Q4 2024 TPG Inc Earnings Call
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Speaker Change: Good morning, and welcome to the G. P. G Fourthquarter 'twenty 'twenty four earnings conference call. Currently all callers have been placed in a listen only mode and following management prepared remarks, the call will be opened for your questions. If you would like to ask a question at that time. Please press star one on your telephone keypad, if you need to remove yourself from Q Preston.
Speaker Change: Saar to forget to as many questions as time permits we ask that you. Please limit yourself to one question.
Speaker Change: At any time, if you should need any operator assistance press star zero. Please be advised that today's call is being recorded. Please go to the Tpg's IR website to obtain the earnings material I will now turn the call over to Gary Stein head of Investor Relations at TPG. Thank you you may begin.
Speaker Change: Thanks, operator, and welcome everyone.
Speaker Change: Turning me. This morning are John Michael Reed, Chief Executive Officer, and Jack Weingart, Chief Financial Officer. In addition, our executive Chairman and co founder Jim Culture, and our President toxicity are also here and will be available for the Q&A portion of this morning's call.
Speaker Change: I'd like to remind you. This call may include forward looking statements 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.
Speaker Change: <unk> undertakes no obligation to revise or update any forward looking statements, except as required by law.
Speaker Change: Within our discussion in earnings release, we are presenting GAAP and non-GAAP measures and we believe certain non-GAAP measures that we discuss on this call are relevant in assessing the financial performance of the business.
Speaker Change: These non-GAAP measures are reconciled to the nearest GAAP figures in Tpg's earnings release, which is available on our website.
Speaker Change: Please note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any TPG fund.
Speaker Change: Looking briefly at our results for the fourth quarter, we reported GAAP net income attributable to the TPG, Inc. A $13 million and after tax distributable earnings of $261 million or 62 per share class a common stock.
Speaker Change: We declared a dividend of <unk> 53 per share of class a common stock, which will be paid on March seven 2025 to holders of record as of February 21, 2025, I will now turn the call over to John.
John: Thanks, Gary good morning.
Speaker Change: Everyone.
Speaker Change: To begin I'd like to take a moment to remember the life and legacy of David Bonderman Bondo to those of US who had the privilege to call him a friend and colleague.
Speaker Change: David was a legendary investor in an innovative leader in the alternative asset industry.
Speaker Change: He cofounded TPG in 1992 after following an unconventional unconventional path to investing.
Speaker Change: It is unique and collaborative style continues to resonate within our firm.
Speaker Change: David was known for architect and some of the most complex and transformative deals in our industry and pioneering private equity in Asia.
Speaker Change: His passion and relentless quest for knowledge extended far beyond investing.
Speaker Change: Into music sports and environmental Conservation.
Speaker Change: While we are deeply saddened by David passing we will honor his legacy by continuing to apply the same level of intellectual curiosity enthusiasm and creative problem solving to our work with TPG.
Speaker Change: In my comments. This morning, I'll review the strong progress we've made in 2024 across investing fundraising and business building.
Speaker Change: I'll, then share our strategic priorities and outlook for 2025.
Speaker Change: Starting with our progress in 2024.
First we entered the year, having recently closed our acquisition of Angelo Gordon.
We were focused on integrating our firms and bringing our people and capabilities together with.
Speaker Change: We successfully executed on those objectives that are operating as one fully integrated firm.
Speaker Change: Importantly, we have begun to realize the revenue synergies and business building opportunities enabled by the combination.
Speaker Change: Second we exceeded the ambitious fund raising targets, we set for ourselves raising $30 billion in 2024.
Speaker Change: Third we expect it to make significant progress on organic growth and innovation, which we did.
Speaker Change: For example, we raised nearly $2 billion for our inaugural GP led Secondaries Fund CGS, which we believe is the largest first time fund of its kind.
Speaker Change: And we successfully launched the transition infrastructure strategy with $2 billion in anchor commitments ahead of our first close.
Speaker Change: And finally in an evolving market backdrop, we continued to execute interesting and creative transactions deploying $33 billion.
Speaker Change: And realized a 23 billion across the firm.
Speaker Change: Looking ahead to 2025, we positioned ourselves to deliver accelerated growth.
