TPG - Earnings call 4 2023

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Operator

Good morning, and welcome to the TPG's Fourth Quarter and Full Year 2023 Earnings Conference Call and following management's prepared remarks, the call will be open for your questions. [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.

begin. may You

Gary Stein

and operator, Great. welcome, Thanks, everyone.

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

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

guarantee undertakes obligation to revise discussion TPG except transaction presenting reflecting remind update as TPG's not from release, Gordon November Earnings our Angelo measures, that SEC GAAP for on events earnings I'd or Release that like include Within the could X, statements, statements Please factors no the results statements. materially any this and close and these you to non-GAAP or required forward-looking to cause may by and performance. call of forward-looking do future to differ actual refer we're law. filings XXXX.

We that measures XXXX. and also January assume the GAAP pro X, present closed on non-GAAP forma transaction

for release, believe we forma TPG's business. pro figures details TPG's These of Please the earnings the this on available non-GAAP the discuss non-GAAP our refer certain in on financial call are performance earnings are nearest to release GAAP to is the assessing on in reconciled relevant We which measures measures website. information. financial that

on fund. an an or a offer Please this solicitation call note TPG offer that of in interest to nothing constitutes to any sell purchase, an

fourth holders to turn paid With common per We on $X.XX Class the $XX of GAAP February Class reported I'll be or quarter. the XX. common of stock, will net to for $XXX results after-tax and dividend million of call A of our a distributable We as TPG share of A attributable $X.XX at of Inc. over briefly record, earnings declared March Jon. Looking X to per that, stock. million income of which share

Jon Winkelried

we laid morning, last TPG, growth updates out several I'll call, Gary. progress. February's that the today on components. year On our was for a year included agenda and for XXXX transformative by earnings Thanks, Good key everyone. begin sharing a X

particular, important progress record of through X these driving the in strong business and expanding We're strategies areas. we've existing in excited completing our acquisitions. our second, continuing all our made targeted and about of fundraises, scaling several and third, organic innovation; growth First, track

Looking today, across equity, and our past manage year than discuss review $XXX more as at furthered outlook. our a credit from highlights private scaled, a firm. business investment our real also we billion differentiated we position estate few and I'll and the

the TPG strategies, as to relates Capital, for generation of completed Rise fundraises funds. First, it Healthcare our existing partners the next and we have

have is This these over track performance We is grown which relationships. strong across of a of in client vintage, outstanding private result direct equity given our a persistent TPG's strategies, fund differentiated vintage significant and and the investment sizes, accomplishment each growing headwinds record industry campaigns fundraising.

closed for vintage. Specifically, commitments, close our X, final up Rise with we we $XX.X for prior Capital the And billion, aggregate X TPG and of XX% held from Healthcare up on too, XX%. billion $X.X Partners

to TPG clients our around East notable in Middle we from progress new the In also Asia. added addition world expanding to the relationships, many existing with and

TPG believe as We well expand the as opportunity significant relationships successor in potential across funds, engagement new for embedded these growth client additional to and create strategies products.

coming will of in hold the Asia a months. our raised billion final $X.X close Capital year-end capital have For of as ongoing we campaign, and

larger we to and predecessor. clients strong express its be fund interest, expect Our to continue to than

in initiatives. and continue highlight the scaling where to organically we a grow distinct parts products by these few we launching demonstrate to have our I'll Second, competitive of market, ability advantages. of

commitments more received the approximately estate fourth than real and $XXX on of new quarter. in million closed $XXX Our strategy credit million

the since in the asset lending. of the significant actively rates, the investing pullback we've now real and higher early real values credit, XXXXs, estate current most declining for market backdrop one are is commercial interesting estate a and dynamics seen We given environments of

strategy capital in for Our is cycle, XXXX. and to raise purpose-built to this the we continue intend part of

climate. December, second TPG $X.X climate-focused a past funds commitment we At announced UAE's to next generation Global $XX Altera, $XXX Private Fund to billion commitment the Climate new COP Climate and XX commitment $X Rise to our Solve includes million This Turning initiative. the from to this of manager. investment a Equity billion billion our a Rise

TPG strategy strategy, joining as later Sachs, TPG Transition Climate preparing of to Infrastructure brand most that co-head Head leadership to our him be Goldman week, we TBT a Scott Rise launch is of to year The as differentiated space. And also Lebo fund. help we're for partner a UAE to Infrastructure will Within served and equity for position, our Impact and as testament of and the private global the co-CIO we recently infrastructure at built Climate its are strong bring Climate just market. selection we've the our this first in announced Scott Inova investing excited and Climate. last

