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David Rubenstein and Afsaneh Mashayekhi Beschloss Deliver Fireside Chat at Greenwich Economic Forum

David Rubenstein and Afsaneh Mashayekhi Beschloss Deliver Fireside Chat at Greenwich Economic Forum

Afsaneh Mashayekhi Beschloss, Founder/CEO of RockCreek, interviews David Rubenstein, Co-Founder of the Carlyle Group at Greenwich Economic Forum (Greenwich, CT)


  • Rubenstein recently published new book called The American Story
  • Rubenstein predicts no recession for 2020
  • Rubenstein has a net worth of $3.3 billion


INTERVIEW TRANSCRIPTS: David Rubenstein, Co-Founder of The Carlyle Group and Afsaneh Mashayekhi Beschloss, Founder/CEO of RockCreek

Julia La Roche – Correspondent, Yahoo Finance: 00:00

Our next panel is another fireside chat and the interviewer is Afsaneh Mashayekhi Beschloss. She is the CEO and founder of RockCreek and she’ll be interviewing David Rubenstein, the cofounder and co executive chairman of the Carlyle group. Please welcome them to the stage.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 00:28

Good morning. You liked it to be here and very interesting to hear from the previous fire chat. I’m especially happy and excited to be here with David. But of course since David interviews, everybody in the world, I have to admit it is kind of nervous making to be here on the stage with him. David, of course we all know as the founder of really an innovator in private equity because when he created Carlyle, he made it into a global fund and one that didn’t really exist in the form that he made it.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 01:05

When David then went on to become a philanthropist, it was the same thing. He was an innovator in philanthropy, and he created the brand of patriotic philanthropy and has helped many historical educational and art institutions really become a lot more vibrant. As you all know, if you don’t now David is the author of the American Story. If you have not bought this book, I hope that you will go out and buy many copies of it and give it to all your friends for the holidays. But David, in writing this book, what was your biggest surprise? You interviewed the number of historians and Supreme justices and others. What was the biggest surprise?

David Rubenstein – Co-Founder, The Carlyle Group: 01:48

Let me describe what it is. I’m on a number of university boards and I’ve never written a book and I felt kind of naked not having written a book with big on a lot of university boards. I said, I have to write a book before I finally die. And so this is my book. What it is, is this about six years ago I thought it’d be a good idea to educate members of Congress a little bit more about history because members of Congress, like many citizens in this country don’t know much about our history and our civics. We don’t teach civics very much anymore in high school or junior high school. And history is not taught that much either. For example three quarters of Americans and a recent survey could not name the three branches of government. One third of Americans could not name even one branch of government. 10% of college graduates think that judge Judy is a member of the United States Supreme Court.

David Rubenstein – Co-Founder, The Carlyle Group: 02:35

Which is not yet the case. And amazingly if you are any naturalized citizens here, anybody is a naturalized citizen. Okay. If you’re a naturalized citizen, you have to spend five years in United States used to be 14 years, then you take a citizenship test, a hundred questions, you’ve got to pay us 60 of them, 91% of the people who take that test pass. Presumably with some study, the task was given recently to native born Americans and all 50 States and in only one state, Vermont was the majority of citizens able to pass that test, which says that many people don’t really know much about our history and our backgrounds so forth. So as a modest way to begin to do some things in that area. I thought about six years ago, be good idea to educate members of Congress a little bit more about history.

David Rubenstein – Co-Founder, The Carlyle Group: 03:21

So I take the great American historians once a month hosted dinner for members of Congress at the library of Congress. We get about 300 members of Congress coming and they say that this is among the most enjoyable things they’re doing because they get an opportunity here from Doris Kearns Goodwin. Robert Kero, David McCullough, Jon Meacham and similar people. So that’s what the book is about. And I’ll just mention one part of the, I interviewed in addition to that, the chief justice of the United States, and he’s somebody that most members of Congress don’t really know, but I knew about his interest in history and I’ll describe that. And so I thought he’d be a good person because they don’t really see him that much and cause even though they’re officer close together. So I said to him at the beginning of the interview, Mr. chief justice, did you always want to be chief justice, the United States?

