Q1 2024 TPG Inc Earnings Call

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Operator: Good morning, and welcome to TPG's first quarter 2024 earnings conference call. Currently, all callers have been placed in a listen-only mode.

Good morning, and welcome to the T. P. G first quarter 'twenty 'twenty four earnings conference call.

Operator: All colors have been placed in a listen only mode and following management's prepared remarks, the call will be opened up for your questions. If you would like to ask a question at that time. Please press star one on your telephone keypad, if you need to remove yourself from the queue Press star two to get to as many questions as time permits. We ask you to please limit yourself to one question.

Operator: After management's prepared remarks, the call will be opened up for your questions. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you need to remove yourself from the queue, press star 2.

Operator: To get to as many questions as time permits, we ask that you please limit yourself to one question. At any time, if you should need operator assistance, press star 0. Please be advised that today's call is being recorded. Please go to TPG's investor relations website to obtain the earnings materials. I'll now turn the call over to Gary Stein, head of investor relations at TPG. Thank you.

Operator: Anytime if you should need operator assistance press star.

Operator: Zero. Please be advised that today's call is being recorded. Please go to T. P. Jeez I our website to obtain the earnings materials and now I'll turn the call over to Gary Stein head of Investor Relations at T. P. T. Thank you you may begin.

Gary Stein: You may begin. Great. Thanks, operator. And welcome, everyone. Joining me this morning are Jon Winkelried, Chief Executive Officer, and Jack Weingart, Chief Financial Officer. In addition, our President, Todd Sisitsky, is also here and will be available for the Q&A portion of this morning's call. I'd like to remind you this call may include forward-looking statements that do not guarantee future events or performance. Please refer to TPG's earnings release and SEC filings for factors that could cause actual results to differ materially from these statements. TPG undertakes no obligation to revise or update any forward-looking statements, except as required by law.

Gary Stein: Great. Thanks, operator, and welcome everyone join.

Gary Stein: Joining me. This morning are John Michael Reed, Chief Executive Officer, and Jack Weingart, Chief Financial Officer. In addition, our President toxicity is also here and will be available for the Q&A portion of this morning's call.

Gary Stein: I'd like to remind you. This call may include forward looking statements do not guarantee future events or performance.

Gary Stein: Please refer to Tpg's earnings release, and SEC filings for factors that could cause actual results to differ materially from these statements.

Gary Stein: TPG undertakes no obligation to revise or update any forward looking statements, except as required by law.

Gary Stein: Within our discussion and earnings release, we're presenting GAAP and non-GAAP measures. We believe certain non-GAAP measures that we discuss on this call are relevant in assessing the financial performance of the business. These non-gap measures are reconciled to the nearest gap figures in TPG's earnings release, which is available on our website. Please note that nothing on this call constitutes an offer to sell or solicitation of an offer of purchase and interest in any TPG fund.

Gary Stein: Within our discussion that earnings release, we're presenting GAAP and non-GAAP measures, we believe certain non-GAAP measures that we discuss on this call are relevant in assessing the financial performance of the business.

Gary Stein: These non-GAAP measures are reconciled to the nearest GAAP figures and TPG is earnings release, which is available on our website.

Gary Stein: Note that nothing on this call constitutes an offer to sell or solicitation of an offer of purchase an interest in any TPG fun.

Gary Stein: Looking briefly at our results for the first quarter, we reported a gap net income attributable to TPG, Inc. of $16 million and after tax distributable earnings of $181 million, or 49 cents per share of Class A common stock. We declared a dividend of 41 cents per share of Class A common stock, which will be paid on June 3rd to holders of record as of May 20th. With that, I'll turn the call over to Jon.

Gary Stein: Looking briefly at our results for the first quarter, we reported GAAP net income attributable to TPG, Inc. A $16 million and after tax distributable earnings of $181 million or 49 per share of class a common stock.

Jon: We declared a dividend of <unk> 41 per share of class a common stock, which will be paid on June 3rd to holders of record as of May 20th with that I'll turn the call over to John.

Jon Winkelried: Thanks, Gary. Good morning, everyone. TPG entered 2024 with significant momentum as a result of the step function change in scale, diversification, and earnings power we experienced last year. This was driven by three primary factors, including our successful fundraisers for existing TPG strategies, with vintage over vintage growth for our funds in TPG Capital, Healthcare Partners, Asia, and RISE. Since going public, we have completed six successor fundraisers in our private equity and real estate strategies and increased fund sizes by 27% on average. I'm pleased with the strong results our teams have achieved, particularly in the face of a difficult fundraising environment.

Jon: Thanks, Gary Good morning, everyone.

Jon Winkelried: Two, our continued ability to innovate and grow organically into new areas, such as GP-led secondaries and real estate credit. And three, most notably, our acquisition of Angela Gordon, where we expanded into credit investing at scale and doubled the size of our real estate platform. To frame the breadth of our transformation, at the end of the first quarter, compared to a year ago, we grew our team over 60% to approximately 1,800 professionals, and our number of strategies increased from 18 to 30.

Jon Winkelried: TPG enter 2024 with significant momentum as a result of the step function change scale diversification and earnings power, we experienced last year.

Jon Winkelried: This was driven by three primary factors.

Jon Winkelried: One our successful fund raises for existing TPG strategies with vintage over vintage growth for our funds from TPG capital.

Jon Winkelried: Health care partners Asia and rise.

Jon Winkelried: Since going public we have completed six successor fund raises in our private equity and real estate strategies and increased fund sizes by 27% on average.

Jon Winkelried: I'm pleased with the strong results our teams to achieve particularly in the face of a difficult fundraising environment.

Jon Winkelried: Two our continued ability to innovate and grow organically into new areas, such as GP led secondaries and real estate credit and three most notably our acquisition of Angelo Gordon, where we expanded into credit investing at scale and doubled the size of our real estate platform.

Jon Winkelried: To frame the breath of our transformation at the end of the first quarter compared to a year ago. We grew our team over 60% to approximately 1800 professionals our number of strategies increased from 18 to 30.

Jon Winkelried: Our fee-paying AUM grew 74% from $79 billion to $137 billion. And importantly, we are now more diversified with scaled platforms across private equity, credit, and real estate. The latter two asset classes currently represent 44% of our total AUM. I'd like to take a moment to highlight our business in Asia, where we are celebrating our 30th anniversary.

Jon Winkelried: Our fee paying AUM grew 74% from 79 billion to 137 billion and importantly, we are now more diversified with scaled platforms across private equity credit and real estate. The latter two asset classes currently represent 44% of our total AUM.

Jon Winkelried: I'd like to take a moment to highlight our business in Asia, where we are celebrating our 30th anniversary.

Jon Winkelried: Since we first started investing in Asia in 1994, we have built a multi-strategy franchise with dedicated buyout, secondaries, and real estate funds. We also actively invest in the region for our global growth and impact funds. And we've been particularly focused on markets such as India, which is one of the fastest growing economies in the world. Over the last five years, more than 40% of the capital we've deployed in Asia has been in India, and we've taken eight portfolio companies public there since late 2021.

Jon Winkelried: Since we first started investing in Asia 1994, we built a multi strategy franchise with dedicated buyout secondaries and real estate funds.

Jon Winkelried: We also actively invest in the region through our global growth and impact bonds, and we've been particularly focused on markets such as India, which is one of the fastest growing economies in the world.

Jon Winkelried: Over the last five years more than 40% of the capital we've deployed in Asia has been in India. We've taken eight portfolio companies public there since late 2021.

Jon Winkelried: In the Asia region, broadly, we currently have over 250 colleagues working across nine cities, and we recently completed several important fundraising campaigns that reflect our momentum and scale. For example, on our private equity platform, we held a final close on TPG Asia 8 last month.

Jon Winkelried: In the Asia region broadly, we currently have over 250 colleagues working across nine cities and we recently completed several important fundraising campaigns that reflect our momentum and scale.

Jon Winkelried: Within our private equity platform, we held the final close for TPG Asia eight last month.

Jon Winkelried: We raised approximately $600 million in the first quarter and over $345 million in early April, bringing the total fund size to approximately $5.3 billion, 14% larger than its predecessor. In addition to the strong results in private equity, we also held final closes for two TPGAG real estate funds, Asia Realty 5 and our first Japan Realty Value Fund. We raised more than $2.5 billion of capital in aggregate, and both funds exceeded their respective fundraising targets.

Jon Winkelried: We raised approximately $600 million in the first quarter in over $345 million in early April bringing the total fund size to approximately $5 3 billion, 14% larger than its predecessor.

Jon Winkelried: In addition to the strong result in private equity. We also held final closes for to TPG AG real estate funds Asia Realty, five and our first Japan real deep value fund.

Jon Winkelried: More than $2 5 billion of capital in aggregate and both funds exceeded their respective fundraising targets.

Jon Winkelried: Looking ahead, we plan to extend our leadership position in Asia with near term plans for further organic growth.

Jon Winkelried: Looking ahead, we plan to extend our leadership position in Asia with near-term plans for further organic growth, while our credit platforms are also experiencing strong momentum. 2024.

Jon Winkelried: Our credit platform is also experiencing strong momentum in 2024, we're raising capital across credit solutions middle market direct lending and structured credit.

Jon Winkelried: We're raising capital across credit solutions, middle market direct lending, and structured credit. Since closing the Angela Gordon Acquisition in November, we've made meaningful progress introducing our respective TPG and AG clients to one another and delivering the combined platform with a particular focus on credit. We raised more than $2 billion in credit in the first quarter and over $800 million since quarter end, driven by closes and middle market direct lending and credit solutions. Notably, through April, we've closed on approximately $1 billion for our third essential housing fund within Credit Solutions. Essential housing was built to address the growing demand from residential home builders for bespoke land financing solutions.

Jon Winkelried: Since closing the Angelo Gordon acquisition in November we've made meaningful progress introducing our respective TPG and <unk> clients to one another and delivering the combined platform with a particular focus on credit.

Jon Winkelried: We raised more than $2 billion in credit in the first quarter and over 800 million since quarter end driven by closes in the middle market direct lending and credit solutions.

Jon Winkelried: Notably through April we've closed on approximately 1 billion for our third essential housing funds within credit solutions Sn.

Jon Winkelried: Our central housing was built to address the growing demand from residential homebuilders for bespoke land financing solutions.

Jon Winkelried: It's a great example of a scalable origination platform we created organically to provide our clients with a differentiated strategy and risk return profile. We've also been making good progress on organic growth initiatives and scaling new businesses. We expect our climate franchise to drive meaningful growth throughout 2024 and 2025 as we build on our market leadership position and impact investing. We are currently in a market with three climate strategies.

Jon Winkelried: Great example of a scalable origination platform, we created organically to provide our clients with a differentiated strategy and risk return profile.

Jon Winkelried: We've also been making good progress on organic growth initiatives and scaling new businesses.

Jon Winkelried: We expect our climate franchise to drive meaningful growth throughout 2024, and 2025 as we build on our market leadership position in impact investing.

Jon Winkelried: We are currently in the market with three climate strategies.

Jon Winkelried: The first is RISE Climate, our dedicated climate private equity strategy, which we launched in early 2021. The enormous capital needs for energy transition, combined with our Focused Investment Strategy and Distinctive Sourcing Capabilities, have generated robust pipelines and highly attractive investment opportunities over the last three years. Our inaugural fund, which is approximately 85% invested and reserved, had value creation of 21% over the last 12 months. We are currently in the market with our second rise climate fund and are seeing strong interest from both existing and new clients ahead of an expected first close in the third quarter. Secondly, we continue to innovate our climate private equity strategy through our recently launched Global South initiative.

Jon Winkelried: The first is rise climate, our dedicated climate private equity strategy, which we launched in early 2021.

Jon Winkelried: The enormous capital needs for energy transition.

Jon Winkelried: With our focused investment strategy and distinctive sourcing capabilities.

Jon Winkelried: We have generated robust pipelines in highly attractive investment opportunities over the last three years.

Jon Winkelried: Our inaugural fund, which is approximately 85% invested in reserve at.

Jon Winkelried: That value creation of 21% over the last 12 months.

Jon Winkelried: We are currently in the market with our second rise climate fund and are seeing strong interest from both existing and new clients had been expected first close in the third quarter.

Jon Winkelried: Secondly, we continue to innovate our climate private equity strategy through our recently launched global South initiatives.

