Private equity firms have a ‘fair amount of dry powder,’ Carlyle Group co-founder says

The co-founder of one of the biggest players in private equity said the industry is in “reasonably good shape” and there will be opportunities to buy companies in the coming months. 

David Rubenstein, a co-founder of the Carlyle Group, said on CNBC’s “Closing Bell” that his firm and other private equity companies are waiting on the right opportunities as the economic impact of the pandemic puts stress on companies around the world. 

“We have a fair amount dry powder, as do the other large private equity firms. We see a lot of opportunities,” Rubenstein said. “But we don’t think that, if you don’t move in a week or two or three or a month, that you’re going to miss the best opportunities.”

The Carlyle Group and other private equity stocks have been hit hard this year, with shares of Rubenstein’s company down more than 26{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} year-to-date. The private equity firm backed out of a deal to buy a 20{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} stake in American Express Global Business Travel because of the pandemic, according to the Wall Street Journal. 

Still, Rubenstein said he’s confident the industry will prove to be successful during the crisis. 

“In the last Great Recession that we had about 10 years ago, private equity performed extremely well and outperformed public markets consistently, and I suspect that will happen again,” Rubenstein said. 

The private equity industry has faced heavy criticism over the past year from politicians, including Massachusetts Sen. Elizabeth Warren. Private equity firms and hedge funds have been barred from taking loans from the Paycheck Protection Program, but Rubenstein said companies owned by private equity should have access to the loans. 

“I recognize the political situation on Capital Hill and elsewhere, but I think Congress should worry about employees and making certain that they’re okay, not whether the private equity companies own (those companies) or not,” Rubenstein said.