Carlyle Group co-founder David M. Rubenstein said yesterday that he sees a "great opportunity" for his private equity firm to buy distressed debt and assets amid a credit crunch that has slowed the buyout boom.
Rubenstein said his firm - one of the world's largest - is evolving into a global company that invests in venture capital, real estate and debt from its traditional role of buying out assets.
The Baltimore native made his comments before speaking at the annual Society of American Business Editors and Writers conference, which is being held at a downtown hotel this year. His appearance drew protests from a union opposing Carlyle's recent buyout of a nursing home company.
"Today, banks don't want to lend money as much," Rubenstein said in an interview. "And so, the great opportunity is to buy debt instruments at a discount because many ... are now trading at discounts. If you could buy something that you think is worth 100 cents on a dollar but you could buy it at 70 cents, that is a good deal."
To that end, Carlyle recently raised $1.35 billion to invest in bonds and bank debts as well as buying financially distressed companies.
Rubenstein told reporters and editors that he sees investment opportunities in financial institutions, whose balance sheets include marked-down assets. Moreover, Rubenstein said he believes banks will become more open to selling debt, including those of Carlyle companies, at a discount.
"The most attractive thing right now is buying back my own debt," he said. "I know the companies are good but the debt is not structured the way it should be and is not valued as it should be. That's what a lot of people are doing, and that's what we're going to do, too."
Rubenstein, who grew up in Northwest Baltimore and graduated from Baltimore City College in 1966, co-founded Carlyle in 1987. It now manages more than $81 billion in assets. The firm has more than 1,000 employees in 21 countries. Its holdings include well-known brands, such as AMC Entertainment, Hertz Corp. and Dunkin' Donuts.
Rubenstein, who now lives in Bethesda, serves on the board of the Johns Hopkins University and Johns Hopkins Medicine.
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In recent years, Carlyle has begun straying from its core leveraged-buyout strategy by offering other investment products. But such diversification has also brought challenges.
