Q2 2023 TPG Inc Earnings Call
Okay.
Speaker 1: Good morning and welcome to the TPG's second quarter, 2023 earnings conference call.
Good morning, and welcome to the T. P. G 's second quarter 2023 earnings conference call.
Speaker 1: Currently, all callers have been placed in a listen-only mode and following management's prepared remarks, the call will be opened for your questions. If you would like to ask a question at that time, please press star 1 on your telephone keypad.
Currently all callers have been placed in a listen only mode.
Following management's prepared remarks, the call will be opened for your questions.
If you would like to ask a question at that time. Please press star one on your telephone keypad.
Speaker 1: If you need to remove yourself from the cue, press star cue.
If you need to remove yourself from the queue Press Star Q.
Speaker 1: To get to as many questions as time permits, we ask that you please limit yourself to one question.
To get to as many questions as time permits we ask that you. Please limit yourself to one question.
Speaker 1: At any time, if you should need operator assistance, press star zero. Please be advised that today's call-
At any time, if you should need operator assistance press Star zero.
Please be advised that today's call is being recorded.
Speaker 1: Please go to TPG's IR website to obtain the earnings material.
Please go to T P jeez I, our website to obtain the earnings materials.
Speaker 1: I will now turn the call over to Gary Stein, head of Investor Relations at TPG.
I will now turn the call over to Gary Stein head of Investor Relations at T. P. G.
Speaker 1: Thank you. And you may begin, sir. Great, great, thanks, Chelsea. Welcome everyone. Joining me this morning are John Winkle Reed, Chief Executive Officer, and Jack Wyingard, Chief Financial Officer.
And you may begin sir.
Great. Thanks Chelsey welcome.
Welcome everyone. Joining me. This morning are John Michael Reed, Chief Executive Officer, and Jack Weingart, Chief Financial Officer.
Speaker 2: In addition, our executive chairman and co-founder Jim Colter and our president Todd Sysinski are also here and will be available for the Q&A portion of this morning's call.
In addition, our executive Chairman and co founder Jim Culture, and our President of toxicity are also here and will be available for the Q&A portion of this morning's call.
Speaker 2: I'd like to remind you this comment include forward-looking statements that do not guarantee future events or performance.
I'd like to remind you. This call may include forward looking statements that do not guarantee future events or performance.
Speaker 2: Please refer to TPG's earnings release and FAC fileings for factors that could cause actual results to differ materially from these statements.
Please refer to Tpg's earnings release, and SEC filings for factors that could cause actual results to differ materially from these statements.
Speaker 2: TPG undertakes no obligation to revise or update any forward looking statements except as required by law.
TPG undertakes no obligation to revise or update any forward looking statements, except as required by law.
Speaker 2: Within our discussion and earnings release, we'll be discussing certain non-GAAP measures on this call that we believe are relevant in assessing the financial performance of the business. We'll be discussing the financial performance of the business.
Within our discussion and earnings release will be discussing certain non-GAAP measures on this call that we believe are relevant in assessing the financial performance of the business.
Speaker 2: These non- GAAP measures are reconciled to the nearest gap figures and TPD earnings release, which is available on our website.
non-GAAP measures are reconciled to the nearest GAAP figures in Tpg's earnings release, which is available on our website.
Speaker 2: Please note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase and interest in any TPG fund.
Please note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any TPG fund.
Speaker 2: Looking briefly at our results for the second quarter, we reported gap net income attributable to TPG, Inc. of $27 million and after tax distributable earnings of $96 million or 26 cents per share of Class A common stock.
Looking briefly at our results for the second quarter, we reported GAAP net income attributable with TPG, Inc of $27 million and after tax distributable earnings of $96 million or 26 cents per share of class a common stock.
Speaker 2: We declare the dividend of 22 cents per share of Class A common stock, which will be paid on September 1st to hold us off record as of August 18th. With that, I'll turn the call over to John . Thanks.
We declared a dividend of 22 per share of class a common stock, which will be paid on September one to holders of record as of August 18, with that I'll turn the call over to John .
Thanks, Gary.
Morning, everyone.
Speaker 3: I'll begin with an update on Angela Gordon and our ongoing work to prepare for integration and to position ourselves to maximize the opportunities for the combined platform. I'll then share my thoughts on two areas within our core business where we have seen substantial activity and progress. The first is investment. Next.
I'll begin with an update on the Angelo Gordon and our ongoing work to prepare for integration.
Ourselves to maximize the opportunities for the combined platform.
And then share my thoughts on two areas within our core business, where we have seen substantial activity in progress. The first is investment activity consists.
Speaker 3: Consistent with the observations I made in our previous earning calls regarding our building pipeline It feels to us that the market has settled into an attractive period for deploying capital across primary and secondary private equity Real estate and impact investments
Consistent with the observations I made in our previous earning calls regarding our building pipeline.
Feels to us that the market has settled into an attractive period for deploying capital across primary and secondary private equity real estate and impact investing.
Speaker 2: As I'll describe, our teams are capitalizing on the opportunity and have announced or closed a number of interesting and distinctive deals.
As I'll describe our teams are capitalizing on the opportunity and have announced or closed a number of interesting and distinctive deals.
The second is organic growth.
Speaker 2: I've previewed several of our organic growth initiatives with you over the past few quarters. And I'm pleased to update you today on the meaningful progress we have made in fundraising, team building, and investing across these offers.
I previewed several of our organic growth initiatives with you over the past few quarters.
And I'm pleased to update you today on the meaningful progress we have made in fundraising team building and investing across these opportunities.
Speaker 2: On Angela Gordon, we received HSR clearance in July and are anticipating additional required government approvals and time for our expected closing in the fourth quarter. Our overall integration planning effort has two objectives.
Financial Gordon we received HSR clearance in July and are anticipating additional required government approvals in time for our expected closing in the fourth quarter.
Our overall integration planning effort has two objectives.
Speaker 2: The first is operational readiness and the second is business integration and revenue.
The first is operational readiness and the second is business integration and revenue growth.
Speaker 2: More than 150 people across our two firms are involved in integration planning.
More than 150 people across our two firms are involved in integration planning.
Speaker 2: Well in advance of signing the transaction, we stood up seven working groups focused on critical areas such as capital formation, people and culture, and firm operation.
Well in advance of signing of the transaction, we stood up seven working groups focused on critical areas, such as capital formation people and culture and firm operations.
Speaker 2: Each group is co-led by senior TPG and Angela Gordon leaders and includes representatives from various business units and function
Eastgroup has co led by senior TPG and Angelo Gordon leaders includes representatives from various business units and functions.
Speaker 2: Given the complexity of integrating our service functions, including finance and accounting, IT and operations, we established a dedicated integration management office to bring project management rigor and expertise to those active-
Given the complexity of integrating our service functions, including finance and accounting.
In operations, we established a dedicated integration management office to bring project management rigor and expertise to those activities.
Speaker 2: On the revenue synergy and growth side, we stood up a senior team that is fully dedicated to identifying opportunities to leverage the combined power of our flat.
On the revenue synergy and growth side, we stood up a senior team that is fully dedicated to identifying opportunities to leverage the combined power of our platforms.
Speaker 2: group which includes more than 20 business leaders from Angela Gordon and TPG.
The group, which includes more than 20 business leaders from Angelo Gordon and TPG.
Speaker 2: is scoping and fleshing out a series of combined growth initiatives and building execution plans around each one. While we are...
Scoping and fleshing out a series of combined growth initiatives and building execution plans around each one.
While we are still in early innings, we believe the opportunity said is even larger than we anticipated.
Speaker 2: We believe the opportunity set is even larger than we anticipated. We're prioritizing among those opportunities and preparing to execute in the quarters after closing.
We're prioritizing among those opportunities and preparing to execute in the quarters after closing.
Speaker 2: Overall, our working groups have made considerable progress on their objectives. Importantly, these working groups have also become a forum for engagement and relationship development between TPG and Angela Gordon.
Overall, our working groups have made considerable progress on their objectives. Importantly, these working groups have also become a forum for engagement and relationship development between TPG and agile aboard.
Speaker 2: From my seat as CEO , I've been encouraged to see how naturally our teams have engaged with one another and the clear compatibility of our cultures. I've grown even more confident around the scope of the opportunity for our combined firm post-closing and there's a clear sense of momentum and collective enthusiasm.
From my seat as CEO I've been encouraged to see how naturally our team should engage with one another and the clear compatibility of our cultures have grown even more confident around the scope of the opportunity for our combined firm post closing and there is a clear sense of momentum and collective enthusiasm.
Speaker 2: connectivity and shared purpose across our firms is tangible and exciting.
The connectivity and shared purpose across our firms is tangible and exciting.
Speaker 2: At the same time that we've been working toward the closing the Angela Gordon acquisition, we've been very active in our core business and I want to provide you with an update on the strong progress we've made across several areas.
At the same time that we've been working towards the close closing the Angelo Gordon acquisition, we've been very active in our core business and I want to provide you with an update on the strong progress we've made across several areas.
Speaker 2: On our last call, we noted that our transaction pipeline have begun to pick up considerably, and that trend has continued to accelerate. From our perspective, a few key factors are driving more favorable investing conditions.
On our last call. We noted that our transaction pipelines have begun to pick up considerably and that trend has continued to accelerate.
From our perspective, a few key factors are driving more favorable investing conditions.
Speaker 2: First, the bid-ask spread among buyers and sellers is narrow despite continued market volatility.
First the bid ask spread among buyers and sellers is narrow despite continued market volatility.
Speaker 2: After a prolonged period of buyers and sellers viewing the world too differently to bridge valuation gaps, sellers are increasingly showing more willingness to adjust valuation expectations in order to consummate transactions.
