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Some of the biggest names in private equity think this go-go market has another year or two (at least)

Earlier today, as part of a private event, this editor was afforded the opportunity to talk with some of the biggest names in the world of private equity, including Carlyle co-founder David Rubenstein; Bain Capital co-chair Steve Pagliuca; Jean Salata, the CEO and founding partner of Baring Private Equity Asia; and Sheila Patel, the vice chairman of B Capital Group AGM and formerly the chair of Goldman Sachs Asset Management.
We covered a lot of ground, from how interested Carlyle and the other firms are in blockchain technologies (the feedback here was a little mixed), to how focused they are on sustainable and socially responsible investing. On this front, Rubenstein claimed that “private equity people are very focused on it,” and predicted that when a financial metric emerges to better assess companies on this front “within the next five years,” it will become a routine factor in evaluating companies.
Patel — who previously served on Goldman’s inclusion and diversity committee — agreed, noting upward of one-third of investors right now find it impossible to measure so-called ESG criteria (though she expects this to change quickly).
Naturally, too, we discussed the current market, including how the investors differentiate their firms’ offerings when everyone these days has a money cannon — and how long they expect to be operating at hyperspeed. In feedback that might surprise some readers and will seem obvious to others, the PE execs suggested that this go-go market could easily continue into 2023, if not beyond.
Only attendees of the event will have access to the full interview, but some notes from this last part of our discussion follow:

Steve Pagliuca:


[P]art of the reason we’re doing so well has been massive government intervention, which I think was warranted. As that starts to wane, we may see an effect from that. The unemployment rate right now is just over 5.2%, which is, to me, astounding in the middle of a pandemic, and it looks like there are lots of jobs out there still unfilled. Part of that is because the [government] payments came out, and less workers were looking for work, so we might see unemployment continue to go down as those payments stop, and the impact of that is going to be a key issue.

David Rubenstein:


They say this is the best of times and the worst of times. It’s the best of times for investors, because if you’re in the tech world, if you’re in the investing world and you’re investing in India, China and the United States, you’ve made a lot of money and you’re beginning to think you’re a genius because you made so much money, and you just don’t realize that it’s the worst of times for people that don’t have internet access, [or who] work with their hands and not with their minds as much, [or who] aren’t educated [or] have childcare [needs]. Really, in the United States and probably other parts of the world, we are further and further creating [an] economic divide unfortunately and greater income inequality and a lack of social mobility, and that’s a real problem.
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