In 2009, a year after the financial crisis began, David Rubenstein admitted that he’d gotten carried away.
“I compare it to sex,” the co-founder of private equity giant The Carlyle Group said at the time, at a conference at Harvard Business School. “You realize that there are certain things you shouldn’t do. But the need is there, and you can’t resist it.”
Seven years later, the markets have once again reached a fever pitch, with exaggerations that alarm investment bankers.
“Financial investors are once again paying maximum prices in corporate takeovers, prices that have reached the level of 2007 or are even higher,” said Rainer Langel, head of the German division of Macquarie Capital Advisers. This has him worried.
“The exaggerations cannot go well in the long term,” he said ahead of the private equity conference in Munich sponsored by Handelsblatt, which began on Wednesday. The industry is at the end of a cycle that usually lasts seven to eight years, he said.