NEW YORK (Bloomberg) William Conway, the deal maker who helped build Carlyle Group into the world’s second-biggest private-equity firm, said the company is gearing up for a public share sale to amass permanent capital and contend with the growing challenge of raising money for buyout funds.

“There will be significant advantages to having a lot more capital,” Conway, 61, who oversees the Washington-based firm’s investments, said in an interview with Bloomberg Businessweek. “Investors are reducing commitments to funds and making economic terms much less attractive.”

Carlyle, which took a $150 million, 22.5 percent stake in Butterfield Bank in March, has considered an initial public offering since at least June 2007, when larger rival Blackstone Group LP began trading on the New York Stock Exchange.

Plans were put on hold soon after when debt markets froze. Carlyle instead sold a 7.5 percent stake to Mubadala Development Co., an arm of the Abu Dhabi government, in September 2007.

After participating in $16 billion of buyouts this year, more than any other private-equity firm, Carlyle plans to file IPO papers late in 2011, said people with knowledge of the matter. The stock sale may not occur until the following year, said the people, who asked not to be identified because the plans are private.

Private-equity funds are struggling to raise money even as buyouts more than tripled this year to $133 billion from a year earlier, according to data compiled by Bloomberg. Firms attracted $71 billion from investors through the third quarter and are set to have their worst fundraising year since at least 2004, data from researcher PitchBook Data Inc. in Seattle show. The wealthy individuals and institutions that traditionally have backed private equity are increasingly reluctant to commit fresh capital after the financial crisis.

Carlyle, which was founded in 1987 by Conway, David Rubenstein and Daniel D’Aniello with $5 million in seed capital, would use proceeds from the IPO to invest in its funds and continue to expand beyond corporate buyouts.

Carlyle, which oversees $98 billion, appointed both to the firm’s special committee, which oversees operations in 19 countries and 78 funds.The firm also hired Rodney Cohen from Pegasus Capital Advisors to lead a fund it hopes will raise $1 billion to buy small companies.