There are times when the merits of a private equity commitment overrides ESG concerns.
Last year, two members of the Oregon Investment Council, which runs the Tigard-based $76.6 billion Oregon Public Employees Retirement Fund, asked Jim Coulter, co-CEO and a founding partner of TPG, about the lack of diversity at the firm.
"You are leaders in ESG and impact and we are leaders in that also," Mr. Coulter said in response to a question about firm diversity from Tobias Reed, Oregon treasurer and council member. "
He acknowledged that although TPG was more diverse than the industry, which has a terrible record, the firm was working to further diversity its workforce.
John Russell, council vice chairman, then noted that TPG had a "stunning" lack of diversity, pointing to a photo of the leadership team of TPG's buyout business.
"My own view is not that people with different ages, ethnicity and gender are better managers, it's just that their view of the world is broader and companies get into trouble without that diversity," Mr. Russell said. "One example is Uber and to know your (TPG) co-chair (David) Bonderman was credited with part of the behavior that crippled the brand and I would attribute that in part to lack of diversity."
Mr. Bonderman quit the Uber board in 2017 after making what was viewed as a sexist comment. Mr. Bonderman had joked that adding more women to a board would increase the talking.
TPG retained a board seat.
Mr. Russell added that he was glad that TPG executives were working to diversify its workforce.
In response, Mr. Coulter said that the picture Mr. Russell referred to was of TPG's U.S. team. He said that if photos of TPG's Africa and Asia teams were included, the picture would have been more diverse.
In general, TPG's rates of diversity are higher than the industry average, he said.
Some 12% to 15% of TPG's workforce are women, which "is not nearly enough," Mr. Coulter said.
"It's something you work on for many years," he added.
As for Mr. Bonderman's comments while he was on the Uber board, Mr. Coulter said that after Mr. Bonderman made the "indefensible comment" he immediately apologized and resigned from the Uber board.
"I am pleased how he responded in the aftermath, although I am embarrassed by the comment," Mr. Coulter said.
In the end, the council voted to commit up to $500 million split pro rata between TPG Partners VIII LP and TPG Healthcare Partners LP for the pension fund's private equity portfolio with Mr. Russell as the lone "no" vote. At the time, Oregon had committed a total of $4 billion in 15 TPG funds over its more than 20-year relationship.