>> the following program is paid for and presented by skybridge media llc. anthony: i' m anthony scare lucci, welcome to "wall street week." investing. is the energy sector a long-term opportunity? are stocks overvalued? are we in the midst of another tech double? my guess today runs a firm with $190 billion in assets under management and they have turned $60 billion to their investment today we will answer your questions to make you a better informed investor.

that has affected people and their money. >> from times square in new york city, the new "wall street week ." anthony: gary is on vacation today. i' m pleased to welcome david rubenstein, cofounder of the carlyle group. pleasure to have you on the show. david: pleasure to be here. anthony: i want to talk to you about your up bringing. david: i grew up in a baltimore. i thought if i was going to go somewhere i would need a college degree and i tried very hard to for a scholarship. anthony: parental pressure? self-motivated? david: like many jewish parents, they are happy with whatever their parent -- their children do better.

law school back to the country. be a dentist? she thought it mankind. she thought that if you were a dentist you were a doctor without weekend hours and she should aspire to be. anthony: your first job out of law school was practicing law? david: i came to paul weiss in new york and ted sorensen was among the people serving in government and i thought if i went to work for him or in that firm, maybe his magic would rub off on me and ultimately i could get a job in the white house myself anthony: what magic rubbed off on you? david: by working for him he was honest and said that i probably wouldn' t be a great lawyer. my clients suggested that as well. ultimately he opened some doors for me to get a job working in the carter campaign. they were 33 points ahead of gerald ford and they won by one point after i joined, so my contribution was not that great. but he did win.

anthony: you are responsible for that question mark david: -- for that? a deputy advisor in the united states. anthony: explain to our viewers what a day would be like in the white house for the young david rubenstein. david: there are an infinite number of meetings, everyone president, groups are trying to lobby you, you are trying to make policy, deal with congress, talk to the president. s a day where you start at about 7:00 and leave it around 10:00 and i loved it, there was more exciting. workaholic, but i did not regard it as work. anthony: what was jimmy carter like to work for? was relatively young, 52. scene.

person, very moral, very focused on human rights in those kinds of things. he tried to do many things at once, and his legacy was impressive. it compares less favorably impact to his post-presidency. he has been a post president for 34 years. no one has ever lived as long as he has after being president and what he has done around the world is spectacular. you can compare that to the four years he spent as president, it makes it look more modest, but he did incredible things there as well. anthony: you made the decision to not stay in government even the you love the experience. david: it was involuntary. if he had been reelected i probably would have stayed for a second term. at that time we do not think we do lose to someone very old. i thought that at the age of 31, to be president.

now i think of 60' s as a middle-aged category. i don' t forgive it that way today. i' m now 65. but we did nothing we would lose. we also thought the hostages would come out and we would win, and it didn' t happen, so i had to get another job outside government. anthony: returning to the law? david: i was not successful . i didn' t really love it. if you don' t love it, find something else. you cannot win a nobel prize doing something you hate. anthony: why did you turn to private equity? why did you think you would love private equity? david: i did not think i was well-suited to be a great lawyer, so i try to do something different. finance seemed attractive. i do not have a finance background, but i was able to recruit some people and we started carlyle. anthony: if you had to describe private equity to a young student, say, how would you describe it? david: let' s just say it' s synonymous with buyouts.

you buy something that isn' t working that well, you go in and as an owner and manager you try to make something more efficient. you buy it, you put in new management or you something to make it more valuable and in 3, 4, five years you can sell it, take it public, show the world what you done to make the company more valuable. it' s an important thing. as companies become more productive, they do good things for the economy. this is some thing i have seen around the world. people like what we have done with private equity in the united states. around the world people say -- can you do in our country what you have done in your country? make it more productive and efficient. can you tell our viewers a bit about -- anthony: can you tell our viewers about the carlyle culture and what has made it so it' s -- so successful? david: we divided it up. bill would oversee the investments. dan would take air of the administrative issues and real

fundraiser, a relationship person, strategist. we were not in each other' s sandbox every day but we respect each other enough that we did not second-guess each other, particularly on the weekends, making sure that we agreed on what to do. we were basically 37 when we started. i read at the time that people start their first companies between 28 and 37 and set -- i better get going. we were trying to let the world know that we were around, but no one was paying attention. because we were not in new york, the center of private equity, we could make mistakes and people weren' t paying attention. we had a different mindset. we changed the face of private equity of it by having a culture , ike -- by having a culture that was more collaborative. anthony: as private equity has evolved, more of these firms have adopted your model.