After a prolonged period of buyers and sellers viewing the world to differently to breach valuation gaps sellers are increasingly showing more willingness to adjust valuate valuation expectations in order to consummate transactions.
Speaker 2: including in some cases, whole company take privates. We anticipate this trend will continue into the back half of the year.
<unk> in some cases whole company take privates.
Anticipate this trend will continue into the back half of the year.
Speaker 2: Second, corporates have become significantly more active in restructuring their portfolios, pursuing acquisitions, and divesting certain assets.
Second corporates have become significantly more active in restructuring their portfolios pursuing acquisitions and divesting certain assets.
Speaker 2: Given the amount of time we spend working with strategic on relationship building and proactive sourcing, our activity around car vows and structured partnerships has picked up meaning.
Given the amount of time, we spend working with strategics on relationship building and proactive sourcing our activity around carve outs and structured partnerships has picked up meaningfully.
Speaker 2: The third, many GPs are searching for ways to appropriately return capital to their fund investors, which is helping to increase the flow of attracted investment opportunities.
And third many GPS are searching for ways to appropriately return capital to their fund investors, which is helping to increase the flow of attractive of attractive investment opportunities.
Speaker 2: This dynamic has driven both new investments, as well as opportunities for us to invest in our existing portfolio companies, to grow and strengthen their positioning in their respective markets.
This dynamic is driven both new investments as well as opportunities for us to invest in our existing portfolio companies to grow and strengthen their positioning in their respective markets.
Yeah.
Speaker 2: Our style of private equity investing, which focuses on transforming high-quality companies and accelerating growth, is particularly well suited for the environment in which we are operating.
Our style of private equity investing which focuses on transforming high quality companies and accelerating growth is particularly well suited for the environment in which we are operating.
Speaker 2: In particular, we have spent years building ecosystems of knowledge and relationships and developing conviction in the sectors, themes and companies into which we want to invest.
In particular, we have spent years building ecosystems of knowledge and relationships and developing conviction in the sectors themes and companies and to which we want to invest.
Speaker 2: When actionable opportunities arise, we move nimbly and with the confidence of our full partnership to lean in.
Accordingly, when actionable opportunities arise, we move nimbly and with the confidence of our full partnership to lean in.
Speaker 2: We've also established a strong track record of building high growth, strategic businesses, and in structuring win-win relationships with corporate partners.
We've also established a strong track record of building high growth strategic businesses and structuring win win relationships with corporate partners.
Speaker 2: Many of our unique strategic investments such as our partnership with Amerisource Bergen to acquire one on college.
Any of our unique strategic investments such as our partnership with Amerisourcebergen to acquire one oncology, which we closed this past quarter, our distinctive within the realm of private capital.
Speaker 2: the closest pass quarter are distinctive within the realm of private capital.
Speaker 2: Recent activity in TBG capital or flagship biofun highlights are investment style and ability to capitalize on the attractive environment.
Recent activity and TPG capital, our flagship buyout fund highlights our investment style and ability to capitalize on the attractive environment.
Speaker 2: Among our recent deals or three corporate carve-offs, a proprietary partnership with a unique put call arrangement, and a take-private we just announced.
Among our recent deals are three corporate carve outs.
Prior to a partnership with a unique put call arrangement and it take private we just announced.
Speaker 2: Last week we signed a definitive agreement to acquire New Relic and a six and a half billion dollar take private transactions.
Last week, we signed a definitive agreement to acquire new relic in a $6 5 billion take private transaction.
Speaker 2: New Relic is a leading provider of cloud-based application performance management and observability software, which has been a long-running, thematic focus area for our software and enterprise technology team, given its mission critical nature and durable growth characteristics.
New relic is a leading provider of cloud based application performance management, and Absorbability software, which has been a long running thematic focus area for our software and enterprise technology team given his mission critical nature and durable growth characteristics.
Speaker 2: In June , we agreed to carve out force points, global governments, and critical infrastructure business. This billed on our track record and cyber security, and thesis on the spectacular tail runs around government and commercial cyber spending.
In June we agreed to carve out forced points global governments and critical infrastructure business. This builds on our track record in cyber security and thesis on the secular tailwind around government and commercial cyber spending.
Speaker 2: As I mentioned earlier, we closed our acquisition of one oncology in the second quarter, which we pursued jointly with the Merisource Bergen and the excellent management team that is currently in place. Although we only closed two months ago, we are already finding compelling opportunities to expand and grow the plan.
As I mentioned earlier, we closed our acquisition of what oncology in the second quarter, which we pursue jointly with Amerisourcebergen and the excellent management team that is currently in place.
Although we only closed two months ago, we're already finding compelling opportunities to expand and grow the platform.
Speaker 2: Similarly in capital Asia, transaction activity has increased across the region.
Similarly in capital Asia transaction activity has increased across the region.
Speaker 2: During the second quarter, I know the pharmaceuticals, which we acquired in late 2022, agreed to carve out Moody Farmers Consumer Healthcare Division.
During the second quarter I know the pharmaceuticals, which we acquired in late 2022 agreed to carve out multi farm as consumer health care Division.
Speaker 2: This is highly strategic for Inova, positioning the combined business as a leading Asia consumer healthcare platform of scale. This is a great example of how we build strong platform companies through both organic investment and targeted acquisition.
As a highly strategic for this is highly strategic Brian Nova positioning the combined business as a leading Asia consumer healthcare platform of scale. This is a great example of how we build strong platform companies through both organic investment and targeted acquisitions.
Speaker 2: We have several other interesting deals near the finish line that we look forward to discussing with you next quarter.
We have several other interesting deals near the finish line that we look forward to discussing with you next quarter.
Speaker 2: Consistent with our expectations, there has also been an uptick in secondary activity as GPs globally seek strategic liquidity solutions for their best performing asset.
Consistent with our expectations. There has also been an uptick in secondary activity in GP sgp's globally seek strategic liquidity solutions for their best performing assets we.
Speaker 2: We are generating greater deal flow globally from New Quest in Asia and TPG GP solutions in Europe and North America.
We are generating greater deal flow globally through new question Asia, and TPG GP solutions in Europe , and North America.
Speaker 2: In the second quarter, we back continuation vehicle phones in India, Germany and the US.
In the second quarter, we back continuation vehicle funds in India.
Germany and the U S.
Speaker 2: Notably, TPG was the lead investor in the continuation fund for IU Group, one of the largest and fastest growing for-profit universities in Germany. We believe this is the single largest, we believe this is the largest single asset deal in Europe so far this year.
Notably TPG was the lead investor in the continuation fund for <unk> group, one of the largest and fastest growing for profit universities in Germany. We believe this is the single largest.
We believe this is the largest single asset deal in Europe , So far this year.
Speaker 2: This transaction was sourced through the RISE team's multi-year, thematic focus on education. It's also a great example of our successful organic growth strategy, where we build new platforms on the full chassis of TPG and create shared incentives for our investment professionals to source opportunities and collaborate across businesses.
This transaction was sourced through the rise teams multiyear thematic focus on education.
It's also a great example of our successful organic growth strategy, where we build new platforms on the full chassis of TPG and create shared incentives for our investment professionals to source opportunities and collaborate across business units.
Speaker 2: Finally, within real estate, we are seeing signs of an improving backdrop for deployment, and we are well positioned with $6 billion of dry powder at quarter end in our latest opportunistic fund.
Finally within real estate, we are seeing signs of an improving backdrop for deployment and we are well positioned with $6 billion of dry powder at quarter end and our latest opportunistic fund.
Speaker 2: The significant market dislocation is creating unique opportunities for us to acquire high-quality assets that rarely become available for sale. Our pipeline continues to build as we source investments across numerous geographies and within attractive sub-sectors such as life sciences, data centers, industrials, and student price.
The significant market dislocation is creating unique opportunities for us to acquire high quality assets that rarely become available for sale. Our pipeline continues to build as we source investments across numerous geographies and within attractive subsectors, such as life Sciences, Datacenters industrials and student housing.
Speaker 2: During the second quarter, we completed the acquisition of a portfolio of assets for alloy properties, which is our life sciences real estate platform in the Boston area. This transaction highlights how we can play offense in a tough market and build value in our portfolio companies through strategic add-ons. We were able to acquire these outstanding properties in the Boston suburbs on a proprietary basis as a direct result of our deep set direction.
During the second quarter, we completed the acquisition of a portfolio of assets for alloy properties, which is our life science real estate platform in the Boston area. This transaction highlights how we can play offense in a tough market and build value in our portfolio companies through strategic add ons.
We were able to acquire these outstanding properties in the Boston suburbs on a proprietary basis as a direct result of our deep sector expertise.
Speaker 2: Just a few weeks ago, we closed a $1.5 billion transaction in partnership with Digital Reality Trust to recapitalize a portfolio of high-quality data center assets in northern Virginia with more than 1 million square feet in total.
Just a few weeks ago, we closed $1 $5 billion transaction in partnership with digital Realty Trust to recapitalize a portfolio of high quality data center assets in northern Virginia with more than 1 million square feet in total.
Speaker 2: The portfolio is located in one of the largest and most interconnected data center markets in the world, which also benefits from supply constraints due to structural barriers.
The portfolio is located in one of the largest and most interconnected data center markets in the world, which also benefits from supply constraints due to structural barriers.
Speaker 2: Taking a step back and consistent with the highlights I just shared, we are seeing a notable increase in transaction activity across our platforms. And we are well positioned to get
Taking a step back and consistent with the highlights I just shared we are seeing a notable increase in transaction activity across our platforms and we are well positioned to continue our momentum.
Speaker 2: We deployed $2.3 billion in the first quarter, and $2.8 billion in the second quarter. And if we aggregate the investments that we have signed, but not yet closed, this represents an incremental $5.5 billion of capital that will be deployed.
