Earnings call transcript Q2 2023

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Operator

Good morning, and welcome to the TPG Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. Please go to TPG's IR website to obtain the earnings materials.

I will now turn the call over to Gary Stein, Head of Investor Relations at TPG. Thank you, and you may begin, sir.

Gary Stein

Great. Chelsea. Thanks, everyone. Welcome,

morning Jack this Winkelried, Executive Chief Joining Chief are Financial and Weingart, Officer. Officer; me Jon

In addition, will our our Executive this Chairman and Co-Founder, Sisitsky, the portion also morning's for call. President, Jim are here available and be Q&A of Todd Coulter; and

guarantee remind TPG's not from earnings that SEC for events like release that except to include could statements Please undertakes by no or TPG as revise forward-looking factors results statements. materially this and these you I'd or to cause may performance. call forward-looking to do required future to differ law. any actual refer filings obligation update statements,

an performance Within in reconciled our on be GAAP a call an that is of offer discussing These TPG's to on interest our fund. website. non-GAAP Please of to this to we'll relevant which call release, we earnings on or and discussion this figures certain believe that the nothing non-GAAP in financial any in nearest constitutes the measures offer available earnings sell TPG business. purchase are an measures are release, the assessing note solicitation

and to of the Inc. briefly income our net We which of $XX attributable as or earnings Class distributable Looking reported share at be $XX record GAAP paid quarter. a We share second X XX. of dividend of for results stock, million holders million after-tax per TPG declared A A of $X.XX common will stock. of on common of $X.XX Class per to September August

to I'll turn that, call over Jon. With the

Jon Winkelried

business position to thoughts then we progress. platform. our have ongoing substantial the in for update an begin maximize core integration and the Good seen where within on I'll work and Gordon morning, opportunities for Gary. Thanks, I'll areas our my Angelo with everyone. to activity X share ourselves prepare to combined on

us that private and with attractive investing. deploying our investment into settled pipeline, the is estate to an activity. Consistent across real calls and regarding market made period the secondary building primary previous it equity, our I impact earning has feels first observations for The in capital

As I'll announced the describe, number or distinctive our teams capitalizing and of opportunity have interesting deals. closed on and a are

organic you organic the reviewed of past investing our second team few over and we several is in on I'm opportunities. progress with fundraising, update pleased building you initiatives quarters, growth I've growth. and have The the meaningful across these made today to

On Angelo closing for are Gordon, at received required time anticipating expected we government and our July quarter. fourth the clearance approvals HSR in additional in

effort objectives. planning integration X has overall Our

readiness More and integration the in people is second revenue integration our The operational firms and first growth. involved across business is X planning. than are XXX

is critical advance group transaction, from firm various the business culture people operations. of units stood such and Each groups Senior as Leaders working includes TPG and formation, up by areas Well Angelo Gordon signing focused and X in we and on and capital co-led functions. representatives

operations, management of Given the activities. service expertise bring rigor functions, and our management integration and to complexity to office finance accounting, established we IT a and project including dedicated those integrating

to stood TPG identifying building of XX than includes series combined we that leaders senior side, fleshing one. around up to revenue combined is Angelo business growth the plans On a each and Gordon from fully which a scoping more growth leverage our and of dedicated opportunities group, The synergy and execution out and team platforms. power the is initiatives

their preparing innings, quarters set in those to believe opportunities progress larger still we the considerable closing. Overall, have made and prioritizing the While objectives. is we we in are our even We're execute anticipated. than early after on working among opportunity groups

and become TPG forum for also Importantly, relationship these between engagement working Gordon. development and a have groups Angelo

of with connectivity there's At areas. same I've for of the as seat been one active post-closing across the cultures. the and been progress our we've Angelo teams that and across grown I business, exciting. update engaged tangible combined acquisition, and naturally with I've of clear how to our very Gordon momentum the confident provide scope the clear we've have shared opportunity to compatibility around enthusiasm. the firms want our towards working and is see CEO, time our The a more firm purpose and sense we've an closing our even core the you strong encouraged made in been on my several another From and collective

On call, have perspective, more conditions. continued begun factors accelerate. transaction our has our and driving a to trend From few up last key investing we pipelines our to that are noted pick that considerably, favorable

half the showing spread to whole some of into period market take cases, of valuation trend year. sellers willingness is transactions, adjust increasingly differently to and the doing this prolonged more expectations company volatility. After in buyers We back valuation will to narrowed continue among order in sellers buyers a bridge continued the gaps, now too First, including, bid-ask sellers are consummate anticipate the world and despite privates.

