One of the world's biggest private equity and investment houses is looking to spin off its financial advisory arm.

Blackstone has announced plans to spin off its business units which provide advice on corporate transactions and combine them with PJT Partners, an independent financial advisory firm founded by Paul Taubman.

The new entity will be an independent, publicly-traded company, led by Taubman as chairman and chief executive, according to a statement from the New York-listed business.

Upon completion of the spin-off – which is expected to close next year – Blackstone’s current unit-holders will initially own approximately 65 per cent of the new entity. Blackstone’s advisory employees will roll their Blackstone units into the new company and, along with Taubman and his partners, will initially own approximately 35 per cent of the company.

Prior to founding PJT Partners, Taubman spent 30 years at Morgan Stanley, most recently as co-president of the institutional securities group. Before that, he was head of global investment banking and head of the firm's global mergers and acquisitions department.

“Blackstone began as an advisory firm nearly 30 years ago...As the largest alternative asset manager in the world, and with our investing areas considerably broader and larger than even a few years ago, we have not been free to aggressively grow our advisory businesses further out of concern for potential conflicts,” said Stephen Schwarzman, Blackstone’s chairman, CEO and co-founder. “The separation of our investing and advisory areas will create new growth opportunities for both businesses.”

As highlighted in a report on DealBook, the potential move by Blackstone comes as other major firms have been pursuing spinoffs to sharpen their focus on more profitable business lines.

“But while breaking up may be in vogue in Silicon Valley, it is rare on Wall Street, where most giant banks and private equity firms have grown even larger since the financial crisis,” it said.

Excluding capital markets revenues attributable to Blackstone’s financial advisory segment (which will not be part of the transaction), Blackstone’s advisory businesses generated approximately $380 million of revenue for the 12 months ending 30 June, 2014.

Completion of the transaction is subject to the satisfaction or waiver of certain customary closing conditions, including: the effectiveness of a registration statement with the US Securities and Exchange Commission; the receipt by Blackstone of an opinion from its tax counsel as to the tax-free nature of the transaction; and certain regulatory approvals.