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Rubenstein Predicts PE Consolidation

(Reuters) – David M. Rubenstein, co-founder of buyout firm Carlyle, said Asia’s private equity industry will likely rise to challenge U.S. and European dominance of the sector over the next five to 10 years.

Rubenstein, who co-founded Carlyle in 1987, said he expects some of China’s current crop of private equity firms to rival U.S. companies in the next few years, and for Asian private equity practices to be imported into the U.S.

“Asia will emerge as the counterweight to the United States as opposed to Europe,” he said. “Similarly I think China and the United States will be the two most important fundraising markets and the two most important investment markets.”

Speaking at the AVCJ conference in Hong Kong, Carlyle’s co-founder also said he expects consolidation in the private equity industry to gather steam in the near future, with large global players taking on smaller rivals.

“You’re also going to see more consolidation of the industry, the larger firms are probably going to acquire more and more smaller firms,” he said, adding that this was a trend he expected to see quite frequently.

Carlyle acquired AlpInvest Partners B.V. and Emerging Sovereign Group LLC in July this year, creating a global alternative asset manager with approximately $153 billion of assets under management across 86 funds and 49 fund-of-fund vehicles.

Rubenstein also said the private industry would likely undergo a series of changes in coming years, including having to respond to social responsibility requirements as major companies seek to improve their public images.

He declined to comment on whether the firm will go ahead with its planned IPO in the U.S.

(Reporting by Stephen Aldred and Denny Thomas; Writing by Elzio Barreto; Editing by Chris Lewis and Ken Wills)