divesting acquisitions have become corporates certain portfolios, restructuring in active Second, significantly and assets. their more pursuing

us ways of to their fund spend portfolio and attractive appropriately third, helping investments carve-outs investment strengthen well has driven activity GPs return both our meaningfully. strategics their opportunities. markets. structured Given is as up and around to in the their to invest we with sourcing, new time positioning and many companies working the has increase And partnerships for proactive opportunities amount in as building capital are searching on picked relationship of our respective grow which This to to investors, flow dynamic existing for

the accelerating for high-quality environment operating. In suited we which years are which investing, well knowledge in of the spent particular, focuses we full have building ecosystems growth of in themes to lean the style actionable transforming Our sectors, private confidence and nimbly want on of move conviction and into companies particularly is companies equity Accordingly, developing to we our and relationships we arise, opportunities and which and partnership when in. invest. with

our of such within private investments, partnership strategic the realm which Oncology, as past this building One high-growth, partners. with record businesses track unique and Many strategic relationships strong our to win-win a acquire of with quarter established distinctive also closed are structuring We've of capital. we AmerisourceBergen corporate

our activity TPG attractive our we carve-outs, with Recent Among style flagship partnership deals unique announced. ability and call the arrangement just X investment a to recent bio proprietary put environment. fund a corporate private a in our capitalize or highlights on take and Capital,

Last Relic week, we New definitive take-private billion signed to acquire a transaction. a agreement and $X.X

has of enterprise durable long-running nature application growth a is software management a and technology and software, its been Relic focus provider observability area mission-critical thematic which for New characteristics. and our cloud-based given leading team, performance

and agreed builds in spending. This tailwinds carve and we June, and critical global on cyber commercial track thesis record business. our to In out infrastructure the cybersecurity secular on governments government Forcepoint's around

quarter the in and As I closed mentioned place. our with acquisition AmerisourceBergen which is of one jointly excellent pursue we earlier, we in management team the oncology second currently that

expand already X platform. opportunities Although ago, grow to and we are months finding compelling closed we only the

transaction Similarly, in has Capital across increased the Asia, activity region.

organic During build consumer the combined targeted second late for strategic scale. Asia and carve we Healthcare division. example how -- acquisitions. leading Consumer of we quarter, strong as in positioning care a Inova, agreed this Mundipharma's great Inova which This both the acquired is investment XXXX, a out health is This platform companies business through Pharmaceuticals, of platform to highly strategic

to in assets. several there expectations, Consistent discussing seek uptick solutions best liquidity with with as look their other the next deals finish activity our been We for you GPs have performing line strategic near interesting secondary an quarter. has also that forward globally we

of across This in we for organic business believe the largest full thematic the also lead platforms to of the Rise in largest shared quarter, was asset for universities transaction We is in multiyear deal Europe are single of and the far build generating and this U.S. greater so Group, units. second IU was and Asia America. India, professionals North source investor the NewQuest on through TPG team's Germany. investment the fund new focus opportunities deal continuation fastest-growing TP create we solutions -- It's Europe the the on a in Notably, In vehicle great this through year. successful in continuation the in sourced is believe our largest globally flow example where education. strategy, TPG collaborate for-profit funds and and growth chassis and we TGP single We one Germany backed our incentives this

Finally, seeing within assets an dry improving with billion $X The at estate, become for significant creating positioned rarely that sale. us well signs acquire are are of high-quality end we to of we real and market is available backdrop unique quarter opportunistic deployment, for powder fund. and opportunities for dislocation latest our

across to industrials pipeline and such as data Our we geographies life housing. student within numerous build source centers, sciences, subsectors continues investments as attractive and

market play value strategic estate in real outstanding of properties a We deep portfolio expertise. direct were proprietary properties, tough suburbs transaction completed in area. of basis we sector build on life highlights acquisition alloy in Boston the and During to add-ons. platform Boston sciences our a through portfolio a companies as quarter, we our able result which acquire of a our the offense the in how second can these assets This is for the of

high-quality we we constraints world, The in from and one which data partnership due a center million weeks largest of located square in total. few most data interconnected closed than a center in feet Just structural X Realty of benefits with the more barriers. the in a Trust to portfolio Digital is assets Virginia ago, capitalize Northern supply with to in transaction portfolio markets $X.X billion also

are billion and if momentum. in quarter seeing with the across the and of represents Taking $X.X shared, we we deployed I the but that incremental our quarter. just the are have transaction investments an not We well a this capital increase $X.X a and deployed. in closed, step we first yet back to billion that positioned we signed, continue our aggregate And highlights $X.X be second will activity platforms, in consistent notable billion