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year, Solutions our we Credit And direct partners. distribution BDC large new and lending secured this wire relationships and have banking with for several houses private Fund far so

access sharing provide with We the private future. in and investors are you more our look we to strategies, to forward focused additional on delivering that products wealth

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We more the will consistent the on channels. both Wealth steadier, basis across and Institutional in be a market Private

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may our during GP monetizations. 'XX spreads, corporates were pipelines, receptivity solutions You increasingly that earnings transaction ramp-up including creative to contributing several seeking and a quarter narrowing is that our remember bid-ask for discussed their in realign second to call, we businesses factors greater strategically among

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market, find would see we attractive more under expect companies otherwise this liquidity. As such as come for that increasing to not areas assets ahead real year for typically as pressure look in estate, to themselves sale we

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in focus a that combines year In in led For Southeast on one transactions, of Southeast ecosystems fourth thematic every transaction we Capital creates quarter Asia, groups building closed regional record building by aligns alone, investments hospital value. XXXX high region Columbia, Asia. investment, This operate. unique our the portfolio X almost strategic Asia, we platforms hospital for with existing platform where closed scale, of our Asia with several deployment, with interesting including was and very a largest company, in the

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Rise Our pace funds. with Impact Rise remained our platform and has active, both strong across Climate extremely investment

invested reserved, nearly across Rise first now a revenue approximately portfolio that XX and XXXX. of in is Our XX% Climate Fund XX% diverse companies, grew

traded ownership IPO offer year, recently last monetized and Nextracker in have Technologies prices, portion of Tata X their our Nextracker. up than Additionally, our XXX% both and a IPOs respective from we more

and Private launch with are we fund prepare positioned We to well new Transition strong Climate as strategy. Climate momentum, our Infrastructure second Equity

strategies. Credit to Turning our

and volatile over market lending more forma TBG new Twin Brook, a of backdrop through companies borrowers. direct covenant losses a at strong billion providing XX and during top with add-on structure the to investments XXX maintained deployed basis of XXXX, platform, performance Despite realized $X robust loans Twin on and no credit existing than the disciplined market has middle sector-driven capital nearly had Brook in approach capital into Our pro its strategy protections. the

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institutional and investment the visualized and leadership private which This example high and the resources in strong within to its a this diverse a is equity continuing TPG our with group, provide potential TPG scale. will investor strategic managers. strategy manager. want industry, completed investment serve to building we business firm of and anchor Next, highlight visualizes I to commitment look inaugural to support forward to our Finally, augmenting new partnership as see will quarter a significant investment

active Although we increasing macro for and to geopolitical an environment tensions, to due a decisions characterized Fed uncertain valuations, TPG. cautious start XXXX by very significant of policy off anticipation remain is

pipeline interesting of opportunities. a have robust investment We

drive a number are new in engaged see levers existing to and with further our dialogue across of business. high-quality growth clients and innovation and many We we

long-term of a lot our have build do and I'm but for this deliver our value our ability to We continue confident work to year, shareholders. to in for clients

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

Jack Weingart

Thank John. you,

closed December TPG our actual November on the earlier, XX. acquisition I'll months discussing basis, through close Gary and provided today forma fourth release, mentioned of assumed XXXX. also which from date our X, results transaction earnings January pro X As an we've includes Angelo full the Gordon of on financials the year for which In XXXX, X, quarter be

total offset of billion by and AUM, $XX billion over and outflows $XXX $XX of of with billion, partially This under year billion raised of capital assets the management, driven $X year-over-year. in the $X of billion was months. ended XX We realizations value creation up acquired XX% billion by $XX last

As as the due to had strong we our quarter for well closes funds, close fund. John across the as mentioned, of capital and growth our a rolling fundraising, final Rise first

