Carlyle's Rubenstein Says U.S. Recession `Inevitable' by 2018

Updated on
  • Sees nation's economy growing 1 percent to 2 percent in 2015
  • 'Not happy' that Carlyle's stock is down 31% this year

The U.S. will probably enter a recession in the next three years, Carlyle Group LP’s David Rubenstein said.

"At some point in the next year or two or three, you can expect a recession," Rubenstein, the co-founder of Washington-based Carlyle, said Friday in a television interview on “Bloomberg <GO>” with David Westin and Stephanie Ruhle. “We tend to have recessions every seven years, more or less, in the U.S. since World War II. It’s inevitable at some point.”

David Rubenstein

Photographer: Matthew Staver/Bloomberg

The U.S. economy will probably grow 1 percent to 2 percent this year, Rubenstein said. It expanded in the second quarter more than economists had previously estimated amid bigger gains in consumer and business spending. Gross domestic product rose at a 3.7 percent annualized rate, government figures showed in August, exceeding all estimates of economists surveyed by Bloomberg.

"It’s not here now,” Rubenstein, 66, said of recession signs. “It’s going to be modest growth for a while."

Rubenstein, Carlyle’s co-chief executive officer, started the firm in 1987 with Bill Conway and Dan D’Aniello. The company, which sold shares of itself to the public in 2012, managed $193 billion in private equity holdings, real estate, credit assets and hedge funds as of June 30.

Carlyle’s stock has slumped 31 percent this year to below its initial public offering price as equity investors show concern that declining values in energy holdings and hedge-fund losses will hurt future earnings. Peers Apollo Global Management LLC and KKR & Co. have also dropped.

"We are not happy with our stock price," Rubenstein said. "We have a very solid company, we know what we’re doing, we’re earning a fair amount of money. Eventually the market will figure it out."

(Updates with stock price comment in final paragraph.)
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