Jon Winkelried: This is a new frontier for us, focused on driving much needed capital to tackle the decarbonization challenge across the global south. We announced an anchor commitment from Altera at the end of last year and expect to raise additional capital this year. And our third strategy is climate infrastructure, which we are building organically within our RISE platform. The Energy Transition will require a complete reconfiguration of global infrastructure, and we are well positioned to become a leading provider of climate-related infrastructure capital.

Jon Winkelried: This is a new frontier for us focused on driving much needed capital to tackle that de carbonization challenge across the global South.

Jon Winkelried: We announced an anchor commitment from Alterra at the end of last year and expect to raise additional capital this year.

Jon Winkelried: And our third strategy is climate infrastructure, which we are building organically within our rise platform the.

Jon Winkelried: The energy transition will require a complete reconfiguration of global infrastructure, and we are well positioned to become a leading provider of climate related infrastructure capital.

Jon Winkelried: We continue to anticipate a successful first close for this strategy later this year. Our largest and most important clients are highly supportive of our efforts in this area, and in the near term, we expect to announce additional strategic initiatives with partners that will continue to help us scale these strategies. We manage $19 billion of AUM across our market-leading impact platform today and expect to grow to more than $35 billion of AUM within two years.

Jon Winkelried: We continue to anticipate a successful first close for this strategy later this year.

Jon Winkelried: Our largest and most important clients are highly supportive of our efforts in climate and in the near term, we expect to announce additional strategic initiatives with partners that will continue to help us scale. These strategies.

Jon Winkelried: We managed $19 billion of AUM across our market, leading impact platform today and expect to grow to more than 35 billion of AUM within two years.

Jon Winkelried: TPG GP Solutions, our inaugural European and North American GP-led secondaries fund, has completed five investments to date, and in every transaction, we're engaging in meaningful bilateral dialogue between TGS and the sponsor to directly negotiate the transaction ahead of a broader syndicatation. Over the last several months, I've met with dozens of our largest clients around the world, and the topic of secondaries, especially GP-led secondaries, has been consistently top of mind, given the liquidity pressures across private equity today.

Jon Winkelried: <unk> solutions are normal European and North American GP led Secondaries fund has.

Jon Winkelried: Has completed five investments to date and in every transaction, we are engaging in meaningful bilateral dialogue between T. G S and the sponsor to directly negotiate the transaction ahead of a broader syndication.

Jon Winkelried: Over the last several months I've met with dozens of our largest clients around the world on the topic of secondaries, especially GP led secondaries has been consistently top of mind, given the liquidity pressures across private equity today we.

Jon Winkelried: We expect to scale this strategy meaningfully over time. Finally, I'd like to highlight our focus on private wealth, where we are expanding our global distribution capabilities and developing products specifically tailored for this channel. We have historically raised $1 to $2 billion of capital annually from the wealth channel, and we're focused on growing that figure by several multiples over the coming years. During 2024, we plan to raise capital for nine products in the wealth channel, including climate, growth, credit solutions, direct lending, and structured credit.

Jon Winkelried: We expect to scale this strategy meaningfully over time.

Jon Winkelried: Finally, I'd like to highlight our focus on private wealth, where we are expanding our global distribution capabilities and developing products specifically tailored for this channel.

Jon Winkelried: We have historically raised $1 billion to $2 billion of capital annually from the wealth channel and we're focused on growing that figure by several multiples over the coming years.

Jon Winkelried: During 2024, we plan to raise capital for nine products in the wealth channel, including climate growth credit solutions direct lending and structured credit.

Jon Winkelried: Looking forward, we plan to further expand our product set through the launch of semi-liquid funds, beginning with private equity. We believe we are well-positioned to offer retail investors differentiated products, given our strong track record, distinct investment style, well-established global brand, and existing relationships with key distribution partners. The addition of TPG Aging Credit, especially TCAP, our non-traded BDC managed by Twinbrook, has accelerated our growing presence in the channel. Turning to deployment, you might recall from our last several earnings calls that we have been accelerating the pace of deployment across our platform, particularly in private equity and real estate, for much of the past year. That trend has continued.

Jon Winkelried: Looking forward, we plan to further expand our product set.

Jon Winkelried: Launch of semi liquid funds, beginning with private equity.

Jon Winkelried: We believe we are well positioned to offer retail investors differentiated products, giving our strong given our strong track record.

Jon Winkelried: Distinct investment style, well established global brand and existing relationships with key distribution partners.

Jon Winkelried: The addition of TPG AG credit, especially T cap or non traded BDC BDC managed by Twinbrook has accelerated our growing presence in the channel.

Jon Winkelried: Turning to deployment.

Jon Winkelried: Might recall from our last several earnings calls that we have been accelerating the pace of deployment across our platform, particularly in private equity and real estate for much of the past year.

Jon Winkelried: That trend has continued.

Jon Winkelried: And in 2023, our deployment pace more than doubled in the second half of the year compared to the first half and has remained strong through the first quarter of 2024. We believe our robust investment activity relative to the broader alternative space has been driven by our distinctive sector-based sourcing approach and patient, targeted strategy of developing our own proprietary opportunities, including corporate carve-outs and structured partnerships. With over 51 billion metric tons of dry powder in an increasingly active market, we are well positioned to capitalize on the differentiated opportunities that our global investment teams are sourcing.

Jon Winkelried: 2023, our deployment pace more than doubled in the second half of the year compared to the first half and has remained strong through the first quarter of 2024.

Jon Winkelried: We believe our robust investment activity relative to the broader alternative space.

Jon Winkelried: It's been driven by our distinctive sector based sourcing approach.

Jon Winkelried: In patient targeted strategy of developing our own proprietary opportunities, including corporate carve outs and structured partnerships.

Jon Winkelried: With over 51 billion of dry powder in an increasingly active market, we are well positioned to capitalize on the differentiated opportunities that our global investment teams are sourcing.

Jon Winkelried: We invested over $6 billion of capital in the first quarter, and I'll highlight some notable recent activity. Starting with our private equity strategies, our funds are on track for a three to four year deployment cycle. We continue to expect structured partnerships and carve outs to be an important source of proprietary deal flow and are also beginning to see more sponsor to sponsor activity. To highlight an interesting example of a corporate partnership, after Quarter End, our Rise and Rise Climate Funds invested in Cyra, a company founded to decarbonize and de-waste the textile industry through recycling at hyperscale, starting with polyester.

Jon Winkelried: We invested over $6 billion of capital in the first quarter and I'll highlight some notable recent activity.

Jon Winkelried: Starting with our private equity strategies, our funds are on track for a three to four year deployment cycle.

Jon Winkelried: We continue to expect structured partnerships and carve outs to be an important source of proprietary deal flow and are also beginning to see more sponsor to sponsor activity.

Jon Winkelried: To highlight an interesting example of a corporate partnership after quarter end, our rise and rise climate funds invested in Syrah company founded to Decarbonize D waste the textile industry through recycling of Hyperscale, starting with polyester we.

Jon Winkelried: We are making this investment together with several key partners, including H&M, which entered into a multi-year offtake agreement for a significant share of their recycled polyester demand in connection with this transaction. Next, our real estate platforms ended the quarter with nearly $15 billion of dry powder on a combined basis, and our diversified capabilities, with dedicated pools of both equity and debt capital, enable us to provide solutions across capital structures globally. Within our equity strategies, the higher for longer rate environment is continuing to create a wide range of investment opportunities that we are pursuing on a very selective basis. Last month, TPG Real Estate completed the acquisition of a large office building in downtown Manhattan that will be converted into an approximately 800-unit multifamily rental property.

Jon Winkelried: We are making this investment together with several key partners, including H and M, which entered into a multi year offtake agreement for a significant share of their recycled polyester demand in connection with this transaction.

Jon Winkelried: Next our real estate platforms ended the quarter with nearly $15 billion of dry powder on a combined basis.

Jon Winkelried: Our diversified capabilities with dedicated pools in both equity and debt capital.

Jon Winkelried: Enable us to provide solutions across capital structures globally.

Jon Winkelried: Within our equity strategies are higher for longer rate environment is continuing to create a wide range of investment opportunities that we're pursuing on a very selective basis.

Jon Winkelried: Last month <unk>.

Jon Winkelried: <unk> real estate completed the acquisition of a large office building in downtown Manhattan.

Jon Winkelried: That will be converted into an approximately 800 unit multifamily rental property.

Jon Winkelried: This was a result of our broader thesis on secular headwinds within the office market and the opportunity to pursue office to residential conversions as multifamily fundamentals in New York City have been historically resilient. Within TPGAG real estate, our net lease business is seeing a significant increase in activity from corporate owner-occupiers looking for sale-leaseback transactions given the cost and challenges within the traditional financing markets.

Jon Winkelried: This was a result of our broader thesis on secular headwinds within the office market and the opportunity to pursue office to residential conversions as multifamily fundamentals in New York City have been historically resilient.

Jon Winkelried: Within TPG AG real estate, our net lease business is seeing a significant increase in activity from corporate owner occupiers looking for sale leaseback transactions.

Jon Winkelried: Given the cost and challenges within the traditional financing markets. Many companies are seeking alternative forms of balance sheet financing.

Jon Winkelried: Many companies are seeking alternative forms of balance sheet finance, and as a result, we are seeing entry cap rates at their 15-year highs. During the first quarter, we entered into three separate sale-leaseback transactions in highly attractive sectors, which are insulated from typical economic cycles. Our real estate credit strategy, TRECO, is purpose-built to leverage our leading real estate platform and capitalize on what we see as the most attractive investing environment in the last two decades to provide capital solutions across the real estate credit market.

Jon Winkelried: As a result, we are seeing entry cap rates at their 15 year highs.

Jon Winkelried: During the first quarter, we entered into three separate sale leaseback transactions and highly attractive sectors, which are insulated from typical economic cycles.

Jon Winkelried: Our real estate credit strategy <unk>.

Jon Winkelried: Is purpose built to leverage our leading real estate platform and capitalize on what we see as the most attractive investing environment in the last two decades to provide capital solutions across our real estate credit market.

Jon Winkelried: We activated our inaugural fund in the first quarter and have already closed three investments which underwrite to mid-teens returns. These first investments are concentrated in the multifamily housing sector and are representative of the opportunities we are seeing as a result of elevated borrowing costs and a reduced lending appetite from banks. Finally, within credit, we deployed over $3 billion across our strategies in the first quarter, during what is normally a seasonally slower quarter. Twinbrook, our lower middle market direct lending business, had its busiest first quarter ever with approximately $1.7 billion of net origination.

Jon Winkelried: We activated our Norbert will fund in the first quarter and have already closed three investments, which underwrite to mid teens returns.

Jon Winkelried: The first investments are concentrated in the multifamily housing sector and a representative of the opportunities. We are seeing as a result of elevated borrowing costs and reduced lending appetite from banks.

Jon Winkelried: Finally within credit we deployed over $3 billion across our strategies in the first quarter.

Jon Winkelried: During what is normally a seasonally slower quarter twin.

Jon Winkelried: Twinbrook, our lower middle market direct lending business had its busiest first quarter ever with approximately $1 7 billion of net originations.

Jon Winkelried: Most of this volume was driven by M&A activity from sponsors seeking liquidity within their portfolios, given the improved valuation environment. The pace of deployment with our asset-based lending and specialty finance strategy remains very strong as clients continue to diversify a portion of their fixed income allocation. Private Structured Credit Opportunity. During the quarter, TPG AG's first asset-based private credit fund, ABC, was launched. Together with Barclays Bank, they announced a new lending partnership with Funding Circle to provide up to 300 million pounds of small loans for businesses in the UK. ABC is already more than 75% deployed.

Jon Winkelried: Most of this volume was driven by M&A activity from sponsors seeking liquidity within their portfolios given the improved valuation environment.

Jon Winkelried: The pace of deployment with our asset based lending and specialty finance strategy remains very strong as clients continue to diversify a portion of their fixed income allocations.

Jon Winkelried: Structured credit opportunities.

Jon Winkelried: During the quarter TPG Ags first asset based private credit fund a b C.

Jon Winkelried: Together with Barclays Bank.

Jon Winkelried: Asked a new lending partnership with funding circle to provide up to 300 million pounds of small loans for businesses in the U K a.

Jon Winkelried: And we are in the market with our new evergreen vehicle and our second ABC fund with anticipated closes in the second half of the year. Our corporate credit strategy, Credit Solutions, continued to rotate its portfolio in response to changing market conditions. In 2022, we took advantage of higher yields and lower dollar prices.