AUM dry of increased $XXX powder had representing year-over-year and fee-earning of more AUM. earning billion XX% deploy, billion, than XX% $XX Fee to available to we

our fee We had also billion embedded earning of fee represents growth, across we was credit vehicles. the driver significant This end year, at deploy subject growth AUM this which fees. as management not $XX of of a to growth of the $XX particularly yet earning billion capital, potential

from the year-over-year and due in fees XX% XXXX. billion revenue as the quarter the $XXX Rise Fee-related the XX% as $XXX million final the million the up up and AG quarter, fees Management XX% capital in and in well results, totaled and in year, $X.X grew for of sequentially sequentially, substantial was part related our closes inclusion catch-up TPG Funds. to to for XX%

record year. million fees year-over-year in totaled QX. A for sequentially full to increased Transaction $XXX level and million XX% the and XX% $XX

transaction where debt the lead quarter elevated or were fees for by closing was sole transactions, of the large the fourth Our several arranger financing. TPG

to over AG. transaction growth drive we John expect expand as capabilities As our to fee time, broker-dealer revenues, noted, we TPG in

Fee-related that XXXX, XX% $XXX However, again a earnings from for quarter last $XXX we closings, for million year. fourth seasonally the year. to were And saw And million up and XX% be for case as year-over-year. QX sequentially is light this quarter, the often expect deal XX% XXXX. we up

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in we've described. growth initiatives investing While also

back $XX expense of strong margin earnings our We A term, distributable over exceed stock, the will quarter continue up XX%. and from $X.XX expect and million realized to the were maintain fourth Class for After-tax longer to discipline performance including we or to allocations. million scale $XXX share per common

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has as have markets pipeline said, being increased. potential begun normalize, monetizations to That our of

is acquisition, realized in noncore included quarter, Angelo performance markets of in Assuming other of expect we item. the supportive, allocations fourth million remain In investment income which the line to $XX Gordon and increase closing realized the also expenses to XXXX. incurred related we our

to costs, ongoing expect we closed. now is integration continue normalize the this will incur to transaction we While

other We long-term Turning and to our $XXX the of cash of to our drawn of used revolver balance non-GAAP a quarter. $XXX of capacity the debt. on fund cash AG We ended year the fourth million closing sheet. approximately and equivalents, a and the in million with transaction $XXX cash million portion revolver

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conservative, Our closing moderate ample post balance leverage with and sheet remains liquidity.

to was increase of AG, offset $XXX the compared and the accrued year the gains. million realized at performance accrued driven $XXX million $XX acquisition third the million balance the value XX% million, of TPG to the by quarter. date by carry at $XXX $XX end increase in was partially in million net attributable Our our This of in investments,

While performance the generating. in XX% AUM we realizations. eventual have results we potential, pickup model billion will and performance-related At the FRE-centric, our $XXX our AUM, eligible our total fee significant of totaled billion our earnings operating the was year, is of which expect of $XXX performance embedded from benefit or end financial

continued durable expertise in our resilience, a investment has portfolio underpinned and careful assets high strong demonstrate growth Our margins. selection period volatility, by sector and deep of to with through

Our XX quarter appreciated Impact X% the which and Growth the Equity Capital, platforms, months. approximately Private portfolio, last and over our in includes X%

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benefited of also into heading rally the the end broad year. from strategies Our the market credit

the In Real resulting assets of underlying fundamentals reflects Estate, portfolio from higher challenges remain strong. the in rates, and our the our the broader performance although sector, sectors across core

guidance we Teach-In I'll forward, that our Looking provided in November. reiterate at the

to expect capital private XXXX of Infrastructure Climate equity raised to in launch the Transition the grow and our XXXX, as compared by growth well and as infrastructure Climate for our fundraises Strategy. Rise driven We total

in base Additionally, more for earning of fee we capital raised in pro doubling we year, the will John XXXX significant strategies grow $XX exceed indicated, a platform our our core increase On by credit as the basis. billion, AUM. XXXX, forma expect this in deployment, each Credit of expect AG TPG which on a to than fundraising

We've focus our executing we've maintaining returns back, excellent against past in for clients. the strong over strategic while made X our Stepping our a we're priorities. delivering diversified scaled progress on business, excited the years, about and

path equally Looking forward, we're excited our about ahead.

our our revenue of leverage. growth growth with operating base phase into visibility great to next multiple expand drive and have and We asset the levers

and in our for delivering value our ability to performance shareholders. differentiated clients confident continue our for long-term We're

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

Operator

[Operator first take Instructions] Blostein Alex question Goldman We'll with from our Sachs.