We deployed $2 3 billion in the first quarter and $2 8 billion in the second quarter and if we aggregate the investments that we have signed but not yet closed. This represents an incremental $5 $5 billion of capital that will be deployed.
Speaker 2: In addition to our day-to-day focus on our core investment activities, we have also seen significant momentum across TPG in building new investment platforms with substantial growth potential.
In addition to our day to day focus on our core investment activities.
We are also seeing significant momentum across TPG and building new investment platforms with substantial growth potential.
Speaker 2: At the time of our IPO, we described how important organic innovation has been to our historic growth, and we also shared our expectation that it would continue to be a key driver for us going forward.
At the time of our IPO, we describe how important organic innovation has been to our historic growth and we also shared our expectation that it would continue to be a key driver for us going forward.
Speaker 2: Despite a challenging fundraising environment, we have already raised anchor capital in connection with several funds and have begun investing.
Despite a challenging fundraising environment, we have already raised anchor capital in connection with several funds and have begun investing.
Speaker 2: Collectively, we have raised or have near-term visibility to raising more than $2.6 billion of capital for these first-time funds. And we believe each of these initiatives can drive significant and highly accrued of growth for TPG over time.
Collectively we have raised or have near term visibility to raising more than $2 $6 billion of capital for these first time funds and we believe each of these initiatives can drive significant and highly accretive growth for TPG overtime.
Speaker 2: Our inaugural European and North American GP-led Secondaries Fund had a closing after quarter-end.
Our normal European and North American GP led Secondaries fund had a closing after quarter end.
Speaker 2: bringing total committed capital to approximately $750 million and the fund is lined up side to reaching a billion dollars of capital.
Bringing total committed capital to approximately $750 million and the fund is line of sight to reaching $1 billion of capital.
Speaker 2: to date the team has completed four deals out of its inaugural fund. All within sectors where TBG has deep-etched for teeth.
To date the team has completed four deals out of its inaugural fund all within sectors, where TPG has deep expertise.
Speaker 2: We believe this is a market and strategy that is potential to scale meaningfully over time.
We believe this is a marketing strategy that has potential to scale meaningfully over time.
Speaker 2: Our inaugural Life Sciences Fund, which targets earlier stage opportunities across therapeutics, medical devices, diagnostics, and innovative services, continues to raise capital and completed two investments in the second quarter. We've raised over $250 million of capital with clear momentum toward raising a $500 million fund.
Our normal life Sciences fund, which targets earlier stage opportunities Cross therapeutics medical devices diagnostics and innovative services continues to raise capital and completed two investments in the second quarter, we've raised over $250 million of capital with clear momentum toward raising a $500 million fund.
Speaker 2: Turning to Treco, our private real estate credit strategy, we have visibility to raising over 750 million for the first close dedicated to the strategy, including notable anchor commitments from some of our most active relationships.
Turning to <unk>, our private real estate credit strategy, we have visibility to raising over $750 million for the first close dedicated to this strategy, including notable anchor commitments from some of our most active relationships.
And finally, we've previously discussed the considerable amount of infrastructure capital required to address climate and energy transition globally.
Speaker 2: and previously discussed the considerable amount of infrastructure capital required to address climate and energy transition global.
Speaker 2: As a result of our leadership position with our rise and rise climate funds, we see a significant amount of deal flow and believe a dedicated climate infrastructure fund will extend our unique position in this market.
As a result of our leadership position with our rise and rise climate funds, we see a significant amount of deal flow and believe a dedicated climate infrastructure fund will extend our unique position in this market.
Speaker 2: We are in the process of lining up anchor LPs and look forward to sharing more with you in the coming quarters.
We are in the process of lining up anchor Lp's and look forward to sharing more with you in the coming quarters.
Speaker 2: As you can see, we've made meaningful progress and reached key milestones across each of these organic growth initiatives. We feel highly confident about the trajectory of our core business and with the Penning Acquisition of Ansela Gordon, KBG is positioned to continue delivering strong performance and diversified growth for our investors. Now I'll turn the call over to Jack to review our financial results.
As you can see we've made meaningful progress and reached key milestones across each of these organic growth initiatives, we feel highly confident about the trajectory of our core business and with the pending acquisition of Angelo Gordon TPG is positioned to continue delivering strong performance and diversified growth for our investors now I'll turn the call over to Jack to review our financial results.
Speaker 2: Thank you, John , and thanks to all of you for joining us today. Our second quarter financial results were in line with our expectations.
Thank you John and thanks to all of you for joining us today.
Our second quarter financial results were in line with our expectations and reflect broader industry dynamics and the current macroeconomic environment.
Speaker 2: and reflect broader industry dynamics and the current back of economic environment.
Speaker 2: All the numbers I'll be discussing are for TPG on a standalone basis. And do not include angelic word.
All the numbers I'll be discussing are for TPG on a standalone basis and do not include Angela Gordon.
Speaker 2: We expect to publicly file a comprehensive information statement around the time the transaction closing, which will include historical financials for Angela Gordon.
We expect to publicly file a comprehensive information statement around the time of the transaction closing, which will include historical financials for Angelo Gordon.
Speaker 2: and pro forma financials for TPG and angelic Gordon on combined base.
And pro forma financials for TPG and Angelo Gordon on a combined basis.
Speaker 2: We finished the second quarter with $139 billion of assets and management, up 9% year over year. This was driven by $15 billion of capital raised and value creation is $7 billion.
We finished the second quarter with $139 billion of assets under management up 9% year over year.
This was driven by $15 billion of capital raised and value creation of $7 billion.
Speaker 2: partially offset by $10 billion of realizations over the past 12.
Partially offset by $10 billion of realizations over the past 12 months.
Speaker 2: Fee earning AUM was 79 billion at the end of Q2, which grew 17% from a year ago.
Fee, earning AUM was 79 billion at the end of Q2, which grew 17% from a year ago.
Speaker 2: AUM, subject to fee earning growth, totaled $11 billion, of which $9 billion was not yet earning.
AUM subject to fee, earning growth totaled $11 billion of which 9 billion was not yet earning fees.
Okay.
Speaker 2: Management fee is told of 257.9 in the second quarter, which grew 15% year over year.
Management fees totaled 257 million in the second quarter, which grew 15% year over year.
Speaker 2: As expected, transaction and monitoring fees rebounded to $17 million in the quarter. And we expect this will further normalize as our pace of deployment increases.
As expected transaction and monitoring fees rebounded to $17 million in the quarter and we expect this will further normalize as our pace of deployment increases.
Speaker 2: Total fee-related revenue for the quarter was 286 million, up 8% sequentially, and 12% compared to Q2.
Total fee related revenue for the quarter was $286 million up 8% sequentially and 12% compared to Q2.
'twenty two.
Yeah.
Speaker 2: We reported few-led earnings of 125 million in the second quarter, which increased 23% year over year. Our FRE margin for the quarter was 44%. This margin improvement from the first quarter is a result of increased management fees, higher capital market revenue.
We reported fee related earnings of $125 million in the second quarter, which increased 23% year over year.
Our FRE margin for the quarter was 44% this margin improvement from the first quarter as a result of increased management fees higher capital markets revenue.
Speaker 2: and continued strong expense discipline across the firm.
And continued strong expense discipline across the firm.
Speaker 2: After taxes to the earnings for the second quarter were 96 million or 26 cents per share of plus a common stock. This was impacted by
After tax distributable earnings for the second quarter were $96 million or <unk> 26 per share of class a common stock.
This was impacted by a couple of items.
Speaker 2: First, our net realized performance allocations continue to reflect our moderated pace of realization.
First our net realized performance allocations continue to reflect our moderated pace of realizations.
Speaker 2: while we will selectively monetize investments in this environment. And we have several in process.
While we will selectively monetize investments in this environment and we have several in process. Our priority continues to be driving growth across our portfolio of companies.
Speaker 2: Our priority continues to be driving growth across our portfolio.
Speaker 2: Second, similar to last quarter, we incurred non-core expenses related to the insularningen Court of Nocturnisation.
Second similar to last quarter, we incurred non core expenses related to the Angelo Gordon acquisition.
Speaker 2: These costs reduced our distributed, distributable earnings by $15 million.
These costs reduced our distributed distributable earnings by $15 million this quarter.
Speaker 2: Excluding these expenses, our aftertacks DE would have been 111 million or 31 cents per share of class A comments.
Excluding these expenses our after tax de would've been $111 million or <unk> 31 per share of class a common stock.
Okay.
Speaker 2: Turning to our non-get balance sheet, we had 578 million of cash and 450 million of long-term debt as a June 30th.
Turning to our non-GAAP balance sheet, we had $578 million of cash and $450 million of long term debt as of June 30.
Speaker 2: Our net-becrued performance allocation balance was $760 million, which represents the 20% allocation to the TPC operating.
Our net accrued performance allocation balance was $760 million, which represents the 20% allocation to the TPG operating group.
Speaker 2: This increased 7% from the first quarter driven by 58 million of value crease.
This increased 7% from the first quarter, driven by $58 million of value creation.
Speaker 2: This value creation was a result of our aggregate portfolio appreciating 2% in the second quarter and 9% over the last 12.
This value creation was a result of our aggregate portfolio appreciated 2% in the second quarter and 9% over the last 12 months.
Speaker 2: Our companies are showing continued resilience in this period of economic uncertainty, with average revenue growth over the past 12 months of 22%.
Our companies are showing continued resilience in this period of economic uncertainty with average revenue growth over the past 12 months of 22%.
Speaker 2: Finally, on fundraising, we raised one and a half billion during the quarter and 15 billion over the last 12 months.
Finally on fundraising we raised $1 5 billion during the quarter and $15 billion over the last 12 months as you'll recall from last quarter, we updated our targets for our flagship funds given the challenging fundraising environment, we're continuing to manage our business toward these revised targets and we're pleased with the quality and breadth of the dialogue.
