YouSaid · the spoken record

Nick Rohatyn

lines on the record: 98
first: 2026-01-22
most recent: 2026-01-22
sittings or episodes: 1
sources: podcast

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“Would say achievement and happiness, hopefully. Maybe those are two different things. Getting my firm to where it does make a big difference because it's bigger. It's one of the things that maybe it's a truism in many businesses. People don't always think of it in ours, but I think we will do much better the bigger we get. The bigger we get, the more good we will do. This is the flywheel I'm after. And we are at a scale and a set of capabilities and at a moment in time that augur well for that. But we still have a gigantic execution challenge ahead of us. If five years from now my firm is a 500, 150 billion dollar asset manager in emerging markets, that would be very gratifying. Secondly, all of the components of wellness and happiness and truly Multi dimensional, satisfying life would be important.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Preston went to run the World Bank in 1995. Ernie in turn came to JP Morgan and became not my boss directly, but he became the vice chairman of JPMorgan in charge basically to look after emerging markets. I spent a lot of time with Ernie Stern. Ernie was a great man. Whatever you said, if he agreed with you, he would say, you're absolutely right. Just like that, to have a great man deal with you like that to me was incredible. The humility, the accessibility, the straightforwardness was amazing. This is a guy who brought China into the World Bank. He did it. A guy who Stanley Fisher worked for him. Manmoan Singh worked for him. These are the caliber of people. That he would spend a minute with me. I'll always kick myself. So those are the ones that I remember the most.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“One was Dennis Weatherstone. Dennis Weatherstone was the CEO of JPMorgan after Lou Preston. Is British? Started as a teenager in the trading room sweeping the floor, literally, and grew to be the CEO of JP Morgan, Sir Dennis Weatherstone, diminutive fellow, soft spoken, always calm, and a gentleman. He grew up on the trading side of the house. To say that for people who grew up on the trading side of the house is saying something. I love that fact about him. The second was a fellow named Ernie Stern. Ernie was a concentration camp survivor who came to the US ended up as the vice president of the World Bank and for a time the acting president of the World Bank. World Bank is one of these places that has one vice president. And Ernie was a legend, an absolute legend at the World Bank. The World Bank would typically have political presidents, but Ernie was the constant. He was absolutely revered. When Luke...”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“I didn't know that's what I was doing. I was writing down numbers that the banks sent me every day. And then when the Dutch subsidiary or the French, I would say, well, these are the numbers. I didn't know they were forward foreign exchange points. But being a waiter, the other thing it taught me was I can stack four plates on one arm.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“First page on by somebody not related to me was as a busboy for two summers in a row, once at a place called the Box Tree in Westchester and once in France in a hotel called the Concorde Lafayette. That taught me a ton about hard work, discipline, collegiality, the fact that there's value in everybody. A couple of times I whined about stuff and I got shot down that taught me something too. I love those experiences. They were great, great experiences. Then I ended up at Unilever as a summer intern. Little did I know that what I did all summer, I literally did not realize this until a couple of years later was that I was quoting FX forwards to all of their subsidiaries.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“I told you I was going to give a plug for my younger brother's movie called Drop Dead City about the New York City fiscal crisis of 1975, which people can find on Amazon. My wife's gallery is called Salon 94. But that's really it. What was your...”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“In Tokyo and picked it up again when I came back. I absolutely love going bike riding outdoors. Road biking almost exclusively. I love that it's a social sport. I love that it clears my head. I feel that it chemically alters my brain for an entire day if I have a good bike ride. Of course, if I wanted to stretch the analogy into emerging markets and what I do, I would say there's a lot of risk management there and all that kind of stuff. I have ridden in emerging markets, ridden in Africa. I haven't ridden yet in South America in a big way. But it is something I absolutely love to do. And I do it, say, 100 to 200 miles a week normally. I get into Central Park early in the morning. It's a great sport. I have three grown children, 20, 23, and 26. My wife has a thriving art business. She's an art dealer here in New York.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Cycling. I become an avid cyclist. It started when I was a kid originally European cycling in Europe, Tour de France. I was crazy for that. Then I dropped it when I went over to Japan. Not a good place to ride a bike.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“At JP I was the founder and first chairman for five years of the Emerging Market Traders Association. We brought transparency, code of conduct, standardized documentation, all of that stuff to the markets. The Trade Association was absolutely central in growing the pie that was emerging markets trading. Here on the private market side, I've been the chairman of the My two professional goals in life are build a great business and help the pie grow for emerging markets, for the recipients and for the investors, being able to do that and hopefully saying that I had something to do with that is a very gratifying thing.