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Expect a Credit Rebound in '08, Says Dealmaker

Dealmaker David Rubenstein says the merger-and-acquisition market is in a "pause," but he disputes a Financial Times report that "failed buyouts have more than doubled from last year."

Interviewed by CNBC at a private-equity conference in New York, the co-founder and managing director of the Carlyle Group was optimistic. "The outlook for 2008 is very good," Rubenstein said. "The economy should be good. The credit markets are going to come back."

The Financial Times report said there have been 76 abandoned deals this year, worth $202.3 billion, compared to 55 failed private-equity bids worth $98.9 billion for the same period last year.

Rubenstein said the use of the term "failed buyouts" may be misleading. "Lots of deals get negotiated," he said. "Sometimes they happen, sometimes they don't." But he said the ones that don't get consummated aren't failures "in the sense of deals going bankrupt or people losing money."

He admitted the credit crunch has had an impact: "Because of the changes in the credit market, it's harder to finance some of these transactions, and sometimes they seem less attractive, but I think the markets have now absorbed that, and the $300 billion of deals that were caught up in this credit crunch have now largely been resolved."

Looking forward, Rubenstein was upbeat. "The buyout market will come back to largely where it was before. We won't see the gigantic deals for a while, but we will see a lot of deals going forward."

Now, he said, may be the best dealmaking time of all. "The most attractive private-equity deals are always done when there's some time of uncertainty, when there's some time of distress."