Speaker Change: We expect to raise significantly more capital in 2025 compared to 2024.
Speaker Change: In addition to several flagship campaigns, such as TPG capital and Health care partners. We expect a number of our newer strategies to continue to contribute meaningfully to our growth Jack.
Jack: Jack will discuss this in more detail.
Speaker Change: We are actively expanding our client relationships across the full breadth of our franchise.
Speaker Change: As well as discussing large cross firm strategic partnerships.
Speaker Change: We expect these efforts to drive greater inflows in 2025.
Speaker Change: We're also growing our presence in important distribution channels, such as private wealth and are on track to launch our new evergreen private equity vehicle targeting the retail channel.
Speaker Change: And building on the success, we've had with TPG AG, we continue to evaluate inorganic opportunities that further increase the scale.
Speaker Change: Origination capabilities and diversification of our franchise.
Speaker Change: Now I'd like to review some highlights from the fourth quarter and full year 2024.
Speaker Change: First we had a very strong year on capital formation, raising $30 billion, which.
Speaker Change: Rents are 54% increase from 2023 on a pro forma basis.
Speaker Change: We successfully grew private equity and infrastructure fund raising year over year, raising 14 billion in 2024.
Speaker Change: In the fourth quarter, we held the first close for our normal rise climate transition infrastructure fund.
Speaker Change: We secured anchor commitments of $2 billion.
Speaker Change: Three large strategic clients head of formally.
Speaker Change: Formally launching our campaign and closed on $1 3 billion in the quarter.
Speaker Change: We are excited to expand our rise climate franchise into an adjacent asset class.
To address the substantial and growing need for transition infrastructure capital.
Speaker Change: Importantly, this is our first infrastructure investing strategy as a firm and we see significant opportunity to grow our capabilities into this major asset class over time.
Speaker Change: In credit, we raised more than $12 billion for the year, which exceeded our $10 billion target.
Speaker Change: We raised nearly 3 billion in the fourth quarter, among our diversified set of strategies, including direct lending structured credit and credit solutions.
Speaker Change: In addition, we've continued to be extremely active and introducing our credit teams to our most important firm wide client relationships.
Speaker Change: Are the dialogues are focused on scale multi product credit commitments and we anticipate meaningful conversions in 2025.
Speaker Change: Throughout the year, we also continued to deliver organic innovation.
Speaker Change: This includes our new rise climate transition infrastructure fund, which I just discussed.
Speaker Change: Last week, we announced the funds first investment.
Speaker Change: The $2 2 billion take private of <unk> power, one of the largest U S commercial scale providers of clean electric power.
Speaker Change: Also represents the first take private transaction for our impact platform.
Speaker Change: For our first GP led secondaries fund.
Speaker Change: After holding a final close in the back half of the year.
Speaker Change: Phone is approximately 70% committed or deployed.
Speaker Change: We expect to be back in the market later this year with our second vintage, which we believe can scale meaningfully as we continued to build and market leading strategy.
Speaker Change: In the fourth quarter, we held the first close for our new hybrid solutions fun.
Speaker Change: This is a natural extension of our private equity and credit solutions franchises and is an excellent example of how we're collaborating across the firm to execute differentiated deals and build new businesses. Our teams have already signed or closed five transactions to date.
Speaker Change: And just yesterday, we held the first close for <unk>.
Speaker Change: Our new dedicated mid cap strategy focused on developed markets in Asia.
Speaker Change: <unk> Leverages, our long standing presence in the region and is consistent with our strong track record of building out adjacent strategies.
Speaker Change: We received commitments for nearly half of our target fund size and expect to immediately see the portfolio with two investments.
Speaker Change: In private wealth, we made important investments to grow our capabilities.
Speaker Change: This includes developing additional perpetually offered solutions like T Park.
Speaker Change: Our new private equity vehicle.
Speaker Change: And continuing to grow the size of our private wealth team.
Speaker Change: Private wealth is a high priority growth area for the firm and we believe 2025 will be an inflection point for us in this channel.
Speaker Change: Finally, we delivered step function growth in our capital markets revenue in 2024, driven by the further integration of our broker dealer across our platforms and strategies.