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“This methodology exists in spades in developed markets on the public market side. I think the biggest multi-asset class fund in public markets is the $100 billion fund. The biggest one in emerging markets is $800 million. There are only five that I can find. In private markets, you're starting to see multi-asset class in developed markets. You have not seen it yet in emerging markets at all. My ardent hope around this moment, which I do think is a real inflection point for EM that can last quite some time, is that we as an industry, not just me, TRG, will involve in such a way that we can offer these kind of solutions to investors. Keep in mind, one thing I didn't touch on, Ted, my motivation here is, yes, of course I want to build a big business, but the do-good part is definitely still there.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“The private asset classes to the extent possible across as many countries as possible. In other words, diversification on two dimensions. A lot of private credit plus some private equity plus some secondary private equity plus some infrastructure plus some renewables, let's say, for starters. If you have real estate capabilities, fantastic. If you have venture capital capabilities, even better, there is a core that is those first three or four items where if you have the ability to deploy, you can deploy very large amounts. And if you are empowered to do that over at least an entire continent, if not all of EM, that's when you get to something that can make a difference. Nobody's got that. Nobody has the strategy nor the scale yet. That's where I'm trying to get to.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“The developing a multi-asset class approach in both private and public markets is the key to unlock large pools of capital coming to emerging markets. I really believe that because I don't think we will end up with large pools of capital in traditional strategies sufficient to make a difference, either to the investors or to the countries involved. Let's spend a minute on the private market side on this, Ted. As I mentioned, the market for private investing super fragmented, lots of small managers, very little ability for your typical sovereign wealth fund, large state pension fund, Canadian pension fund to deploy hundreds of millions, let alone billions of dollars into these countries which need hundreds of billions of dollars. The solution is to do so in a structure that allows deployment into all of”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's crazy that president is crazy. This thing is crazy. Nothing is crazy. Everything is understandable. Just as things are never as good as they seem, nor are things ever as bad as they seem. This notion that people have, and it's a global notion of extrapolating from the present in a straight line, is just as wrong in developed markets as it is in emerging markets.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that people inaccurately in holding, let's say, the US as the benchmark for rule of law, for sanctity of contract, for this, for that, unfairly denigrate a lot of these other places because there are rules in all of these places. There are laws in all of these places. There are contracts in all of these places. The process may be different. The importance of relationships may be more important than the existence of a contract and a precedent. But you can figure out how to do business in any of these countries if you take the time to understand the country and the culture and the people and to have a local presence in these countries, which is really important. I've had so many people in my time at JP and since who say, you know, emerging markets has this giggle factor. Oh, we don't understand.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“As you travel around and engage in all these markets, what are some of the things that you've come to believe that are different from how you think most people view both the countries and investing in the markets?”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Done it for so long now, Ted. It's been since 1988 to me, it's very second nature. Back then it was called the squawk box, the push to talk. Now it's teams, what have you. So people are talking to each other all day, every day. And then as many get-togethers as possible in person so we know each other in person, sometimes harder to do than others, and lots of travel. Luckily, I like the travel. I typically travel 10 days a month. It's one of the things that drew me to this industry, learning about these countries, these cultures, the language, the music, the art in these different places is great. I have friends in all of these countries by now. Everywhere I travel, I can have a social dinner. I've gotten to know a lot of finance minister types and then business leader types in these countries. It's endlessly interesting.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Forwards, there's one. Everything comes with costs, but this is where I say that having everything under one roof is far superior if they are incented and cultured to work together. Because if you have a good FX person next to a good, even public market equity person, both of those will generate better returns for sitting next to each other. Similarly on the private investing side, it's not just about currencies, but about sourcing. If you have somebody who can source private equity in a given country, they should be able to suss out the good private credit opportunities as well. So you have all of these return synergies if you build an integrated firm in emerging markets. There aren't that many people who are trying to do it.