Speaker 2: As you'll recall from last quarter, we updated our targets for our flagship funds, given the challenging fundraising environment. We're continuing to manage our business toward these revised targets, and we're pleased with the quality and breadth of dialogue we're having without.
Having with Lps.
Speaker 2: While we continue to make good progress in our LP discussions, there is a more pronounced barbell effect across the industry, where the middle period of campaigns has been along.
While we continue to make good progress in our LP discussions there is a more pronounced barbell effect across the industry, where the middle period of campaigns has been elongated.
Speaker 2: Therefore, we expect the remainder of our flagship fundraisers to be weighted toward the end of these processes.
Therefore, we expect the remainder of our flagship fundraisers to be weighted towards the end of these processes.
Speaker 2: As we work toward completing these flagship campaigns, we're also actively engaging with LPs to capitalize the organic growth initiative.
As we work towards completing these flagship campaigns. We're also actively engaging with Lps to capitalize.
Our organic growth initiatives that John described.
Speaker 2: We've made tangible progress and are now actively investing in a number of those strategies. In addition, at the end of the second quarter, we began raising our sixth growth.
We've made tangible progress and are now actively investing in a number of those strategies.
In addition at the end of the second quarter, we began raising our sixth growth fund.
Speaker 2: Looking forward, I want to reiterate the compelling growth we see ahead for
Looking forward I want to reiterate the compelling growth we see ahead for TPG.
Speaker 2: Through the addition of ANZLA Gordon and our various organic growth initiatives, we're entering what we believe will be the next liability of significant growth across our French.
Through the addition of Angelo Gordon and our various organic growth initiatives. We're entering what we what we believe will be the next leg of significant growth across our franchise. We are confident in our ability to generate additional fee, earning assets and build long term shareholder value.
Speaker 2: We're confident in our ability to generate additional fearning assets and build long-term shareholder value. Now I'll turn the call back to the operator.
Now I will turn the call back to the operator to take your questions.
Yes.
Thank you.
Speaker 1: At this time, if you would like to ask a question, please press star one on your telephone keypad.
At this time, if you would like to ask a question. Please press star one on your telephone keypad.
Speaker 1: You may remove yourself from the Q by pressing star Q.
You may remove yourself from the queue by pressing star Q.
Speaker 1: Again, we ask that you please limit yourself to one question.
Again, we ask that you please limit yourself to one question.
Speaker 1: And our first question will come from Ken Worthington with GP Morgan. Your line is open.
And our first question will come from Ken Worthington with Jpmorgan. Your line is open.
Speaker 4: Hi, good morning and thanks for taking the question. I wanted to focus on fundraising, probably not surprising. You talked about the flagship funds needing about $7 billion to get to your newer target last quarter and you sort of talked about that guidance again. I assume that your confidence in reaching these targets is somewhat based on LP verbal commitments that they're making to you.
Hi, good morning, and thanks for taking the question.
I wanted to focus on fund raising probably not surprising.
You talked about the flagship funds needing about $7 billion to get to your newer target last quarter or and you sort of talked about that guidance again I assume that your confidence in reaching these targets is somewhat based on LP verbal commitments that they're making to you.
Speaker 4: Are there consequences for LPs that tell you one thing on fundraising and then deliver something else?
Are there consequences for Lps that tell you one thing on fund raising and then deliver something else and then along the lines of fund raising the ft reported that GPS are offering sweeteners to secure fundraising commitments.
Speaker 4: And then along lines of fundraising, the F.T. reported that GPs are offering sweeteners to secure fundraising commitments, and the F.T. included T.P.G. in its reporting. What are the incentives that you are offering, and what are you seeing in the broader market?
The FTE included TPG and its reporting what are the incentives that you are offering and what are you seeing in the broader marketplace.
Speaker 2: Hey Ken, it's Jack. Let me start there and others can chime in. Thanks for the question. First of all, just to make one minor correction. In last quarter, when I talked about our revised targets, I talked about needing to raise 5 to 6 billion to get to those revised targets. I think you mentioned 6 to 7. And as I mentioned on the call, we do continue to work toward those objectives and expect the remainder of that beyond what we raised in the second quarter here.
Hey, Ken It's Jack let me start there and others can chime in thanks for the question first of all just to make one minor correction in last quarter, when I talked about our revised targets I talked about needing a need to raise $5 to $6 billion to get to those revised targets I think you mentioned, 6% to seven.
And as I mentioned on the call. We do continue to work toward those objectives and expect the remainder of that.
We raised in the second quarter here.
Speaker 2: to be back loaded toward the end of the campaigns. I'm not, you ask if there are consequences to LPs who say one thing and do another. We have 20 to 30 year relationships with a lot of these LPs, and when we are engaged in fundraising discussions with them, we don't generally find that to be the case. So...
To be back loaded towards the end of the campaigns.
Yes, if there are consequences to Lps, who say one thing and do another like we have we have 20 to 30 year relationships with a lot of these Lps.
And when we are engaged in fundraising discussions with them.
We don't generally find that to be the case so.
Speaker 2: And then on the other question around incentives, look, I think everyone in the industry is getting, is finding the largest LPs in the market to be good partners in helping build new businesses. And that comes in lots of different forms. And we believe that that's an attractive way for us to build new businesses like the ones John described. Right.
And then on the other question around incentives look I think everyone in the industry is getting.
Is finding the largest lps in the market to be good partners in helping build new businesses and that comes in lots of different forms and we we believe that that's a that's a that's an attractive way for us to build their businesses like the ones as John described.
Yes.
Great. Thank you.
Thank you.
Speaker 1: Our next question will come from Flynn Shore with Evercore. Your line is open.
Our next question will come from Glenn Schorr with Evercore. Your line is open.
Yeah.
Speaker 5: Hi, thanks very much. This might be a little nitty gritty, but Rise 3 is a little weird. It has a...I know it's early, but it has a...
Hi, Thanks very much.
This might be a little nitty gritty, but.
Rice III.
It was a little weird it has that I know, it's early but it has a.
Speaker 5: one point one time to moa gross but then there was a weird big negative net and i r i'd net i r r what was their fee taken to something turn on or off was their loss in there i'm just curious in that it's just important line
One one times more gross but then there was a weird big negative net NII.
IR or was there a fee taken did something turn on or off was there a loss in there I'm just curious.
That is just too important.
Important line of business.
Okay.
Speaker 2: would Glenn it's it's it's John I'm not sure what you're looking at and maybe
Glen.
It's Sean.
I'm not sure what Youre looking at it.
And maybe.
Okay.
Speaker 5: We can come back to it to Niddy Gray. I'll reserve that one for later and I'll go to another topic. Yeah, we'll follow up with you on that one, because unless you're, no, back then we'll know that. So you're showing a lot of seeds. You laid out a lot of numbers, almost too many for me to write down.
We can come back we can come back to that it's Navy Greg.
I'll I'll allow reserves that one for later I'll go to another topic.
We'll follow up with you on that one because I'm not sure.
No exactly okay.
Okay.
You're selling a lot of seeds you laid out a lot of numbers almost too many for me the write down.
Speaker 5: What is it all add up to in terms of the line of site commitments that you have on the, you know, the combination of the new organic bills and the, you know, fun two, fun three, fun fours that you have in motion? Do you have any metrics, you know, without including Angela Gordon on what we could be looking at of the next 12 to 18 months on that fundraising side?
What does it all add up to in terms of the line of sight commitments that you have on the combination of the new organic builds in.
Fund to funds refund floors that you have in motion do you have any metrics without including Angela Gordon on what we could be looking at over the next 12 to 18 months on that fund raising side.
Speaker 2: You're talking about the new issues in particular, I know he's talking about both. He's trying to get a sense for agri.
Youre talking about the new initiatives in particular, Glenn I know you spoke I'm talking about both you're starting.
Aggregate.
Aggregate, just trying to get a sense for aggregate.
Speaker 2: Well, we obviously announced that we raised one and a half billion in Q2 out of the five to six billion. Start with the flagship funds, right? We talked last quarter about the need to raise five to six billion to get to our relies target.
Well, we obviously, we announced we raised $1 5 billion in Q2 out of the five to 6 billion start with the flagship funds right. We talked last quarter about the need to raise $5 6 billion to get to our revised targets. We just raise call. It one to one and a half of that so leaving $4 to $5 billion. So assuming we're successful.
Speaker 2: We just raised, you know, call it one to one and a half of that. So leaving four to five billion. So assuming we're successful at getting to our flagship fundraising targets by early next year when most of those campaigns are completed, that would be that amount. And then we're launching our growth fund, as I mentioned.
Getting to our flagship fundraising targets by.
Early next year when most of those campaigns are completed that would be that amount and then were largely our growth funds as I mentioned.
Speaker 2: Just launched haven't had a close yet. We're targeting 4 billion for that fund, which is up 10% or so from the prior fund.
Just just launched haven't hadn't closed yet.
We're targeting 4 billion for that fund, which is up 10% or so from the prior fund.
Speaker 2: and then add to that the initiatives John talked about where he mentioned we have line of sight to raising about about 2.6 billion.
And then add to that the initiatives John talked about where he mentioned we have line of sight to raising.
$2 6 billion.
Speaker 2: for those initiatives and that's only a start to some of those initiatives. So we expect further fundraising for those beyond that.
For those initiatives and that's only a start to some of those initiatives. So we expect further fundraising for those beyond that.
Speaker 2: live audio, and also the?t vi come on on on
But without without thinking about Angelo Gordon those are the.
Speaker 2: the primary fundraising levers that I would highlight.
The primary fundraising levers that I would that I would highlight.
Speaker 5: We're going to need to think of. For Ansel Gordon, online of site of Ansel Gordon.
When do you think.
Angelo Gordon on line of sight of Angelo Gordon sorry.