Jon Winkelried: <unk> is already more than 75% deployed and we are in the market with our new evergreen vehicle and our second ADC fund with anticipated closes in the second half of the year.

Jon Winkelried: Our corporate credit strategy credit solutions continue to rotate its portfolio in response to changing market conditions.

Jon Winkelried: In 2022, we took advantage of higher yields and lower dollar prices to deploy capital opportunistically into the public debt markets.

Jon Winkelried: Deploy capital opportunistically into the public debt markets. As spreads have tightened over the last year, recently touching near five-year lows, we've shifted our focus to private opportunities where we control the economic, legal, and structuring terms. Across our Credit Solutions funds, we generated more than $2.5 billion of gross sales over the past 12 months, achieving strong returns, and are recycling the proceeds into bespoke private financing transactions on what we believe are highly attractive terms. TPG AG Credit Solutions is well positioned as one of the few lenders of scale, and our pipeline for deployment is robust as corporate borrowers and sponsors seek sizable, creative, privately structured financing transactions.

Jon Winkelried: As spreads have tightened over the last year recently touching near five year lows, we've shifted our focus to private opportunities, where we control the economic legal and structuring charge.

Jon Winkelried: Across our credit solutions funds, we generated more than $2 5 billion of gross sales over the past 12 months, achieving strong returns and a recycling the proceeds into bespoke private financing transactions on what we believe are highly attractive terms.

Jon Winkelried: TPG AG credit solutions is well positioned as one of the few letters of scale and our pipeline for deployment as robust as corporate borrowers and sponsors seek.

Jon Winkelried: <unk> sizable creative privately structured financing transactions.

Jon Winkelried: Moving to realizations, as we've mentioned before, we aggressively monetized our portfolio during the period of peak valuations a few years ago. Since mid-2022, we've been net buyers given the investment opportunities arising from the market dislocation. But now, as we enter a relatively more stable environment with improving valuations, we are beginning to see selective monetization opportunities. We're cautiously optimistic regarding the outlook for potential realizations as our pipeline gradually builds. In the first quarter, we sold approximately half of Rise Climate's remaining position in Nextracker following its successful IPO just over a year ago. And last month, TPG Growth exited its investment in Onfido, a global leader in identity verification, through a sale to Entrust. Capital Asia closed the sale of SingLife.

Jon Winkelried: Moving to realizations as we've mentioned before we aggressively monetize our portfolio during the period of peak valuations a few years ago.

Jon Winkelried: Since mid 2022, we have been net buyers given the investment opportunities arising from the market dislocation.

Jon Winkelried: But now as we enter a relatively more stable environment with improving valuations, we are beginning to see selective monetization opportunities.

Jon Winkelried: We're cautiously optimistic regarding the outlook for potential realizations as our pipeline gradually builds.

Jon Winkelried: In the first quarter, we sold approximately half rise climates remaining position in next tracker. Following its successful IPO just over a year ago.

Jon Winkelried: And last month TPG growth as you exited its investment in our veto a global leader in identity verification through a sale to entrust.

Jon Winkelried: Capital Asia closed the sale of <unk> life to Sumitomo life during the quarter, bringing to conclusion, a distinctive deal for our Asia franchise, representing the first ever private equity insurance transactions of scale in southeast Asia.

Jon Winkelried: Sumitomo Life during the quarter, bringing to conclusion a distinctive deal for our Asia franchise, representing the first ever private equity insurance transaction of scale in Southeast Asia. And just last week, we successfully took Viking Cruises public in a $1.8 billion offering, the largest US IPO so far this year. We priced near the top end of the initial range and were able to upsize the offering by over 45% from launch due to strong investor demand. The book was multiple times over-subscribed from high-quality blue-chip accounts.

Jon Winkelried: And just last week, we successfully took Viking cruises public and a $1 8 billion offering the largest U S. IPO so far this year.

Jon Winkelried: We priced near the top end of the initial range and were able to upsize the offering by over 45% from launch due to strong investor demand.

Jon Winkelried: The book was multiple times oversubscribed from high quality Blue Chip accounts, we originally invested in Viking in 2016, providing the company with its first institutional equity capital investment.

Jon Winkelried: We originally invested in Viking in 2016, providing the company with its first institutional equity capital investment, and we subsequently leaned in during the height of COVID in 2020 with a significant follow-on preferred investor. This was driven by our confidence in the company's long-term differentiated positioning. And post-pandemic, Viking continues to achieve record booking levels.

Jon Winkelried: We subsequently leaned in during the height of Covid in 2020 with a significant follow on preferred investment.

Jon Winkelried: This was driven by our confidence in the company's long term deferred a differentiated positioning and.

Jon Winkelried: And post pandemic Viking continues to achieve record booking levels were.

Jon Winkelried: We're incredibly proud of the partnership we have built together. Taking a step back, we've successfully executed across a number of growth opportunities, and our platform is substantially more scaled and diversified today. Since our last earnings call, we've hosted advisory committee meetings for six of our strategies, attended by nearly 150 of our LPs, and I've met with some of our largest clients around the world, including a visit to the Middle East a couple of weeks ago.

Jon Winkelried: We're incredibly proud of the partnership we have built together.

Jon Winkelried: Taking a step back we've successfully executed across a number of growth opportunities.

Jon Winkelried: And our platform is substantially more scaled and diversified today.

Jon Winkelried: Since our last earnings call. We hosted Advisory Committee meetings for six of our strategies attended by nearly 150 of our Lps and I've met with some of our largest clients around the world, including a visit to the middle East a couple of weeks ago.

Jon Winkelried: Given the depth of our relationships, the focus of our conversations has evolved from single strategies to engaging in cross-platform solutions and meaningful strategic partnerships. Our largest clients want to do more with us, and we believe we are well positioned as the partner of choice given our track record of delivering strong investment performance and differentiated deal flow. This is one of many clear levers we see to drive continued growth, and we look forward to executing on these opportunities over time. Now, I'll turn it over to Jack to review our financial results. Thanks, Jon.

Jon Winkelried: Given the depth of our relationships the focus of our conversations has evolved from single strategies to engage in a cross platform solutions and meaningful strategic partnerships.

Jack: Our largest clients want to do more with us and we believe we are well positioned as the partner of choice given our track record of delivering strong investment performance and differentiated deal flow.

Jack: This is one of the this is one of many clear levers we see to drive continued growth and we look forward to executing on these opportunities over time.

Jon Winkelried: Now I'll turn it over to Jack to review our financial results.

Jack Charles Weingart: And thank you all for joining us today. We ended the first quarter with $224 billion of total assets under management, up 63% year-over-year. This was driven by $75 billion of acquired AUM from Angela Gordon, $18 billion of capital raised, and $7 billion of value creation, partially offset by $13 billion of realizations over the last 12 months. Fee earning AUM increased 74% year over year to $137 billion, and we ended the quarter with more than $51 billion of dry powder, representing 37% of fee earning AUM. We also had AUM subject to fee earning growth of $25 billion at the end of the quarter, of which $14 billion was not yet earning growth.

Jack: Thanks, John and thank you all for joining US today, we ended the first quarter with 224 billion of total assets under management up 63% year over year.

Jack Charles Weingart: This was driven by 75 billion of acquired AUM from Angelo Gordon $18 billion of capital raised and $7 billion of value creation, partially offset by $13 billion of realizations over the last 12 months.

Jack Charles Weingart: Fee, earning AUM increased 74% year over year to $137 billion, and we ended the quarter with more than $51 billion of dry powder, representing 37% of fee, earning AUM.

Jack Charles Weingart: We also had AUM subject to fee, earning growth of 25 billion at the end of the quarter of which 14 billion was not yet earning fees.

Jack Charles Weingart: Our fee-related revenue in the first quarter was $451 million, up 70% year-over-year, primarily driven by the acquisition of Angela Gordon. It's important to point out, though, that in addition to the growth attributed to AG, TPG on a standalone basis grew fee-related revenue 20% organically year over year. Our Q1 FRR included management fees of $403 million and transaction fees of $34 million.

Jack Charles Weingart: Our fee related revenue in the first quarter was $451 million up 70% year over year.

Jack Charles Weingart: Primarily driven by the acquisition of Angelo Gordon.

Jack Charles Weingart: As important to point out, though that in addition to the growth attributed to AG TPG on a standalone basis grew fee related revenue, 20% organically year over year.

Jack Charles Weingart: Our Q1, <unk> included management fees of $403 million and transaction fees of $34 million.

Jack Charles Weingart: The first quarter is typically seasonally light for new deal closings, but our transaction fees were strong, due in part to a number of opportunistic refinancings for our existing portfolio companies taking advantage of improving credit market conditions. Looking forward, we expect to drive further growth in transaction fees as we expand our capital markets team and integrate our broker dealer capabilities into the TPG AG platform. We reported fee-related earnings of $182 million for the first quarter, up 84% year-over-year, and our FRE margin was 40%.

Jack Charles Weingart: The first quarter is typically seasonally light for new deal closings, but our transaction fees were strong due in part to a number of opportunistic refinancings for our existing portfolio of companies, taking advantage of improving credit market conditions.

Jack Charles Weingart: Looking forward, we expect to drive further growth in transaction fees as we expand our capital markets team and integrate our broker dealer capabilities into the TPG TPG AG platform.

Jack Charles Weingart: We reported fee related earnings of 182 million for the first quarter up 84% year over year.

Jack Charles Weingart: And our FRE margin was 40%.

Jack Charles Weingart: As we noted on our last call, our normalized margin has blended down through the inclusion of TPGAG, and we now have an opportunity to drive profitable growth through margin expansion. However, our FRA margin will fluctuate quarter to quarter due to items such as catch-up fees and transactions. We expect our margin to exceed 40% for the full year in 2024 as we realize operating leverage from the integration and scaling of our business, while also investing in growth initiatives. Moving below FRE, we had $32 million of realized performance allocations in the quarter.

Jack Charles Weingart: As we noted on our last call our normalized margin is blended down through the inclusion of TPG AG and we now have an opportunity to drive profitable growth through margin expansion.

Jack Charles Weingart: Although our FRE margins will fluctuate quarter to quarter due to items, such as catch up fees and transaction fees, we expect our margin to exceed 40% for the full year 2024, as we realize operating leverage from the integration and scaling of our businesses, while also investing in growth initiatives.

Jack Charles Weingart: Moving below FRE, we had 32 million of realized performance allocations in the quarter.

Jack Charles Weingart: While we've been net buyers over the last couple of years, we are gradually building our realization pipeline as the exit environment improves. As Jon mentioned, just last week... Our portfolio company Viking Cruises executed a highly successful IPO, the largest US IPO so far this year. This is the largest remaining position in TPG7, a 2015 vintage fund, and we sold approximately $675 million of equity in the offer. We continue to differentiate ourselves with our fund investors through our consistent return of capital.

Jack Charles Weingart: While we have been net buyers over the last couple of years, we are gradually building our realization pipeline.

Jack Charles Weingart: As the exit environment improves as John mentioned, just last week, our portfolio company Viking cruises executed a highly successful IPO of <unk>.

Jack Charles Weingart: Largest U S ipos so far this year.

Jack Charles Weingart: This is the largest remaining position in TPG seven 2015 vintage fund and we sold approximately $675 million of equity in the offering.

Jack Charles Weingart: We continue to differentiate ourselves with our fund investors through our consistent return of capital.

Jack Charles Weingart: While TPG7 is a strong promote-paying fund, this particular monetization will not generate any promotion due to the fund waterfall mechanic. We currently expect PRE to begin picking up in the back half of this year. Our realized investment income and other line items in the first quarter included $8 million of non-core expenses related to the acquisition and ongoing integration of Angelo Gordon, a step down from $18 million last quarter. We expect to incur a similar level of quarterly non-core expenses through the end of this year, primarily focused on IT investments to integrate our operating platform. After-tax Distributive Earnings for the first quarter totaled $181 million, or $0.49 per share of Class A common stock.

Jack Charles Weingart: While at TPG seven is a strong promote pain fund. This particular monetization will not generate promote due to the fund waterfall mechanics. We currently expect PRA to begin picking up in the back half of this year.

Jack Charles Weingart: Our realized investment income and other line item in the first quarter included $8 million of noncore expenses related to the acquisition and ongoing integration of Angelo Gordon stepped down from $18 million last quarter, we expect to incur a similar level of quarterly non core expenses through the end of this year.

Jack Charles Weingart: Primarily focused on investments to integrate our operating platforms.

Jack Charles Weingart: After tax distributable earnings for the first quarter totaled $181 million or <unk> 49 per share of class a common stock.