our begun Despite driver continue substantial on investment we has raised and across and also addition capital to investment a challenging new that seen a anchor fundraising growth significant of our our investing. historic focus connection our going have with innovation our it growth, we be key how have day-to-day activities, time us expectation and already TPG with forward. have for to environment, will also been At important shared momentum we IPO, several organic platforms we building the In to funds described potential. core in

visibility drive billion and or growth $X.X funds, accretive more over significant each raised of capital have time. these than initiatives near-term and have we Collectively, of first-time believe to for for TPG we these highly raising can

that capital billion reaching Our of fund of closing capital. $XXX to secondaries has inaugural sight line committed To its normal expertise. quarter within after X a European deals We of date, to where sectors million is American is strategy fund, meaningfully bringing total potential the approximately out completed deep fund this to team $X has and and the all TPG North scale marketing end, GP-led believe time. had over a has

diagnostics Life We've capital raising Inaugural momentum stage Sciences therapeutic, million the devices, continues and fund, capital Our second across raise $XXX fund. earlier which toward and to services innovative completed with opportunities quarter. X targets $XXX million investments in clear a over raised of medical

Treco, credit our to strategy. estate private Turning real

visibility to to close the have some active notable strategy, for including over of dedicated first raising We $XXX from relationships. million the our commitments most anchor

finally, amount address capital the transition of to And previously energy we and discussed climate considerable globally. required infrastructure

this As Rise Climate extend significant fund market. a our believe a in our flow position see and unique position of a amount leadership infrastructure result we deal will our Rise climate of dedicated and with Funds,

up quarters. We are the forward process and anchor of sharing lining to you LPs in coming in with the more look

business see, about can confident diversified performance across growth progress to you the each key growth the trajectory TPG organic with reached continue and pending strong milestones delivering is highly core and acquisition we've our investors. and these meaningful of We of initiatives. Gordon, Angelo As for our made feel of positioned

financial Jack our to Now results. turn over call I'll the to review

Jack Weingart

you, and us all for you to Jon, of thanks Thank today. joining

industry be TPG quarter reflect financial our results dynamics basis Gordon. a for do second stand-alone environment. I'll discussing on Angelo All the not and numbers Our in include line macroeconomic and expectations with are were the broader and current

We raised $XXX of $XX partially with assets by time comprehensive Angelo for and financials a closing, finished file TPG include Angelo the of historical around publicly on a information to which will Gordon and statement expect financials forma We the basis. the transaction of offset combined management, of for by pro of realizations capital $XX up XX billion creation billion quarter the year-over-year. past value months. This over driven under second billion billion $X was and X% Gordon

fees was end Fee-earning totaled which fees. was $XXX of fee not AUM of the from at ago. AUM earning second Management growth yet $XX totaled XX% $X the a billion QX, grew which billion which quarter, subject year million $XX XX% billion, earning year-over-year. grew to in

quarter and as pace the million of this monitoring 'XX. XX% to further rebounded to Total compared $XXX normalize the deployment transaction fee-related in million, fees will and quarter, increases. $XX and expect sequentially X% QX revenue was expected, we As our for up

We million in second year-over-year. reported which fee-related earnings of the XX% $XXX quarter, increased

was the strong After-tax A capital Our second quarter first quarter for result the continued management firm. of $XX distributable for fees expense earnings XX%. per This items. FRE This of couple improvement across the was by a margin the $X.XX share or is margin increased and of markets revenue million discipline impacted higher quarter were a stock. Class common from

of continue our moderated First, our realizations. reflect allocations net pace realized to performance

have While several monetize and we this in environment, will process. selectively investments we in

continues priority portfolio growth driving companies. our to Our be across of

acquisition. costs expenses to we this quarter. our incurred quarter, reduced the million Gordon These $XX by Angelo last similar Second, non-core to earnings distributable related

DE $X.XX per million of A been expenses, these our Excluding Class or after-tax stock. $XXX would share common have

non-GAAP to $XXX sheet. of debt of balance of cash $XXX our million Turning had June We million long-term as and XXth.