Speaker 2: Yeah, we're going to be disclosing more complete financial information about individual Gordon that matches what we talk about with TPG around the time of closing with a comprehensive information, same with them a lot more to talk about.
Yes, we're gonna be disclosing more.
Financial information about Angelo Gordon that matches, what we talked about TPG.
Around the time of closing with a comprehensive information statement that we'll have more to talk about.
Thank you.
Speaker 1: Our next question will come from Alex Blostin with Goldman Sachs. Your line is open.
Our next question will come from Alex Blaustein with Goldman Sachs. Your line is open.
Speaker 6: Hey, good morning everybody and thanks for taking the question. So you guys talked about a pretty meaningful pickup in deployment pipeline. You started kind of alluded to that last quarter and I think there's more evidence of that. Can you spend a couple of minutes and maybe the composition of that pipeline? What does that look like between take privates versus kind of strategic and sponsor sales?
Hey, good morning, everybody and thanks for taking the question.
So you guys talked about a pretty meaningful pickup in deployment pipeline you started kind of alluded to that last quarter and I think there is more evidence of that can you spend a couple of minutes and maybe the composition of that pipeline. What does that look like between take privates versus kind of strategics and sponsor sales and I guess more importantly, as you sort of settle into our <unk>.
Speaker 6: And I guess more importantly, is you sort of settle into our higher borrowing costs for the industry, have your expectations for sort of perspective returns changed at all, or the purchase multiples you think have adjusted low enough, where you could still generate, call it a, you know, high key into 20% that IRR. Thanks.
Higher borrowing costs for the industry have your expectations for sort of prospective returns changed at all or the purchase multiples do you think of adjusted low enough, where you could still generate call. It high.
High teens to 20% net IRR. Thanks.
Speaker 2: I want you to take that on the cross private equity. Sure, let me add.
Why don't you take that.
Across private equity sure Amit let me add.
Speaker 7: I think thanks for the question. From the composition standpoint, maybe I'll start with, you know, with just a sort of overall look at some of the deals that John walks.
I think thanks for the question.
From a composition standpoint, maybe I'll start with.
With just sort of overall look at some of the deals that John walk through quickly I think we have seen consistent with John sort of industry observation.
Speaker 7: I think we have seen consistent with John's sort of industry observation a significant pick-up.
Significant pickup.
Speaker 7: in corporate dialogues, which in many cases for us has resulted in a number of different carveouts. So, you know, everything from a force point deal.
In corporate dialogues, which in many cases for US has resulted in a number of different carve outs. So.
Everything from our.
Fourth point deal.
Speaker 7: Elite and then several car bouncing connection. I know over which is our TV our Asia platform in consumer health care acquired a really attractive asset
Elite.
And then several carve outs and connection.
I know about which is that our TV, our Asia platform in consumer healthcare <unk>.
Wired a really attractive asset that was also a carve out so we're seeing a lot more activity and again, we've talked about in the past, we think were particularly well positioned for carve outs by virtue of our operating skills, but also sort of the relationships. We've dealt with a number of the strategics that although likely partners. There beyond carve outs. We actually have also seen situations and this I think again as some of the more unique.
Speaker 7: that was also a carve out. So we're seeing a lot more activity. And again, we've talked about in the past, we feel like we're particularly well positioned for carve out by virtue of our operating skills, but also sort of the relationships we've built with and I'm with the strategic set of the likely partners there. Beyond carve outs, we actually have also seen situations. And this I think again is some of the more unique things that TVG does relative to our competitors that look more like corporate partnerships, a very unusual and interesting partnership with.
The TPG does relative to our competitors that look more like corporate partnerships.
Very unusual and interesting partnership with.
Speaker 7: The minister is berging around one oncology as a good example. If you look at our pipeline, we have seen a number of transactions continue to evaluate the number of transactions that fall into both of those buckets.
In the North Bergen around one oncology is a good example, if you look at our pipeline we have seen a number of transactions continue to evaluate a number of transactions that fall into both of those buckets.
Speaker 7: And in the second bucket, feel a little less like clear cell and clear buyer and more like just two parties trying to figure out how to create value.
And the second bucket would feel a little less clear shallow nuclear buyer and more like just two parties trying to figure out how to create value.
Speaker 7: You mentioned take privacy. We have seen a pickup in the take private opportunities as some evaluations have reset. So in software, for example, you know, we've seen some multiples in the lower growth side reset by 20% in the higher growth, even greater percentages.
You mentioned take privates, we have seen a pickup in the take private opportunities.
Some of the valuations have reset so in software for example.
We've seen some multiples in the lower growth side reset by 20% and higher growth, even greater greater percentages.
Speaker 7: And that has opened the door to take private in a way that probably hasn't been as robust and interesting in the last-
And that has opened the door to take privates in a way that probably hasn't been as robust and interesting in the last 345 years. So that that resulted in a new route I'd take private which we recently announced.
Speaker 7: three, four, five years. So that resulted in the new relic take private which we recently announced.
Speaker 7: And I think there are more of those in the pipeline that from my standpoints, always early and never enough till the end, but look pretty interesting and may result in a pretty compelling valuation proposition. So, you know, it's an environment where we feel like the opportunity to deployment is increasing. And the short answer your question of whether we feel like the same returns are available.
And I think that I think there are more of those in the pipeline that from my standpoint. It's always early you never know till the end, but look pretty interesting and May result in a pretty compelling.
Valuation proposition so it's an environment.
<unk>, where we feel like the opportunity of deployment is increasing and the short answer to your question of whether we take the same returns are available is yes.
Speaker 7: I feel like this will... Yeah, I feel like, you know...
I actually like this.
Yeah.
I feel like that.
Speaker 7: We're factoring in, of course, a higher cost of capital on the debt side. That's part of the model. As I said, we've been very conservative in our exit multiple assumptions relative to our entry multiple here for the whole last cycle. Probably a little too early relative to continue strength of the economy. But the net result of that is that we've been investing in very growth-y businesses.
Yes.
We're factoring in of course, the higher cost of capital on the debt side.
That's part of the model.
As I said, we've been very conservative in our exit multiple assumptions relative to our entry multiple here for the whole last cycle, probably a little too too early relative to the continued strength of the economy.
But the net result of that is that we've been investing in very growth businesses secular growing businesses and.
Speaker 7: secular growing businesses and and we continue to feel like the opportunities for strong returns are there and in some cases, you know, we feel like the opportunities are better than they were two to three years ago.
And we continue to feel like the opportunities for strong returns or are there in some cases, we feel like the opportunities are better than they were two or three years ago.
Speaker 2: Yeah, I think Alex also on the real estate's hide as I mentioned there, you know, there are a couple of opportunities that
Yes, I think.
Alex also on the.
On the real estate side as I mentioned, there are a couple of opportunities that.
Speaker 2: We thought we're very attractive that we've taken advantage of and you know, given what's going on in the real estate market where there's meaning of dislocation.
We thought were very attractive that we've taken advantage of and.
Given what's going on in the real estate market, where theres meaningful dislocation.
Speaker 2: Financing obviously has become much more difficult there overall. The nature of our strategy in real estate part equity partners being opportunistic and having obviously a fair amount of dry powder as result of our capital reserves put us in a pre-opportunistic position be able to do some interesting things both with our existing portfolio as well as beyond that
Financing, obviously has become much more difficult there overall.
The nature of our strategy.
In.
In real estate part equity partners.
Being opportunistic and having obviously a fair amount of dry powder as a result of our capital ratio has put us in a pretty opportunistic position to be able to do some interesting things.
Both with our existing portfolio as well as beyond that.
Speaker 2: So I think we very much kind of like that opportunity and clearly there's been an uptick.
So I think we very much kind of like that opportunity and clearly theres been an uptick in the.
Speaker 2: The nature of the dialogue there, where there are in some cases
The nature of the dialogue, there where there are.
In some cases.
Speaker 2: you know, funds or owners of assets that have to do something, you know, based upon, you know, needing to sell certain assets, sell assets that are high quality assets in certain cases because those are the ones they can sell.
Funds or.
Owners of assets that have to do something.
Based upon needing to sell certain assets.
Sell assets that are high quality assets in certain cases, because those are the ones. They can sell so we feel pretty good about that opportunity. That's in front of us there and if you look at I mean.
Speaker 2: So we feel pretty good about that opportunity that's in front of us there. And if you look at, you know, I mean, you obviously follow the banks and follow the M&A activity that's going on in the market. If you look at what's going on in the market, you know, there has been a very substantial uptick in...
You, obviously follow the banks and fall the M&A activity, that's going on in the market. If you look at what's going on in the market. There has been a very substantial uptick in.
Speaker 2: Incorporates optimizing their mix of businesses
In corporates.
Optimizing their mix of businesses and that really is very much in our sweet spot that's been a core part of our investing across the platform now.
Speaker 2: And that really is very much in our sweet spot. That's been a core part of our investing across the platform now.
Speaker 2: whether it's capital, whether it's our growth franchise, whether it's our impact franchise.
Whether it's whether it's capital whether it's our growth franchise, whether it's our impact franchise.
Speaker 2: And so that reach and the nature of that dialogue for us that I think is putting us in a position where we're seeing some interesting things. And it's, you know, it's kind of right.
And so that reach and the nature of that dialogue for US I think is putting us in a position where we're seeing some interesting things.
And it's you know it's kind of right in that.
Speaker 2: kind of writing our power alley in terms of, you know, historically what we've done well.
It's kind of right in our in our power Alley in terms of you know historically, what we've done well.
Speaker 7: But one last comment I forgot to mention just on the second area's front, that platform process has been very busy and you know, and it's...
One last comment as Scott mentioned, just on the secondaries front that platform for us has been very busy and.
Speaker 7: In some ways, the fact that it's been a little harder for the sponsor community to find liquidity has created, I think, even more of an opportunity there. So that platform...