Jack Charles Weingart: Our effective corporate tax rate was lower than usual in the quarter due to the tax benefits of the first annual vesting in January of our Ad IPO and Ordinary Service RSU. We expect this will be a recurring seasonal factor in the first quarter of each year going forward. Turning to our Gap Balance Sheet, during the quarter, we issued long-term bonds for the first time, benefiting from the strong investment grade credit ratings we obtained in connection with our IPO.

Jack Charles Weingart: Our effective corporate tax rate was lower than usual in the quarter due to the tax benefits of the first annual vesting in January of our at IPO and ordinary service or issues.

Jack Charles Weingart: We expect this will be a recurring seasonal factor in the first quarter of each year going forward.

Jack Charles Weingart: Turning to our GAAP balance sheet during the quarter, we issued long term bonds for the first time benefiting from the strong investment grade credit ratings, we obtained in connection with our IPO, we raised $1 billion through through the highly successful issuance of 10 year senior notes and 40 year subordinated notes we.

Jack Charles Weingart: We raised a billion dollars through the highly successful issuance of 10-year senior notes and 40-year subordinated notes. We used the proceeds to fully repay our revolver, which we had drawn in the fourth quarter in connection with the AG transaction, to fully repay our term loan, and to replenish additional cash on our balance sheet. Following these transactions, our balance sheet remains conservatively capitalized with moderate leverage and ample liquidity. We ended the first quarter with more than $290 million of cash and cash equivalents and $1.2 billion of undrawn capacity on our revolvers, providing us with significant flexibility to continue investing in growth. Our net accrued performance balance at the end of the first quarter was $915 million, compared to $891 million in the fourth quarter.

Jack Charles Weingart: We used the proceeds to fully repay our revolver, which we had drawn in the fourth quarter in connection with the HG transaction.

Jack Charles Weingart: To fully repay our term loan and to replenish additional cash on our balance sheet.

Jack Charles Weingart: Following these transactions our balance sheet remains conservatively capitalized with moderate leverage and ample liquidity. We ended the first quarter with more than $290 million of cash and cash equivalents and $1 2 billion of undrawn capacity on our revolver.

Jack Charles Weingart: Providing us with significant flexibility to continue to continue investing in growth.

Jack Charles Weingart: Our net accrued performance balance at the end of the first quarter was $915 million compared to 891 million in the fourth quarter.

Jack Charles Weingart: This 3% increase was driven by $56 million of value creation in our investment, partially offset by $32 million of unrealized gain. At the end of the first quarter, our performance eligible AUM totaled $193 billion, or 86% of our total AUM, of which $153 billion is currently generating performance fees. Our investment portfolios continue to perform well. We generated positive value creation across all of our platforms for the first quarter and last 12 months.

Jack Charles Weingart: This 3% increase was driven by $56 million of value creation in our investments, partially offset by the $32 million unrealized gains.

Jack Charles Weingart: At the end of the first quarter, our performance eligible AUM totaled 193 billion or 86% of our total AUM.

Jack Charles Weingart: Of which 153 billion is currently generating performance fees.

Jack Charles Weingart: Our investment portfolio has continued to perform well we generated positive value creation across all of our platforms for the first quarter and last 12 months.

Jack Charles Weingart: Our private equity portfolio, which includes capital growth and impact platforms, appreciated approximately 2% in the first quarter and 7% over the last 12 months. In aggregate, our portfolio grew revenue by 19% over the last 12 months, and margins have remained stable. Our credit portfolio appreciated 3% in the quarter and 15% over the last 12 months. This performance was consistent across our credit strategies and was driven by continued strong credit selection and a low annualized loss ratio.

Jack Charles Weingart: Our private equity portfolio, which includes capital growth and impact platforms appreciated approximately 2% in the first quarter and 7% over the last 12 months in aggregate our portfolio grew revenue by 19% over the last 12 months and margins have remained stable.

Jack Charles Weingart: Our credit portfolio appreciated, 3% in the quarter and 15% over the last 12 months. This.

Jack Charles Weingart: This performance was consistent across our credit strategies.

Jack Charles Weingart: It was driven by continued strong credit selection and low annualized loss ratios.

Jack Charles Weingart: TPG's real estate portfolio appreciated approximately 4% in the first quarter and 1% over the last 12 months, and TPG AG's real estate portfolio appreciated 40 basis points in the first quarter and 1% over the last 12 months. This positive value creation in a challenging commercial real estate market is attributable to the quality of our portfolio construction in our core thematic areas. These defensive sectors, such as light industrial and student housing, continue to see strong secular demand growth, limited supply, and rental rate improvements. Turning to fundraising, we raised $4.7 billion during the quarter.

Jack Charles Weingart: TPG real estate portfolio appreciated approximately 4% in the first quarter and 1% over the last 12 months and TPG a G. As real estate portfolio appreciated 40 basis points in the first quarter and 1% over the last 12 months this positive value creation and a challenging commercial real estate market.

Jack Charles Weingart: <unk> to the quality of our portfolio construction in our core thematic areas. These defensive sectors, such as light industrial and student housing continue to see strong secular demand growth limited supply and rental rate improvements.

Jack Charles Weingart: Approximately $2.1 billion of this capital was raised across TPG AG credit, with nearly a billion in credit solutions and approximately $600 million in middle market direct lending. In addition, our private equity strategies raised $1.8 billion with incremental closings across Asia 8 and the growth sector. Looking forward, consistent with our prior guidance on fundraising, we continue to expect total private equity and infrastructure capital raised in 2024 to grow compared to 2023, driven by the fundraisers for growth and rising climate, as well as the launch of our climate infrastructure strategy.

Jack Charles Weingart: Turning to fundraising we raised $4 7 billion during the quarter approximately $2 1 billion of this capital was raised across TPG AG credit with nearly $1 billion in credit solutions at approximately approximately $600 million in middle market direct lending.

Jack Charles Weingart: In addition, our private equity strategies raised $1 8 billion with incremental closings across Asia, eight and growth six.

Jack Charles Weingart: Looking forward consistent with our prior guidance on fundraising we continue to expect total private equity and infrastructure capital raised in 2024 to grow compared to 2023.

Jack Charles Weingart: Driven by the fund raises for growth and rise climate as well as the launch of our climate infrastructure strategy.

Jack Charles Weingart: More than 200 LPs in our growth, rise, and rise climate funds are actually here with us in San Francisco today and tomorrow for their respective annual meetings, providing us with a great opportunity to connect in person and discuss our strategies in depth. Notably, Fundraising for our second rise climate fund, which is our largest active campaign, is off to a very strong start with high levels of investor interest and engagement. We expect a substantial re-up rate among our current clients, as well as new strategic partnerships, driving us toward a sizable first close in the third quarter. Additionally, in 2024, we expect fundraising for TPGAG credit to exceed $10 billion, more than doubling the capital raised by the platform last year.

Jack Charles Weingart: More than 200 Lps that are growth rise and rise climate funds are actually here with us in San Francisco today, and tomorrow for their respective annual meetings, providing us with a great opportunity to connect in person and discuss our strategies in depth.

Jack Charles Weingart: Notably.

Jack Charles Weingart: Fundraising for our second rise climate fund, which is our largest active campaign is off to a very strong start with high levels of investor interest and engagement, we expect a substantial re up rate among our current clients as well as new strategic partnerships driving us toward a sizable first close in the <unk>.

Jack Charles Weingart: Third quarter.

Jack Charles Weingart: Additionally, in 2024, we expect fundraising for TPG AG credit to exceed $10 billion.

Jack Charles Weingart: More than doubling the capital raised by the platform last year.

Operator: As Jon mentioned, we're seeing strong interest from some of our largest LPs in engaging with us about our credit strategies, and we're excited to share more with you in the coming quarter. The Wrap-Up, We have significant growth opportunities ahead of us across all of our businesses. Our existing portfolio continues to deliver strong performance, and we're well positioned with substantial dry powder to deploy into an increasingly active market. We've been successfully scaling our existing businesses and investing in a number of growth initiatives that will contribute meaningfully to our business and build shareholder value over time.

Jack Charles Weingart: As John mentioned, we're seeing strong interest from some of our largest Lps and engaging with us about our credit strategies and we're excited to share more with you in the coming quarters.

Speaker Change: To wrap up.

Operator: Significant growth opportunity ahead of us across all of our businesses.

Operator: Our existing portfolio continues to deliver strong performance and we're well positioned with substantial dry powder to deploy into an increasing increasingly active market.

Operator: We've been successfully scaling our existing businesses and investing into a number of growth initiatives that will contribute meaningfully to our business and build shareholder value over time.

Operator: Now I'll turn the call back to the operator to take your questions. Thank you, sir. At this time, if you wish to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2.

Speaker Change: Now I will turn the call back to the operator to take your questions.

Speaker Change: Thank you Sir at this time, if you wish to ask a question. Please press star one on your telephone keypad, you may remove yourself from acute my pricing start to again, please limit yourself to one question you can rejoin the queue. If you have additional questions.

Operator: Again, please limit yourself to one question. You can rejoin the queue if you have additional questions. We'll take our first question from Craig Siegenthaler, from Bank of America. Good morning, John, Jack. Hope everyone's doing well.

Operator: We'll take our first question from Craig Siegenthaler.

Craig William Siegenthaler: With bank of America.

Craig William Siegenthaler: Good morning, John Jack Hope everyone's doing well.

Craig William Siegenthaler: Hey, Greg.

Craig William Siegenthaler: So our question is a big picture one on the investing side of the businesses, and we're focusing on the three large legacy TPG businesses, capital, impact, and growth. So if you strip out Angela Gordon, the contribution was 55% of deployments. However, investing activity was somewhat muted in the capital business.

Craig William Siegenthaler: So our question is a big picture one on the investing side of the businesses and we're focusing on the three large legacy PPG business as capital impacting growth. So if you strip out Angela Gordon the contribution was 55% of deployments.

Craig William Siegenthaler: Investing activity was somewhat muted in the capital business. So.

Unknown Executive: So how are your investment pipelines tracking in the legacy TPG businesses? Are you expecting a significant ramp-up in capital and growth deployments later this year? And, you know, we track a lot of the activity. I think Classic Collisions and Olympus Terminals were the only recent announcements that could close in 2Q.

Craig William Siegenthaler: How are your investment pipeline tracking and the legacy PPG business says.

Unknown Executive: Are you expecting a significant ramp in <unk>.

Unknown Executive: Capital and growth deployments later this year and we track a lot of the activity I think classic collisions.

Unknown Executive: And Olympus terminals, where the only recent announcements that could close in Tokyo, I think Olympus was an impact investment talent.

Speaker Change: Thanks, Brian I'm really I'm going to let Todd start on that yes.

Speaker Change: Yes, I'll start.

Speaker Change: Great. Thanks, Thanks for the question.

Unknown Executive: I think Olympus was an impact investment too. I don't want to repeat too much of what Jon said, but just from a framing standpoint relative to the legacy businesses, we actually have felt very good about the deployment pace and, probably, the forward indicator, the pipeline over the past almost a year now. I think we were earlier than some in terms of saying that we're seeing a significant pickup. And as Jon mentioned, our legacy TPG deployment pace sort of more than doubled in the second half of 2023 versus the first half of 2023.

Unknown Executive: I don't want to repeat too much of a Johnson said, but just from a from a framing standpoint relative to the legacy businesses. We actually felt very good about the deployment pace and probably as a forward indicator the pipeline over the past.

Unknown Executive: Almost a year now I think we were earlier than some in terms of saying that we're seeing a significant pick up in <unk>.

Unknown Executive: John had mentioned our legacy TPG deployment pace sort of more than doubled in the second half of 'twenty three.

Unknown Executive: Versus the first half of 'twenty three.

Unknown Executive: When I, you know, when I look at the pipelines across our businesses, particularly in the legacy side, I continue to feel like the deployment pace is going to be strong, you know, going forward. From a qualitative standpoint, I think there are two reasons for that. There are two drivers.

Unknown Executive: When I look at the pipelines.

Unknown Executive: Across our businesses, particularly in legacy side I continue to feel like they are.

Unknown Executive: Deployment pace, it's going to be strong going forward.

Unknown Executive: From a qualitative standpoint, I think there are two reasons for that.