Alexander Blostein

it's My credit, X is got around first quick to it. question albeit parts

relationships for you And think sort question of, AG talked that also much hear reiterated that fundraising? TPG? previously. is, first in that much sort expectations million Can the and billion like was side, the how you embedded growth And the that that number legacy strategies, the what incorporating I $XXX you just of $XX minute of of how the terms the I comprised So a some on spend you key talked also just but related credit? accelerating cross-selling is second on over the about fees, we of opportunities or about to within and curious, of AG shadow between on of the incremental here. then that's is deployment you're of

Jon Winkelried

last I up start currently involved of I'll But, dig with follow of across strategies. the expect relationships formation on see that part the it, capital from capital on think first -- we out. that not, and if if a But healthy those team the all, we're and has, we'll really AG the side, we'll dialogues then we and between mix Credit that existing formation, actively you. in

that our TPG but now. has on we're And expect close, of I expand the of on of being relationships also good Credit we're a as in and -- that we're a time you to given about side. AG, and lot to expanding have focused the progress. the feel about close, the an making this be exceptional time think formation capital TPG that team the the since certainly LP before, AG both talked lack relationships of to spending we before, continues prior I is post breadth like base overlap even capital opportunity with introduced the those breadth spending And of but to formation lot for we've We us of to talked that there

strategies. finish when year that market. of So will have credit the that nice broadening in expect deepening AG form and a base will we that also those for relationships the also in contribute future to that I'd this and growth We're

that the also my AG Credit, the of channel, be will process and ongoing as in TPG of the strategies, and access the be becomes for focus and market raising expand with I vehicles of in -- Wealth the in each of an that for Wealth capital and channel mentioned continued multiple more a capital I that think we're reach. creating a terms capability ours in we of expanding reach number in of will that raising comments, in vehicles so these also

we a us. have of with And have I number that started process already partners think I channel that mentioned,

AG track further So the to as, brand and I'd the that activity. together, well in the expect TPG there they've penetration deep as increase see given created investing the result well, recognition of a as record as with frankly,

as said, I our Credit see well. And with So think of in I to that, we're I strategies. expect the that market as all

the different for the that And occur. will growth so me X will exactly hard strategies, but of our growth in will down the It's all across how say fundraising credit expect occur pillars it to X. break between

Jack Weingart

call $XXX is in that's and estimated is kind you TPG biggest fee the half that remainder the Real annual bucket fees, not probably the within this million step-up, that, AUM, as in components and of Credit Alex, question earning that AUM million or fee fees your platforms. yet Jack. $XXX so not million And Estate subject the earning it, million $XX $XXX fee of not across And of of the expect. and AG's be $XX toward fees, Estate On is about from Growth weighted earning category. weighted business million yet and toward the yet Probably both of would and is the opportunity Real AUM step-up

up had as And capital. in Estate is about component Real million $XX in some biggest the the AG to our we And would capital platform you remember, of that step $XX we because that up, subject the that FAUM be of invest the Capital mitigant in million, structure J-curve in business. steps the

Operator

with JPMorgan. comes Ken question next from The Worthington

Kenneth Worthington

a more part of phase aggressive as IPO... through [indiscernible] the realization

Jon Winkelried

hear of part first couldn't your broke question We Ken, Can again? you up. your you. start

Kenneth Worthington

Yes, I apologize.

is phase, front-end went like the next if we if a looked do aggressive few you've accrued should IPO. realization seem benign. realization But years? a vintage, play carry Structure at carry, XX% would through remind to you about of times a think should out out prior today loaded. we remains that we X accrued you by called perspective, net XXXX, older How the As and realizations and than the years, it more market the Gordon Angelo from us European reasonably the And? environment the Can be how fund think Waterfall over about number

Jon Winkelried

want on to you first? to private Todd, you equity realizations Do -- do want on side, comment the

Todd Sisitsky

Yes.

a last spent This we position on few I -- good well-performing Let in we the is start realize investing and our some me companies, very our a companies a on as spend should I'll in have certainly an ahead. years year value the investors. It's we that. And in area to that years partner important really lot think important fund focusing be of our to time It's group. and good management. to

had It in quarters. is, I think, worth noting some recent we've important successes

exit last year, strong mentioned half duration. of we second your we in of was sale XX-year really That about was, again, which CAA a a and waited picked and think, the I spot. our that point was partnership the to

first actually in went sold of from IPO public of up which recent We is had sizable weeks. We realization quarter XXX% about in is in shares a important company also block 'XX, Nextracker, an a price. its the

offer in and their trading are India that pick really the above still the the we over indicators years, positions our all are X able of example IPO IPOs well liquidity. more to price. spots, of And side, Private we just on Equity hold One are leading last launched of IPOs course, particularly we how X

opportunities some So there.