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“A number of different ways is the short answer first of all on the private investing side there are absolutely industries that are FX depreciation positive return industries that is to say their earnings are in dollars their expenses are in local currency think about any export industry in emerging markets you look for the things that are by definition unexposed or positively exposed to the depreciation recognizing that now you got to think the other way to secondly If you have a fixed income capability next to let's say your private equity capability and they're not in silos that are in different buildings of a mammoth asset manager, then your private equity people should be able to talk to your currency and macro people and say, what do I do about this currency risk? There is always something you can do about currency risk. There are currency options.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Who allocate to a given country are also asking for trouble because the cycles are so tough. So if you say, well, I'm just going to invest in China and India because these are the largest economies. It's a mistake because it's not your job to support large economies. It's your job to make money. Putting that many eggs in so few baskets doesn't make sense anymore.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Private money being invested in emerging markets around the world. 90% of that money went to Asia, of which 90% went to China. This concentration, 81% of all private investing money in emerging markets flowed to one country for year after year after year. That is no longer the case, and it is no longer the case for the reasons we all know in terms of a turnaround in policy that made it unpredictable about five, six years ago. By the way, big echo of the United States in 2025. Since then, China went from the darling to uninvestable to today, it's a trade, it's not an investment. I will say you should not ignore China in general, but it is also an abject lesson in the need for diversification and the fact that institutional allocators”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have never been China experts for a couple of reasons. It is a highly competed marketplace. This statistic in the US, there are more private equity firms than McDonald's. There's something like that in China. There's at least 10,000 private equity firms in China. For a long time, everybody owned equity in China. Everybody knows the story about the equity returns in China over the last 20 years and that it's the cautionary tale for GDP growth does not equal equity returns. I don't have a particular insight on the Chinese market. What I have observed is for a period of time it became the other magnet for capital and it was the other problem for the rest of emerging markets. Emerging markets for a long time until five years ago was competing with two magnets. Outside of EM it was the US. Inside of VM it was China. There was a period of time where of all the”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Locals or exiles with money. And development finance institutions and sovereigns doing it for strategic reasons. That's the group that we'll go in today. Commercial, institutional investors, no way will they be in today. If things get better along the way, if the new regime, whatever it is reinstitutes various institutional frameworks, rule of law, central bank, treasury, constitution, it's a long list, then it's a great opportunity. By the way, Argentina is a great opportunity too. And they're well ahead of where Venezuela is. Beyond that, I'm going to be focused on, hey, what can we do in Mexico? What can we do in Argentina? What can we do in private credit in the region? What can we do in energy in the region? There's a lot that can be done right now.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Somebody said to me today, gee, if this all works out, it's going to be a great investment opportunity and a great business opportunity, to which the answer is yes. The if is the relevant word here. If you can invest from this level in a country that has the resources and the scale and the proximity and the strategic importance that Venezuela has, and if you can invest at scale at these levels and then have a relatively straight line macro improvement to the point where it looks like Chile or Mexico 10 years from now, you're going to be really rich. Lots and lots of ifs along the way. First of all, you can't invest right now. Although there is money for everything, there will be adventurers who will try to invest right now. I have no doubt about that. They're not going to be the biggest institutional investors around the world. They're going to be family offices.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Equities, there's a lot of different flavors that can be complementary. Private investing, private credit obviously would be the big thing. To me, the eyes open stuff is also a lot about Latin America. You may agree with the reasons. You may disagree with the reasons, but it certainly is a region that is relatively diverse without being too diverse. One of the arguments about Africa is it's too diverse, 54 countries, Latin America, really more like a dozen that count. It's got a bit of everything. It's got energy. It's got natural resources. It's got critical minerals. It's got Brazil at the heart of it, which is a big economy. It's got Mexico for near shoring. It's got a lot and it has this overarching narrative of the American strategic interest in the region. I think investors are going to pay a lot of attention to that. It is.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“For each of these lines of business, we have a map. Last year, we talked to 120, 130 GPs, probably two-thirds potential love matches, one-third arranged marriages, and it's everywhere. Yes, we have to be strategic about it. So where would I like to do something? I'd love to do something in fixed income that got us to scale right away. That would be great. I would love to do more in Southeast Asia. That would be great. I would love maybe a gems large market EM equity strategy. That would be great. There are priorities and we have a strategic framework for scoring things. At the end of the day, it all ends up with who shows up that wants to do a deal. Today, for instance, in forestry and agriculture, it's more agriculture managers as opposed to forestry managers who are interested for reasons pertaining to that marketplace. Elsewhere, fixed income is hard to find.