david: many of the leading ones have. when we started their work 250 private equity firms in the world. now there are over 5000. only about seven of them are global and operating on our basis. multiple funds, centralized in one place, operating really all over the world with many different products. anthony: i want to talk about the decision to take carlyle public. why did you decide to do that? you did it in 2012. david: many of our competitors had gone public and they had stock to recruit and retain employees on a tax-free basis. one of the main reasons that they went public and that we went public is that actually it begins to transfer wealth from the founders to the next generation. this enables the founders to basically monetize what they have built and capitalism, they like to get their fruits, and we wanted to do that too, but in my case to give it away i was the only person in the private equity word -- world to sign the giving pledge, which says that

you will give away during your lifetime or upon your death half of your net worth. you can give away more. warren buffett is giving away all of his money. i will essentially be doing that as well. i decided i would rather be giving it away while i was alive. anthony: tell us a bit about how you are doing that today. david: i have a unique style. most people like other people' s -- their own ideas better than others. no one came to me and said that the magna carta should be -- say the united states. i basically realized i was elected to say the united states and i gave it a permanent loan. i began the process of buying historic documents and putting them on display so that americans could see them and learn more about their history and fixing historic monuments like monticello as a way of kind of reminding people of our history. my goal was to make people better informed citizens. i call this patriotic philanthropy, to give back to

your country as a thanks for the great fortune the people like i have had in this country. it is an ancient greek word that means loving humanity. not rich people writing checks. generally i think when you help other people, you feel better about yourself, you have done something to make the world a better place. anthony: you love what you are doing. david: i do. anthony: how did you go from being locked into a law firm to being a successful entrepreneur? david: if you are always a success, you don' t have a tendency to do anything risky. i did not think i won the first third of life. i talk to young people sometimes to have run -- you have one rhodes scholarships and supreme court courtships and i say that she won the first third of life, the second -- the trick is winning the second third. i was not that a cop was as a student or an athlete. i had to keep working hard. people who keep working hard, if they don' t do it later, they won'

t succeed to do anything worthwhile. you need to keep working hard and taking the skills that enable you to be successful and keep applying it. i think you will have much greater happiness in your life if you are doing something worthwhile. one of the complicating things in life if you are successful is -- what about your children? my wife and i have three children who have grown up in what you have -- what you would call an advantage upbringing. in hindsight my of bringing was advantaged. if you have the unconditional love of two parents, if they let you do what you want to do, you don' t need to be successful. in a wealthy family it' s much harder to feel that what you have achieved is on your own. my children have a bit of a disadvantage. yes, they have money and a good education and sore from -- so forth, but they have to achieve on their own. i try to let them succeed on their own but it' s difficult for

a parent to just want to say to a child -- do it you can and i won' t help you, you want to help you want the child to be independent and strong. anthony: self-esteem is at stake. they have to feel good about themselves irrespective of you. david: in the end the only legacy that they will leave his children. we had a concern. we want to make sure that they are doing good things, are happy and doing something productive. anthony: it starts with that other essential truth, unconditional love in giving that level of support. david: warren buffett said to me once that he had the advantage of having two parents that gave him unconditional love. anthony: "wall street week" will be right back. david: the industry has changed more in the four or five years since the crisis in the previous 45 years. >> hi, i' m ted langone. >> carl icahn. >> larry summers. >> ticket grasso. >> suzanne saunders. >> lee cooperman. >> byron wayne. >> i' m watching "wall street

week." >> i watch "wall street week." >> i was the guest on the original "wall street week." >> and i am pleased to be on the brand-new one. >> i hope you are too. >> i am sure you will be, too. >> sponsored in part by hightower. an unobstructed view. >> imagine a business built on the premise of delivering straightforward financial device being the right thing -- advice being the right thing to do. rising above the discord of an industry compromise by conflicts of interest. we live by the fiduciary standard. to put our client' s interests first. not because fiduciary is the were built to do. >> i used to dread getting up and going to work. >> i was done with the grind. starving artist. >> i was looking for a business