David Rubenstein – Co-Founder, The Carlyle Group: 04:00

And he said, well, no, I didn’t want to do that when I was younger. What did you want to be a justice at all? No, I didn’t want to be a justice that you want to be a judge? No. Would you want to be a lawyer? No, I didn’t want to be a lawyer either. What did you want to be when you’re little? I wanted to be a historian. That’s all I cared about American history. And so I just told my father that my father said, well, it’s not much money in being a historian. You’ll write books nobody would ever read. And John said, I don’t really care. That’s what I want to do. So father said, okay. So he went off to Harvard, he majored in history, came back from his junior year, got off the Logan airport in Boston, got in a cab. And so the cab driver take me to Cambridge. Oh, cab driver said, are you a student? Harvard? Yes, I am. What are you majoring in? I’m majoring in history. Cab driver said, well, when I was a student at Harvard, that’s what I majored in also. So John thought maybe his father had a good point.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 04:51

So you have always been a student of history and we are now in this unprecedented time when markets are at the big high and the economy is doing so well. What are the things that worry you right now? What keeps you up and what do you are you concerned about a possible recession?

David Rubenstein – Co-Founder, The Carlyle Group: 05:11

We have recessions every seven years on average since World War II. And so for the last three or four years, I’m saying we’re probably going to have a recession at some point. Every time I do that, I get in trouble because people say Rubenstein’s predicting recession. So I’ve decided not to do that anymore and say that eventually at some point I cannot predict the economy will go down. I don’t know when that will be. When I was in the white house in 1980, President Carter’s inflation advisor used to say, I think we’re heading into a recession and Carter running for reelection said, look, I’m running for reelection to send the inflation advisor named Fred Kahn. Do not use the R word. People get scared when you use it. But Fred Khan, I have to be honest, what do you want me to do? So just don’t use the artwork.

David Rubenstein – Co-Founder, The Carlyle Group: 05:47

So from then on Fred concept, I think we’re heading into a banana and he would use the word banana as a substitute for recession. So I don’t know if we’re heading into banana, but I would say that right now it appears that because of lower interest rates the economy’s in reasonable shape, low unemployment, I suspect that we can get through 2020 without a quote recession. Now remember we might grow at 2% or 1.5%. That’s not a recession, not heroic growth, but an economy of our size growing at 2% is probably, you know, reasonable.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 06:20

David. Do you think we’ve had too many rate cuts too soon?

David Rubenstein – Co-Founder, The Carlyle Group: 06:26

Well time will tell. And like everybody else, I’ll have a memo on the file that will say if it went bad, I predicted it and I’ll pull the memo out of the files as everybody else does. As I like to say, people always predict recessions, but they don’t tell people that they predicted them until the recession is actually here. Then they get the memos out of the file and say, I, here’s what I actually said. People didn’t pay attention at the time probably. At this point Jay who used to be at our firm for about eight years, a very smart person is trying to balance many different considerations. Being the chairman of the fed during an election year is not pleasant because you get lots of people who want to push interest rates lower. The problem with pushing interest rates too low is that if you do get into recession, the fed doesn’t have a lot of weapons left. The only weapon they’d have left probably would be so-called quantitative easing, which seems to have worked when we use the last time. But I suspect the fed is as a chairman of the fed set, probably pausing for a while. So I think interest rates are low, but I’d be nervous that they went too much lower.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 07:21

Are you willing to give Jay a grade as a, you said he was at Carlyle, he sat a couple of doors down from you. I remember when I was in Carlyle, I sat on the other side.

David Rubenstein – Co-Founder, The Carlyle Group: 07:33

A++. He was a very talented person had been in government before. He had the advantage of being a lawyer, which I am trained as well. And he I think it was a very smart deal person, but he did not believe that private equity was the highest calling of mankind unlike me and therefore he decided to leave and do other things in public service. But I don’t fault them for leaving the, the great world apart private equity.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 07:56

So on that point, on the great world of private equity, you created one of the best. And they said I was fortunate I was still a partner there. If you started from scratch today, given all the conversations about ESG inclusion, sustainable investing, how would Carlyle be different or how would the next creation by David Rubenstein be different?