In some ways. The fact that it's been a little harder for the sponsor community to find liquidity has created I think even more of an opportunity there so that platform.
Speaker 7: has been busy in in Europe , it's been busy in the US and the pipeline has picked up pretty significantly if you look over the last six to twelve months.
Has been busy has been busy and in Europe , it's been busy in the U S and the pipeline has picked up pretty significantly if you look over the last six to 12 months. So that's another I think the area that we think will be fruitful in the next few quarters for certain.
Speaker 7: So that's another, I think, area that we think will be fruitful in the, you know, few, next few quarters for certain. So. Fans are leaving.
Great Alright, thank you for all the detail there.
Speaker 7: Yeah, Chelsea, you just hang on one minute. Just back.
Yes.
Jesse.
Hang on one minute.
It's back.
Speaker 2: Back to the question of rise three, you know, for as Jim culture over the many years of the private equity industry We had something called the jaker which tells you that early in a fund you get anomalies in IRRs that don't reflect the ongoing progress in the fund I think today we will name a new phenomenon, which is the on the line anomaly Which essentially as funds are set up to draw capital on the line
Back to the question of Rice III for as Jim culture over the many years of the private equity industry, we had something called the J curve, which tells you that early in a fund you get anomalies and IRR is that don't reflect the ongoing progress in the fund.
Today, we will name a new phenomenon, which is the on the line.
Emily which essentially as funds are set up to draw capital on the line.
Speaker 2: when they draw their first capital call essentially during that period if you annualize the short term effect of that quarter's first draw, taking down expenses and as you put in the ground the first investments.
When they draw their first capital call essentially during that period. If you annualize the short term effect of that quarters first draw taking down expenses and as you put in the ground the first investments.
Speaker 2: The annualization of that brief quarterly moment creates anomalies in the numbers. And that's what happened here as rise three got to its one year anniversary and started to call capital that had previously been called in the line, you get a near term effect, which
<unk> of that brief quarterly moment creates anomalies in the numbers and Thats. What happened here is rise three got to its one year anniversary and it started to call capital that had previously been called on the line you get a near term effect, which.
Speaker 2: will ameliorate over time. So early and fund LPs and GPs now understand that the effect of the line will create swings around the long-term J-Circum phenomenon. Those are not indicative of the progress, which in the fund is quite good.
Hello, ameliorate over time.
Early in and fund Lps and GPS now understand that the effect of the line will create swings around the long term J curve phenomenon those are not indicative of the progress which in the fund is quite good.
Okay, we're ready for the next question.
Speaker 1: All right, our next question will come from Michael Cypress with Morgan Stanley . Your line is open.
Alright, our next question will come from Michael Cyprus with Morgan Stanley . Your line is open.
Speaker 8: Great, thank you, good morning. I want to circle back to some of your commentary on Angela Gordon, I think you mentioned that the opportunity set is larger than anticipated. I was hoping you could elaborate on that. What areas are larger? How you might sort of quantify that? How you came to that view. And then if you could just update us on your latest views around the cost and revenue synergies, how that's evolving. Thank you.
Great. Thank you good morning, I wanted to circle back to some of your commentary on Angelo Gordon I think you mentioned that the opportunity set is larger than anticipated I was hoping you could elaborate on that what areas or larger how you might sort of quantify that how you came to that view and then if you could just update us on your latest views around the cost.
Revenue synergies, how that's evolving thank you.
Speaker 2: Yeah, I guess I'll make a couple of comments then maybe, you know,
Yes, Mike.
I guess I'll I'll make a couple of comments then maybe.
Speaker 2: Well, I'll make a couple comments and then we'll see if anybody else has anything to add to it. But first of all, I think that...
Well I'll make couple of comments and then we'll see if anybody else has anything to add to it but first of all I think that.
Speaker 2: We mentioned this when we obviously announced the deal.
And we mentioned this when we obviously announced the deal.
Speaker 2: but at a simplistic high level, one of the things that we see lots of opportunity in is expanding the capital base within Angela Gordon. They're investing and seeing opportunities, I think, that, um,
At.
Simplistic high level.
One of the things that we see lots of opportunity and is expanding the capital base.
Within Angela Gordon.
They're investing and seeing opportunities I think that.
Speaker 3: can support a meaning-free larger capital base.
Can support.
A meaningfully larger capital base.
And.
Speaker 2: And so when you look at RLP relationships historically, the number of institutional LP relationships we have.
And so when you look at our LP relationships historically, the number of institutional LP relationships we have.
Speaker 2: And if we had, we've talked at the time about having, you know, on our end, we have close to 600 institutional LP relationships. Angela Gordon has 500 institutional LP relationships. We basically overlap in about 100.
We had talked at the time about having on our end we have close to 600 institutional LP relationships Angelo Gordon has 500 institutional LP relationships, we basically overlap in about 100, so the opportunity to.
Speaker 2: So the opportunity to really kind of leverage both of those relationship bases, and in particular, you know, when you look at sort of the size of the LP base that TPG has, and bringing some of that...
Really kind of leverage both of those relationship basis and in particular.
When you look at sort of the size of the LP base that TPG has.
And bringing some of that.
Speaker 2: bringing their product capabilities and some of the strategies into our relationship base. We feel
Bringing their product capabilities and some of the strategies into our relationship base, we feel like.
Speaker 2: There's clearly an opportunity to do that. Number two is the opportunity to extend into channels that our product base has limited us around historically.
There is clearly an opportunity to do that number two is the.
The opportunity to extend into channels that.
That our product base is limited.
Limited us around historically so.
Speaker 2: One of the things we've talked about in the past is obviously the insurance phenomena in our industry. In the past, before...
One of the things we've talked about in the past is obviously the insurance phenomenon in our industry.
In the past.
Before Angelo Gordon, we've had dialogue and interaction with.
Speaker 2: We've had dialogue and some interaction with
Speaker 2: Some of the insurance players in the market, we've been limited from a product capability perspective because of obviously the focus on credit product yield product.
Some of the insurance players in the market, we've been limited from a product.
<unk> ability perspective, because of obviously the focus on credit product yield product.
Speaker 2: And this gives us an opportunity coming together to really have the full product suite in terms of what we need to do to be able to be partner with a number of players in the insurance industry. And pre-closing.
And this gives us an opportunity.
Coming together to really have the full product suite in terms of what we need to do to be able to be to partner with a number of it.
Players in the insurance industry.
And pre closing some.
Speaker 2: Some of that dialogue has already started. We are beginning to work together to develop a strategy there, but also we've had
Some of that dialogue has already started.
We are beginning to work together.
To develop a strategy there, but also we've had.
Speaker 2: a number of proactive reach outs from certain players on the insurance side. And we picked up some of the active dialogues that we have had. So I think we're excited about that prospect in terms of, you know, that being a real opportunity for us to source capital from a channel that we haven't historically sourced it from. And obviously you're well familiar with the nature of those arrangements in, you know, in the alternatives business. That's another, that's another area. A third area would be,
A number of proactive reach outs from certain players on the insurance side.
And we picked up some of the active dialogues that we've had so I think we're excited about that prospect in terms of that being a real opportunity for us to source capital from a channel that we haven't historically sourced it from.
And obviously, you're well familiar.
With the nature of those arrangements in.
In the alternatives business. So that's another that's another area a third area would be.
Speaker 2: the whole kind of mass affluent retail channel, where we feel that
The whole kind of mass affluent retail channel.
Where we feel that the combined brand of.
Speaker 2: combined brand of TPG and Angela Gordon together will be a strong partner in those channels. And I think there are a number of opportunities for us to...
TPG and Angela Gordon together will be a strong partner in those channels.
And I think there are a number of opportunities for us too.
Speaker 2: our partnerships with Channel Partners and also to some extent evolve some of the product capabilities at Angelo Gordon.
Expand.
Our partnerships with.
With the chat with channel partners and.
And also to some extent evolve some of the product capabilities that Angelo Gordon.
Speaker 2: to meet sort of the kind of semi-liquid product.
To meet sort of the.
Kind of semi liquid product.
Speaker 2: in alternatives that has, that has obviously been meaningful to the channel. If you look at the various businesses, there are other interesting opportunities that we see. So, I'll just to quickly tick through them on the direct lending side. If you look at the Twin Brook business that Angela Gordon has built, which is a lower-middle market direct lending franchise, there are clearly opportunities there for us to, number one, expand the capital base. Just, if you look at the origination.
In alternatives that has obviously been.
Been meaningful to the channel.
If you look at the various businesses there are other interesting opportunities that we see so I will just quickly tick through them.
On the direct lending side, if you look at the Twinbrook business that Angela Gordon has built which is a lower middle market direct lending franchise. There are clearly opportunities there for us to number one expand the capital base. Just if you look at the origination from that platform and what they hold versus what they syndicate theirs.
Speaker 2: from that platform and what they hold versus what they syndicate there's a basic opportunity which is
There's a there's a there's a basic opportunity which is holding.
Speaker 2: hold more of what they originate and that's dependent on again growing the capital base. And so that's one of the things that we're focused on and we will be focused on coming out of the box. Secondly, there's this question of
Hold more of what they originate.
And and that's dependent on again growing the capital base and so thats one of the things that we're focused on and we will be focused on coming out of the box.
Secondly, there is this question of at the lower middle market focused lending franchise following their borrowers for longer.
Speaker 2: As a lower middle market focused lending franchise, following their borrowers for longer, you know, many of their borrowers grow over time. They've been very focused on covenant structure and the style of lending.
Many of their borrowers grow over time, they've been very focused on.
Covenant structure and the style of lending.
Speaker 2: and perhaps there's a way for us to grow with some of our borrowers over time as they get larger and as the need, as the borrowing need changes. So those are two examples in twin-rock.
