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Rohatyn Group may not be done with acquisitions after Citi deal

  • Firm bought Citi Venture Capital last year
  • Emerging markets GP eyes public equities
  • Abraaj Group exec sees some GP consolidation

The firm’s purchase of the emerging markets business of Citi Venture Capital International less than 12 months ago helped bring its assets under management to the $6 billion-range and “into the upper tier” of independent general partners in emerging markets, said CEO Nicolas Rohatyn. But he said there’s more room to grow.

“We’re in a world with LPs allocating to more people with scale—you have to get to scale, “ he said.

His remarks came during a fireside chat, “Buy versus Build–Examining Growth Strategies and Industry Consolidation Trends” as part of the International Finance Corp’s 16th Annual Global Private Equity Conference, put on in association with the Emerging Markets Private Equity Association.

Rohatyn said he’s focused on two areas of interest for possible growth: public market equities in emerging markets and private credit. Rohatyn hinted that the firm may be looking to grow its emerging market credit investment platform on its own.

“If you’re good in private equity, you ought to be good at private credit,” he said.

The firm may consider the acquisition of an overseas specialist in public equity investing in emerging markets, since it currently has no fund for that asset class. Currently, Rohatyn invests in fixed income, private equity, local currency debt, and inflation-linked bonds; it manages two macro hedge funds focused on currencies and interest rates in emerging markets.

“If you invest in emerging markets, you want to be able to work across as many asset classes as possible,” he said. “You ought to get investment synergies.”

He said the firm is probably done for now in terms of adding to its emerging markets private equity business, in the wake of its Citi Venture Capital International acquisition. Rohatyn said the purchase “gave us capabilities around the world and a lot more business options in terms of launching new funds down the road.”  

Sarah Alexander, managing director of The Abraaj Group, said she expects to see more consolidation among the roughly 4,000 private equity firms doing business in emerging markets.

Looking ahead, Abraaj Group, the largest private equity firm in the Middle East, doesn’t plan to buy any private equity firms in the near term, she said.

“One never says never, but we’re focused on executing our strategy,” she said. Abraaj Group is opening a new office in Chile, she said. “The key is to be local in these markets,” Alexander said.