Saturday, October 8, 2016

Carlyle's Rubenstein Conducts Seminar on How to Grow Inequality

The IMF held a panel discussion on global inequality and Carlyle Group co-founder David Rubenstein occupied the chair furthest from the moderator.  Rubenstein shared his worries that businessmen will be blamed for income inequality and elected officials may try to solve the complex problem with simplistic short term solutions.  He remarked, "It will take a long time to make modest progress."

He defended the people who go to Davos, the 1%, and said they don't intersect with people who aren't doing as well.  The lowly people "we don't really deal with on a daily basis." We have to figure out how to communicate better, the elites and the non-elites.  Many people who are voting are not happy with the elites."  In his assessment they are disconnected.

Rubenstein also worries about social unrest.  "You're going to have a lot of frustrated people who do things we don't really want."  

The IMF piece on the event offered:

“Many people in the United States are not satisfied with the income inequality gap, and also the social mobility gap,” said David Rubenstein, a financier and founder of The Carlyle Group, a private equity investment company based in Washington, D.C. “Increasingly, people in our society feel they can’t get to the top, and that may be a bigger problem than income inequality.” 

Global inequality:  Brought to you by The Carlyle Group and its:

1.  Global portfolio of more than 275 companies and more than 250 active real estate investments as of June 30, 216
2.  More than 675 investment professionals on six continents with local knowledge and relationships.
3.  More than 1,650 professionals operating in 35 offices in North America, South America, Europe, the Middle East, Africa, Asia and Australia.
4.  More than 1,750 investors from 81 countries rely on Carlyle to achieve premium returns on their invested capital.

Carlyle is a global alternative asset manager with $176 billion of assets under management across 128 funds and 170 fund of funds vehicles.  Founded in 1987 in Washington, DC, Carlyle has grown into one of the world’s largest and most successful investment firms. 
In the latter part of the panel discussion Rubenstein encouraged leaders, most of whom believe in globalization to do a better job of describing and supporting it. At 55:35 Rubenstein dubbed himself moderator and offered the "Private Equity Answer" for investors seeking out-sized returns in a low interest rate environment.  The Carlyle infomercial lasted three minutes and virtually closed the session on inequality.  Frankly, it couldn't have ended on a worse note. 

The rise of private equity corresponds with the rise in income inequality and the decline in social mobility, which is in effect multi-generational income inequality.