Unknown Executive: One is more the macro, where, you know, in private equity, you see bid-ask spreads narrowing, there's, I think, more of a need for creative capital solutions that applies certainly to PE. Credit Solutions, and TTAD and other businesses, you know, need for liquidity and recapitalizations in real estate and elsewhere. I also feel like the stuff, the second driver is more related to our particular push for private equity, which is that our pipelines and our portfolios have a large number of often proprietary carve-outs, structured relationships with strategics that's really across growth, capital, Asia, real estate, and that side of the business is a little less cyclical, I think, than maybe the first side of the business, which is why I think we saw the pace increase as much as we did.

Unknown Executive: There are.

Unknown Executive: Two drivers one is more of a macro where private equity you see bid ask spreads narrowing theres I think more of a need for creative capital solutions that applies certainly the p/e.

Unknown Executive: Credit solutions.

Unknown Executive: And T Tad and other businesses.

Unknown Executive: Need for liquidity and recapitalization and real estate and elsewhere I also feel like the stuff. The second driver is more related to our to our particular pushed private equity which is that our pipelines in our portfolios have a large number of often proprietary carve outs structured relationships.

Unknown Executive: With strategics, that's really across growth capital Asia.

Unknown Executive: Real estate and that side of the business has been a little less cyclical I think than the than the <unk>.

Unknown Executive: Maybe the first side of the business, which is why I think we saw the pace of increase as much as we did.

Unknown Executive: On your specific comment about TPG Capital, you know, that's our largest pool of capital as a firm, and, you know, we just finished fundraising for TPG9 and TPG Healthcare Partners, too. In TPG9, we're, you know, we're about 50% invested and signed, and so very much on pace for the three-to-four-year investment period that we think is prudent and the one that we have articulated to our You mentioned Classic Collision, which was announced; we did close G&A Partners, so, you know, a steady pace, you know, on that side.

Unknown Executive: On your on your specific comment about TPG capital, that's our largest pool of capital.

Unknown Executive: As a firm and.

Unknown Executive: We just finished fundraising for <unk> and TPG health care partners too and then TPG nine where we're about 50% invested and sign.

Unknown Executive: And so very much on pace with <unk> for the three to four year.

Unknown Executive: Investment period that we think is prudent and the one that we have articulated to our to our Lps you mentioned classic collision, which was announced we did close.

Unknown Executive: G&A partners.

Unknown Executive: So steady pace.

Unknown Executive: On that side on GP solutions, which again this is John highlighted that's been we just had a pricing call investment Committee call.

Unknown Executive: On GP Solutions, which is the other business John highlighted, you know, that's been, we just had a pricing call and an investment committee call earlier this morning before I got on this call. We, you know, we closed Yellow Hive in April, so subsequent to the end of the quarter.

Unknown Executive: Earlier this morning before I got on this call.

Unknown Executive: We closed yellow hive.

Unknown Executive: <unk>.

Unknown Executive: So subsequent to the end of the quarter.

Unknown Executive: TPG Growth, we had two deals that closed in the quarter, one in March and one in January, Compass Surgical Partners and Ciari Labs, a deal on TTAD at Easy Cater. So I think that the overall picture for us on the legacy businesses has been strong. Transcripts provided by Transcription Outsourcing, LLC.

Unknown Executive: TPG growth.

Unknown Executive: Had two deals that closed in the quarter when in March one in January.

Unknown Executive: Surgical partners since they already labs.

Unknown Executive: I deal on tea CAD at easy cater so.

Unknown Executive: I think that the overall picture for us on the legacy business has been strong.

Unknown Executive: Pace and in a sense of.

Unknown Executive: I have not only a strong pipeline, but a differentiated pipeline. So we've been excited about the investments we've been able to execute on and I think the broader market is coming back as well.

Unknown Executive: But we felt it steady pace through the first part of the year.

Jon Winkelried: Craig, the only thing I would add and then we can move on is that just having come back from two days at Milken and seeing a lot of our LPs, a lot of clients, to Todd's point, we feel like our pipeline, just deal flow around our firm is generally really strong. I think that one of the interesting questions going on in the market right now is the importance of selectivity, and I think we're very focused on this, and we definitely see an uptick in terms of overall deal flow.

Speaker Change: Craig the only thing I would add and then we can move on is that just having come back.

Jon Winkelried: From two days down it at milk and seeing a lot of our Lps a lot of clients.

Jon Winkelried: To touch point, we feel we feel like our pipeline just deal flow around our firm is generally really strong I think that.

Jon Winkelried: One of the interesting I think questions going on in the market right now is the importance of and and I think we're very focused on this as the importance of selectivity.

Jon Winkelried: And we definitely see an uptick in terms of overall.

Jon Winkelried: Kind of deal.

Jon Winkelried: I think the questions also relate to pricing in a number of cases as well because, you know, with financing having gotten much more fluid and available, you know, and we're, you know, we're, relative to last year, I think we see an increase in sponsors, sponsor to sponsor level activity, given the pressures on sponsors to try to return capital, and I think also, as Todd said, we felt we were a little earlier in terms of some We liked the prices a lot, and we liked our deal flow a lot.

Jon Winkelried: Slow I think the questions also relate to pricing in a number of cases as well because with financing haven't gotten much more.

Jon Winkelried: Fluid and available.

Jon Winkelried: And where we are.

Jon Winkelried: Relative to last year.

Jon Winkelried: I think we've seen an increase in sponsors sponsor to sponsor level activity given the pressures on sponsors to try to return capital.

Jon Winkelried: And I think also.

Jon Winkelried: Again as Todd said, we felt we were a little earlier in terms of some deal.

Jon Winkelried: Activity in the third and fourth quarters of last year.

Jon Winkelried: We liked the prices a lot and we liked.

Jon Winkelried: Our deal flow a lot I think that we're now seeing signs of in some cases, what look like people sort of jumping over one another a little bit in terms of pricing and valuation. So I think theres. Some theres. Some I think just continuing to keep our eyes on being selective and being focused on performance.

Jon Winkelried: I think that we're now seeing signs of, in some cases, what look like people sort of jumping over one another a little bit in terms of pricing and valuation. So I think just continuing to keep our eyes on being selective and being focused on performance is something that's front and center for us. Our next question comes from Ken Worthington with JP Morgan. Hi, good morning, and thanks for taking the question.

Kenneth Brooks Worthington: It's something that's front and center for Us.

Jon Winkelried: Our next question comes from Ken Worthington with JP Morgan.

Kenneth Brooks Worthington: I was hoping to get more color on your prepared remarks on the integration of Angelo Gordon. You mentioned cross-marketing is well underway. What sort of reception are you getting given you have a number of Angelo Gordon funds in the market this year? And as you think bigger picture about Angelo Gordon and next steps for growth? What are the priorities over the next 12 months and then over the next three years as you build out the business? Um, good morning.

Kenneth Brooks Worthington: Hi, good morning, and thanks for taking the question.

Speaker Change: I was hoping to get more color on.

Kenneth Brooks Worthington: On your prepared remarks on the integration of Angelo Gordon You mentioned cross marketing is well underway what sort of reception are you getting given you have a number of Angelo Gordon funds in market. This year and as you think bigger picture about Angela Gordon and next steps for growth what are the.

Kenneth Brooks Worthington: The priority is say over the next 12 months and then over the next three years as you build out the business.

Jon Winkelried: Good question. I think that if you were a fly on the wall inside of this organization, you wouldn't be able to miss the level of focus and intensity around the engagement between TPGAG. And, you know, as I say that, too, I just think that, you know, the other sort of the other dynamic that I guess I would point to is that, you know, the integration of our two firms has gone extremely well.

Speaker Change: Good morning.

Jon Winkelried: Good question I mean, I think that if you.

Jon Winkelried: We're a fly on the wall inside this organization.

Jon Winkelried: You wouldn't be able to mess.

Jon Winkelried: The level of focus and intensity.

Jon Winkelried: Around.

Jon Winkelried: The engagement between.

Jon Winkelried: Kind of TPG AG and.

Jon Winkelried: As I say that to I, just think that the other the other sort of.

Jon Winkelried:

Jon Winkelried: The other the other dynamic that I guess I would I would point to is that.

Jon Winkelried: And again, every day, I think we, you know, we don't think of ourselves as two firms; we think of ourselves as one firm. And we've spent a lot of time using resources across both organizations to systematically deploy capital into our LP basis. And so all of us that, you know, do this routinely in terms of meeting with our most significant relationships around the world, are organizing and deploying together to make sure that it's clear that we are one firm now and that the strategies that are represented under what was the AG umbrella are core parts of our strategy here as a firm.

Jon Winkelried: The integration of our two firms had.

Jon Winkelried: As gone extremely well and again every day I think we we don't think of ourselves as two firms, we think of ourselves as one firm and we've spent a lot of time.

Jon Winkelried: Using resources across both organizations to sit.

Jon Winkelried: Systematically deploy into our L P basis.

Jon Winkelried: So all of us that do this do this.

Jon Winkelried: Very very routinely in terms of meeting with our most significant relationships.

Jon Winkelried: Around the world.

Jon Winkelried: R.

Jon Winkelried: Organizing and deploying together.

Jon Winkelried: To make sure that it's clear that.

Jon Winkelried: We're one firm now and that the strategies that are represented under the what was the AG umbrella.

Jon Winkelried: So, you know, if you had been with me on my trip to the Middle East two weeks ago, you wouldn't have been able to differentiate between me talking about our private equity strategies or our real estate strategies or our credit strategies.

Jon Winkelried: Our core parts of our strategy here as a firm.

Jon Winkelried: So if you were with me on my trip to the Middle East two weeks ago.

Jon Winkelried: You wouldn't be able to differentiate between.

Jon Winkelried: Me talking about our private equity strategies, where our real estate strategies or our credit strategies in other words, it's a core part of what we're talking about.

Jon Winkelried: You know, in other words, it's a core part of what we're talking about. And I think that as we do that, you know, we're also having, you know, many, many meetings and discussions, like down at Milken over the last two days. You know, most of our meetings were some combination of our private equity team and our credit teams together. Because one of the things that we feel is a differentiated part of our business now, our model is that we have the ability, just like we've always collaborated between our strategies here at the firm, we have the ability to collaborate now between our PE and our credit businesses in terms of sourcing opportunities, valuing opportunities, and creating sort of value-add solutions that create really interesting investing opportunities.

Jon Winkelried: And.

Jon Winkelried: I think that as we do that we're also having many many meetings and discussions like down at Delek milk. It over the last two days.

Jon Winkelried:

Jon Winkelried: Most of our meetings, where some combination of our private equity team.

Jon Winkelried: And our credit teams together.

Jon Winkelried: Because one of the things that we feel is a differentiated.

Jon Winkelried: Part of our business now in our model is that we have the ability just like we've always collaborated between our strategies here at the firm we have the ability to collaborate now.

Jon Winkelried: Between our <unk> and our credit businesses in terms of sourcing opportunities valuing opportunities.

Jon Winkelried: And creating sort of value add.

Jon Winkelried: Solutions.

Jon Winkelried: That debt.

Jon Winkelried: The thing that you're hearing around the world right now when you talk to institutional investors is this concept of solutions capital, which is becoming more and more prominent because of interest rates being higher for longer, because of valuation dislocation, because of the pressure on sponsors to work to return capital. There's more and more focus on how large institutional LPs use their capital to partner with us to create really interesting investment opportunities and return opportunities.

Jon Winkelried: Really interesting investing opportunities the thing that you're hearing around the world right now when you talk to Lps.

Jon Winkelried: Is this concept of solutions capital is becoming more and more prominent because of interest rates being higher for longer because of valuation dislocation.

Jon Winkelried: Because of the pressure on sponsors to work to return capital.

Jon Winkelried: There's more and more focus on how to large institutional Lps use their capital to.

Jon Winkelried: <unk> partner with us to create really interesting investment opportunities and return opportunities.

Jon Winkelried: And we just feel like we're incredibly well positioned with our clients to do that. Because if you look at the orientation that we've always gone to market with, we have, you know, our core strategies across the various asset classes.

Jon Winkelried: And we just feel like we're incredibly well positioned.

Jon Winkelried: With our clients to do that because if you look at the orientation that we've always gone to market with we have our core strategies across the various asset classes, we have horizontal step out strategies that provide solutions based capital like our TGF business that Todd was talking about our tech Adjacencies fund.

Jon Winkelried: We have horizontal step-out strategies that provide solutions-based capital, like our TGS business that Todd was talking about, or our tech adjacencies fund. And now within our credit strategy, things like credit solutions, given the leverage, the number of lever capital structures that need to be that need to be worked through or essential housing, as an example, which is a, you know, kind of a purpose-built, creative approach to financing. The major homebuilders that are all ramping up their production.