David Rubenstein – Co-Founder, The Carlyle Group: 08:17

Well, people probably forget this, but private equity was a mom and pop business in the seventies and eighties, because the partnership agreements for bad year to have more than one fund at a time. So if you had a partnership and you raise, you had to spend a 100% of your time managing that partnership, which makes sense. I decided to ignore that a bit and to ask for forgiveness rather than permission. And I asked my partners to run that fund and then I said, I’m going to try to create a fidelity or T-Rowe price and private equity having multiple funds and then globalizing it, which was novel at the time. Now it’s not as novel, but that was what we did that was different. If I was starting all over again, I’d probably be based in Singapore because you know, the greatest growth in the world is going to be in Asia. And I suspect firms based in Asia will probably grow at a faster rate than firms grow based in the West. But I also think that today private credit along with private equity will, will both boom and I says my private credit will probably be a bigger business in time than private equity.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 09:15

And things like renewable energy, things like health sector, ed, tech, technology innovation, are those things that would be a bigger part of future investments?

David Rubenstein – Co-Founder, The Carlyle Group: 09:25

Yeah, and in the early days of private equity, people were not as worried about ESG. In fact, when Mitt Romney ran for the Senate the first time against Ted Kennedy and then he ran for governor and president, he was criticized for things that Bain had done in the early days and many of the early day kinds of things that all private equity firms did were really focused on highest rate of return. They weren’t worried about job removal to other overseas countries. They weren’t worried about environment protection, they weren’t worried about taxes and other things. Today, people are much more concerned about that. They weren’t worried about diversity in those days either. So Mitt Romney, when he ran, he was criticized by his political opponents for things that, that Bain had done. In those days, which were normal then, but they wouldn’t look good. And so I think today if I were to start all over or anybody started all over, you would be much more worried about ESG factors than you, than you had been then. And at sometime we will have a, an indicator which indicates that even if you have good IRR’s, if your ESG factors aren’t that good, you probably won’t get money from institutional investors today. I’d say you can still get money of your IRS are high, even if your ESG might not be great, but at some point down the road that will probably change.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 10:28

You talked about Singapore and China and Asia, obviously today we’re starting to hear the news about the trade deal. Is this really a deal or are we going to not really be gaining anything in this negotiations that have been very hard and the Chinese look at things a hundred years, not sort of until the next election. So what is your thinking, this short term success?

David Rubenstein – Co-Founder, The Carlyle Group: 10:54

I think the president’s been told by many people that the overhang of a tension with China is probably not a good thing for the economy and our country and not a good thing for the economy in the year of his reelection effort. Therefore, I think he would like to get something done and I think while he’s not going to get everything done in the first deal flow phase one. I think it’s better than what we have today. The, there are three parts to the overall deal we’re trying to, number one is trying to buy more things from United States. Number two, they would open up markets in the United States that aren’t currently open. And number three, we would have to deal with China 2025. I think the presidents recognize that getting something on China 2025 is not likely in the near term. So there’ll be a so-called phase one transaction or agreement, which we’ll deal with, not the parts one and two that I just mentioned. And I suspect phase two will take much more time. It’s much more complicated, but I think that will be a relief to the markets. And I think the markets are already beginning to say that they’re, they’re pleased with something getting done.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 11:54

Do you think a phase two will ever happen or are we in a situation where the Chinese economy and the Chinese political system will not allow that?

David Rubenstein – Co-Founder, The Carlyle Group: 12:02

It’s much more challenging because the Chinese government doesn’t want to say, well we w we want to let the Americans to tell us what we, what we can do in semiconductor design, artificial intelligence, robotics. They want to be able to do what they want to be able to do. And if they want to use government resources, they don’t want to be constrained by the United States saying you can’t do that. I think it’d be hard to get it done quickly. But I don’t know the market is anticipating. In fact, the whole dispute with China was over trade deficits. It really wasn’t over trying to 2025. And so I suspect that political zeitgeist is such that if you can get something done on phase one that probably will solve for the near term, the political demands to get something done.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 12:41

Do you have any plans to interview anyone in China anytime soon?

