Policy uncertainty isn't necessarily a barrier to private equity investment, but elected officials must come to grips with spending and debt that could eventually crush the U.S. economy, Carlyle Group co-founder David Rubenstein said Friday.
"The uncertainty that might exist now is a good thing for certain types of private equity investments, " said the managing director of the private equity giant .
"You make most of your money when you're doing things in an uncertain environment, " he said. "So this equilibrium is the kind of thing that people like us like."
Rubenstein added that a short-term "grand bargain" that prevents the U.S. economy from going over the fiscal cliff was unlikely in the lame-duck session of Congress, which runs from Election Day into January 2013. Still, the next president must come to terms with the burgeoning deficit. (Read more: Five Players Who Can Drive Us Over the 'Fiscal Cliff' .)
"The most important thing the next president has to do is resolve the uncertainty of the debt and deficit, " Rubenstein said, adding that it was impossible to predict whether either President Barack Obama or Republican nominee Mitt Romney would be
Whoever is elected, "what I hope he'll do is … recognize the country cannot continue to have $16 trillion in debt and a $1.3 trillion annual deficit, " he said.
Despite the soft U.S. growth, Rubenstein said there were still pockets of strength worthy of investment, such as the manufacturing sector. He cited DuPont and Sunoco Logistics as manufacturing-related stocks Carlyle has recently invested in.