David Rubenstein ignored his parents and took a risk. It paid off.
Instead of becoming a dentist—as his mother had hoped—the Washington, D.C.-based entrepreneur began an active career in law and politics before co-founding the Carlyle Group in 1987. Today, it is one of the world’s largest private equity firms.
The company manages $106.7 billion from 30 international offices, with 84 funds across four investment disciplines—buyouts, credit alternatives, growth capital and real estate (including multifamily housing).
In April, Rubenstein spoke to nearly 500 people attending a business event at the Willard InterContinental in Washington, D.C., touching on these disciplines and sharing his economic analysis and predictions on a national and global scale.
Following are highlights:
1. The spirit of entrepreneurship is what attracts people to the United States, although it is harder to get a business off the ground now than it was 15 years ago, Rubenstein said. “We have a wonderful wave of social entrepreneurship in the United States—a government position isn’t the only way to serve the country.”
2. China, India, Brazil and Israel have caught up to the United States in terms of entrepreneurship, Rubenstein said. He believes the U.S. economy will soon be No. 3 in gross domestic product (GDP) to China and India.
3. Rubenstein said Brazil and India aren’t “emerging markets”—they are “emerged.” China is his top pick for international investment.
4. Rubenstein believes a commission should force an up or down vote to tackle the United States’ budget and the country’s $14.2 trillion debt.
5. “People still want an American university degree. They also love our entrepreneurial spirit,” Rubenstein said.
6. Inflation in the United States may rise by 5 percent over the next few years—an increase Rubenstein considers tolerable. He is, however, concerned about keeping the dollar viable as the world’s reserve currency if the country’s debt and employment problems continue much longer.
7. Competition for deals is intense because sellers are nervous they will not get the most for their money in this market, so they’re holding out on selling, Rubenstein said. Therefore, there isn’t a lot to buy.
8. Rubenstein said most people predicted that private equity firms would crash and burn. In reality, they have fared reasonably well during the recession.
9. There are a few deals that “got away” from The Carlyle Group, Rubenstein said. “My daughter went to Harvard, as did her husband. When they were dating, I met him and he told me I should meet a fellow classmate who was dropping out of school to start a company and needed a few investors. I told him I wasn’t interested. The company was Facebook and the classmate was Mark Zuckerberg.”
–NAA’s Lauren Boston