our the accrued million XX% the quarter from net quarter, appreciating allocation a last $XX This second creation. the creation by over value allocation to months. $XXX result portfolio of increased in million, the X% XX of represents Operating This value first balance TPG Group. X% X% Our and was which performance the driven was aggregate

average economic of are past Our resilience companies the this continued growth uncertainty showing months period over in of with XX%. XX revenue

and billion the XX during Finally, quarter $XX fundraising. last We on raised over months. billion $X.X the

the quarter, having targets for with fundraising the manage our to our we We're challenging business flagship last targets, with updated breadth revised the quality LPs. toward our As of continuing from these dialogue given pleased you'll funds recall we're environment. we're and and

elongated. the to While be these where more progress industry, there a pronounced discussions, we the we processes. of continue barbell our of make remainder period to been weighted of expect in middle campaigns effect toward good fundraises the Therefore, across is our the LP has flagship end

organic we work completing these with in actively made progress LPs flagship initiatives Jon of and towards engaging now actively that growth strategies. a the are those investing capitalize As number we're campaigns, also described. We've tangible to

fund. quarter, end addition, second growth raising the In we the at of began our sixth

organic what growth in leg next long-term Looking forward, be the compelling initiatives, we addition reiterate franchise. believe Angelo shareholder we're growth will generate I ability additional of assets want growth our our Through to for TPG. ahead entering the our see to value. and we confident various significant fee across the Gordon earning We're build of and

operator Now the I'll to back turn Chelsea? call your take the questions. to

Operator

[Operator first Instructions] come Ken will from And our JPMorgan. with question Worthington

Ken Worthington

I probably not surprising. to on focus fundraising, wanted

target tell then offering and that on about $X making LPs and your targets lines to flagship funds again. sort along Are FT are talked they're and you consequences what that last to you incentives of You the reaching the the sweeteners quarter included seeing there reported marketplace? talked in to confidence about its that offering? assume to you are of verbal fundraising, about that I are billion fundraising commitments something that fundraising FT the else? on needing newer thing for your get the are based commitments you. somewhat one GPs reporting deliver guidance that and is in these And broader LP TPG then secure what you And the

Jack Weingart

Jack. it's Ken,

there start me in. Let chime and others can

last targets. just get our quarter, I those revised First when minor to billion about I needing to make to of billion all, $X $X talked correction. targets, about to one raise revised In talked to

to that on raised to beyond I mentioned the backloaded call, $X work quarter And in towards second end billion the and be as the do those to here of expect mentioned towards of think billion. remainder objectives the you continue $X the we I campaigns.

discussions do -- there to don't in not LPs consequences XX- we with be case. who that fundraising a engaged and of I'm another, are to you say LPs have relationships the are XX-year like asked when them, and to if with we one generally we thing find lot these

comes -- So the in finding the market LPs on way is different John that's the good an new like And in build everyone other of new the to be ones that is in getting look, And largest that around for incentives, helping businesses -- industry think then in we forms. attractive to us partners question lots described. businesses. and I the build believe

Operator

Our next come will with question from Evercore. Glenn Schorr

Glenn Schorr

in be gross, a weird. might early, a just on curious was of but X.Xx then fee loss but was IRR. turn just has weird it's net This a little III it's has Rise something I'm a Did Was NIR important nitty-gritty, business. -- negative I there there [Indiscernible] little in a but there? know a off? Was line or it there taken? big an It that,

Jon Winkelried

Glenn, looking Jon. maybe -- it's at, and you're what not I'm sure

Glenn Schorr

that another come nitty-gritty. back. and We I'll topic for can I'll later, one It's to reserve go --

Jon Winkelried

exactly that with on We'll because up you not follow I'm what is. one that sure

Glenn Schorr

So a you're feet. lot showing of

What laid too lot the in Gordon, metrics me Do on you the combination of could the many to for have IVs add that of XX you write XX terms and out be including does that down. all in commitments Fund months have to numbers, III, at have line-of-sight on almost next the to over the organic up any new looking you what fundraising Fund of it You the Angelo builds II, we side? without Fund on motion. a

Jack Weingart

new about particular, You're Glenn? talking initiatives in the

Jon Winkelried

trying No, -- no, I to, both. he's He's talking think about

Glenn Schorr

Aggregate.

Jon Winkelried

for He's a aggregate. Aggregate. get sense trying to

Jack Weingart

raise We billion to our just to we to billion -- get the flagship $X revised billion We raised $X.X about the of that. billion. $X billion $X targets. billion right? talked $X raised, Out to last Well, QX. the $X.X Start announced it, to of call funds, with that obviously, quarter need $X we to we in billion

$X billion $X leaving to So billion.

we're assuming which targets when $X we're fund. targeting our at billion just our for is So flagship by so launching are growth fund, would early that to launched or to And be the amount. close next those I We're of up completed, year yet. that campaigns then successful prior getting mentioned, as most fundraising haven't that had XX% from fund,

line initiatives. John to add raising we mentioned about where the start initiatives. a for of he then those initiatives billion. to only that, those of have sight about to And some that's $X.X And talked

There's would -- those Gordon, fundraising that expect further that. highlight. the beyond I about Anglo we levers So thinking fundraising without those primary for are