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“That invests in private equity solely emerging market cost based businesses that expand into developed markets. You buy a business in Romania, Bulgaria, what have you, then you expand it into Western Europe. We have a business in India as well that is managing mostly infrastructure and renewables. That's the private investing business. The last piece, which was an acquisition from GMO in Boston eight years ago, is a forestry and agriculture business. This is our only business that deviates a little bit from my EM orthodoxy. It's one-third emerging markets in Latin America, two-thirds US plus Australia and New Zealand. We have in the firm about 85-90 people today, half of whom are investment professionals around the world, and we work for 250 roughly institutional investors.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Long only strategy. That is the one stop approach for emerging market investing. We also are working on a couple of other strategies. One is a carry strategy, one is a equity long short strategy. On the private market side, we invest in private credit, private equity, infrastructure and renewables. Our biggest presence is in Latin America where we have multiple offices. And Latin America is obviously important to this administration. So I think there will be a lot of strategic capital looking at Latin America right now for which I think we are well positioned. We have a business in Central and Eastern Europe run out of London, but it's basically”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“To date, you should think of us as having three lines of business. We have a public markets line of business, private markets, and a forestry and agriculture business. In public markets, we are solely enlisted equities, although we have a very strong background in fixed income as well. We have managed local currency debt strategies, we have managed FX strategies, and we have managed inflation-linked bond strategies in emerging markets. Today, we manage long-only equities in three single countries around the world, Turkey, Mexico, and Thailand. Our fourth invests in non-BRIC EM countries, so mid-sized emerging market countries and frontier, very concentrated 20 to 30 investments at a time. Our growth is to get up and running, something we've been paper trading for a while now, which is a multi-asset class EM.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Out of business. I'm sorry. It's terrible and it's terrifying. This diversification in terms of growing the business by region by asset class, but also by money raising technique, continuation vehicles, GP led secondaries, GP replacements. You have to have this diversification approach, acquiring clients rather than cultivating clients. That's the only way to survive in a market with these characteristics.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“We were trying to build from the beginning, but I didn't fully appreciate the importance of diversifying the business itself, that the way to survive the cycles is diversification. Diversification in asset class, diversification in region, diversification in investment style. Some things are going to work in some years and some things are not. If you are a monoline, mid-sized emerging market manager, public or private, it is not a question of are you going out of business? It's a question of when are you going out of business because of the question you ask, the cycles, unpredictable and violent. If you tie yourself to one thing, I'm an equity guy. I'm a Latam guy. I'm a this person. I'm that person. And you only get to the scale that that thing allows you to get to because it's a niche market after all.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Mentioned earlier the importance and some of the strategies about having a tailwind behind you. There are lots of cycles in emerging markets. How have you experienced the ability to manage both assets and the team through some of the cycles, both expected and unexpected?”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Collegial execution and distributed incentives. I wouldn't say it's been the secret sauce. It's just the way we've built the business.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, the first thing is we're consistent in saying what we're trying to build. Nobody can say that they didn't know what they were getting into. I promise you that. Secondly, I don't manage any of the money at TRG. Other people do. PMs, partners. That's a strength because it shows distributed responsibility from day one. Thirdly, the way we run the firm is very collegial. I have an EXCO of seven people. We're on the phone formally two to three times a week. We've never had a vote on anything in 23 years. We come to conclusions that we buy into. Thirdly, I have distributed equity widely throughout the firm. More than half the firm today has equity in one form or another in the firm. That consistency of message”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Managers and kind of funds they want to back. That's a different chapter entirely. Our typical commercial LPs, we're not that interested in Africa. So we couldn't get it done ultimately rather than shrink the business to die. The partners there decided to take it back, which we thought was best for the LPs and best for the business. And obviously, if they thought it, best for them. So that's what happened. others mostly If it wasn't clearly and unwind, have stayed with the firm.