>> it helped me to create a business plan and implement it. >> they really taught me how to think big. >> help me to make unimaginable >> i' m here because of score. >> get your free business mentor at score.org. anthony: we are back with david rubenstein, cofounder and co-ceo of the carlyle group. joining us now, liz and saunders . we' re not missing gary today. >> thank you. anthony: you were backstage listening to this conversation. liz: it' s fascinating, a treat to be here with you. i' ve been a great admirer. have you ever thought about going on a more public awareness philanthropy? truly explaining to people who may not understand what private equity is and the value it brings to the economy?

the broad economic wealth it creates? david: i do think that our image took a hit in 2012. i think that mitt romney did not want to defend private equity because his polling data showed that every time he utter the word private equity in defending himself, his numbers would go down. so, i think he decided not to talk about it. maybe that was a correct or incorrect decision, i don' t know, but i think that private equity took a bit of a beating. i think we could do a better job letting people know what we do. people obsess over our tax rate as opposed to whether we are creating jobs, which is unfortunate. maybe i could do a better job in explaining to people what we do and others could as well. i think it' s a mission that many of us should take on. >> you started in washington on the evil of what were considered great connections. reagan, o' neill, gingrich, clinton, can we get there again?

it' s clear that as of the rise of talk radio, the need to race a much money, the need to do things back in your district, members don' very much. republicans come together. things that would make it better? david: if members of congress did -- did spend more time with other members of congress. they use to have delegations go abroad. now that' s heavily criticized. that' s when they bonded with each other and members of the other party. i also think that members of more time in washington, d.c. tuesday and thursday and then they are gone. it takes a long time to get to know people and once you do, you each other. i started a program where i interview a scholar and we invite members of congress only to come. members of congress say that s the only time they can socialize with people from the other party without getting criticized.

david: doris kearns goodwin did a book on taft and roosevelt. we just did mccullough, the wright brothers, previously on john adams. we have had a lot of great scholars talk about the presidential figures who were great americans and we will do more of this. liz: let me ask you a question specific to private equity. there is a school of thought that the golden age is over and this concept of dry powder is so abundant. talk about the difficulty of making successful investments in this era. david: there is a lot of money, the returns of an good, investors see that there is nothing better than private equity overall, so that' s why there is a fair amount of money. in the old days investors might want 25% annualized rate return. that' s very good. today if you can get 16%, that' s great too. expectations have come down, that' s probably good, fueling the money coming in, they are

happier with lower returns. we have had high stock prices for a long time now. until there is a market correction it probably won' t be the case it you can buy that many things. prices are very high and we have been outbid by strategic' s. liz: i happen to work for a firm, charles schwab. he was a leader in democratizing investments. how does an individual investor get exposure? david: an accredited investor can go, net worth $1 million, income over $250,000, they can go and come together into a feeder fund and it might be one investor coming, but it is 500 of theirs or something like that. accredited investors can do that. there are funds that have been raised for nonaccredited investors and many organizations allow them to come in with lower

occur in the near future is that people who have ira and 401(k) accounts will be able to check off and save a want some of it to go into a private equity fund listed as one of the things that they can pick from. i think that that will be the great revolution. as we go from defined benefit plans, more people will have they will want to go into something that is high returning, like equity. david: i want people to can think on their feet. i want people that can communicate and solve problems. >> like us on facebook, follow us on twitter and instagram. "wall street week" sponsored in part by coke industries. we are coke. >> baidu nearly 800 million people suffer from lack of clean water around the world? that is completely unacceptable to me. that is why i am working on a way to solve this global problem.

by taking the polluted water we have an providing technologies to filter it back into clean water. my name is manny. senior vp of technology. we are coke. >> checking your fantasy league? >> just my 401(k) statement. >> where did you find the money for that? >> saving a little bit every month. >> i can' t see -- seem to save anything. >> what about the money you are spending? >> it' s gone before i get my hands on it. >> pizza for todd? >> can someone spot me? >> get tools for saving at feed the pay.org. -- feed the pig.org. anthony: we are back with david rubenstein. how has the private equity

david: it has changed more since the crisis than in the previous 45. it used to be the case that the largest investors were public pension funds, now it' s sovereign wealth. everyone used to go in and pay the same fee, now they pay lower fees. it used to be the case that everyone paid the same fee whether they come in early or late, now if you come in early you get smaller fees. now people want separate managed accounts. liz: when you think about federal reserve policy from a macro perspective tom a it something that we think about a lot because we look at our investors who are being forced out of the risk sector. how do you incorporate that thinking into what you do? david: of late the fear he has been that private equity is getting a lot of money because people cannot find things with a good return. that' s your point. if interest rates are what they were when i was at the white house, you might say -- why put your money in a private equity? 10% is adequate. i think that if interest rates

