Who says Americans can’t do irony? David Rubenstein, co-founder of buyout group Carlyle, certainly can.
Speaking to a large audience of business leaders and politicians in Los Angeles he declared that all the leading private equity groups would have to follow Backstone’s example and go public.
“To be competitive and grow they will have to [go public] so they have a currency to attract employees [and] keep employees,” he told the Milken Global Conference. “I wouldn’t be surprised if all the major firms were public four or five years from now.”
There’s also a generational issue, he added. “The founders of all these firms are in their mid-50s, late-50s or early 60s. And they probably want to take some money off the table before they are unable to do so.”
David Bonderman, head of rival TPG, begged to differ. “All of us are in private equity because we want to be private,” he said.
Meanwhile, turning to the tax treatment of buyout groups, Mr Rubenstein sounded a rather menacing note. Responding to the fact that Congress is examining whether to hike the tax rate applied to carried interest, he declared:
“Every partnership in the US is governed by the same capital gains tax rules…If Congress tries to carve us out and tax us differently I think we will have people doing things that aren’t very desirable.”
Whatever can he mean?