recovers, overall, the there in selective, we've So And of a increasing really big partner strength recent of been market the far and -- And as this momentum going been 'XX and driving year. drive opportunities we've focused we of start have group deal successes. to the managing these each the the with like growing there's we're value very actively the as market realizations the very as -- firm. feel to overall portfolio been liquidity and in be forward, your private cycle to in of companies, building to liquidity we as with a But on important your But do are in the an go business question, the 'XX. after portfolio unit. number equity,

Operator

from The Morgan Michael Cyprus next question Stanley. with comes

Michael Cyprys

back come you Private Private to some you positioning to hoping have. you talk now wanted to on marketplace. Just that the the within of maybe Maybe could the opportunity. Wealth that guys was Wealth elaborate products the I have

you the you think to some existing that? some are traction well. as thinking you talk bringing the about are that 'XX. looking the to I What alluded products products, to marketplace, maybe in on of new in marketplace, you're here seeing steps How to the sort of take

Jon Winkelried

Equity of channel Yes. was Estate routine on were know actively a think by of been I you engaged And strategies part in Private partners we number through to we've dialogue Well, campaign what those I partners. Real with Mike, the that our raising essentially and prior a think, channel AG acquisition, doing campaign. some through capital

the as the that had a ability with et approach function AG series really of offered of that and AG a dialogue continuously completely a now and that function. of result more come a acquisition, holistic with as approaching we've more we're dialogue together of pre-existing about how we've the It's to expansion strategies a step -- now, taking number with channel. partners channel our channel vehicles, kind BDCs, dialogue been partners, strategic and such change a different offer is relationship the sort The step like of our of cetera, because having to

is in over the that offering very in the in partners Wealth looks channel. in channel the there several meetings I've or a strong various TPG. And product know so. would course a myself those to last I appetite of you channel, what of desire had capacity month strategies. terms actually is the the And more from allocate to the strong say of what I mean available like the you Wealth holistic obviously to yourself There's wanting from data having a

seeing that the in diversification products driving for through And having are some level channel. demand of brands strong we're

say those would actively we're what I we're And so partners, very deploying we're and of channel that, into as that from hearing those opportunities. a encouraged by result

a that's at well more feet on terms management and our point our X combined look on a street of team resource from our product focused you If as firms, as as resource the structuring, the creation, of view. than here, the doubled result and essentially product the relationship channel marketing of in of penetration

noticeable a change And for us. so that's been step function

products to be are in channel we and So our Brook. business for will the lending have Twin that across up continue direct

And some strategies are obviously, Credit up that that offer also on the channel We going of have were products our business. to besides, the channel. our private for Structured through equity

now capabilities, complete it's real product should I capability a So have including as estate our well. menu also mentioned like of looking

menu. we strong brand, now it. more the gaining and traction looking it's brand continue we complete And put a is and channel, behind So in as more continue it's as like to a resources our very to

pretty time. So what about we're we over Wealth to expect feeling the channels do good in

for that. we're also think And distribution it course a sourcing base over last of objective will having -- our X said our a we've of about before, talked it, our on become I there strengthening and part path And the to of do capital. years, and the we've I think larger

Operator

Bank Craig The with next question of Siegenthaler America. comes from

Craig Siegenthaler

So to target. hit question, margin the FRE I my for on wanted

already this but this starting the Angelo on margin think FRE and initially catch-up synergies. XX% fees. you cost transaction forma Gordon driven I will target, pro reverse XX% fees 'XX, will your And margin, as long-term then Your beat weigh realize by although was

conservative? your you XXXX Or this is all a level long-term XX% investing? too XX% and isn't of pull together, implying healthy this also as So targets

Jack Weingart

We for at point. think to Thanks, right articulating it's Craig, target for us be question. the this the

drivers. quarter margins, I from benefited were core transaction fees. my fees. the comments, They mentioned the above also strong think elevated you by key catch-up fourth mentioned but some in fundraising also I The expected of as

So some not of XXXX. those in will reoccur

private Think fundraising some over longer large of fees them. We the a about catch-up we're flagship completed end in the elevated natural of, fund right? arc, the waves equity middle Those had raises. towards the just

fees in complete Private growth get you'll funds. XXXX. fund of Now new in see you Infrastructure in will in those And more those connection toward big we're new like Equity the new with some with the Funding catch-up some the Climate, fund as market campaigns, entering again likely 'XX Climate, the the end flagships