Jon Winkelried: And now within our credit strategy things like credit solutions.

Jon Winkelried: Given the leverage the number or the number of levered capital structures that need to be that need to be worked through or essential housing as an example, which is a kind of a purpose built.

Jon Winkelried: Creative approach to financing.

Jon Winkelried: The major homebuilders that are all ramping their production.

Jon Winkelried: And so we honestly feel great about it so far in terms of how we're delivering the firm holistically to our clients. So more to come on that will keep you apprised, but we feel like we're really well positioned. Hey, Kenneth, Jack, I would just add, you asked kind of what we're focused on going forward. As I think about it, it's scaling the existing TPG AG credit businesses, which we've talked about; it's innovating new products together and penetrating new channels together, including insurance.

Jon Winkelried: And so we.

Jon Winkelried: We honestly feel great about it so far in terms of how we're.

Speaker Change: We're delivering the firm holistically to our clients so.

Speaker Change: More to come on that will keep you will keep you apprised, but we feel like we're really well positioned.

Jon Winkelried: Hey, Ken This is Jack I would just add you asked kind of what we're focused on going forward.

Speaker Change: I think about it it's scaling the existing TPG AG credit businesses, which we've talked about.

Speaker Change: It's innovating new products together.

Speaker Change: And penetrating new channels together, including insurance it opens up the obviously the addition of the TPG AG credit businesses opens up the insurance channel like we've never had access to before and we're very focused on that on scaling their existing businesses as I mentioned in my comments, we are making very good.

Jon Winkelried: It opens up the, obviously, the addition of the TPG AG credit businesses opens up the insurance channel like we've never had access to before, and we're very focused on that. On scaling their existing businesses, as I mentioned in my comments, we are making very good progress with TPG's historically larger LPs in introducing the credit platforms to them. Jon talked about his trip to the Middle East and the meetings at Milken.

Jon Winkelried: Progress with Tpg's, historically larger Lps and introducing the credit platforms to them John talked about the shift to the middle East the meetings that book and the fact is that we just launched most of those campaigns this year.

Jack Charles Weingart: The fact is that we just launched most of those campaigns this year, and creating a new LP relationship in a new asset class is a multi-meeting cycle. So we're, you know, halfway through those meetings with some of our largest LPs. As I mentioned in my remarks, we will be sharing more about that in the coming quarters as we complete that multi-meeting cycle and bring in new clients to that platform. Our next question comes from Alex Blostein of Goldman Sachs. Hi, good morning, guys.

Jack Charles Weingart: And.

Alexander Blostein: Creating a new LP relationship in a new asset class is a multi meeting cycle. So we're halfway through those meetings with some of our largest Lps as I mentioned in my in my remarks, we will be sharing more about that.

Alexander Blostein: In quarters as we as we complete that multi meeting cycle and bring in new clients to that platform.

Alexander Blostein: Our next question comes from Alex <unk> with Goldman Sachs.

Alexander Blostein: Thank you for the question. So one of the key elements of the growth strategy for the firm has been expansion to wealth. You highlighted a couple of things on this as well, but can you speak a little more to the sort of product development you expect to have over the next kind of 12 to 18 months when it comes to the wealth channel, both in terms of maybe the semi-liquid products and any other sources of capital raising you see there? Thanks. Sure. Thanks, Alex. I'll start on that. It's Jack.

Alexander Blostein: Hi, Good morning, guys. Thanks, Hey, good morning, Thank you for the question.

Jack: So one of the key elements of our growth strategy for the firm has been expansion to wealth you highlighted a couple of things on this as well, but can you speak a little more to the sort of product development you expect to have over the next kind of 12 to 18 months when it comes to the wealth channel. Both in terms of maybe the semi liquid product and any other sources of capital raising you see there. Thanks.

Alexander Blostein: Yes.

Jack Charles Weingart: Look, we're very focused, as we've been saying, on expanding our presence on the Wealth Platform, and that's got multiple dimensions to it. Internally, we're significantly building our own resources in that area, building out our distribution team focused on wealth. On the new product side, we definitely see a significant movement of client demand into permanent capital open-ended structures. We've obviously got TCAP, the direct lending vehicle, in the market. We've got a couple of other vehicles already focused on that.

Alexander Blostein: Sure. Thanks, Alex I'll start on that Jack.

Jack Charles Weingart: So look we are we're very focused as we've been saying on expanding our presence in the wealth platform and Thats got multiple dimensions to it.

Jack Charles Weingart: Internally, we're significantly building our own resources in that area building out our distribution team focused on wells on the new product side, we definitely see significant movement of client demand into permanent capital open ended structures. We've obviously got T cap.

Jack Charles Weingart: The direct lending vehicle in the market. We've got a couple of other vehicles already focused on that we don't yet have a private equity semi liquid product, but we're actively working on that and expect to launch it early next year.

Jack Charles Weingart: We don't yet have a private equity semi-liquid product, but we're actively working on that and expect to launch it early next year at the latest. We expect that, as you know, our performance across our private equity products around the world has been differentiated. And I would just say that in all of our conversations with our partners on the bank channel side, they are very eager to have a differentiated TPG, semi-liquid private equity product in their channel.

Jack Charles Weingart: At the at the latest and.

Jack Charles Weingart: We expect that to be as you know our performance across our private equity products around the world has been differentiated and I would just say that all of our conversations with our partners.

Jack Charles Weingart: On the bank channel side, they are very eager to have a differentiated TPG semi liquid private equity products in their channel. So we intend to keep pursuing that in other ways to access, which obviously is where client demand is flowing.

Jack Charles Weingart: It's also beneficial to us to have more stable and growing sources of capital that don't rely upon.

Jack Charles Weingart: Starting from scratch, each each fund raising cycle.

Jack Charles Weingart: Yes.

Jack Charles Weingart: So we intend to keep pursuing that and other ways to access capital, which obviously is where client demand is flowing. It's also beneficial for us to have more stable and growing sources of capital that don't rely upon, you know, starting from scratch each each fundraising cycle. Our next question comes from Michael Cyprys with Morgan Stanley. Great. Thank you. Good morning.

Jack Charles Weingart: Our next question comes from Michael <unk>.

Michael J. Cyprys: With Morgan Stanley.

Michael J. Cyprys: Just hoping to circle back to credit for a moment. I understand you have all, I believe, all your credit strategies in the market capital raising this year. I think you reiterated your expectations to raise over $10 billion in credit. But the question is, how should we think about the growth profile of the credit business on a multi-year basis? Would you anticipate any sort of slowdown in 2025 or 2026 if some of those strategies won't be in the market raising?

Michael J. Cyprys: Great. Thank you good morning, just hoping to circle back to credit for a moment I understand you have all I believe all your credit strategies in the market capital raising this year I think you reiterated your expectations raised over 10 billion in credit but question how should we think about the growth profile of the credit business on a multiyear basis, what do you anticipate any sort of.

Michael J. Cyprys: Slowdown in 25 or 26 at some of the strategies won't be in the market raising or do you think you can maintain or even grow that 10 billion pace on a multiyear basis.

Michael J. Cyprys: Just curious how youre thinking about that and what some of the biggest contributors might be within credit.

Michael J. Cyprys: Okay.

Michael J. Cyprys: Or do you think you can maintain or even grow that $10 billion pace over a multi-year basis? Just curious how you're thinking about that and what some of the biggest contributors might be within credit. Hey Mike, um, well, with respect to sort of the long-term growth profile, I think that, and this is something that we talked about just after having completed the acquisition, if you look at platforms within the credit business, all of them continue to outsource and out originate the underlying capital base.

Speaker Change: Hey, Mike.

Michael J. Cyprys: I think.

Michael J. Cyprys: With respect to sort of a long term growth profile I think that and this is something that we talked about.

Mike: Just after having.

Mike: Completed the acquisition.

Michael J. Cyprys: If you look at the.

Mike: The platforms within the credit business.

Mike: All of them.

Mike: <unk> to outsource and out originate.

Mike: The underlying capital base.

Michael J. Cyprys: So.

Jon Winkelried: So, we have a factory and a team and a capability that's been built that I think I would describe as undercapitalized. And that, you know, that's obviously a clear opportunity for us. So the focus on, you know, raising over ten billion dollars of capital this year is the beginning of rightsizing the capital base associated with that business. I think that we have many opportunities as we dig into the business.

Mike: We have a factory in a team.

Jon Winkelried: And a capability that's been built that I think.

Jon Winkelried: I would describe as under capitalized and that.

Jon Winkelried: That's obviously a clear opportunity for us so the focus on raising over $10 billion of capital. This year is the beginning of right sizing the capital base associated with that business.

Jon Winkelried: I think that we have many opportunities.

Jon Winkelried: Digging into the business if you look across our platform and we have if you look at for instance are.

Jon Winkelried: If you look across our platform and we have, and you look at, for instance, our, you know, our direct lending business, our credit solutions business, and our structured credit business, I think we're in the right neighborhood in all three of those businesses in terms of what's coming and what's happening just in terms of the flows. If you look at our direct lending business, where we're currently focused on the lower middle market, we had our largest sourcing and origination quarter in the history of the business.

Jon Winkelried: Our direct lending business, our credit solutions business and our structured credit business I think we're in the right neighborhood and all three of those businesses in terms of whats coming in whats happening just in terms of the flows.

Jon Winkelried: If you look at our direct lending business, where we're currently focused on the lower middle market.

Jon Winkelried: We had our largest sourcing and origination quarter in the history of the business.

Jon Winkelried: And.

Jon Winkelried: And so, you know, the ability to continue to scale that business within the lower middle market and our differentiated position there is, I think, you know, provides, you know, continued upside and growth within that platform. I mean, just to give you an idea, right, we had new loan deployment in the first quarter of a billion seven. Just to give you a relative framework, the previous high quarter, the previous high watermark for another quarter, was the first quarter of 2021, where we originated a billion.

Jon Winkelried: And so the ability to continue to scale that business.

Jon Winkelried: Within the lower middle market and our differentiated position there.

Jon Winkelried: Is.

Jon Winkelried: I think.

Jon Winkelried: Provides continued upside and growth within that platform I mean, just to give you an idea right. We we had new loan deployment in the first quarter of $1 seven.

Jon Winkelried: Just to give you a relative framework.

Jon Winkelried: The previous high quarter.

Jon Winkelried: The previous high watermark for another quarter was the first quarter of 2021, where we originated $1 billion.

Jon Winkelried: So, with the level of activity stepping up and add-ons to the portfolio, this continues to represent a growth opportunity in the core part of our business there. And as we've talked about before, as companies grow and move out of the lower middle market into their next stage of life and their next, and to their next owner, we have the ability to move with them in terms of what we think of as the kind of companies that are graduating out of our portfolio. So I think that this business has a lot of scale in front of it. Both sourcing from institutional sources as well as from sourcing on the channel.

Jon Winkelried: So.

Jon Winkelried: With the level of activity stepping up add ons to the portfolio.

Jon Winkelried: This continues to represent a growth opportunity in the core part of our business there and as we've talked about before.

Jon Winkelried: As companies grow.

Jon Winkelried: And move out of the lower middle market into.

Jon Winkelried: The other piece of our business is on the structure, the flipping to the structured credit side. When you go around and talk to sources of capital in credit right now, there is a lot of focus on how to continue to diversify exposures away from EBITDA-based credit. How do we think about our fixed income allocations and our private credit allocations moving from exposure to EBITDA-based credit, where, naturally, there will be some kind of credit cycle, to non-EBITDA-based credit, particularly given the constraints that we're seeing in the regional banking system and the lack of liquidity there?

Jon Winkelried: The next stage of life and their next and.

Jon Winkelried: And to their next.

Jon Winkelried: Owner.

Jon Winkelried: The ability to move with them in terms of what we think of as kind of companies that are graduating out of our portfolio. So.

Jon Winkelried: I think that business has a lot of scale in front of it.

Jon Winkelried: Both sourcing from institutional sources as well as from sourcing on the channel.

Jon Winkelried: The other <unk>.

Jon Winkelried: Piece of our business is on the structured flipping to the structured credit side.

Jon Winkelried: When you go around and you talk to two sources of capital and credit right. Now there is a a lot of focus on how to continue to diversify exposures away from EBITDA based credit.

Jon Winkelried: How do we think about our fixed income allocations at our private credit allocations moving from exposure to EBITDA.

