TPG Earnings Fall in First Quarterly Report Since IPO

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Private-equity firm’s net income came in at $41.2 million, compared with $45 million a year earlier

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While the figures are from a period before TPG’s IPO, they have been adjusted to reflect the way it is structured now and how it will report earnings in the future.

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The value of the firm’s investments climbed by 7% in the quarter versus 17% a year earlier. The S&P 500 rose by 11% during the quarter. TPG’s investments are appreciated by 38% for the full year, compared with 18% the prior year.

Based in Fort Worth, Texas, and San Francisco, TPG was one of the last of the original private-equity giants to remain a closely held partnership before it opted last year to move forward with a plan to list its shares. The stock closed at $29.99 Friday, just above its IPO price of $29.50, giving the firm a market capitalization of about $9.3 billion.

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Like many of its peers, TPG took advantage of a strong market in 2021, and sold off $25.4 billion of assets including $7 billion in the fourth quarter.

On the back of the asset sales, TPG’s distributable earnings, or cash the firm could return to shareholders, were $137 million in the quarter, up from $102 million.

It continued selling assets in the first quarter. On March 1, a pair of private-equity firms closed a deal to buy cybersecurity company McAfee Corp., which TPG had taken public in 2020. The firm, which still owned a large stake in the business, made nearly seven times its money on the sale.

In January, technology company Aptiv PLC agreed to buy TPG portfolio company Wind River Systems Inc. for $4.3 billion.

“We’ve consistently felt that creating liquidity in the portfolio and taking advantage of the high-valuation environment that we’ve generally all been living in should be a top priority,” TPG Chief Executive Jon Winkelried told Businesshala. “That’s been borne out by the volatility we’ve seen.”

Assets under management were $113.6 billion at the end of the fourth quarter, up from $109.1 billion in the third quarter and $89.5 billion a year earlier. TPG raised $20.5 billion in 2021, including $2.8 billion in the fourth quarter, and is in the early stages of a major fundraising cycle across its biggest strategies.

Fee-earning assets under management climbed by nearly $10 billion to $60.1 billion in the quarter.

Write to Miriam Gottfried at [email protected]


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