Glenn Schorr

Gordon [Indiscernible] of Angelo of Gordon, on site sorry. line And Angela

Jack Weingart

complete to Angelo to talk that matches then we're about. going Yes, the closing of with what we'll more be have disclosing more around TPG about information a financial information talk Gordon statement, we comprehensive time about with

Operator

question Blostein come next from Our Goldman Alex Sachs. will with

Alex Blostein

guys pretty deployment you So in pipeline. pickup meaningful talked a about

what into more at generate, kind changed And that I last the enough borrowing still started between a of importantly, it, the for industry, sort Can that. You costs spend of does multiples high pipeline of minutes adjusted XX% low you that to alluded there's our could as teen think expectations the of of have strategic kind IRR. and on sort have sponsor that versus returns prospective I more all? purchase evidence quarter of look your a Or maybe guess, you and for higher to couple take of where settle privates you like think you composition call sales?

Jon Winkelried

equity. take don't that across private Why you

Jack Weingart

Sure.

some the start of standpoint, add a that the composition just overall look question. deals at thanks walked with maybe through Jon quickly. From me sort a Let I'll of for

many a I a in of which with in in carve-outs. of corporate for dialogues, number think different us resulted observation pickup Jon's consistent we have sort has seen cases significant

asset Elite a know, consumer several also Forcepoint connection, in attractive Asia I health acquired carve-out. was from our and in which that is everything a really care then So deal carve-outs platform

skills, are a likely as talked of well positioned sort strategics And past, seeing about the we virtue our that we're lot partners again, but built our with So the more like operating we've carve-out in by relationships the also feel activity. for we've there. particularly we're of

to and Beyond and partnerships, Oncology TPG interesting things actually the of seen look does that our a very AmerisourceBergen relative more One competitors corporate partnership around carve-outs, some good a I again, this, more unusual situations, like think, also we is that is example. have with unique

transactions If out just you evaluate trying have that selling, the bucket number and to of those seen more to a number second into value. buyer and a a like little clear look parties we at feel fall of a to of clear less how our figure create both buckets X continue pipeline, like transactions

mentioned private. You take

as a We have set. valuations pickup the seen opportunities that in some private the take we of

example, the greater as probably lower door for in some we XX% growth, a that higher software, in take hasn't robust by opened has percentages. the X, the years. set And seen and X, in interesting growth So that we've even and been multiples private in way X side last

take we private, even So the which that interesting until the my there a pipeline pretty resulted think of it's and result in announced. recently more in that, in early the are new And end, compelling route standpoint, pretty those I from may look valuation proposition. always but

part And the the we capital So same cost it's That's is actually of we on the like factoring model. is whether Actually higher like increasing. the side. are an yes, the course, deployment of debt the feel your question to of -- there's we're in, available like answer of like environment feel of short yes. opportunity returns where

ago. result very cases, investing they opportunities X the feel that last here been and in relative some probably secular cycle, feel very our returns for the to to to opportunities we've better than in we growing of that we've a that strong or too said, X there, the for we the businesses, strength are growthy is continue I in were economy. been years businesses, As are But like and early multiple conservative entry the our assumptions continued little net the exit relative of whole multiple

Jon Winkelried

Yes.

market and meaningful much a there The financing us nature what's I that strategy we as dislocation, obviously there the has going well side, become capital position overall. having our equity beyond estate partners being mentioned, estate as difficult portfolio the opportunistic with interesting to were of obviously real opportunistic opportunities in on of real pretty of amount where of are do think more dry couple a some things, in I as that attractive our very our Alex a real also there's that. as able And taken of. given estate fair result thought we've on in a powder be part reserves both existing put advantage

I think nature kind And that So there, clearly, we of very been cases, there's in uptick like the the much where some are, funds or of an in there needing of opportunity. owners ones assets in certain are assets can that to high-quality certain because have are sell. assets to do dialogue sell cases upon something those based they assets that sell the

feel front pretty there. that's we of us about that opportunity So in good

I obviously the mean, And if and the follow at, going look market. M&A in on you banks activity follow that's the you

a of now at been core businesses, franchise. spot. our on If going impact really That's what's is sweet capital, corporates franchise, investing our in the their it's market, much whether in has very platform substantial our very a optimizing you been the and it's whether part in our look uptick there growth it's mix of across that whether

done reach dialogue nature of we're I us that things, well. we've what in kind our that us terms of the some interesting power in is and alley where of seeing so a think historically right in and that putting position And it's for