And perhaps there is a way for us to grow with some of our borrowers over time as they get larger and as the need as the borrowing need changes. So those are two examples.
Speaker 2: and credit solutions, which obviously in this market up, in this market environment,
Twinbrook and credit solutions, which obviously in this market and this market environment.
There is a.
Speaker 2: It's a really interesting opportunity now in sort of what I would describe as kind of, you know, middle of to higher up in the capital structure opportunity. With our reaches of firm, with Angela Gordon's reaches of firm, I think that the power of the sourcing franchise in terms of seeing really interesting opportunities is clearly going to grow.
It's a really interesting opportunity now in sort of what I would describe as kind of middle of two higher up in the capital structure opportunity with our reach as a firm with Angelo Gordons reaches a firm I think that the power of the sourcing franchise in terms of seeing really interesting opportunities is clearly going to grow.
Speaker 2: We had an offsite together between our private equity businesses and the credit solutions business.
We had an offsite together between our private equity businesses and the credit solutions business.
Speaker 2: out here on the West Coast a week and a half ago. And we spend time talking about what those opportunities are. And we're very encouraged that there are gonna be some...
Out here on the West Coast, a week and a half ago.
And we spent time talking about what those opportunities are and we're very encouraged that.
We're going to be some really interesting ways of forming capital around what we think is kind of hybrid capital structure type opportunities. So that's another place where we feel like there's going to be some really interesting opportunity.
Speaker 2: really interesting ways of forming capital around what we think is kind of hybrid capital structure type opportunities. So that's...
Speaker 2: another place where we feel like there's going to be some really interesting opportunity. And then, you know, obviously across the real estate franchise is, you know, our real estate businesses focus on different parts of the market. And again, we feel like there are going to be some really interesting opportunities there in conjunction also with what we're building on the real estate credit side.
And then obviously across the real estate franchises, our real estate businesses focus on different parts of the market.
And again, we feel like Theyre going to be some really interesting opportunities. There in conjunction also with what we're building on the real estate credit side.
Speaker 2: Our two firms come at it from a slightly different perspectives. We're, as I mentioned in my prepared remarks, we're raising...
Our two firms come at it from a slightly different perspectives, where as I mentioned in my prepared remarks, we're raising.
Speaker 2: a fund around real estate credit opportunities, what we call Treco.
Fund around real estate credit opportunities, what we call <unk>.
Speaker 2: And we've made good progress there. We are now in the market looking at investments. We're also focused on team build.
And we've made good progress there we are now in the market looking at investments. We're also focused on team build.
Speaker 2: But we have, you know, the cycle of raising these funds is basically, and the cycle of raising these new strategies is...
But we have.
The cycle of raising these funds is basically in the cycle of raising these new strategies as <unk>.
Speaker 2: you know, find partners among our LP bays that want to build these businesses with us, get in the market and invest.
Find partners among our LP base that we want to build these businesses with us get in the market and invest and then that obviously provides us with a different narrative. When we go back to the market to raise additional capital people can see what we're doing and they can see tangible evidence of the strategy. So the connection between real estate equity and real estate credit right now.
Speaker 2: And then that obviously provides us with a different narrative when we go back to the market to raise additional capital. People can see what we're doing and they can see tangible evidence of the strategy. So the connection.
Speaker 2: real estate equity and real estate credit right now in the market is very interesting.
When the market is very interesting given what's going on in the market and we see that from the side of real estate from truck go, particularly as it relates to whole loan opportunities.
Speaker 2: given what's going on in the market. And we see that from the side of real estate, from Treco, particularly as it relates to whole-own opportunities and dislocation in the market there. Angela Gordon is seeing it from the structured credit side, where they're seeing
And dislocation in the market there Angela Gordon is seeing it from the structured credit side.
Where they are they're seeing.
Speaker 2: real opportunities in dislocation in the market, CNBS, and other securitized markets, et cetera. So, and the last thing I guess I would say in structure credit is you probably still on Angela Gordon announced.
Real opportunities and dislocation in the market and see MBS and other securitized markets.
Et cetera, So and then the last thing I guess I would say in structured credit as you probably saw Angelo Gordon announced.
Speaker 2: Raising over a billion dollars in what they call their asset back fund. It
Using over $1 billion in what they call their asset backed funds.
Speaker 2: We call it the ABC Fund. This is a place where I think...
We call it the ABC fund.
This is a place where I think.
Speaker 2: Private credit is just really beginning to come into its own with respect to providing asset-based financing and specialty- the specialty asset-based financing in the market, particularly given what's going on with the regional banks and contraction of availability, liquidity, it's federation, so that's an area that we're pretty excited about as well. So I would say that, you know, kind of is how we- just a quick snapshot of how we see the opportunity.
Private credit is just really beginning to come into its own with respect to providing asset base financing.
Specialty specialty asset based financing in the market, particularly given what's going on with the regional banks and contraction of the availability of liquidity.
Et cetera. So that's an area that we're pretty excited about as well. So I would say that kind of is how we just a quick snapshot of how we see the opportunity.
Great. Thanks for the comprehensive answer.
Thank you.
Speaker 1: Our next question will come from Mike Brown with KBW. Your line is open.
Our next question will come from Michael Brown with <unk> your.
Your line is open.
Speaker 9: Okay, great. Maybe just a narrowing on the investment income line a little bit. So the 15 million of angelic order related costs this core, can just unpack those a little bit and then maybe share some thoughts how we should think about the second half here. And then I guess underneath that, it looks like investment income would have been negative excluding those costs. So can you just...
Okay great.
Maybe just to narrow in on the.
Investment income line, a little bit so the $15 million of Angelo Gordon related costs. This quarter can you just unpack those a little bit and then maybe share some thoughts how we should think about.
The second half here and then I guess underneath that yeah. It looks like investment income would have been negative excluding those costs. So could you just expand on maybe what's the drivers there and how we should think about that excluding those costs for the second half as well.
Speaker 9: drivers there and how we should think about that excluding those costs.
Speaker 10: Sure. Thanks for the question, Mike. First of all, that line, as you point out, is not just the 15 million of angelic order expenses.
Sure.
Thanks for the question, Mike first of all that line as you pointed out is not.
And not just the <unk> 15 million of Angelo Gordon expenses, the $23 million of.
Speaker 10: the $23 million of kind of cost running through that line, include those. They also include another $4 million or so.
Kind of.
Costs running through that line include those they also include another $4 million or so of other non core expenses.
Speaker 2: of other non-correct fences. And there are four million of investment losses running through there largely.
And there are $4 million of investment losses running through there largely.
Speaker 2: tied to a couple of legacy companies from older funds that we wrote off during the quarter.
Tied to a couple of legacy companies from older funds that we wrote off during the quarter.
Speaker 2: On the individual board expenses, most of that is related to due diligence and integration work, you know, things like third party spending on lawyers and consultants. We expect some of that to continue, but it'll come down a fair bit in Q3 and then in Q4, when we close the transaction, we'll pay the advisor fees that will also run through that line, but that line will be tapering off from its current run rate.
On the Angelo Gordon expenses, most of that is related to.
Due diligence and integration work.
Things like third party spending on lawyers and consultants.
We expect some of that to continue but it will come down a fair bit in Q3, and then in Q4 when we when we closed the transaction we will pay the advisor fees that will also run through that line, but that line will be tapering off from its current run rate.
Okay. Thank you.
Thanks.
Speaker 1: Our next question will come from Brian Badell with Georgia Bank. Your line is open.
Thank you.
Our next question will come from Brian Bedell with Deutsche Bank. Your line is open.
Speaker 11: Great, thanks, good morning folks. If it could switch the conversation back to the Impact Platform, to part question.
Great. Thanks, good morning folks.
If I could switch the conversation back to the impact of platform too.
Two part question.
Speaker 11: First on rise climate looks like that's 44% deployed as of now maybe just some commentary around.
First on rise climate it looks like that's 44% deployed as of now maybe just some commentary around.
Speaker 11: how you're seeing the pace of deployment uh... continuing to progress there and at what at what stage uh... deployed would you begin to start uh... uh... talking to lp's about rise climate to
How youre seeing that pace of deployment.
So continuing to progress there in that.
At what stage deployed would you begin to start.
Talking to Lps about rise climate too and then on the climate infrastructure product realize there is more to come there, but should we be thinking of that broadly.
Speaker 11: And then on the climate infrastructure product, we realize there's more to come there. But should we be thinking of that broadly?
Speaker 11: similar to the you know out of your peers with you know fairly large infrastructure funds and rise climate itself being quite large we be thinking of this of the potential size of that fund um... in in that vein so maybe maybe not quite as big as the classic capital funds but um... you know second largest basically
Similar to the you know a lot of your peers with a fairly large infrastructure funds and.
And rise climate itself being quite large should we be thinking of this of the potential size of that fund.
In that vein, so maybe maybe not quite as big as the classic capital funds, but.
Second largest basically.
Speaker 2: First of all, in terms of deployment, I think there's a bit of a on the line effect to in your number of 40%. The actual fund deployment is closer to 60% on a growth basis.
First of all in terms of deployment I think there is a bit of.
On the line affects two in your number 40% the actual fund deployment is closer to 60% on a gross basis.
Speaker 2: and fundraising documents typically allow fundraising for the next generation to start as you get to 75% deployed. So we're approaching a period where it would clearly make sense to launch rise climate to.
And.
Fundraising documents typically allow fund raising for the next generation to start as you get to 75% deployed so we're approaching a period, where it would clearly makes sense too.
Launch.
<unk> climate too.
Speaker 2: And generally that would probably make sense to think about as we begin 2020.
And.
Generally that would probably make sense to think about as we begin 2020.
Speaker 2: for 24 L LA
For for claims for 2024 allocations.
