Private equity (PE) firm TPG’s total assets under management (AUM) rose to $135 billion on Dec 31, 2022, compared with $114 billion a year ago — an increase of 19% year-on-year, it said during its fourth-quarter earnings call.
US-based TPG raised $30 billion last year, of which $3.6 billion was in Q4 2022. The fresh capital raised in 2022 included $8.9 billion in its TPG IX vehicle, $3.4 billion in Asia VIII, and also $6.8 billion in TREP IV, which is part of TPG Real Estate Partners.
Its net income under generally accepted accounting principles (GAAP) was at $23.6 million in Q4 2022, down from $41.2 million in the previous year.
After-tax distributable earnings —i.e the cash used to pay dividends to shareholders — fell 26% year-on-year (YoY) to $227 million in Q4, from $307 million a year ago, as TPG financed fewer investments across its portfolios. TPG said its net profit from asset sales fell to $95 million in the fourth quarter, down from $251 million in the year-ago quarter.
The PE firm added that it invested $17 billion in the year, of which $5.7 billion was in the final quarter.
Additionally, its private equity funds appreciated 2.2% in Q4, its real estate funds fell 1.5%, while its growth funds and impact funds remained flat.
TPG classifies its capital raised and assets managed under five “platforms”:
Capital: This includes TPG Capital, Healthcare Partners, and TPG Asia and invests in the core sectors of healthcare, technology, and consumer. The segment, which completed five healthcare deals in Q4 2022, raised $15.3 billion in capital, and invested $6.3 billion, in the entire 2022.
Growth: This includes the Growth, Tech Adjacencies, and Digital Media funds. It raised $2.2 billion and invested $3.1 billion in 2022, TPG said in its earnings release.
Impact: This includes the TPG Rise Climate fund, which was launched in early 2021. The Impact platform raised $3.6 billion and invested $3.7 billion in 2022.
Real Estate: This includes TPG’s Opportunistic Real Estate funds. The platform raised $7.3 billion in 2022 and invested $3 billion.
Market Solutions: This includes TPG’s Public Investing funds. It had AUM of $10 billion as on Dec. 31, 2022.
“Our fundraising objectives are as follows — number one, successfully complete the campaigns for our flagship Capital, Healthcare Partners, Asia, and Rise Funds, which we expect to extend through the remainder of this year given ongoing challenges in the fundraising market,” said TPG’s chief financial officer Jack Weingart.
The PE firm completed the first close of its latest Asia fund last November. It raised $3.4 billion, of the targeted corpus of $6 billion.
“In Asia, TPG NewQuest closed the creation of a unique continuation vehicle for a leading Singapore-based alternative asset manager,” said chief executive officer Jon Winkelried in the earnings call.
Last month, Singapore-based PE firms Capital Square Partners and Basil Technology Partners closed a $700 million fund which raised capital from TPG NewQuest, alongside HarbourVest Partners, Committed Advisors, and other institutional investors.
TPG is the latest private equity firm to report a decline in its Q4 2022 income as a slump in corporate valuations impedes asset sales. PE giants such as Blackstone, Carlyle, KKR, and Apollo Global also reported a decline in its Q4 2022 income.
On Thursday, DealStreetAsia reported that the Indian edtech giant BYJU’s was in talks to raise $500 million at a flat valuation from investors including TPG. Earlier this month, TPG had co-led a $300 million investment alongside BlackStone and ChrysCapital in Pune-based logistics startup XpressBees.