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U.S. Buyout Dominance Likely To Recede: Carlyle

27 April, 2011

America’s global dominance of the private equity industry will likely remain for only a handful more years, as other geographies grow stronger and rival firms around the world flex their muscles, Carlyle Group co-founder David Rubenstein predicted on Tuesday.

The major global private equity firms are predominately U.S.-based, such as Blackstone Group, Kohlberg Kravis Roberts & Co, TPG Capital and Apollo Global Management.

While the United States “more or less invented private equity,” America can’t expect to dominate the space as long as it has dominated some other industries, Rubenstein said, speaking at a conference organized by Thomson Reuters’ Buyouts publication.

At some point, firms in Brazil, China, the Middle East or Europe will ask why they can’t build a global firm, Rubenstein added.

The UK has a number of firms that are semi-global that have prospects to become global, Rubenstein added.

Still, America will probably dominate the industry for the next five years or so, Rubenstein said, pointing to the lengthy time it takes to raise money for private equity funds as a barrier to entry for new players.

Rubenstein, who has long been bullish on China, forecast that China will overtake the United States around 2030 as the world’s dominant economy when measured by GDP. He called it an “extremely attractive place to invest” due to its size and growth rate.

China is “welcoming of foreign capital” and encourages private equity firms to invest, Rubenstein said.

Conversely, Rubenstein said he thought the political risk in the United States “is as great as the risk in emerging markets.” He cited concerns in the United States such as the government deficit.


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U.S. Buyout Dominance Likely To Recede: Carlyle

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