Returns from private equity investments will continue to beat public markets, even as a flood of new capital comes in from retail investors, Carlyle’s top executives told Semafor’s Liz Hoffman in Abu Dhabi.
Mom-and-pop investors in the US will be able to get access to private equity funds “in the next year or two,” Carlyle Chairman David Rubenstein said at Abu Dhabi Finance Week. While that may push down returns from private markets, they will still be as much as 400 basis points higher than returns from public markets, he said.
Regulators are moving to open up private equity funds, traditionally only accessible to sophisticated investors with hundreds of thousands of dollars to deploy, to a wider investor base.
“For the last 50 years, every time a new set of investors came along — public pension funds, sovereign wealth funds, global pension funds, private family offices, high-net worth individuals — people said it’s too much capital, and the rates of return will come down, and almost every time they’ve been wrong,” Rubenstein said.
Opening up alternative asset funds to retail investors will unlock a significant new pool of capital at a time when government budgets are overstretched and demand for investment in infrastructure is growing, Carlyle Chief Executive Harvey Schwartz said at the same event.