Jack Weingart

created, ways, some has an the to liquidity last community it's been comment That for front. harder find on to us just for in little very the I sponsor a think, there. I platform mention And fact busy. the opportunity has One even of more secondary been set

busy, if over the busy So X has been look that picked to and in pretty up it's last busy platform in significantly, months. Europe, the the been XX it's been you pipeline U.S. has

be think, I another, that's few for will few -- the fruitful we certain. in quarters next think So that area

Jim Coulter

IRRs called on many to you the something hang question private just ongoing Coulter, III Chelsea, fund. in early reflect for, industry, X progress the is of years the don't the in J-curve, anomalies get minute. James equity fund, that over tells we a you the Rise which in this Back the that of had

that line. which effect the creates put down as capital period, annualize the the essentially, the think that I will if first is in taking to we investments a ground, on that you line are of first the moment call annualization their on in of new draw, essentially and phenomenon, funds the the today, name quarter's expenses short-term anomaly, which capital up anomalies brief set you draw first they numbers. quarterly as draw during the When

happened that's Rise started previously been time. call will and capital on effect, ameliorate over that to get had you what And near-term X here is anniversary a got line, to the its which X-year called

that progress, in and LPs fund Those swings in early are of indicative will effect GPs phenomenon. good. So quite not line understand is the long-term now the [Indiscernible] the the the create around fund of which

Jon Winkelried

We're Okay. for that ready question.

Operator

Our come Morgan next question will from Michael with Cyprys Stanley.

Michael Cyprys

is views just evolving. how might us that you if you you of was on came latest you are to on how areas Gordon, how sort could I view? the that. wanted update synergies, What to and Angelo I And anticipated. around hoping larger, I cost elaborate then revenue could circle on that's mentioned set than the back that to larger some commentary opportunity quantify of your that, think you your

Jon Winkelried

mentioned guess a I couple it. make first obviously then comments, make couple and all, within that announced opportunities, of the of Mike. we we'll capital I investing base simplistic expanding They're I think, Gordon. the has in seeing level, high of opportunity anything larger deal, a support see but this maybe things add that that I'll comments, we capital I'll Yes. see to we the at and But think a meaningfully lots can to is Angelo when of else of if then anybody one a base.

LP institutional I have think end, our relationships relationships institutional you we institutional at time having we when basically LP Gordon about LP to at has we XXX XXX -- so look about LP And relationships have, overlap the of on our we talked relationships, the historically, close at Angela number XXX.

has So the size to really and clearly bringing -- our in of there that look we at some of of when and capabilities of that that. relationship those relationship opportunity leverage strategies TPG sort bases. And kind an you of do LP the both their opportunity the of into bringing the particular, like some base, is product to base feel

is into extend the channels product opportunity limited Number X around us to historically. base that our has

of, gives the In capability of we've we've our obviously with coming been product, suite this yield from some market. opportunity the a industry, the is in that be phenomena obviously, in players one perspective insurance to of full the in about do product of dialogue need of really product have product, to the together interaction We've Gordon, what in of things industry. dialogue and this So because an with has pre-closing limited be in the on already to past, -- had insurance the a us started. some to before Angelo to talked number and past and the players partner credit some able we insurance focus terms

We beginning we've But up work of of develop and are on to also, that there. we've number reach insurance have picked active from a dialogues had strategy had. players the to some certain together the outs a we proactive side,

of from. business. we to being terms I excited haven't with about a we're think arrangements of familiar obviously, us historically So a it for And nature that in you're capital alternatives in from real sourced well channel the source that that opportunity prospect the those

So that's another area.

has will feel opportunities number been partners in I Gordon channel Angelo of us A kind meaningful extent, alternatives in expand mass a are of semi-liquid to the sort the evolve be retail of of there think third where for strong together, partnerships combined channel, to product that a at TPG of also, Gordon of whole the product a Angelo that would our channel. And capabilities those affluent we some to to the brand obviously meet area channels. kind and be partner and with some

If look various there you interesting that see. businesses, we the at other opportunities are

