William McGlashan Jr., co-founder and CEO of TPG's The Rise Fund and founder and managing partner of TPG Growth, has been terminated "for cause" after he was charged with conspiracy to commit mail fraud as part of the college admissions scandal, according to a TPG statement.
Jim Coulter, co-CEO and a founding partner of TPG, will take over the managing partner responsibilities for the firm's TPG Growth and Rise funds, a business that makes growth equity and buyout investments in companies that provide social impact and/or environmental benefits, the statement said.
"After reviewing the allegations of personal misconduct in the criminal complaint, we believe the behavior described to be inexcusable and antithetical to the values of our entire organization," TPG stated.
At the same time, investors in the TPG Rise Fund II, which held a $1 billion first close, will be allowed to take back their commitment to the fund. Investors in the latest of a series of funds raised by TPG's social responsibility business, TPG Rise and TPG Growth funds include the $128.1 billion Washington State Investment Board, Olympia, and New Jersey Division of Investment, which runs the $70.9 billion New Jersey Pension Fund, Trenton.
Although no key person provisions were triggered by Mr. McGlashan's termination, TPG executives opted to allow investors to reaffirm their commitments to the fund because it was the right thing to do, said sources familiar with the situation.
The fund has a hard cap of $3.5 billion, according to a report to the New Jersey Division of Investment. Other key investment executives involved with the fund are Mike Stone, CIO of The Rise Fund, Maya Chorengel, senior partner, who serves the impact and financial services sector lead at The Rise Fund, and Steve Ellis, senior partner of TPG Growth and Rise business building group, the New Jersey report states.
For his part, Mr. McGlashan, in a note to board members Thursday, said he resigned and that he's “deeply sorry this very difficult situation may interfere with the work to which I have devoted my life.” He added that “there are aspects of the story that have yet to emerge that I wish I could share.”