Jon Winkelried: EBITDA based credit we're naturally at some point there will be some kind of a credit cycle to non EBITDA based credit, particularly given the constraints that we're seeing in the regional banking system and the lack of liquidity. There. So I mentioned that in my prepared remarks in terms of some of the.

Jon Winkelried: So I mentioned that in my prepared remarks in terms of some of the flow arrangements and the joint venture arrangements that we're creating. If you look at what's happening in the regional banking system, what we're seeing right now is we're at the stage in the market development where people are trying to sell their highest-priced assets and better assets to continue to work on capital levels within their businesses.

Jon Winkelried: Some of the flow arrangements on the joint venture arrangements arrangements that we're creating.

Jon Winkelried: If you look at what's happening in the regional banking system, what we're seeing right now is worth a part of the part.

Jon Winkelried: We're at the part we're at the stage in the market development, where people are trying to sell their highest priced assets are better assets to.

Jon Winkelried: To continue to work on capital levels within their businesses, we expect that to continue systemically and and.

Jon Winkelried: We expect that to continue systemically, and so the opportunity to finance SMAs and, you know, structured arrangements with clients, as well as the opportunity potentially to take that to the wealth channel as well. And we're seeing people obviously think now about evolving semi-liquid structures and permanent capital structures around non-EBITDA-based credit opportunities. And then in credit solutions, you know, looking at the opportunity in front of us there in terms of private market solutions.

Jon Winkelried: And so the opportunity to finance.

Jon Winkelried: Do asset based financing to finance non bank lenders.

Jon Winkelried: Having the factory that we built over time.

Jon Winkelried: Positions us to I think really continue to scale that business, so and again, we're out originating our capability there in terms of our our embedded capital base. So we expect that will continue to grow both through asset base through our commingled funds SMA is in.

Jon Winkelried: Structured structured arrangements with clients as well as the opportunity potentially to take that too.

Jon Winkelried: The wealth channel as well and we're seeing people, obviously think now evolve.

Jon Winkelried: Semi liquid structures.

Jon Winkelried: And permanent capital structures around non EBITDA based credit opportunities and then and then in <unk>.

Jon Winkelried: Credit solutions.

Jon Winkelried: Looking at the opportunity in front of US there in terms of private market solutions.

Jon Winkelried: Unknown Speaker Just to give you an idea of the flow that we're seeing in that business, as I mentioned in my prepared remarks, we're shifting toward private market solutions and from kind of public opportunities just because of the compression and spread. If you look at the number of levered capital structures and the compression in things like interest coverage, and the significant backlog of companies trying to be sold or refinanced, this is going to be a really interesting source of bespoke return opportunities.

Jon Winkelried: Just to give you an idea of the flow that we're seeing in that business.

Jon Winkelried: As I mentioned in my prepared remarks, we're shifting toward.

Jon Winkelried: Private market.

Jon Winkelried: Solutions and.

Jon Winkelried: The from from public opportunities just because of the compression in spreads. If you look at the number of Levered capital structures and the and the.

Jon Winkelried: And the and the compression in things like interest coverages.

Jon Winkelried: The significant backlog of companies trying to be sold or refinanced.

Jon Winkelried: This is going to be a really interesting source of bespoke return opportunities and give you an idea in the first quarter.

Jon Winkelried: And to give you an idea, in the first quarter, I think we signed something like between 60 to 70 NDAs with sponsors and companies to work on bespoke capital structures. And what we're doing is, where appropriate, we're bringing together our private equity expertise, where we've seen these companies before, or we have industry expertise or sector knowledge with the tactical knowledge that we have on the credit solution side and working on essentially these bespoke capital structure solutions. And as you would imagine, given the size of some of the companies that are now under sponsored control, these opportunities are very large.

Jon Winkelried: We signed something like between 60 to 70.

Jon Winkelried: N D A's with sponsors and companies to work on bespoke capital structures.

Jon Winkelried: And what we're doing is we're basically where appropriate we're bringing together our private equity private equity expertise, where we've seen these companies before we have industry expertise of our sector knowledge with the tactical knowledge that we have on the credit solution side and working on essentially these bespoke capital structure solutions and they are there.

Jon Winkelried: As you would as you would imagine given the size of some of the companies that are sponsored controlled now these opportunities are very large so we're looking basically to raise more capital in the wake of those opportunities partner with Lps.

Jon Winkelried: So we're looking basically to raise more capital in the wake of those opportunities, partner with LPs, in terms of co-invest opportunities. And we think that that will continue to require more capital, and it's a big opportunity to grow into. And then we also have the essential housing business where we originated that business and started that business with Lenar first as our first partner.

Jon Winkelried: In terms of co invest opportunities and.

Jon Winkelried: We think that that will continue to require more capital and it is a big opportunity to grow into and then we also have the essential housing business, where we were.

Jon Winkelried: We originated that business and started that business with all the <unk> versus our first partner and we've now added 11 other homebuilders to the to the to the strategy. So that has the ability to continue to scale in a pretty major way. So that all of you should put all of that in the context of at some point will probably flow into a credit cycle.

Jon Winkelried: And we've now added 11 other home builders to the strategy, so that has the ability to continue to scale in a pretty major way. And you should put all that in the context of, at some point, we'll probably flow into a credit cycle.

Jon Winkelried: Managing through that credit cycle and being smart about deployment and how we deploy capital will be important, not only to us but to everyone in the market. So, anyway, that's the frame of reference that we have for the growth of the business going forward. Our next question comes from Dan Fannin with Jeffer. Thanks. Good morning.

Jon Winkelried:

Daniel Thomas Fannon: Managing through that credit cycle, and being smart about deployment and how we deploy capital will be important not only to us but everyone in the market. So.

Daniel Thomas Fannon: But anyway.

Daniel Thomas Fannon: That's a frame of reference that we have on the growth of the business going forward.

Jon Winkelried: Our next question comes from Dan Fannon with Jefferies.

Dan Fannin: Jack, I wanted to follow up on your comments around transaction fees and maybe separate the near term based upon activity levels and then the longer term opportunity as you get the benefit fully from Angelo Gordon. And then also, maybe if there was a split between the revenue contribution of the two businesses in this quarter to maybe get a sense of how that's tracking. Sure. Let me start with the last question because it kind of frames the rest of it.

Daniel Thomas Fannon: Hi, Thanks, Good morning, Jack I wanted to follow up on your comments around transaction fees and maybe separate the near term based upon activity levels and then the longer term opportunity as you get the benefit fully from Angelo Gordon.

Dan Fannin: And then also maybe if there was a split between the revenue contribution of the two businesses in this quarter to maybe get a sense of how thats tracking.

Dan Fannin: Sure.

Dan Fannin: Let me start with the last question because it kind of.

Jack Charles Weingart: The transaction fees in Q1 were almost entirely associated with the legacy TPG business; think about almost nothing coming from AG because that requires a little bit of work. We're in the process of integrating the broker-dealer into their businesses, which requires a little bit of new hires. It requires a little bit of work on their fund documents to allow for more capital markets business, so that'll be a growth driver going forward. The baseline in Q1 was a little higher than we indicated on our last call we thought it would be because we didn't see a big enough new deal closing pipeline to get to the kind of levels we got to.

Dan Fannin: Frames the rest of it.

Jack: The transaction fees in Q1 were.

Jack Charles Weingart: Almost entirely associated with legacy TPG businesses think about almost nothing coming from AG because that.

Jack Charles Weingart: That requires a little bit of work we're in the process of.

Jack Charles Weingart: Integrating the broker dealer into their businesses.

Jack Charles Weingart: Acquired a little bit of new hires it requires a little bit of work on their fund documents to allow for more capital markets business. So that that will be a growth driver going forward. The baseline in Q1 was a little higher than we indicated on our last call. We thought it would be because we didn't see a big enough new deal closing pipeline.

Jack Charles Weingart: To get to the kind of levels, we got to.

Jack Charles Weingart: As I mentioned in my in my remarks that ended up being amplified.

Jack Charles Weingart: As I mentioned in my remarks, that ended up being amplified by some opportunistic refinancing as credit spreads tightened, and we were able to improve the capital structures of many of our private equity portfolio companies. As I think about it, the current quarter represents a decent kind of average run rate for TPG's existing business in the capital markets. We're expanding our... And then from there, the growth will come from a couple of things. Number one, expanding that capability across more of TPG's business as we grow in the area of climate, as we grow in the area of climate infrastructure. There are a lot of ancillary capital markets needs around those businesses.

Jack Charles Weingart: By some opportunistic refinancing as credit spreads tightened and we were able to improve the capital structures of many of our private equity portfolio companies.

Jack Charles Weingart: As I think about it the current quarter represents a decent kind of.

Jack Charles Weingart: Average run rate for Tpg's existing business and capital markets, we were expanding our <unk> and then from there the growth will come from a couple of things number one expanding that capability across more of Tpg's business would be growing climate has grown climate infrastructure. There are a lot of ancillary.

Jack Charles Weingart: Capital markets needs around those businesses and we intend to build a capital markets business to service those needs more broadly than just our private equity focus today.

Jack Charles Weingart: And we intend to build a capital markets business to service those needs more broadly than just our private equity focus today. And then, secondly, the AG opportunity, which I think you should expect to kick in really late this year and into next year as we keep doing the work that I outlined. So those two elements, on top of the current quarter, of course, you're going to see fluctuations quarter to quarter.

Jack Charles Weingart: And then secondly, the AG opportunity, which I think you should expect to kick in really late this year and into next year as we keep doing the work that I that I outlined so that those two elements on top of the current quarter of course, youre going to see fluctuations quarter to quarter, but as you think about kind of the baseline for that business over the coming <unk>.

Jack Charles Weingart: But as you think about kind of the baseline for that business, over the coming couple of years, those two opportunities will create kind of two steps up in the average opportunity for that business. Our next question comes from Brian McKenna with Citizens JMP. Thanks. Good morning, all.

Brian J. McKenna: <unk> of years, those two opportunities will create.

Brian J. McKenna: Two steps up in the average opportunity in that business.

Brian J. McKenna: Our next question comes from Brian Mckenna with citizens J M P.

Brian J. McKenna: So a follow-up on AG credit, how should we think about the cadence of fundraising and how that flows through into fee-earning AUM? I'm assuming this will be more driven by deployment activity, but is there a way to think about the ramp of fee-earning AUM inflows throughout 2024 for this segment specifically? And then I know there can be some noise quarter to quarter on fee rates, but are the first quarter fee rates for AG credit and AG real estate good starting points for QQ and beyond? I'll start on that, I guess.

Brian J. McKenna: Thanks, Good morning, all so I'll follow up on AG credit how should we think about the cadence of fundraising and how that flows through oriented fee, earning a land I'm, assuming it will be more driven by deployment activity, but is there a way to think about the ramp of fee, earning AUM inflows throughout 2024 for the segments specifically.

Brian J. McKenna: And then I know there can be some noise quarter to quarter on fee rates or the first quarter fee rates for AG credit and AG real estate, good starting points for Q2 and beyond.

Jack Charles Weingart: I think the way I think about kind of the credit business flowing into FAUM is first and foremost, deployment because almost all of the capital in that business pays fees on deployed capital only. I think all the fundraising you see us talking about and doing this year, the more than $10 billion, is really setting us up for the second leg of growth next year. Most of the funds we're raising this year, some will be deployed this year, but in your modeling, it's hard to draw a direct connection between this year's fundraising and 2024 FAUM and FRR, because that's more driven by deployment pace in the near term. And I think on the average feed rate question; there's nothing abnormal in the first quarter there.

Speaker Change: I'll start on that I guess I think.

Jack Charles Weingart: The way I the way I think about kind of.

Jack Charles Weingart: The credit business flowing into.

Jack Charles Weingart: AUM is first and foremost deployment because almost all of the capital in that business pays fees on on deployed capital on me.

Jack Charles Weingart: I think all the fund raising you see us talking about in doing this year the more than $10 billion is really setting us up for the second leg of growth next year. Most of the funds. We're raising this year some of them. Some will be deployed this year, but it's hard to in your modeling it's hard to draw a direct connection between this year's fundraising and 2002.

Jack Charles Weingart: 94.

Jack Charles Weingart: AUM in Fr, that's more driven by deployment pace in the near term.

Jack Charles Weingart: And I think on the average fee rate question, there's nothing abnormal in the first quarter there.

