Private Equity’s Biggest Mystery Has a Simple Answer

Earlier this week, David Rubenstein, the co-chairman of private equity giant Carlyle Group Inc., said there are three great mysteries: What came before the Big Bang? Is there an afterlife? And why don’t private equity stocks trade higher?

The line got a laugh. But, despite the delivery, Rubenstein was asking something that he and others in his industry think is a serious question. And while it may be hard for Rubenstein and other PE titans to see — in part because they are at the heart of the problem — the answer is not all that mysterious.