So just tick quickly them. through

is at hold dependent syndicate, there the which Angela more there the and On if that franchise, one, Brook basic middle has from direct business a capital of you they you capital us if the number and built, that's market what to, they again, lower the which they expand what growing look look just originate, side, direct a twin opportunities hold origination there's what the lending versus are on, opportunity, is base. base at lending for Gordon that clearly platform

things the that of coming And so be that's on of we focused on, and the we're out focused box. one will

lending, and need as way over lower question some borrowers and they with as lending of grow need their middle changes. They've borrowers time borrowers longer, the -- this many and on the style their for market to as as of us following of structure get of time. our there's the covenant is franchise focused a over there very for larger perhaps borrowing a focused Secondly, been grow

kind interesting So in a Credit as describe those opportunities market terms X it's this interesting the seeing are examples Twin of grow. sourcing in really in Angelo which a opportunity is would think our I structure reach a -- the In of clearly I in a the what in now with as to reach Solutions, of up to capital of really environment, there is franchise Gordon's middle sort Brook. obviously, with opportunity of higher firm, as going firm that power

the of about interesting what between around time capital Coast going ago, ways we're structure some we private those opportunities and what together forming businesses our of are. very And on we are out business weeks off-site there an the equity Solutions that and hybrid kind is to capital think encouraged Credit West spent talking here opportunity. had be type We X.X really

another we to place opportunity. going feel be there's interesting like that's So where really some

businesses estate real estate there like side. the we're credit real opportunities really real the franchises, building And some what are parts on also be market. across our interesting of to estate the focus on obviously, feel we there conjunction in going then And with again, different

as it opportunities, Our there. slightly from made call Treco, mentioned X what We're prepared good remarks, I come different perspective. a -- a raising firms at we've credit estate fund and around real my progress we're in we

at are in now investments. the market We looking

market build they with get see we're we the raising then can cycle We're but these with and is can and LP strategies additional the that to of funds these these want our new of different also focused a that tangible among us, build, doing, what strategy. the provides raising market cycle have to is capital. narrative partners on to the go raise back People -- And in and see we obviously when evidence invest. us team of find -- basically base businesses the

market So the opportunities estate particularly on loan Treco, is and given market it in the in that -- real dislocation to equity right estate what's connection relates in the and real as interesting from whole we the estate real see credit between going now very there. market. And side from the of

the seeing other the et they is cetera. markets, Gordon side, it credit CMBS dislocation real and are opportunities in in market structured securitized where seeing Angelo from and

structured financing -- last banks we where market, $X availability the really what's asset-based would fund, providing ABC place a in respect cetera. into billion I thing, credit, of and saw they the say I Gordon is specialty This think it with I credit beginning the on own their what announced in just fund. private in So with raising liquidity, you its Angelo given is to over as call financing, call asset-backed the probably particularly then come and asset-based of regional to going et guess, contraction

area an excited as that's well. about that So we're pretty

So snapshot I we a opportunity. is see -- kind quick we say just would the how how that of of

Operator

with will KBW. Mike question from come next Brown Our

Mike Brown

income just on Maybe bit. investment narrowing a line a the little

have think Angelo bit here? just second we you Gordon like those how So looks negative, costs that, can some the little $XX million it excluding income And would half this maybe a those then been related share underneath of should I about guess, investment the thoughts unpack quarter, then costs. and

the we should about costs drivers for think could expand how there, half maybe excluding that as and well? what's those So you second the on just

Jack Weingart

Thanks question, Sure. the for Mike.

point out, of $X as running Gordon the of costs $XX kind you all, of The is also $XX of line, another They not include line expenses. just million million those. First Angelo that through include that of wrote off there, of the to companies quarter. during we and tied million funds $X that investment are legacy losses expenses, largely of older there so through a from couple running other or million non-core

that On like the integration consultants. and related things is to third-party Angelo lawyers Gordon work, spending due diligence and expenses, on most of

of fees that line, expect close in be will current come run but QX, we to that the it that its transaction, then bit run will will down fair the from pay continue, through when tapering adviser that off We also QX. but some line And in rate. that we'll a

Operator

next Brian question with Deutsche Bank. Bedell come from Our will

Brian Bedell

If you could switch the conversation back to the question. Impact platform, X-part

XX% to continue looks that's would stage what progress And the Rise of I talking there you on First deployment product, some realize commentary of it on there's Rise then just deployed Maybe Climate, and broadly there. fairly LPs be to similar Climate in we about deployed fund pace to how lot large to as basically. you're be and come like around start infrastructure second begin to thinking seeing the funds large. as with your should but being that potential now. X? vein? more itself of thinking Climate of classic -- peers So a that big of that maybe as funds, capital of climate size quite Should we the the Rise But quite infrastructure largest not the

Jim Coulter

bit start as documents deployment, a get for I in terms basis. in line think And on on actual you effect is to there's fundraising The your XX% a deployment of deployed. of gross fundraising typically to the all, next of allow fund of to First closer XX%. generation XX% to number the

would sense begin to it it to allocations. approaching think we about Climate make where Rise period launch X. And XXXX clearly make we're So a XX sense would for probably generally, that as

note very of be and remains getting particular of to right. in the LP terms part of So that And it's interest opportunities you terms both in robust, this marketplace is time market. that the in exactly

the of do you're business, infrastructure capital By the of that nature, pools. assets large require In terms right scale. opportunities portion their they

while either approach together we funds. announce view. of the targets you with not the that And to range aspirations from a are We in a product, it at could talking it the would you're would to time, a our want what's here But a timing reflect market takes position private fund of point a build imagine them for over it's to equity. yet should, size, in happening while about, new be where