Day, So transaction when synergies. mentioned bottom point, about about really much synergy also consistently cost at our cost your you to said the cost the We've over line. we had dropping and achieved this that growth not million and diversification Analyst investing -- we more and that of synergies years and is growing on $X and the platform

million. synergies additional are $X finding above We cost the

long-term Our intention is reinvest to those in growth.

year generating take longer And are we will account, that scaling we the operating this we're margins all term, into leverage. when be appropriate. businesses for targeting our and certainly think we So

Operator

The with next question comes from Mike KBW. Brown

Michael Brown

lines. any I from product to since service of if lot Gordon, got guess wanted you was when the there But see that the maybe you really of months the now there out looking And opportunities at closed want to build Angelo partners? to I you bolster the continue you just business in it's the the in few is about start update to think of across a the fully then -- element insurance on insurance the platform strategic major think diversification to balance with terms opportunity. Credit I opportunity broader and sheet? wanted there of any full you've

Jon Winkelried

that we've it's been much because focused on. a good Sure. focused it's question Yes, on very something we're and

insurance say clients insurance One of me there's the X just is that I of think, a -- that products. a reiterate companies currently -- sort range categories have across a number of that of we our are opportunity, both opportunity. is ours, Let of just

sector insurance the of our both across firm, strategies. all both exists here the penetration, also date that of a sides and think on is of LP to of source So

are process. our and insurance benefits that a with dedicated the as asset product LPs I we of sector, the we're expansion covering of think general capabilities, seeing the we think dialogue and to important selection terms I insurance the with knowledge a team companies more in insurance holistic, able have that's a bit And companies of have already of the what's embedded their to with

part opportunity. say, for be of also a a it global So, would continues us, grow continues I to and one that, and great is that to it's opportunity

strategic for and there, with -- with classes. dialogue center expansion of front is insurance Obviously, range more Secondly, talked the it's asset our about a to of a across before this us. on have clearly opportunity into the side, The number we've strategic companies

that announcement say And I up Angelo of quite the the Gordon, meaningfully. of picked would that since has acquisition dialogue

ourselves we doing a so do we're would strategic in we'll terms say careful course, we're position ultimately can. And I lot be and way selective we in of on And most work so that the it. we of evaluating opportunities. very what of

Credit mean of particularly the of the great I And lines, we feel instance, that a as in wasn't only as have product we mix that us a the far It AG. side, to line things was about direct capability that, Angelo we was product the feel on was multi-strategy platform. multi-strategy it It a attracted was lending. platform. doing for mono one that Gordon,

Credit direct a Structured Solutions and it a It Credit had has it So capability. has capability. a lending capability,

and things the say companies insurance is And one it's on product the have whether behalf risk of creating note capabilities, corporate got source is able and you of be the of in making asset particular, would managing to that structures, process purely pure reach capabilities I tranching in of structuring of the sourcing to very sure assets important that risk, EBITDA non-EBITDA essentially product also you've outside outside rated on side. side, just

we Credit whole that XX a built last those products, So mortgage been business business product our over the infrastructure, out finance, finance, that's Structured product, we specialty have and of years range a capability in asset-based have securitized -- the of terms has breadth. servicing across

we're we We'll and good with continue to as that building but we capital, them done be to pretty tools expand more the businesses respect feel about never scale build businesses. we'll now have. those them to able those So,

feel that's positioned So we now. right how we're

Operator

from comes The Brian next question McKenna JMP. with Citizens

Brian Mckenna

performance outperformance? initial coming the infrastructure pretty base the So climate Climate down and next for expectations would driving great impressive what's get with just pike, then strategies? IRR these on funds today really XX%. for of performance in to color some And It rise this be Rise case your is an with what are

Jon Winkelried

you're I on. James, think

James Coulter

questions and about Thanks for from the greetings XXth of where the Geneva, Climate above launch. I'm Rise the city

positioned questions. the opportunity terms X outperformance place I'd really decarbonization answer We creation. last deployment was well years ago. of being the the we in a almost of position right as ahead say those result, and a in think to in I investment ourselves started So a market the journey And I'm year wave. lead to

which for able Equity. creation where we But market obviously companies. I Last is execute the very in And in forward generation standout next X was a ready that's of in the XX%, year, up think public IPOs market, certainly fund were climate were I the for important to Private particular, IPOs because value that the is a rare. think

far exactly we that So Private in world invested. to happened in years this as the diversified. fund XX-plus told is fund Equity. so well has in the expected invested It's be we where a X that companies market live been It's in

