James Coulter, a co-founder of TPG Capital LP , said private equity funds should wait for the valuation of Facebook to drop before investing in the social media company.
"When an area is hot, you can invest in it early, but you better get out before it crashes," Coulter told the AVCJ private equity conference here on Wednesday.
"So private equity should not be investing in Facebook at a $100 billion," Coulter said, referring to some estimates of Facebook's current market value. "But once it crashes, and it will, you can find strategies to invest in lower valuations."
Coulter mentioned digital media as among the 48 hot themes that TPG has identified for investments globally.
Other themes that Coulter touched upon during the key note address included the U.S. residential mortgage market and the China's savings industry.
"We think prices are going down further (in residential real estate in the United States). But today there is almost $200 billion in non-performing loans on banks books in the U.S., and they are getting ready to sell," he added.
He said TPG had "quietly" acquired about 100 portfolios over the past couple of years consisting of 10,000 small loans.
"Right now ... I can tell you, there are several billion plus portfolios coming to the market," he said.
He said China's savers were sitting on too much cash and the asset management industry should benefit by developing the right products.
"This is a country of savers ... and way too much of it is in cash," Coulter said. He estimated about 67 percent of savings to be sitting in cash.
"This industry will find a way to come up with products that are interesting to these savers," he added. "If you look around the world, some of the largest fortunes created are in the asset management area. And in China, this is going to be an extraordinarily important area in the next couple of years."