Operator

Brian from come JMP will McKenna with question next Securities. Our

Brian McKenna

your fund growth you next look of noted commenced I if right the has growth at for And So generated that net X, on at a end. quarter fundraising IRR XX%.

the for? with of what's more will $X.X fundraising, totaled think you coupled performance, you fund you size, the fund? for predecessor this macro do in around long environment can expectation given billion? think this And this surpass about Do market which the So how be size broadly the one the then

Jack Weingart

Jack. Yes, it's

more plenty that The a of we $X of in interesting target. that mentioned announced think have opportunity activity I investing interesting have has we'll that that billion. hit size, much growth kind fund there's now. confidence to set And investment that and fund equity gotten we earlier We're just think I for we LPs target starting. warrant

the close early 'XX when should yet. take account take launched, be probably toward expect close as 'XX mentioned, to through you market had first second into you haven't think We will when quarter. first a place. and I you the of our And into fund We in end the that

Operator

Mason Luke with from come Paribas. will question next Our BNP

Luke Mason

Just $XXX on XXXX million pipeline? of from look performance the and at that for your fees, happen to then market return realizations your comments of to in larger -- the that pipeline pace I around kind of just needs funds of And portion a to prior. in the what terms for guess I relates exit accrued if

capital to please? So I'm more is that, wondering, line from are want just those conversations of just any funds back time there that kind starting they and around

Todd Sisitsky

Sure.

exit question me Let around the with start just the pace.

deploying, dollars to deploying, I XXXX, selling net the continue were us sellers. We significant think as that we well context to particular, a we're pretty find healthy opportunities. frankly, we're interesting in were a mention as first the of at XXXX, look sort of the during it in if of period multiple pace thing is we at the you some of

attractive to view sort place the multiples so a sell. in was It that of deliberate. was very that And a were

side, On software company an as sold and we capital prior example. the X every in TPG

phase quite interesting. was that the so more We're is And a in now where deliberate. opportunity actually

working sold on of a are flipped buyer. we've With portfolio. of and we have So a we number with progress think a bit our result -- exits. net we transformational the to that That's to in lot said, to younger as like efforts have that switched some feel we And like a really at what I on right in that was of in said, good starting made companies our But hopefully, always dialogues, come. start quarters companies, we and to open we they're report those exits. put to -- focus fruit. when And more bear growth we're to and against the we having the moment, feel

in of we of started some as like the -- our most combination So are activity in market work interesting individual it's that variables companies. But we strategics stand level on overall the we the reflect particular, in a things the and again, where in always both against have the terms things have prospects right put in now. that our portfolios to having investments of and

investors. an we'll environment then we're continue mostly at in read find exit build where to we'll selectively and So mode,

Jack Weingart

On your Jack, a add bit. it's question, little to just

we Todd much aggressive in As were mentioned, XXXX. most our more peers than of

is, it a as of a So percentage that's see back was sell in as our one being XXXX. powder intentional. did the high lot dry you reasons very as we That

you Xx focus fund, TPG returned about our X XXXX is capital on If to buyout business, vintage investors. our

call, on investments. who in that the think market some to through a unrealized not capital pressure lot our play we're have realize and their fund. to GPs the have of of returned investments those business during as of GPs And a seeing, secondaries Jon lot lot a you're of in definitely there's help mentioned So building that I

that bit. building We were to younger portfolio, when picking up on we're aggressive because than feel lot said, in more the a We've on being multiples industry, so of selling. at little is sell a average so in honestly than back the don't a pressure higher. we were market focused got portfolio that value That and selling

feel we in have don't to. that mentioned, We Todd alluding several but pressure process, you're the as

Operator

over Q&A concludes closing any the would additional portion for call This Stein Gary to or like to call. of remarks. I turn back today's now the

Gary Stein

thanks, Thanks, again, Great. operator, morning. for us and joining this everyone,

any follow-up look forward the please and next quarter. with we'll have feel speaking IR again to back team, to circle you If you questions, free to

Operator

Thank today's you, and XXXX second TPG's webcast. quarter call This concludes ladies gentlemen. earnings and

wonderful and You have at this your time, line a may day. disconnect

TPG (TPG) 8 Aug 232023 Q2 Earnings call transcript