And so think, been I as has performance, out, far, the you pointed strong.

position think, Private I Infrastructure to be significant Equity we amount of Going and Infrastructure think been Equity to fair focused continue In a show able we're offers, decarbonization for essentially market into fund. positioned I target Private in you world, continue opportunities, we've from in forward, the a interest differentiated well should on generate this that the to the our see us. continue adjacency returns to we expanding the and opportunity to think

differentiation, of climate. in are it in looking good to period position sector a I is time investors and a to think live this continue we're that So offer for

Jack Weingart

the terms South the next X, TRC in that that's terms Global publicly fund, targeting Equity you're at least targets referring fundraising Brian, when the business, of in were initiative. we say $XX what across billion, for to, And announced if we was of commitment did Private our combined with

year. Infrastructure And That raised all those numbers won't the year. those of this include will over the funds raised this be toward assume end and It activated be next be that not more do will year So year. business. the

Operator

next The with Mason Paribas. Luke question comes BNP from

Luke Edward Mason

fees. just transaction It's on

seasonally integrate AG there. up You talked weaker QX picking about you pipelines back and

in should I'm the So if in issue more coming of capital wondering the transaction revenue kind just how fee markets? years, potential growth think about markets benign we we

Jack Weingart

Good question, Luke.

at Capital the businesses business, building for the AG, adding If fees we're the and $XXX TPG be run of a legacy Capital side. Markets you today's TPG into rate and to of business, separate Credit through is said normal What historically think think that level we've that we Markets Markets on the then kind here particularly of integration million. around about Capital

basis, to is normal quarterly relative high, rate. $XX a million that run So on

from our of as of then were AG, over innings layer grow early time on developing. Now you in that's growing opportunities be businesses. that to we which going And top the

the normal year. down the contribution light this number side, QX. of in TPG think course of I stepping in below seasonally the And the So level of the year would QX to AG of then growing, because deals during a closing

growing the the So kind the of also year. TPG the AG and back the loaded of side during course the in, year side and during of feathering course

the So you start back of the revenue year, toward grow where and Capital year, pattern year. this Markets much our same like of saw this line I'd kind low expect the

Operator

The with Calin. Katz next comes Bill from question TD

Unknown Analyst

question. on pick that to want last up Just

you Gordon, that the target? FRE directional of capital within then the is how platform margin would markets much the XX% embedded in opportunity a about As Angelo the long-term think be reasonable for view? And set Apollo assumption

Jack Weingart

proxy -- for We kind Apollo doing question. I that is I opportunity good think a in decent Yes, underwriting say what early kind opportunity we're set. the for of directional is would of ourselves. pretty

ready not But longer-term XX%, incorporates say, number we're the only So I opportunity. target of a put FRE margin out piece a of to would there. that

Operator

Brian comes Bedell Deutsche from Bank. question next with The

Brian Bedell

of outlined some terms us Slide some color the Maybe But segmenting if million the on in just you you and timing that give XX, for just $XXX the thanks can But were Or on -- my or course AG? $XXX color deployment year? situation likely on maybe of $XXX the we're perspective of mostly it Is on how the answered. questions million. breaking by that of deployed might on you this where think in be that it over million a credit year-end? that reflected, see be to dependent conditions within say, is much more we are

Jack Weingart

step-up $XXX not step-up that million the on structures. most funds I fees, of as few deployed, ago, a said capital -- say, associated already natural minutes is or not of deployed with structures yet the would step-up I Well, capital

deployed has taken those thinking of deployment to across swag on probably underlying capital that So a X-year just average just capital it yet not question, about funds. real your time, kind the a pace

in I if take had kind feather guess, would that over I'd So to period. a of a X-year say about

Operator

The comes Adam next Beatty UBS. with question from

Adam Beatty

market appreciate revenue to good. about I earlier know either is there's I just want firm-wide, monitoring AG intense there. pretty middle despite credit I was Credit growth with equity some there concern within growth XX% around the performance docks or tight that. I and around the these But quite stable And Obviously, Credit think was days portfolio. ask comments it performance the margins. around

So whether just are wondering, you? not could there's what those any detail or about or companies equity have you performing, share been backstops how

Jack Weingart

a but last million. in just that finish question that second on question $XXX to that the General want Brian I asked,

X-year a a want onetime I opportunity don't impression comes that, So that like to in that's the leave over period.

