More PE firms likely to go public: Carlyle's co-founder

David M. Rubenstein, the co-founder of the private equity firm Carlyle Group, said on Wednesday that he believed more private equity firms would seek to go public in the next few years.

Speaking at SuperReturn International, the private equity conference in Berlin, Rubenstein said that smaller private equity firms were likely to follow a wave of initial public offerings by larger firms in recent years.

Rubenstein said that the perceived level of assets under management that a firm should have before going public was likely to decline, opening the door to more offerings by midsize and smaller firms.

"I think you'll see more and more of these firms go public," Rubenstein said.

Carlyle, Kohlberg Kravis Roberts, The Blackstone Group and Apollo Global Management have all publicly floated their stock in recent years despite concerns that firms might struggle to balance the conflicting expectations of so-called limited partners who invest with the firms and the shareholders who buy the firms' stock.

On Tuesday, David Bonderman, the co-founder of TPG Capital, said that his firm was contemplating going public, but hadn't committed to doing so.

Rubenstein also said on Wednesday that he believed that lawmakers in the United States were unlikely to pass legislation this year that would increase taxes on so-called carried interest, which refers to profits that private equity firms make from investing in companies.

Representative Dave Camp, the chairman of the House Ways and Means Committee, has suggested treating carried interest as income rather than as capital gains, which are taxed at a lower rate, as part of his proposal to overhaul the tax code.

Rubenstein said that he didn't believe that lawmakers would make substantial changes in the tax code this year in part because Max Baucus, the former chairman of the Senate Finance Committee, had recently been confirmed as the ambassador to China. As a result, it is unlikely that the Senate will consider a major tax code change this year, Rubenstein said. Rubenstein also noted that Camp, a Michigan Republican, would have to give up the chairmanship of the committee next year because of term limits.

©2014 The New York Times News Service