By Geoff Colvin, senior editor-at-large
FORTUNE -- In a global investment bazaar, where's the best place to invest right now?
Depends on who you are, as three recent responses to that question make clear.
I asked David Rubenstein, co-founder and co-CEO of the giant Carlyle Group (CG) private equity firm (assets under management: $180 billion), where he's looking to buy companies now. He answered immediately and enthusiastically: "The greatest market in the world, without doubt, is still the United States. Because of the rule of law, the transparency, the quality of the managers, the quality of the financing, the opportunities to exit, the United States, despite its 2.2% growth and despite the inefficiencies of Congress, let's say -- there's no doubt that it's still the best place to invest."
A few days later I asked about 100 CFOs from major corporations where they were finding their greatest growth opportunities. Using an audience response system, they were given a menu of nine countries. Their No. 1 choice by a mile was the U.S., named by 44% of them; China was No. 2 with just 8%.
Not long after that I was talking with Rob Arnott, famed investment researcher and strategist. Would he buy U.S. stocks at today's prices? Absolutely not, he said. What looks better? Stocks in emerging markets, he answered; an overall index of them, weighted by fundamental measures like revenue and cash flow, not by market cap, is priced well below long-term multiples. They're a bargain, he argues.
Can all these smart people be right? I think they can be and are. The key is to remember that Carlyle and major corporations aren't investors like you and me. When Carlyle buys a company, it controls the managers. When a big corporation builds a new facility or launches a new product, it obviously controls the whole process. In light of the many U.S. advantages that Rubenstein details, it makes sense that he and the CFOs see the world as they do. While their bets won't all be winners, they'd rather play the game in the U.S.
But when you and I invest in stocks, we're just going along for the ride, and research shows overwhelmingly that we shouldn't even try to pick winners and losers; we should buy the whole market, or not. That's why Arnott is also right. Buying the U.S. market at today's prices will likely produce paltry returns over the next decade.
The U.S. is the world's greatest business environment. But just as a great company can be a bad investment if it's priced too high, so can a great country. We individual investors need to find cheaper markets.
David Bonderman isn't in a hurry, but he also isn't slamming the IPO door shut.
FORTUNE -- TPG Capital is the largest private equity firm in America that isn't publicly traded, with more than $55 billion in capital under management. And that isn't expected to change any time soon, although TPG boss David Bonderman today nudged the door open a crack, while speaking at the NY Times Dealbook Conference.
"We haven't been MOREDan Primack - Nov 12, 2013 12:47 PM ET
Private equity giant publishes U.S. 'economic indicators'
FORTUNE -- Tomorrow we'll get the jobs report that should have been released more than two weeks ago. September retail sales data comes next Tuesday, while the Consumer Price Index has been pushed back to next Wednesday. And if you want September housing starts, check back during Thanksgiving week.
All of these delays, of course, are courtesy of the mindless government shutdown (which heretofore will MOREDan Primack - Oct 21, 2013 2:18 PM ET
Carlyle has made lots of money on Booz Allen, but the NSA scandal could tamp down future returns.
FORTUNE -- The Carlyle Group has gotten all sorts of unwanted attention this week, as majority shareholder of defense contractor Booz Allen Hamilton (BAH), where NSA leaker Edward Snowden worked before hopping a flight to Hong Kong.
For the uninitiated, Carlyle (CG) bought a majority stake in the company's government services business for around $2.5 MOREDan Primack - Jun 12, 2013 10:30 AM ET
Is Hertz better off today than it was seven years ago?
FORTUNE -- Hertz's private equity sponsors sold their remaining shares earlier this week, fully existing the company more than 7 years after buying it from Ford Motor Co. (F).
That deal came in the midst of private equity's "golden age," and was one of that era's most-criticized transactions. Not so much the original purchase, but rather the subsequent $1 billion dividend MOREDan Primack - May 9, 2013 3:35 PM ET
Big private equity firms are offering diversified products, but one size may not fit all investors.
FORTUNE -- One year ago I recommended that you buy stock in publicly-traded private equity firms, like Apollo Global Management (APO) and The Carlyle Group (CG). My theory was that such issuers were being undervalued by analysts who obsessed over assets under management (i.e., fund management fees), while paying too little attention to underlying portfolio MOREDan Primack - Apr 29, 2013 2:26 PM ET
Have reports of the club deal's death been greatly exaggerated?
FORTUNE -- Before the financial markets went to hell in a securitized handbasket, private equity firms regularly partnered with each other on the same transactions. These so-called "club deals" sometimes included as many as seven firms, and were a way for private equity to purchase larger and larger companies (while reducing possible competition). In fact, of the 25 largest leveraged buyouts completed MOREDan Primack - Apr 10, 2013 2:31 PM ET
Do private equity firms need to make a structural change?
FORTUNE -- Private equity funds have long featured "hurdle rates," or preferred returns that funds must generate for investors before fund managers get to begin sharing in the profits (i.e., carried interest). But one senior private equity executive believes that current hurdle rates pose "a potential crisis" for the industry.
Jeremy Coller, founder and chief investment officer of Coller Capital, made the comments last MOREDan Primack - Mar 5, 2013 12:33 PM ET
What didn't kill private equity made it stronger.
FORTUNE -- David Rubeinstein, co-founder of The Carlyle Group (CG), believes that the private equity industry is stronger today than before the Great Recession.
Speaking at the SuperReturn International conference in Berlin, Rubenstein argued that private equity faced several serious threats in the wake of the Lehman Brothers collapse. Not only massive decreases in fundraising and deal-making, but also the possibilities of debilitating regulation, MOREDan Primack - Feb 27, 2013 3:48 AM ET
Carlyle's earnings miss aside, it's been quite a run for listed private equity firms.
FORTUNE -- Private equity firm shares have been on a year-long tear, even though yesterday's headlines were about declines caused by The Carlyle Group's (CG) earnings miss. Makes me feel much better about my advice last May, which was the only time I've even flirted with the hazardous world of stock-picking:
I think there's potential upside to private MOREDan Primack - Feb 22, 2013 11:56 AM ET
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