Speaker 2: So your note that it's getting to be that time is exactly right.
So youre.
Note that it's getting to be that time is exactly right and the marketplace remains very robust both in terms of opportunities and in terms of LP interest in this particular part of the market.
Speaker 2: marketplace remains very robust in terms of opportunities and in terms of LP interest in this particular part of the market.
Speaker 2: In terms of the assets portion of the business, you're right that infrastructure opportunities do scale by their nature. They require large capital pools. We are not at a fishing yet to announce targets for either of the funds, but you could imagine that we would want to approach the market together with them from a timing point of view.
In terms of.
The assets portion of the business you are right that infrastructure opportunities to scale by their nature are they require large capital pools.
We are not at a position yet to announce targets for either of the funds.
But you could imagine that we would want to approach the market together with them from a timing point of view.
Speaker 2: And while it takes a while to build a new product, our aspirations here would be in the range you're talking about, where it's fun-sized, it should over time reflect what's happening and privately. Great.
And while it takes a while to build a new product our aspirations here.
Would be in the range Youre talking about where its fund size. It should over time reflect what's happening in private equity.
Great Great that's great color. Thank you.
Thank you.
Speaker 1: Our next question will come from Brian McKenna with JMP Security. Nourlin is open.
Our next question will come from Brian Mckenna with JMP Securities. Your line is open.
Speaker 12: Great. Thanks. So you noted that fundraising for your next growth fund commenced right at quarter-end. And if I look at growth 5, the fund is generated a net IRR of 22%. So given this performance coupled with the macro environment more broadly for fundraising, what's the expectation around the size of this fund? Do you think you can surpass the predecessor fund size, which totaled about three and a half billion dollars? And then how long do you think this fund will be in the money?
Great. Thank so you noted that fundraising for your next growth on commenced right at quarter end and if I look at growth five to fund has generated a net IRR of 22%. So given this performance coupled with the macro environment more broadly for fundraising what's the expectation around the size of this fund do you think you can surpass the predecessor.
Or fund size, which totaled about $3 $5 billion and then how long do you think this one will be in the market for it.
Speaker 10: Yeah, hey, it's Jack. I think I mentioned earlier that we have announced to our LPs a target for that fund of $4 billion. The opportunity set in growth equity investing has gotten much more interesting now and we think there's plenty.
Yeah, Hey, it's Jack again.
I mentioned earlier that we have announced or Lps that target for that fund of $4 billion.
The opportunity set in growth equity investing has gotten much more interesting now and we think theres plenty.
Speaker 2: of interesting investment activity to warrant that kind of fun size and we have confidence that we'll hit that target. We're just starting. We haven't had a first close yet. We launched, as you mentioned, toward the end of the second quarter and I think you should expect that fund to be in the market through 24 and probably into early 25 when you take into account when our first close will take place. Got it. Thank you.
Of interesting investment activity too.
That kind of fund size and we have confidence that we'll hit that target. We're just starting we haven't had a first close yet we launched as you mentioned towards the end of the second quarter.
I think you should expect that fund to be in the market through.
Through 'twenty, four and probably into early 'twenty five when you take into account what our first closing will take place.
Got it thank you.
Thank you.
Speaker 1: Our next question will come from Luke Mason with B&P Parabas. Your line is open.
Our next question will come from Luke Nathan with BNP Paribas. Your line is open.
Speaker 13: Yeah, thanks for taking my question. Just only comments around kind of the exit pipeline. I guess what needs to happen in the markets for that pace of realisation to return, in terms of the pipeline. And then just if I look at your accrual performance fees, a large portion of that, $760 million relates to funds from 2017 and prior. So I'm just wondering, is there a young conversation of LPEA, are they starting to want more capital back from those kind of funds and just timeline around that, please? Thank you.
Yes, thanks for taking my questions.
And your comments around just kind of the exit pipeline I guess, what <unk> in the market for that pace of realizations to return in terms of the pipeline and then just if I look at your accrued performance fees.
A larger portion of the $760 million relates to funds from 2017 and Brian .
So I'm just wondering is that having conversations Lps are they starting to one more capital back from those kind of offense and just.
Timeline around that please thank you.
Speaker 7: Sure, let me start just with the question around the exit pace. I think the first thing to mention the context of Austin particular.
Sure. Let me let me I'll start just with a question around the exit pace I think the first thing to mentioned in the context of <unk>.
<unk> in particular.
Speaker 7: If you looked during the period of sort of 2020-2021, we were significant net sellers. We were selling it at a multiple of the dollars we were deploying and we're deploying, frankly, to pretty healthy pace as well. If you continue to find some interesting.
Is it if you look during the period of 2000 22021, we were significant net sellers, we were selling it at a multiple of the $1. We are deploying and redeploying frankly at a pretty healthy pace as well as we continue to find interesting opportunities and so.
Speaker 7: And so, you know, that was deliberate. It was sort of a view that the multiples were in a very attractive place to sell, you know, on the capital side. We sold every software company in TPG7 and priors as an example. And so that was quite deliberate. We're now in a phase reaction to capricinies and we're interested until we have switched, flipped a bit to Netfire.
That was deliberate.
Have a view that multiples were in a very attractive place to sell.
On the capital side, we sold every software company in TPG seven and prior as an example.
And so so that was that was quite deliberate we're now in a phase where actually opportunities more interesting. So we have switched flipped a bit to net buyer.
Speaker 7: But with that said, and we have younger companies as a result of having told a lot of what was in our portfolios, with that said, we are working on a number of exits. And I think you know, have made some good progress in those dialogues, hopefully more to report in the quarters to come.
But with that said.
And we have younger company as a result of having sold a lot of what of what was in our portfolios with that said we are working on it.
A number of exits.
And I think you have made some some some good progress in those dialogues hopefully more to report in the quarters to come.
Speaker 7: And we're always open to the right moment. We feel like that the...
And we're always open to.
At the right moment, we feel like that the the.
Speaker 7: the growth and transformational efforts that we've put against our companies, we feel like they're starting to bear fruit. That's when we really start to focus on exit.
The growth and transformation.
Efforts that we put against our company as we think they are starting to bear fruit. That's when we really start to focus on exits.
Speaker 7: So it's always a combination of variables, it's most in garlic, both the overall market and the activity level of...
So it's always it's always a combination of variables is most things are in life.
Both the overall market and the.
The activity level.
Speaker 7: You know, it's strategic and in particular. And where we stand in our, in the individual investments in the portfolios in terms of having things that have started to reflect the work that we put against our company.
Strategics.
In particular.
And where we stand in our in the in the individual investments in the portfolios in terms of having things that have started to reflect the work that we put against our companies.
Speaker 7: But again, we have some interesting prospects right now. So we'll continue to selectively find access to even an environment where we're mostly in build mode and then where we're at investors. Yeah, on your question, let me just add a little bit. As Todd mentioned, we were...
But again, we have some interesting prospects right now so so.
We will continue to selectively find exits even in an environment, where we're mostly in build mode, and then where we're net investors.
On your question, Jack just add a little bit as Todd mentioned, we were.
Speaker 2: Much more aggressive than most of our peers in 2021. So that's one of the reasons you see our dry powder is a percentage of FAUM being as high as it is. We did sell a lot back in 2021. That was very intentional. If you focus on our buyout business, that's our 2000.
Much more aggressive than most of our peers in 2021. So that's one of the reasons you see our dry powder as a percentage of AUM being.
Being as high as it is we did sell a lot back in 2021 that was very intentional focus on our buyout business our 2000.
Speaker 2: 15-vintage fund, TPG-7 is about 2X capital returned to investors. So there's definitely a lot of pressure on GPs in the market who have not returned a lot of capital and have a lot of unrealized investments in their fund. And you're seeing, as Jen and John mentioned during the call, some of that play through to our secondary business that we're building to help those GPs realize investments.
15 vintage fund TPG seven is about <unk> capital returned to investors. So there's definitely a lot of pressure on GPS in the market, who have not returned a lot of capital and have a lot of unrealized investments in their fund and you are seeing as I think John mentioned during the call some of that play through to our secondary.
Business that we're building to help those GPS realized investments, we honestly don't feel a lot of that pressure because we are so aggressive at selling back when multiples are higher we've got a younger portfolio than than average in the industry and we're focused on building value in that portfolio.
Speaker 2: We honestly don't feel on a lot of that pressure because we are so aggressive at selling back when multiples were higher. We've got a younger portfolio than average in the industry and we're focused on building value in that portfolio. More so than selling. The market to sell is picking up a little bit. We have several in process, as Todd mentioned, but we don't feel the pressure that you're alluding to.
More so than selling that being said the the market to sell is picking up a little bit we have several in process as Todd mentioned, but we don't feel the pressure that youre alluding to.
Alright, thank you.
Thanks.
Speaker 1: Thank you. This concludes the Q&A portion of today's call. I would now like to turn the call back over to Gary Stein for any additional or closing remarks.
Thank you.
This concludes the Q&A portion of today's call I would now like to turn the call back over to Gary Stein for any additional or closing remarks.
Speaker 14: Great, thanks. Braider and thanks again, everyone, for joining us this morning. If you have any follow-up questions, please feel free to circle back with the IR team. And we'll look forward to speaking.
Great. Thanks, operator, and thanks again, everyone for joining us this morning.
If you have any follow up questions. Please feel free to circle back with the IR team and we'll look forward to speaking to you again next quarter.
Speaker 1: Thank you ladies and gentlemen. This concludes today's TPG's second quarter, 2023 earnings call and webcast.
Thank you ladies and gentlemen, this concludes today's <unk> second quarter 2023 earnings call and webcast.
Speaker 1: You may disconnect your line at this time and have a wonderful day.
You may disconnect. Your line at this time and have a wonderful day.
Speaker 15: And.
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Yes.
Okay.
Okay.
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