Blackstone smashing in debut

NEW YORK — Blackstone Group shares rose 13 percent in their stock market debut Friday, as investors scrambled for a piece of the sixth-richest initial public offering in U.S. history.

Chief Executive Stephen Schwarzman now controls a copany whose market value stands at about $38 billion. His personal wealth also skyrocketed, with a 24 percent stake in Blackstone’s management partnership worth around $8 billion, on top of the roughly $449 million he was expected to cash out in the IPO.

Exuberance about the booming private-equity industry overshadowed mounting criticism of the lavish lifestyles of top executives from politicians, labor unions and the media. The strength of Blackstone’s debut marks a coming of age for the once-secretive industry, as it joins Wall Street’s publicly traded top-tier investment houses.

“This is a new breed of publicly traded financial firm,” said Matthew Rhodes-Kropf, a professor of finance at Columbia Business School. “Once the market demonstrates its appetite for this type of investment, we’re going to see all the biggest and the best go public — even after the incredibly negative press it has generated.”

For those lucky enough to get in on the IPO — a difficult task since most shares were snapped up by big financial institutions and money managers — the stock barreled past its $31 initial price. The shares closed up $4.06, or 13.1 percent, to $35.06.

About 113.1 million shares traded hands — almost the full offering of 133.3 million shares. The deal’s underwriters did not exercise their option for extra shares, but are expected to do so early next week.

The offering is the biggest U.S. IPO for a private-equity firm and the largest overall U.S. IPO in five years.