Jack Charles Weingart: As we talked about at the analyst meeting, I guess the only thing I'd say is that there are obviously three or four different, very different businesses within AG credit, and the average fee rate will be driven more by the deployment mix across those businesses than it will be by some kind of macro, some kind of macro factor. Our next question comes from Adam Beatty with UBS. Thank you, and good morning.

Jack Charles Weingart: As we as we talked about at the at the.

Adam Quincy Beatty: Analyst day, I guess, the only I would say is that.

Adam Quincy Beatty: Obviously, three or four different very different businesses within AG credit and the average fee rate will be driven more by the deployment mix across those businesses that it will be by some kind of macro some kind of macro factor.

Jack Charles Weingart: Our next question comes from Adam Beatty with UBS.

Adam Quincy Beatty: I want to follow up on the wealth management channel, focusing on your existing product set and your existing distribution relationships. I know there's a lot more to come on both those dimensions, but just trying to get a sense of among your distribution partners in wealth right now, you know, how many of the products Jon mentioned are out there targeting wealth, how many of those are on a given platform, you know, what's kind of the average or what have you.

Adam Quincy Beatty: Alright, Thank you and good morning, I wanted to follow up on the wealth management channel focusing on your existing product set and your existing distribution relationships I know theres a lot more to come on both those dimensions, but just trying to get a sense of among your distribution partners in wealth right now.

Adam Quincy Beatty: How many of the products John mentioned several products.

Adam Quincy Beatty: Out there targeting wells, how many of those are on a given platform whats kind of the average or what have you what I'm trying to get at is maybe the near term maybe next 12 months opportunity, where you have a distribution relationship and wealth you already have one or two products on there, but maybe not all of them. So how you could maybe roll.

Adam Quincy Beatty: What I'm trying to get at is maybe the, you know, the near term, maybe next 12 months' opportunity, where you have a distribution relationship in wealth, you already have one or two products on there, but maybe not all of them. So how you could maybe roll more of those into those relationships in the near term. Thank you.

Adam Quincy Beatty: Or more of those into those relationships and the near term. Thank you.

Jon Winkelried: I think, um... As I mentioned in my comments, I think that what we've, you know, we have progressively over the last several years, this is not, this is not a new phenomenon this year, continue to be disciplined about establishing distribution arrangements and wealth arrangements for essentially every strategy we bring to market through various partners of ours. And as you would, of course, as you would imagine, we have multiple relationships and multiple partners, which we highly value.

Adam Quincy Beatty: I think.

Jon Winkelried: As I mentioned in my comments I think that what we have.

Jon Winkelried: We have progressively over the last several years, it's not this is not a new phenomenon this year.

Jon Winkelried: Continue to be disciplined about establishing.

Jon Winkelried: Distribution arrangements in wealth arrangements for essentially every strategy, we bring to market.

Jon Winkelried: Through various partners of ours and as you would of course as you would imagine we have multiple relationships with multiple partners, which we highly value and.

Jon Winkelried: And that those products are in some cases being distributed through, in some cases, one partner. And in some cases, a particular strategy is being distributed actually through multiple partners, depending on the sequencing of when we're launching and then, frankly, the calendar schedule that our partners have as well in terms of kind of queuing up various strategies.

Jon Winkelried: That those products in some cases are.

Jon Winkelried: Are being distributed through in some cases, one partner and in some cases, a particular strategy is being distributed actually through multiple partners depending on the sequencing of when when we're when we're when.

Jon Winkelried: When we're launching and then frankly the.

Jon Winkelried: The calendar schedule that our partners have as well in terms of kind of queuing up various strategies.

Jon Winkelried: And those are for sort of the traditional fund structures that we've historically brought to market. And we're continuing to do that. And we've ramped that up last year and now into this year.

Jon Winkelried: And those are for sure.

Jon Winkelried: Traditional fund structures that we have historically brought to market and we are continuing to do that and we've ramped that.

Jon Winkelried: Over last year and now into this year, so to the extent that you.

Jon Winkelried: So, to the extent that you see products of ours that are in the market that we're fundraising for, there will be a private wealth strategy around essentially all of them. We are, as we said before, and obviously, all of the important partners in the market are partners of ours as a result of our brand and our performance and the relationship that we've established with those partners over time through multiple interactions at different levels within these organizations.

Jon Winkelried: You see products of ours that are in the market that we're fundraising for.

Jon Winkelried: Yeah.

Jon Winkelried: There will be a private wealth strategy around essentially all of them.

Jon Winkelried: We are as we said before.

Jon Winkelried: And.

Jon Winkelried: Obviously.

Jon Winkelried: All of the.

Jon Winkelried: Important partners in the market are partners of ours as a result of our our brand and our performance.

Jon Winkelried: And the relationship that we've established with those partners over time.

Jon Winkelried: Multiple interactions at different levels of these organizations.

Jon Winkelried: And I spend time, Jack spends time, Todd spends time, Jim spends time meeting with these partners, both in terms of the strategic relationship at the top of the house, as well as the key people that are driving those distribution relationships into private wealth and marketing our brand, marketing our strategies, you know, meeting with advisors, etc. So, we're well into that process in terms of, you know, how we're approaching it.

Jon Winkelried: <unk>.

Jon Winkelried: I spend time.

Jon Winkelried: <unk> Bernstein Taj bench time, Jim spent time with.

Jon Winkelried: Meeting with these partners both in terms of the strategic relationship at the top of the house as well as.

Jon Winkelried: On the key people that are driving those distribution relationships into private wealth.

Jon Winkelried: And marketing our brand marketing our strategies meeting with advisers et cetera, So we're well into that process in terms of how we're approaching it.

Jon Winkelried: So, you should expect, I think, that we'll continue to kind of ramp up the overall level of distribution, the amount of capital we're raising, and that, you know, over time, the pie chart of distribution for our capital will continue to inflect more and more toward wealth as we do that. We're obviously now focused on the next stage of that, which is these continuously offered products, which are very important. Jack mentioned that and emphasized that in the channel now, the ability for advisors to recommend to their clients to allocate to various strategies is requiring alternative products to be available on a continuous basis.

Jon Winkelried: So you should expect I think that will continue to kind of up ramp the overall level of distribution in the amount of capital raising and that over time. The pie chart of distribution for our capital will continue to inflect more and more towards wealth as we do that we're obviously focused on the next stage of <unk>.

Jon Winkelried: That.

Jon Winkelried: Which is these continuously offered products, which are very important Jack mentioned that emphasize that in the channel now the ability for advisers to.

Jon Winkelried: I recommend to their clients to allocate it to various strategies.

Jon Winkelried: Acquiring alternative products to be avail.

Jon Winkelried: Available on a continuous basis. So just like just like mutual funds or other products are in the market and so we're actively working on.

Jon Winkelried: So, just like mutual funds or other products are in the market, we're actively working on structuring and preparing our semi-liquid private wealth product that Jack already talked about, and we will be launching that in the channel. We have our BDC from our Twinbrook business that's actively being marketed in the channel. Over time, I think what you should probably expect to see from us is other continuously offered products, maybe in the form of non-traded REITs for parts of our business as well.

Jon Winkelried: Structuring and preparing our semi liquid private wealth product that Jack already talked about and we will be launching that into the channel we have our BDC.

Jon Winkelried: From our Twinbrook business Thats actively being marketed in the channel.

Jon Winkelried: Over time, I think what you should probably expect to see from us as other continuously offered product maybe in the form of non traded Reits.

Jon Winkelried: For parts of our business as well so.

Jon Winkelried: So, I think that's what you should expect. And we know that it is a significant source of capital on a going forward basis, but the relative allocation in that channel is certainly less than what we see on the institutional side.

Jon Winkelried: I think thats, what you should expect and.

Jon Winkelried: We know that it is a significant source of capital on a go forward basis.

Jon Winkelried: And the relative allocation in that channel is certainly less than what we see on the institutional side. So the ability to kind of have a multiplier effect in terms of growth is clearly present.

Bill Katz: So the ability to kind of have a multiplier effect in terms of growth is clearly present. Our final question comes from Bill Katz with TD Cohen. Okay, thank you for taking the question. In your question on your longer-term FRE margins, I heard the affirmation of sort of getting to that 40% plus margin for this year. But as you think about the step-step function of the scaling of the credit platform, the scaling of the capital solutions footprint, I was just sort of wondering, as we look beyond 24 to 25, maybe 26, how do you sort of see the profile of the company? Can you realign with some of the bigger peers? Or is there a different sort of glide path from here? Thank you. Yeah, a good question, Bill.

Jon Winkelried: Our final question comes from Bill Katz with TD Cohen.

Bill Katz: Okay.

William Raymond Katz: Okay. Thank you for taking the question.

William Raymond Katz: So maybe a question on your longer term FRE margin. So I heard the affirmation of sort of getting to that 40% plus much for this year, but as you think about the step step function of the scaling of the credit platform scaling of the capital solutions footprint.

William Raymond Katz: Wondering as we look beyond 2025, maybe 26, how do you sort of see the profile of the company can you will realign with some of the bigger peers or is there a different sort of glide path from here. Thank you.

Jack Charles Weingart: We have not provided any longer-term FRA margin guidance other than to say that we do believe we'll be expanding back to 45% and eventually higher, which was our initial TPG target margin. As you think about our margin profile and the reason we reiterated 40% for this year, think about a lot of the FRR contributors and the fundraising activity we have this year. Our current assumption is that the biggest fundraisers we're in the market with right now that have fees on committed capital, across all the climate strategies, we're assuming those probably turn on in the third and fourth quarter of this year. That means that FRR for those businesses doesn't really pick up meaningfully until call it the fourth quarter. We could be wrong about that.

Speaker Change: Yeah. Good question Bill.

Jack Charles Weingart: We have not provided any longer term FRE margin guidance other than to say that we do believe we will be expanding back to 45% and eventually higher which was our initial TPG target margin as you think about our margin profile and the reason we reiterated 40% for this year think about a lot of the fr contributors.

Jack Charles Weingart: And the fundraising activity, we have this year our current assumption.

Jack Charles Weingart: Is that the biggest fundraisers were in the market with right now that have fees on committed capital that being across all the climate strategies were assuming those probably turn on in the third and fourth quarter of this year that means that <unk> those businesses doesn't really pick up meaningfully until call. It the fourth quarter.

Jack Charles Weingart: We could be wrong about that we could accelerate the activation earlier, but that's our assumption, but during the course of the year. The investment we're making in raising those funds, which will become more and more visible in the coming quarters will set us up for more meaningful for our growth next year as you get the annualized benefit of that plus <unk>.

Jack Charles Weingart: We could accelerate the activation earlier, but that's our assumption. But during the course of the year, the investment we're making in raising those funds, which will become more and more visible in the coming quarters, will set us up for more meaningful FRR growth next year, as you get the annualized benefit of that, plus accelerated credit deployment. So as we're thinking about the FRA margin trajectory, we do believe that the guidance toward exceeding 40% this year is the right guidance, and then we'll begin to see an acceleration of FRA margin expansion next year, as some of those FRA drivers kick in next year.

Jack Charles Weingart: Celebrated credit deployment, so as we're thinking about the FRE margin trajectory, we do believe that the guidance toward exceeding 40%. This year is the right guidance and then we'll begin to see an acceleration of FRE margin expansion next year as some of those fr. Our drivers kick in next year and there is no reason we should.

Jack Charles Weingart: And there's no reason we shouldn't get back to 45%, and eventually higher than that, as we keep scaling our business. This concludes the Q&A portion of today's call. I would now like to turn the call back over to Gary Stein for closing remarks. All right. Thank you. Thank you all for joining us today. We look forward to speaking to you again next quarter. And in the meantime, if you have any questions, feel free to contact the IR team. Thanks, everyone. This concludes today's TPG's first quarter 2024 earnings call and webcast. You may disconnect your line at this time and have a wonderful day.

Jack Charles Weingart: Shouldn't get back to 45% and eventually.

Gary Stein: Higher than that as we keep scaling our business.

Jack Charles Weingart: This concludes the Q&A portion of today's call I would now like to turn the call back over to Gary Stein for closing remarks.

Gary Stein: Alright. Thank you. Thank you all for joining us today.

Gary Stein: Look forward to speaking to you again next quarter and in the meantime, if you have any questions feel free to follow up with the IR team.

Gary Stein: Thanks, everyone.

Gary Stein: This concludes today's Tpg's first quarter 2024 earnings call and webcast. You may disconnect. Your lines at this time and have a wonderful day.

Jack Charles Weingart: [music].

Jack Charles Weingart: Uh huh.

Jack Charles Weingart: [music].