Brothers chief Pete Peterson, Blackstone is going public as low debt costs spur a boom in private equity takeovers.

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 LLC 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 Inc. and Bear Stearns Cos., had respective market values of $38.6 billion and $17.8 billion.

Blackstone is selling units as a master limited partnership, giving shareholders limited voting rights.

Existing holders would retain a 78.1 percent stake, while Beijing would own 9.7 percent and new unit holders 12.2 percent, Blackstone said. If the overallotment option were exercised, new unit holders would own 14.1 percent.

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.

Schwarzman said the China investment may be "part of a trend".

The country, 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 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 Corp. for $6.76 billion.

Blackstone plans to list its units on the New York Stock Exchange under the symbol "BX." Citigroup Global Markets Inc. and Morgan Stanley are the lead underwriters. Credit Suisse, Deutsche Bank Securities Inc., Lehman and Merrill Lynch & Co. are joint book-runners.