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have done around 10 or 11 in total, of which seven are still part of the business today in one form or another. The most recent one you would have read about was in Africa. Two and a half years ago, we took over a business there called Ethos Capital Partners. Very good group of people. I had known them for a long time. It's a love match, put every effort into growing that business. It was about a $1.6 billion business one of only half a dozen surviving scale GPs in Africa tried four or five different ways of growing the business, just couldn't get it done. Nobody's particular fault, I wouldn't point a finger. Africa is a tough market for raising money. It is dominated by the development finance institutions, IFC, EBRD, who are particular in the kind of”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“A business around as an example. In others, we're not taking any of these people. We're going to manage out the assets. That's what you're paying us for. We have a contract for it. We're not under any illusions that there's anything else after that. Our job is to help you out with this.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“One is not GP acquisitions, but GP replacements. There are situations certainly on the private market side. There are situations where a group of investors in a fund have a sufficiently large position in the fund to be able to effect a change in manager. We have done that at least twice, where a group of investors has come to us and said, we don't like this GP. It may be their fault. It may not be their fault. We're not happy. We're getting rid of them. Will you step in and manage out these assets? That is a perfectly fine business proposition. Sometimes I say you can be in the rehab business or in the hospice business. Both are good businesses if you do them right. You'd have to understand which one you're in. Sometimes you take on a fund. Whether it's GP acquisition or GP replacement with the notion of, oh, I like these capabilities. It just needs to be tweaked a little bit. Within this group, I like these three guys or these three people. So let's build something around them. The city group London team, we built...”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“And number two, what are the basic principles on which we're not willing to compromise? There are not that many. One is it's one platform. So all the risk management, all the finance, all the ops, all the business development, all of that is one firm. Second is investment team and process, augmentation, not replacement. In any of these, all the LPs have to sign up. And LPs generally don't want you to sign up saying, look, I'm going to change everything here. You won't recognize the signature at the bottom of that newsletter. They have generally signed up with that team. So you have to be able to say hand on heart, we are going to augment, we'll put in a risk manager, we'll put in a macro guy for an equity team. We're not going to replace, generally speaking, this team is going to cross-fertilize to the rest of the firm also. They'll learn other stuff.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“You guys are going to report to these guys. If you can't accept that, you can't accept it. In both cases, I would say these were arranged marriages. The GP was not on GP the way you think of it. They were employees of a bank, structured as managing a GP. They had no leverage in that sense. I was negotiating with a bank more than with the team. We've done a bunch of arranged marriages. And in those, my conclusion is you have to have the structure to oversee them and you have to be very unbending about who's in charge. Then you have deals where they don't need to do the deal and where you're negotiating with the team. That's a love match kind of thing. There you have to see eye to eye. The cultures need to fit and you really need to think it through. And it's a different exercise. I try to be clear-eyed about what's the nature of this discussion.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“What did that group look like, and how was it managed, and what did Citigroup do with that group? That was painful. That took a long time to digest. It ended up as a transformative moment in our history. I'm very happy I did it. It made us a global private equity firm. And from there, it allowed us to do other things. To give you a related example, one of the lessons learned on these acquisitions many years later, 2017, 2018 comes JPMorgan. And they've got an infrastructure private equity business in India for their own reasons. They can't support anymore. And they're looking for a home. I already had a team in India thanks to the Citigroup transaction. That allowed me to do that deal of absorbing at the time it was about $800 million in assets. But under a completely different rubric, which was, look, I already have a team here.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Two or three things came out of it. The first thing that jumped out at me literally within days of announcing this deal was the secondary market. We started getting calls from collar capital, Lexington, you name it, people I didn't know existed. Silly meat. I hadn't followed that end of the business. That, oh my gosh, there is this enormous marketplace, which has real implications for our industry. The arrival and the importance of the secondary market hit me then. And since then, we've actually done about 10 secondary market transactions. The second thing was the culture thing. Citigroup has a distinct culture. Private equity firms within banks have a distinct culture, as I have learned. I was so eager to get this thing done that I was in sales mode. And now everybody's there. And now you got to deal with the culture issues. And the culture issues are...”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“At JP, the pluses and minuses of building joint ventures, minority stakes, majority stakes, but I wanted to try. I learned a lot from both of those experiments, neither of which have lasted to this day, I should say. The big change was when Citigroup approached us in two thousand thirteen this is now post Dodd Frank Pulse Volker Bill. All the banks are getting rid of their private equity groups because the capital treatment was too severe. They had emerging market private equity business called CVCI. It was a big business, 4.3 billion dollars under management, six offices around the world, I think 75 investments out of four funds, and they couldn't support it anymore. They didn't, for their own reasons, want to just let it spin out. They wanted it to find a home. And they called, and we worked out a deal that launched us on this path.