Carlyle's Rubenstein still bullish on Japan, China

David Rubinstein
Andrew Harrer | Bloomberg | Getty Images

David Rubenstein, co-CEO of private equity fund firm The Carlyle Group, said Thursday he is still "very bullish" on Asia at the Dow Jones Private Equity Analyst Conference in New York City.

Rubenstein said he thinks China is the second best place to invest in the world, after the U.S. He said Chinese growth may fall to 6 percent or 7 percent, but that was still excellent compared to the rest of the world. "There are still a lot of opportunities there," he said.

Rubenstein also said he was "very bullish" on the Japanese economy despite its challenges.

On Washington, Rubenstein speculated that Congress would raise the debt ceiling and avert a government shutdown, but both would be done at the last minute and after a sloppy process. "It won't be pretty," he said.

"We are the biggest government in the world and we run it like a small mom and pop shop," said Rubenstein, saying such a process could hurt foreign investment in the U.S. "It's embarrassing."

(Read more: China data blitz points to stabilizing economy)

Rubenstein also said he doesn't expect changes to the carried interest tax treatment in the near future. He said it would have to be part of comprehensive tax reform in Congress, which is unlikely to happen.

He also called to lawmakers to change the rules that determine who can invest in private equity and other alternative assets. Rubenstein said it was "unfair" that a person can inherit millions of dollars and instantly be an accredited investor, while a well-educated person who, for example, chooses to work for Teach for America out of college is not considered sophisticated enough by the government to invest in a private equity fund.

Carlyle has more than $180 billion in assets under management across 118 funds and 81 fund of funds vehicles, according to its website.

Carlyle announced this week that it had agreed to buy Metropolitan Real Estate Equity Management, a global real estate funds of funds with more than $2.6 billion in capital commitments. Financial terms were not disclosed and Rubenstein did not discuss the deal in his comments Thursday.

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