go up as they inevitably will, as the fed has said they will increase interest rates, i think those increases will be modest. the fed fund rate goes up by 50 basis points by the end of this year, going up incrementally over the next year or so, i think it will be a relatively low interest rate and i don' t think the people will rush out to go into the two or 3% yield instruments. anthony: talk about industry sectors. what about the tech bubble? david: there is a phenomenon called unicorns, pre-ipo technology companies that have a market value of $1 billion or more and there are roughly 85 of them. in the old days of a company had that value in that setting, you would go public right-of-way, but now you don' t need to do that because there is plenty of money for those companies growing capital. i think that probably care will come out of some of the evaluations. some companies in the technology world have changed the world. uber is one of

them, air b&b is one of them. not every technology company is one of those. or facebook. mice are companies get swept along and at some point when the correction occurs, values will come down in some of those companies. anthony: what is your view on the energy sector? david: it is one of the greatest times in the world to invest in carbon related energy. anthony: for of yours, that' s coal, oil, and gas? david: it came about trillions of years ago. it' s in the earth. will civilization be further ahead or behind there was no carbon? think about this, no oil or gas or coal in the world. would we have figured out how to get it another way? i don' t know the answer to that. clearly there is so much carbon on the face of the year that probably, because it is relatively cheap, it will be developed and for hundreds of years be here. maybe in 50 or 100 years we will have more renewable, but for now

obviously i think that natural gas is going to be a cleaner form of energy than coal, probably more money will go into that and it is a good area to invest in. the emerging markets are becoming more and more important, consuming more energy , and there will be a lot of opportunity to invest in that production, storage, transmission, refining. liz: one of the biggest problems for those higher skill industries is finding those workers. what are you seeing getting done right now? this entrepreneurial approach? david: graduates want to start their own company. it' s great to have this entrepreneurial culture. this is an important point. stem, science, technology, engineering, math, is an important part of the educational world and we should not diminish that education, but we should remember that when you get a good education you should

set a good humanities and arts education as well. the skills that you get of solving problems, learning how to communicate, things that you cannot get from stem are very important. we do want people only to be stem majors and forget the other things that are so valuable. i urge people who worry about getting a job out of college, i would rather hire a history major sometimes rather than an engineering major. i want people to can think and their feet, communicate, solve problems. listening to this right now. we will be right back with more rubenstein and liz saunders. >> banking on wells fargo? bank of america, jp morgan chase , the financial spider etf with 75 financial stocks in the s&p 500 -- s&p 500. why invest in a single financial stock when you can own the

go to sector spiders for a prospectus. we did carefully. visit us on the web. >> you can join millions of americans turning off the old media. we are in 40 million homes on directv channel 200 49 and verizon files channel 115, available online at newsmax tv.com. you can watch us anywhere in the world. download the free app from your iphone or android. do it today, find out why millions are tuning in for real news, better talk. david: sponsored and -- "wall street week >>" is sponsored in part by morgan stanley. anthony: word association is one of our time-honored practices. tell us the historical figure that you most easily identify with. david: abraham lincoln held the

george washington helped the country to get off the ground, he won by being a great general, cannot identify with but i greatly admire. liz: the trait that you most deplore in yourself and others. david: arrogance is not a virtue, humility is. the most impressive people in the world generally have a certain amount of humility to them. liz: most treasured possession? david: leaving aside humans, your children and so forth, i would say the magna carta. i bought it and to the extent that i was able to keep it from here permanently, i' that. anthony: your best investment? the dr. dre was the guy who started that. anthony: you going to wrap or stick to private equity? [laughter] i want to state david and liz for spending time today with "wall street week." that'

s it for today. check in with us all week. until next sunday, have a prosperous week. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]

. (applause) well, god bless you and welcome to lakewood. it's a joy to come into your homes each week. thanks so much for being with us. and if you're ever in our area, please stop by and be a part of one of our services. i promise you we'll make you feel right at home. but thank you for tuning in and thanks again for coming out. i like to start with something funny. and i heard about this older woman. she came to church one sunday morning and a friendly usher met her in the back and said, "ma'am, where would you like to sit?" she said, "i'd like to sit on the very front row." he said, "oh no, ma'am, you don't want to do that. our pastor's very

boring. he'll put you to