TPG appoints bankers to work on IPO of private equity firm

TPG has hired Goldman Sachs and JPMorgan Chase to work on an initial public offering, closer to a stock market offering the private equity firm has considered the past decade.

The group could submit IPO documents to U.S. regulators as early as September, according to people familiar with its plans.

Managers at the buyout company evaluated a merger with a specialty procurement company for several months, but eventually opted for the traditional route of a stock market, the people said.

If the deal goes ahead, it will put David Bonderman’s business on a path fueled by competitors such as Blackstone, KKR and Apollo Global Management more than a decade ago.

These businesses, founded by Bonderman’s peers before he started TPG, which once collaborated on the buyout of big targets, a strategy that led to high-profile failures, including the bankruptcies of energy group TXU and casino operator Caesars Entertainment.

But more than a decade after the end of the “club agreement” fad, TPG fell far behind with its former collaborators. The firm now counts $ 96 billion in assets under management, compared to $ 684 billion for industry leader Blackstone.

The gap means that TPG is unlikely to get a valuation consistent with the largest listed private capital groups, although Bonderman’s business is still benefiting from a rise in share prices in the financial sector.

Blackstone, KKR, Carlyle, Apollo and Ares together have a market value of approximately $ 252 billion, more than three times higher than their March 2020 low of $ 80 billion.

The rise reflects an emerging economic recovery, rising stock markets wiping out paper losses incurred early in the pandemic, and live fee income as pension funds and other asset allocators increase their investments in private capital.

The top manager of TPG has come to the conclusion that investors would take a traditional stock market course more seriously than listing with a Spac stock market.

Listed black check companies, which were growing at the height of the pandemic, have recently been engulfed in a series of scandals and controversies that have whetted investors’ appetites.

JPMorgan and Goldman Sachs declined to comment on their appointment first reported by The Wall Street Journal.

TPG said: “We are continuing to evaluate strategic alternatives and currently have nothing to announce.”

Source: AFE Games 

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