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Buyout firms plan to start trade group

December 04, 2006|From Bloomberg News

Buyout firms are preparing to start their own lobbying group to fend off increased regulation, Carlyle Group co-founder David Rubenstein said.

The trade association will begin work early next year and represent some of the largest leveraged buyout firms in the U.S. and Europe, Rubenstein said in an interview Friday at Private Equity International's Emerging Markets Forum in London. He declined to identify other firms involved.

The private equity industry faces unprecedented scrutiny from regulators after gorging on $608 billion worth of takeovers worldwide this year. The U.S. Department of Justice has begun an informal antitrust inquiry into firms' collaboration on leveraged buyouts.

"The big buyout firms are getting beat up every day," Rubenstein said at the conference. "Unless we do a better job of educating people of what we are doing, we won't be allowed to continue in an unfettered way. We run the risk of regulation."

Carlyle, which oversees more than $44 billion, has had political connections since it was started in 1987 by Rubenstein, a lawyer and former policy advisor in the Carter administration.

Unlike rivals Kohlberg Kravis Roberts & Co. and Blackstone Group, which are based in New York, Carlyle has its headquarters in Washington, and the buyout firm's advisors have included former President Bush and ex-British Prime Minister John Major.

In Europe, the industry last year was likened to the biblical plague of locusts by Franz Muentefering, Germany's Social Democratic Party chairman at the time. Britain's Financial Services Authority has said the default of a large private equity-owned company is "inevitable."

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