June 26 (Bloomberg) -- Blackstone Group LP, the private- equity firm that went public last week, sold an additional 20 million shares, raising $620 million, including $234 million for co-founder Stephen Schwarzman.

It is common for companies to set aside additional stock, known as a greenshoe, in case investor demand for an initial public offering is strong. Blackstone's investment bankers, led by Morgan Stanley and Citigroup Inc., sold the shares yesterday at the IPO price of $31 each, Bloomberg data show.

The sale increased the 60-year-old Schwarzman's personal proceeds to $684 million from $450 million, according to the firm's June 25 prospectus for the offering. New York-based Blackstone, which Schwarzman founded with Peter G. Peterson, 81, in 1985, sold 133.3 million shares in the IPO for $4.75 billion.

Hamilton ``Tony'' James, Blackstone's president, received $191 million, up from $148.9 million before the greenshoe, according to the filing. James, the 56-year-old former chairman of global investment banking and private equity at Credit Suisse Group, is Schwarzman's designated successor as chief executive officer.

Schwarzman's remaining stake of 252 million shares, about 23 percent of the company, was valued at $8.2 billion based on yesterday's closing price. Blackstone shares fell $2.62, or 7.5 percent, to $32.44 in their second day of New York Stock Exchange composite trading.

In a separate transaction, China's State Investment Co. paid $3 billion for 101.3 million units, or about $29.61 each, a 4.5 percent discount from the IPO price. That brought Blackstone's net proceeds to $7.55 billion, including the sale of the extra shares, regulatory documents show.

The 17 investment banks who worked on the transaction split at least $175.7 million, or $1.32 a share, in fees on the sale, according to the filing.

To contact the reporters on this story: Jason Kelly in New York at jkelly14@bloomberg.net; Elizabeth Hester in New York at ehester@bloomberg.net.

Last Updated: June 26, 2007 07:45 EDT