David Rubenstein – Co-Founder, The Carlyle Group: 12:44

I will be there and a couple of weeks I think, and I will be interviewing some people there at a forum, but I don’t know that she Shi Peng is going to be waiting for me to interview them. I did have, I was chairman of Xinghua economic school of economics and management advisory board at one point. And I went to the meeting and they said, all of a sudden, are we taking the entire board to meet with Shi Peng, which I was just new to as a chairman, so I wasn’t really expecting that. And so I sat down and I sit there and all the other prominent people on the board, more former prominent than me were sitting there and I didn’t know what to say to Shi Peng. So I felt like saying, well, you know, there’s an old Chinese proverb that says a trip of a thousand miles begins with a first step. And he, I think he said something like, well, that’s an American, a fortune cookies saying it’s not a Chinese saying. So I shrank a little bit and didn’t announce any more Chinese sayings and didn’t tell him about China so much anymore and just listened.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 13:42

Wonderful. So when you’re not doing anything else, you’re interviewing the whole world. I don’t know if you’re willing to say it in this audience, but what has been your favorite interview?

David Rubenstein – Co-Founder, The Carlyle Group: 13:52

Well, that’s like asking what your children you like the most, I enjoy interviewing because I’m, it gives me a chance to ask questions to people. I am, I’m interested in I interviewed Jeff Bezos and that was fun. We hit about 2000 people and I remembered that when he was starting, he first said that he needed a bibliography of books in print. And I reminded him of that and he came to one of our companies and said that he would give, I think 25% of a new company we’re starting in return for the bibliography of books in print that we would lend him so he could do what he was doing and selling books over the internet. Our people turned it down and we said, we didn’t want that from a startup company. We’d take some cash. Eventually I went out and decided that was a mistake and said, we’ll take 20% of your company or, so he thought he didn’t need it then our bibliography so much, but he gave us some stock and ultimately we sold it the IPO. So it’s today worth about $10 billion a week. Gave that up. I think Oprah Winfrey was good. I thought she has a future in television if she wanted it. And told her that.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 14:56

Have you haven’t interviewed President Trump to my knowledge?

David Rubenstein – Co-Founder, The Carlyle Group: 15:02

I have! Not on my TV show, but he came to the economic club of Washington. And I interviewed him in the green room this was five years ago now. He said ask me anything you want, but asked me if I’m going to run for president. I said, president, what? He said, president of the United States. I said, you have no chance of being president in States. So you know, I was wrong. He also asked me if I wanted to pause here because some people think his hair is fake. He said, you can pull my hair. I didn’t want to do that, but it’s not fake. And anyway, he called me afterward and said it was a great interview and he said that it was the highest rated show in the 40 year history of C-SPAN.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 15:38

So, what would be the question today if you were interviewing the president?

David Rubenstein – Co-Founder, The Carlyle Group: 15:45

Is being present all that it’s cracked up to be? Now that you’ve been president for four years, why do you really want to be president for another four years? Is it that attractive to be? And you know, what’s the best part of the job and what’s the worst part of the job? And you know, things like that. I clearly, he’s re-engineered the presidency. In the old days you had press secretaries and you had press conferences and he’s obviously used the tweeting mechanism to overcome that. He’s different in many ways. And I would say he has a reasonably good chance of getting reelected despite what’s going on in the Congress right now.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 16:23

So you’ve been involved in presidential campaigns from the very beginning, President Carter until today in different formats. So what is your prediction on the next election?

David Rubenstein – Co-Founder, The Carlyle Group: 16:32

If you go back at the last 10 presidential elections a year in advance and say, this person’s going to be president, you’d be wrong almost every time. You wouldn’t predicted a year in advance of Barack Obama, Jimmy Carter Richard Nixon, Ronald Reagan, a year in advance, you certainly wouldn’t predicted Donald Trump. So predicting a year in advance, which is about what it is a year in advance is almost always wrong. It’s fun, but it’s almost always wrong. So I’d say today you know, you have to know who the president’s going to run against. And in the politics there’s an old saying, you can’t beat somebody with nobody. So you have to have somebody running against that. That’s taken seriously. And I, I right now it’s too early to say, but it looks as if the president will have somebody probably closer to his age group that he’s running against than somebody probably very younger.

Afsaneh Mashayekhi Beschloss – Founder/CEO, RockCreek: 17:13

On that note, I think we’re done with our time and thank you so much.


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