a obviously more is As deployed, we're talked that capital, credit capital about. lot raising we've as

yet. billion have raise come So expect provided this with all year credit business, no of rate Credit will want fee assume across you And to some our detail whatever in the there. we've capital fees plus to we that $XX

So as that fee million we're $XXX opportunity growing embedded today. should of be over was time realizing

Jon Winkelried

in -- what's terms on question the in portfolio. the credit on up and pick happening to quality of Just

has to more or strategies little I mentioned I on been to, across bit on our very, as has very good. -- just data maybe Credit alluded been give think color that, some some it. And performance you a

pipeline our transaction activity upon this by business reasonably the based our through up Lending way, Twin look seeing. you If year Brook, at that we're meaningfully Direct here, is

and the last was the year, you uptrend, opportunities if that over terms happening the portfolio seeing. look Equity overall of of credit the the generally performance we're no I the just business in was we generally Private at also course quality reflective, But our business losses We're portfolios. seeing of of of performance the what think, a in had within

is that Brooks focused. business very sector Remember Twin

Care like saw Health performance. across portfolio, things And and strong within so they Services Business their

terms how a our underwriting. in -- I at do, so on have least obviously -- very the And at we we're selective selection think a very of of from least process we what criteria,

portfolio lower our get average, obviously lower underwriting as us it, But result to which to sponsors of We need extent well with portfolio, to. the as the table that nature of a protections across back work allows strong are and overall. was that market very in middle leverage also the with covenant to business as on we

quality in of generally. I In on across think continues our that I strong, ended of an uptrend, excess And said in would the over our XXX the indices my you say up. the comments basis pipeline I be where outlook in point performance Solutions, to terms in very of business, terms Credit look if premium, was

impact obviously think I the year. Jack the the at significant portfolio. alluded in to a fact end there of strong the Credit had rally spreads that That was a on

see a and we of historical we've generally -- of net the result that. opportunity, sellers where spreads, credit is and we've any to tight been in done valuation generally, return like change And as public a what that

the book. structuring of Credit been tightness focus which opportunities of bespoke opportunities. we've we've credit opportunities, opportunities kind more our -- to pivoted liquidating public combination because the of private market, finance our Solutions number across we've as a private of So from well essentially been positions opportunities, are rescue a really of And more private as

and is us of opportunity the front in large. substantial And set very there very, very

If structures trillion CCC capital the B-rated are over coming you or rated the over the that several of essentially of look the $X structure course years. single next due market. There's at of

the market coverage, of less has market Xx market, the XX% has probably more half of less which leveraged the at interest Xx about and that's -- is historically look right you loan coverage. almost like interest than typically than now, If

to going market those on. the us -- structural private able to in And lot force opportunities as execute those value sector dynamic our Credit interesting use both credits underwrite it's that we're business, well in able of and knowledge use very with our So order with there, right knowledge, a our now, create Private Equity industry to across those our to in as to business we're and for companies.

going of the with in It's for on on dynamic that kind respect early And dynamics is, and very that's feel we biggest way are to deleveraging, we're then bank is Structured risk positive going playing in third see the like at the going Credit in look continuing the on the And here to when to transfer. to you we're capital. with credit very in and the a need of stress and that side, we market, us. setting what's community regional that up lastly, stresses to theme second that of drive the for respect market -- the the and think on So sales bank asset inning dynamic or out. terms continue regional go terms

we're has credit corporate overall, the seeing with, transfer. participated of that the participated on risk working opportunity for looking rally, And to non-EBITDA also think has And in. quality we're upgrade an that counterparties not average, say I I would in the that credit

So in see a value, interesting lot opportunities we of terms relative of there.

million number have So situations instance, loans to of portfolio bank a it. -- really from purchased characteristics portfolio, just with community return a recently, for been a we $XXX and of secured attractive consumer there a

even better. So, set shape is is the great the portfolio and opportunity in

that gives we're hopefully, on some -- that guidance So you how positioned.

Operator

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

Gary Stein

us. joining all for you. Great. you Thank Thank

to circle have again next Investor look up questions, you follow-up you quarter. any Otherwise, If the team. free to with forward we to feel please talking Relations

Jon Winkelried

everyone. Thanks,

Jack Weingart

you. Thank

Operator

This concludes and Webcast. Full Year Quarter today's Earnings TPG's XXXX Fourth and Call

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

TPG (TPG) 13 Feb 242023 Q4 Earnings call transcript