US Markets

Carlyle Group is most bullish on this: Rubenstein

US markets look a bit frothy: Billionaire investor
US markets look a bit frothy: Billionaire investor

David Rubenstein reiterated his bullish call on global energy Monday, after the Carlyle Group announced it had raised $2.5 billion for a fund to invest in diversified oil and gas assets outside the United States.

"Generally we think if you can buy now at relatively low prices and hold on for a few years you're going to do quite well," he told CNBC's "Squawk on the Street."

"So we're very bullish on the energy sector. In fact we'd say probably there is no other sector in the world that we are as bullish on as we are on energy," he added.

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The $2.5 billion fund, Carlyle International Energy Partners, will invest primarily in Europe, Africa, Latin America and Asia. Carlyle will look at a broad range of assets in segments including exploration and production, storage and transmission, refining and marketing, and oilfield services. The fund closed on Friday.

Altogether, Carlyle has more than $10 billion across four funds to invest in energy in the United States and abroad. The firm manages $194 billion of assets.

Rubenstein made his comments during a break from the SelectUSA Investment Summit, which is part of a governmentwide initiative to promote investment in the United States.

He told CNBC that while a strengthening dollar may hurt U.S. exporters because it makes their goods more expensive abroad, an appreciating greenback is a net positive for investors.

The euro has fallen about 10 percent year to date against the dollar.

"Overall I think the dollar being strong is a good thing for the United States because people want strong currencies, and they want to know when they invest in a country, the currency's going to remain strong," he said.

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About half of Carlyle's investments are allocated to U.S. assets, Rubenstein said, while the rest of its capital is deployed across 40 different countries. Carlyle is aggressively investing in emerging markets, Latin America, China and sub-Saharan Africa, he added.

The firm is also bullish on Japan, not only because it expects the country to benefit from economic stimulus, but because it faces little competition there, Rubenstein said.

"Generally, we think the dollar is not going to be a problem to invest around the world for us. We have a lot of funds that are in different currencies," he said.

Good advantages to investing in the US: Rubenstein
Good advantages to investing in the US: Rubenstein

As for whether U.S. stock prices are looking frothy or fair, Rubenstein said there is no doubt prices are high by normal standards and are not very attractive to investors. Carlyle believes prices will recede a bit and the eventual rise in U.S. interest rates will bring some valuations down.

Investors have piled into riskier assets because the Federal Reserve has kept its benchmark federal funds rate near zero. The central bank is expected to hike rates later this year or early next year.

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Prices for European stocks are about 25 percent below comparable assets in the United States," he said, adding that equities in emerging markets are attractive as well.

"In the end, the United States has many other strengths though. It's a good place to invest. You just have to be very careful what you do and what price you pay," he said.