The Ledger
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Rubenstein: Carlyle pioneered the multi-product platform model in private equity
“If Carlisle was innovative in anything, it was probably the idea that we would try to create a fidelity or a T. Rowe price of private equity, which is to say, We wouldn't have one buyout fund every four years. We'd have a buyout fund, and then after we raised …”
Rubenstein: Fundraising lacks dealmakers' social status in private equity
“I do think that fundraising is something that doesn't have the social status that maybe dealmakers have accorded themselves. In other words, if you look at the totem pole of people in the private equity world or in the investment world, people generally don't …”
Rubenstein: 90% of buyouts succeed, while historically 90% of VC deals failed
“But I would say 90% of the times buyouts will work. Venture capital, which we were not really in, probably 90% of those deals didn't work.”
Rubenstein: Blackstone, Carlyle, KKR, Apollo make 95% of profits in developed markets
“In the end, if you look at the large firms that we're now talking about, and I'll use the four big ones, Blackstone, Carlyle, KKR, and Apollo. They make 95% of their money in the developed markets. I'm counting China and India, I suppose, is developed for this…”
Rubenstein: Public PE shareholders want fee growth, LP investors want return rates
“The masters that buy your stock are interested in growing earnings, which is typically fee related earnings and growing them every quarter in a fairly consistent way. And the people that invest in your funds are more interested in the rates of return that you'…”
Rubenstein's family office backs an enormous number of first-time funds
“In my family office, I invest an enormous number of first funds because I think they're smaller and they probably need me more and I can probably pay more attention to what they're doing and there'll be more co-investment opportunities and so forth”
Rubenstein: Carlyle stock performed better after founders stepped back
“Our stock price has done much better under this way than when Bill and I were running it”
Rubenstein: Business fundraising is harder than political or philanthropic fundraising
“When you think about it, there are three types of fundraising. One is for philanthropic, one is for political campaigns, and one is for business. I'd say the easiest is probably political because in many ways it's a smaller amount of money, typically until the…”
Rubenstein: Blackstone, KKR, and Apollo lacked global footprints when Carlyle expanded
“Blackstone, KKR, and Apollo really hadn't built international businesses, honestly, at that time, as we were beginning to do it.”
Rubenstein: Carlyle could have been more profitable with a cutthroat culture
“We could have made more money and been more profitable had we been more cutthroat in hindsight.”
Rubenstein: Blackstone's real estate arm is its most profitable business
“Blackstone built a very big real estate business. I think it's the most profitable business.”
Rubenstein: Large family offices will increasingly compete against PE firms
“As we go forward, I suspect you'll see more and more competition from family offices that are large and they will do deals competing with private equity firms.”
The best fund in any vintage is usually a new boutique
“The best performance of any private equity fund in any given vintage year will almost certainly be three guys or three women in a garage in Palo Alto who come up with a new venture fund, and all of a sudden they make 25 times their money.”
Rubenstein: Carlyle sold Amazon at IPO and passed on Facebook and Netscape
“Well, the mistakes that I made and not pursuing Mark Zuckerberg when he was at Harvard, when my now son-in-law was prepared to introduce me to him, or when we kind of sold our stake in Amazon at the IPO. And then also a young man showed up in our office one ti…”
Rubenstein: Early 1980s buyouts required only 1% to 5% equity
“In those days, this is the early 19 eighties, leveraged buyouts were five percent equity or one percent equity. And very often the one percent equity deals, you would take a one percent fee. So you basically got your money back.”
Rubenstein: Bill Simon made roughly $80M on $1M Gibson Greetings buyout
“In his case, it got an enormous amount of attention because he, in 18 months, he put in roughly a million dollars. I'm not sure how much he had left in it after the fees and everything, but for his million dollars or a little bit less than a million dollars, h…”
Rubenstein: Carlyle Group launched with four co-founders and $5M
“We had four of us at the beginning. The person from Marriott, his name was Steve Norris, joined us. Then we went out, and he recruited, with my help, another guy from Marriott, Dan Daniello, and then we recruited Bill Conway, who was then the CFO of MCI. Those…”
Rubenstein: Carlyle traded at lower valuation than Blackstone due to fee neglect
“When Carlisle first went public, we were well known, but we weren't as highly valued as Blackstone because we had not focused on fees that much.”
Rubenstein: Family office enables higher-risk investments than Carlyle allows
“I decided I would do it for a couple of reasons. One, I can diversify. Carlisle doesn't invest in every area. Two, I could be more involved in some ways by taking bigger risk if it's my money. I don't have a fiduciary responsibility to outsiders. So I could ta…”