David Rubenstein speaks at Smith School as final CEO in the 2010-2011 CEO@Smith Speaker Series

The 2010 to 2011 season of the CEO@Smith Speaker Series came to a close on April 12, 2011, as Baltimore native David Rubenstein spoke to an audience of more than 250 students, faculty and staff at the Robert H. Smith School of Business.

“CEO@Smith is the vision of our dean. He really wanted to make sure we complimented all the great things you learn in the classroom with the great things you learn in your internships and work experiences,” Tim Dennis, director of corporate relations at the Smith School, said before Vice Dean Hugh Courtney introduced Rubenstein.

Rubenstein is co-founder and managing director of the Carlyle Group, one of the world’s largest private equity firms, founded in 1987. Since then, Carlyle has grown into a firm managing more than $100 billion in assets from 27 offices around the world.

Rubenstein graduated from Duke University in 1970 and from the University of Chicago Law School in 1973, where he served as an editor of the Law Review. He practiced law early in his career, then stopped to pursue a career in politics. During the Carter Administration, he was deputy assistant to the president for domestic policy.

After his stint in politics, Rubenstein hit a rough patch in his career: “I found out that what people say about Washington is true: If you want a friend in Washington, get a dog. All of these people who thought I was awesome wouldn’t call me back. I couldn’t get a job for four or five months,” so he began practicing law again. He quickly realized again that law wasn’t for him, so he took the entrepreneurial path and started the Carlyle Group.

The Carlyle Group was so successful because of several new ideas they implemented, according to Rubenstein.

They were located in Washington, D.C., while most private equity groups were in New York City: “We took advantage of our situation and said, ‘We don’t want to be in New York, we want to be around companies influenced by the government and that meant locating in Washington, D.C.”

They hired famous people to build their reputation, including former President George H. Bush: “Our theory was is if we had famous people we’d get our calls returned and things done.”

They had multiple funds at the same time, which no other group at the time was doing: “We came up with the idea of having multiple funds and ultimately created about 90 funds.”

Finally, they globalized private equity: “Historically if you were in America you invested in America, if you were in Europe you invested in Europe. So we took the Carlyle name and took it to Europe. Today we are in a situation where the firm is known all around the world.”

Rubenstein talked to the audience about the importance of philanthropy as a businessman, something he said should be taught in business schools.

“As the firm became successful, I realized I’d made a bunch of money. I decided I didn’t want to take my wealth with me. The ancient pharaohs thought that they should be buried with their wealth, but I don’t think there’s anything that proves you can use it later on, so I decided to start giving it away,” he explained. “I think philanthropy is a really important thing.”

As part of his philanthropic efforts, Rubenstein has purchased original copies of the Magna Carta, the Emancipation Proclamation and the Declaration of Independence and given them to the United States to preserve the history of the nation.

He added that he thinks philanthropy is something that should take place while people are alive so they can see the positive effects it has on those benefitting from it and that philanthropy is something that anyone can do – not just billionaires.

Currently, Rubenstein is chairman of the John F. Kennedy Center for the Performing Arts and the president of the Economic Club of Washington. He also serves as a regent of the Smithsonian Institution and is on about 15 boards of directors or trustees.

He is a member of many distinguished organizations, some of which include the Harvard Business School Board of Dean’s Advisors, the Advisory Board of the Stanford Institute for Economic Policy Research, the Board of Trustees of the Young Global Leaders Foundation, and the International Business Council of the World Economic Forum.

Rubenstein finished his talk with tips for entrepreneurs, his thoughts on the economy, and what qualities the Carlyle Group looks for in new hires: “We want to hire people who are reasonably intelligent – geniuses are too hard to manage. We want people who are willing to work hard – you can never accomplish anything great working 9 to 5, five days a week. We want people who know how to work with each other. We want people who want to make a lot of money, not spend a lot of money. And we want people who are interested in being a part of a bigger company that they help to grow.”

Jessica Bauer, Writer and Editor, Office of Marketing Communications