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hire four people, spend two years trying to raise money. You raise some money, but it's conditional on other money. It wasn't going to work after the crisis. Again, the penny dropped. Gee, if I look at acquiring another GP, I can diligence them, I can diligence their track record, I can get to know the people. They're probably break-even or better. And I'm going to capture the LP relationships, which was also very important. Building respectful collegial partnerships with LPs is really hard. Harder than investing, taking on firms who have already done that work, who already have those relationships, and trying to make those additive to our relationships look like a good idea. I started in 2010 dipping my toe a little bit, 2011, same thing, taking in one case a 50% stake, in the other case a 60% stake, in other managers. I knew from past experience.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“What occurred to me after the crisis was that the other big change in the market, aside from this long only bent, was the degree of favor that allocators were going to give to large managers relative to small managers. If you looked at the amount of money allocated to hedge funds post the crisis, for the next three, four years, 95% of the dollars allocated to hedge funds globally went to hedge funds with more than $5 billion. Imagine that at the time we're talking about early 2010. How many hedge funds had more than $5 billion, maybe $100 out of 10,000? 1%. 1% of the population getting 95% of the dollars, 99% of the population fighting for the crumbs. Scale mattered. The notion of, oh, I'm going to start something the old-fashioned way. I'll hire a team that does X, Y, Z. In Africa, for instance.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it saved us a ton of money because you could trade a billion dollars worth of EMFX of that currency at the time. Understanding that there is one risk management instrument that is more or less liquid and always tradable. And having expertise to use that instrument is really important. This is why you put a monoline private equity guy out there in Mexico who just knows how to do private equity that has no clue about currency forwards, currency options, currency swaps. You're going to have a big problem. The biggest thing is there.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Marty Felt without missing a beat says, So, Nick, we shouldn't expect this in the next 10,000 days, right? Course, there was another crisis like that a year later scenario analysis is more important than the standard deviation stuff, number one. Number two, on public markets, the most important thing from a risk management point of view is to have a currency capability because currency liquidity almost never goes away in emerging markets. You may have an equity portfolio that is hard to liquidate. You may have a loan portfolio that is hard to liquidate. You may have a private equity portfolio that you can't liquidate. An example at JP, there was a Brazil crisis. It also put me in charge of the loan portfolio of the bank, at least in emerging markets. We had a big Brazil loan exposure, but I hedged it all against the currency.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“One way to think about it is taking this developed market, emerging market dichonomy. In developed markets, you would say, what's my value or risk? What's one standard deviation? Two standard deviations, blah, blah, blah. In emerging markets, it is more important to say if 1998 had happened right now, what would it be? If 2008 had happened right now, what would it be? Scenario analysis is much more important than standard deviations because in many of those scenarios, it was a six standard deviation event. I still remember in my time at JP Morgan, I was in charge of commodities. So there was a commodity crash at some point. I was probably 36 years old. They asked me to come to the board to explain what happened. I'm sitting across from Marty Feldstein. That was already a mistake. I then tried to sound smart by saying, well, this was a six sigma event that happened in these markets.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“All for one and one for all. Every fund needs a manager. It's not a committee. You can have a committee, but there has to be one person who decides. That's the all for one. The one for all is everybody shares in the result. To a certain extent, no matter their contribution to the result. You want somebody who is a Latin American equity expert to feel good about saying, I think Asia looks like a much better bet than my region. It's a combination of those two things.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to have a lot of experience. We have a pretty deep team. Most everybody has been at it in emerging markets forever. I'm at 37 years and counting here. So it adds up to a lot. At the macro level in terms of understanding what the cycle of a given country, that is not that labor intensive. Countries are either in an inflation cycle, they're in a recovery cycle. At the macro level, it's doable with not that many people. If your strategy then demands a lot of security selection, then it's labor. The strategies that do demand that have bigger teams and the strategies that don't.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source
“There are equity markets, local currency debt markets, and hard currency debt markets that are performing. And when they perform, they really perform. So avoid the losers, pick the winners, but you have to be more flexible than any institutional allocator can be.”
2026-01-22 · Capital Allocators · Nick Rohatyn – Emerging Markets Multi-Asset Investing at TRG (EP.482) · IDENTIFIED FROM THE TRANSCRIPT · source