After surging by 13% on its stockmarket debut last week, Blackstone Group’s share price dropped sharply, falling below the $31 set at the initial public offering.

Amid concerns about legislation introduced in America to increase the tax rate for private-equity firms, investors were spooked by a report that the buy-out boom may have peaked. The trajectory of Blackstone’s share price was no doubt tracked by rivals, such as Kohlberg Kravis Roberts and Carlyle Group, that are considering a public offer