TPG AUM rises 5% for quarter, 17% in year

Boosted primarily by fundraising, TPG reported Tuesday $126.7 billion in assets under management as of June 30, a 5% increase from the end of the prior quarter and up 17% year-over-year.

TPG executives said during the firm's second-quarter earnings call Tuesday that they expect the pace of fundraising to slow in the remainder of the year.

However, they also expect the $430 billion bill passed by the U.S. Senate on Monday that is directed, in part, at combating climate change to be a boon for its investments in the energy transition and other climate change-related investment strategies.

In April, TPG closed the $7.3 billion TPG Rise Climate, a climate investing fund.

Also during the firm's second-quarter earnings call Tuesday, CEO Jon Winkelried and Jack Weingart, TPG's chief financial officer, noted that TPG raised $13 billion in the second quarter and a total of $31 billion in the year ended June 30. The year-over-year period includes the last two quarters of 2021, which had been the firm's second strongest fundraising year with about $20 billion raised by Dec. 31, 2021.

TPG is actively raising several funds including its flagship buyout fund TPG Partners IX, health care-focused private equity fund TPG Healthcare Partners II and impact investing-focused private equity fund The Rise Fund III.

However, Mr. Weingart said fundraising in the second half of the year will take longer, in part, due to drops in investors' public market portfolios causing their alternative investment portfolios to rise to or above their target allocations.

The time it takes to raise a fund across the industry will be extended with funds TPG has in the market expected to close in the next nine to 12 months, TPG executives also said.

TPG reported $39 billion of dry powder, a record amount for the firm.

TPG President Todd Sisitsky said on the same call that realizations have moderated and TPG could switch to being a net buyer from a net seller of portfolio companies, which was the case before the recent market volatility. However, he added, opportunities to sell assets are still there.

However, the dry powder leaves TPG well positioned to deploy capital in what TPG executives expect to be an increasingly favorable investment environment.

Also on the call, James Coulter, executive chairman, founding partner and co-managing partner of The Rise Fund, said the climate change bill should drive investment opportunities.

Unlike prior government climate change legislation, the new bill contains incentives, rather than taxing polluters, that are expected to drive $3 trillion worth of investments in the climate change space, Mr. Coulter said. The climate change bill could also accelerate and increase the exposure investors will want to have in the climate change/energy transition sector, he said.

TPG also reported a GAAP net loss of $10 million in the second quarter but net income of $31 million for the six months ended June 30.