Carlyle Group co-founder David Rubenstein has been a regular at Berlin's SuperReturn International conference. Last year Pitchbook wrote:
The Carlyle Group's David Rubenstein and Robert Smith of Vista Equity Partners were among the heavyweights flying to Berlin for SuperReturn International last week as the private equity industry reflects on its strongest year yet.
The world has changed dramatically. Carlyle had four speakers at the Berlin gathering of private equity underwriters (PEU). Rubenstein was not one of the four.
Bloomberg reported today:
More than a decade of buoyant fundraising and loose monetary policy fueled a boom in private equity dealmaking that made many firms comfortable with spending big in an ultra-competitive market for assets. That led to sky-high valuations that were described as “bananas” at the last SuperReturn meet-up in November.
Not long ago Rubenstein told the story of working in the Carter White House and staff used the word "banana" in place of recession. He coached his PEU peers in Berlin shortly after the Fall 2008 financial crisis.
The greed and leverage boys have no shortage of confidence that they'll make their way through the current difficult market for buying and selling companies.
“Diamonds are made under pressure.”
What if an economic banana (recession) impacted a bunch of bananas (companies purchased at extremely high valuations)? Bananas under pressure turn to mush.
I have no doubt about the PEU boys ability to take care of themselves and their personal pocketbooks. I worry about the people working for their affiliates, people at the bottom of the economic fruit chain. They get bruised long before the private jet, billionaire crowd.