Equity firms make public mark

NEW YORK – For the power brokers at the nation’s top private equity firms, going public has little to do with raising funds for the next big deal; it’s more about preserving their legacy.

Steve Schwarzman, the chief executive of buyout shop Blackstone Group LP, wants to raise $4.5 billion by floating stock in his firm’s management unit. Leon Black, the leader of Apollo Management LP, is debating the merits of an initial public offering or selling part of his investment firm in a $1.5 billion private placement deal.

These days, it takes lucrative stock grants and cash bonuses to attract the industry’s top bankers who would help that transformation along.

Wall Street bonuses soared in 2006 to their highest levels since the dot-com boom, with top executives averaging $40 million to $50 million in compensation.

Private equity firms, along with hedge funds, were better known in the 1970s and ‘80s for buying up big stakes in companies.

These days, private equity shops that buy companies and take them private operate more like conglomerates. It has created a new set of problems – they aren’t just buying companies, they’re running them, resulting in a more pricey payroll to fund.