April 4 (Bloomberg) -- Apollo Management LP, the buyout firm run by Leon Black, is weighing an initial public offering of its own as rival Blackstone Group LP seeks to raise $4 billion, two people with knowledge of the discussions said.

Apollo has sought advice on the plan from banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc., the people said, declining to be identified because the talks are secret. Black's New York-based partnership has invested $16 billion in the past 17 years in companies ranging from casino operator Harrah's Entertainment Inc. to retailer Claire's Stores Inc.

Buyout firms have raised more than $200 billion since the start of 2006, prompting industry executives such as the 55- year-old Black to consider IPOs as they plan for succession. Blackstone said in share sale documents filed last month that it would use some of the cash to expand in new markets and buy out partners as they leave.

``We're going to see a cascade of these as long as they keep working,'' said Matthew Rhodes-Kropf, a finance professor at Columbia University's Columbia Business School in New York. ``It's not going to be a surprise when we start seeing announcement after announcement.''

Fortress Investment Group LLC, a New York-based manager of hedge funds and private equity, went public in February in a deal that raised almost $635 million. The company's shares have advanced 57 percent to $28.99 since Feb. 8 and now trade at almost 30 times profit, three times Goldman Sachs' price-to- earnings ratio.

Apollo Fund

Steve Anreder, an Apollo spokesman, had no comment on the firm's IPO plans, which were reported yesterday by CNBC. Closely held buyout firms don't have to disclose financial information to the public.

Goldman, the No. 1 arranger of private-equity deals, and JPMorgan, the world's top corporate lender, weren't among the six banks that Blackstone hired last month to manage its IPO. All three firms are based in New York.

Apollo has raised capital from the public markets before, gathering $1.5 billion in an IPO of a buyout fund in Europe last May. Shares of AP Alternative Assets LP lost as much as 14 percent of their value after the sale, and the stock is now little changed near the $20 IPO price. Goldman and JPMorgan, along with Citigroup Inc. and Credit Suisse Group, underwrote that IPO.

Real Estate Brokers

Black sold $930 million of shares three years ago in Apollo Investment Corp., a fund that invests mainly in debt securities. Apollo Investment has returned an average 22 percent a year since 2004. Black was former co-head of corporate finance at Drexel Burnham Lambert Inc., the top underwriter of high-yield corporate debt before it collapsed in 1990.

Apollo agreed in March to buy Countrywide Plc, the U.K.'s largest real estate broker, for 1 billion pounds ($1.97 billion). In December, casino operator Harrah's accepted a $17.1 billion buyout offer from Apollo and TPG Inc., the former Texas Pacific Group. Other deals include the $6.6 billion leveraged buyout of real estate broker Realogy Corp., also in December.

Loans for LBOs jumped 65 percent to $1.4 trillion in the past year, and sales of bonds rated below investment grade climbed to $218 billion, up 73 percent from the previous 12 months, according to data compiled by Bloomberg data.

Blackstone, founded in 1985 by bankers Stephen Schwarzman and Pete Peterson, will sell a minority stake through its IPO.

To contact the reporter on this story: Justin Baer in New York at jbaer1@bloomberg.net

Last Updated: April 4, 2007 12:12 EDT