Kohlberg Kravis Roberts & Co., the leader in leveraged buyouts this year, plans to raise as much as $1.25 billion in an initial public offering to help finance its appetite for the biggest takeovers.

The 31-year-old firm will use the money for investments and to “expand into new related businesses,” according to a filing yesterday with the U.S. Securities and Exchange Commission. Founders Henry Kravis and George Roberts won’t sell any shares, unlike Blackstone Group LP founders Stephen Schwarzman and Peter Peterson, who raised $2.56 billion between them from their firm’s IPO last month.

KKR, whose funds owns 40 companies that have 560,000 employees, led $200 billion of leveraged buyouts in the past 12 months, more than the combined total by Blackstone or Carlyle Group, their two biggest competitors, according to data compiled by Bloomberg. The 63-year-old cousins are taking their New York-based firm public as a record number of companies go private in $618 billion of leveraged buyouts this year.

“Fund-raising is a time drain,” the managing director of New York-based Chestnut Hill Partners, which finds deals for private-equity firms, Paul Schaye, said. “This means they don’t have to go back to the market so much.”

KKR is going public amid a rush of IPOs by private-equity firms and hedge funds. Apollo Management LP, based in New York, and Washington-based Carlyle have said they are weighing public offerings. Och-Ziff Capital Management Group LLC, the investment firm run by former Goldman Sachs Group Inc. trader Daniel Och, filed July 2 to raise $2 billion in the largest IPO by an American hedge-fund manager.

While KKR pushed LBOs into the spotlight with the hostile takeover of RJR Nabisco Inc. in 1989, a deal chronicled in the book “Barbarians at the Gate,” its profits trail those of Blackstone Group.

KKR’s net income rose 12% last year to $1.11 billion, compared with $2.27 billion for New York-based Blackstone, which was established 10 years later and expanded into money management, distressed debt, and investment banking advice in addition to buyouts. Profits at Blackstone rose 70% from 2005.

Blackstone shares trade at 14 times earnings, giving the company a market value of $32.2 billion. On that basis, KKR would be worth about $15.8 billion.

KKR didn’t disclose the number of shares it would sell or their anticipated price. The $1.25 billion value given in the filing was an estimate used to calculate the SEC registration fee. The company will be renamed KKR & Co. LP and trade on the New York Stock Exchange under the symbol KKR.

The company invests 83% of its $53.4 billion of funds in leveraged buyouts, compared with 37% of Blackstone’s $88.4 billion of assets. That strategy has helped Blackstone’s funds grow at a 41% compound annual rate in the past six years, compared with 29% for KKR over the past five.

The firm’s Millennium Fund, closed in 2002, has delivered a net internal rate of return of 41% to investors, according to the filing, making it KKR’s best-returning pool.

Blackstone shares dropped 4.1% since the company’s $4.75 billion offering amid concern that the leveraged buyout boom has peaked. The shares rose 45 cents to $29.72 in New York Stock Exchange composite trading yesterday. Fortress shares have fallen 30% since reaching a high on April 19 and closed at $23.17 yesterday, up 15 cents.

KKR’s deals this year include the second- and third-largest LBOs ever. The company is leading investors in the pending $45 billion purchase of Dallas based electricity producer TXU Corp. and the $25.6 acquisition of payments processor First Data Corp. in Greenwood Village, Colo.

The pace may slow as investors start to cut back on the bonds and loans that takeover firms rely on to finance about two-thirds of their deals. U.S. Foodservice, a Columbia, Md.-based unit of Dutch supermarket company Royal Ahold NV, agreed to be bought by KKR and Clayton Dubilier & Rice Inc. for $7.1 billion in May. The transaction closed yesterday, after bankers on the deal postponed a planned debt offering June 26.