The era of U.S. capital hegemony is over, creating a major inflection point and a 'target-rich' opportunity in emerging markets.
Single-strategy, single-country, or sub-regional funds are a fundamentally flawed and unsustainable model for emerging markets investing due to violent cycles and insufficient deal flow.
China has transitioned from a core long-term investment to an 'uninvestable' market, now suitable only for short-term trading, and its past performance is a poor guide for future returns.
A multi-asset, multi-country strategy is the superior approach to EM investing, as it allows for dynamic allocation to the best-performing opportunities while mitigating risk.
There is a significant vacuum of leadership in emerging markets asset management, with no firm currently able to provide comprehensive, multi-asset guidance to institutional allocators.
▶The End of U.S. Hegemony and the EM Inflection Point
Rohatyn's core thesis is that the 15-year trend of capital concentrating in the United States is over. He argues this decline of 'U.S. exceptionalism' creates an inflection point, making emerging markets a 'target-rich environment' for investment after a long period of being overlooked.
This geopolitical view underpins his entire investment strategy, suggesting that investors who remain over-allocated to the U.S. are positioned for the past, while the next cycle of returns will be driven by capital reallocation to emerging markets.
▶Critique of the Monoline EM Asset Management ModelApr 2026
Rohatyn contends that the prevailing model for EM investing—mono-asset class, single-country, or sub-regional funds—is fundamentally flawed and imported from developed markets where it doesn't fit. He predicts that any mid-sized manager following this 'monoline' strategy is destined to fail due to the violent, unpredictable cycles and insufficient deal flow inherent in emerging markets.
This critique serves as the justification for his firm's multi-asset strategy and its M&A-driven consolidation approach, positioning TRG as the solution to a structural industry problem.
▶Consolidation as a Survival and Growth StrategyApr 2026
Rohatyn describes a fragmented EM landscape filled with failing General Partners (GPs) battered by a 15-year bear market in EM currencies. TRG's strategy is to acquire these struggling firms, integrating their expertise and assets into its larger, more resilient multi-asset platform, as exemplified by its major acquisition of Citigroup's CVCI business in 2013.
This M&A-focused approach suggests that Rohatyn sees more value in buying distressed, specialized teams and assets than in building them organically, allowing TRG to scale rapidly and opportunistically.
▶The Evolution of China from 'Darling' to 'Uninvestable'Apr 2026
Rohatyn charts a dramatic shift in his perception of China, which once attracted the vast majority (at one point, 81%) of all private investment capital flowing into emerging markets. He now views China as 'uninvestable' for long-term capital, characterizing it instead as a short-term 'trade' and using its 20-year equity market performance as a cautionary tale against equating GDP growth with investment returns.
This definitive and bearish stance on China is a significant market call that fundamentally reshapes the opportunity set for EM investors, forcing a reallocation of capital to other regions.