Speaker Change: We expanded our product expertise in project finance and structured credit and notably began to capture incremental revenue from our credit platform during the year.
Speaker Change: We expect our capital markets business to be a significant contributor to revenue growth over time.
Speaker Change: Turning to deployment.
Speaker Change: We had a robust fourth quarter to close out one of our most active investing years on record.
Speaker Change: We deployed $10 billion of capital in the fourth quarter and 33 billion for the full year of 2024 and I'll highlight a few examples.
Speaker Change: TPG capital during the fourth quarter, we closed the acquisition of a majority stake ensure scripts, which is a unique health care network business that connects U S providers payers and pharmacies.
Speaker Change: Sure scripts existing shareholders, all of whom are strategics selected TPG as their partner to control and transform this important business due to our extensive track record in corporate partnerships, and our leading healthcare and technology franchises.
Speaker Change: We also announced that rise climate in our portfolio company intersect power.
Speaker Change: We entered into a strategic partnership with Google.
Speaker Change: As part of this collaboration intersect power is targeting $20 billion in renewable power investment by the end of the decade to support an innovative approach to data data Center development.
Speaker Change: Google is also a member of the rise climate coalition, demonstrating the power of our strategic relationships.
Speaker Change: <unk> differentiated opportunities.
Speaker Change: And our credit strategies, we deployed nearly $5 billion in the fourth quarter and over $16 billion in 2024.
Speaker Change: Our middle market direct lending platform Twinbrook had a record year with over $11 billion of gross originations.
Speaker Change: During the year Twinbrook transacted with nearly 70 unique sponsors.
Speaker Change: Demonstrating our leading position in the lower middle market.
Our incumbency among a growing base of high quality sponsors and borrowers as a powerful embedded source of origination.
Speaker Change: We completed nearly 300 add ons with over 100 existing borrowers and 2024.
Speaker Change: And structured credit we deployed more than $3 5 billion during the year.
Speaker Change: We continued to leverage the power of our long standing partnerships with some of the largest financial institutions in the world.
Speaker Change: Help solve their financing and capital needs.
Speaker Change: We recently completed a significant capital relief trade with one of the largest banks in the U S and we upsize a forward flow arrangement with a leading consumer finance company to purchase $1 $3 billion of whole loans.
Speaker Change: And in credit solutions, our deployment pace has continued to accelerate as we find significantly greater value in the private markets.
Speaker Change: We're building a portfolio of the spoke bilaterally negotiated senior secured investments with significant downside protection.
Speaker Change: We believe credit solutions is well positioned as a lender of choice and our pipeline continues to build given the growing number of companies seeking creative solutions to address their capital needs and are higher for longer rate environment.
Speaker Change: Similarly in real estate.
Speaker Change: Higher rates and dislocation in certain parts of the market.
Speaker Change: Continued to create interesting opportunities for our franchise.
Speaker Change: On a combined basis TPG TPG AG real estate deployed more than $2 billion in the fourth quarter and $6 billion during the year.
Speaker Change: After taking a cautious deployment approach in 2022 in early 'twenty three.
Speaker Change: TPG real estate began to increase its investment pace at an attractive point in the cycle.
Speaker Change: Truck deployed nearly $2 billion of capital in 2024, primarily in residential.
Speaker Change: Industrial and student housing sectors with over 40% invested and European assets.
Speaker Change: We focused on executing transactions of scale arising from liquidity and valuation pressures and acquired high quality assets from motivated sellers, including a including public companies pension funds and banks.
Speaker Change: TPG AG real estate also had a busy year deploying over $3 billion of capital and acquire more than 90 properties globally.
Speaker Change: This was broadly diversified across our U S Europe, and Asia businesses, and notably our Asia platform launched its first real estate credit strategy in South Korea, with an important strategic partner.
Speaker Change: The fourth quarter was also strong from a monetization perspective, we generated $7 billion of realizations in the quarter and 23 billion for a full year.
Speaker Change: A 50% increase from 2023 on a pro forma basis.
Speaker Change: Importantly, our realized performance revenues totaled $105 million this quarter, which is the highest level since early 2022.
Speaker Change: Jack will provide more details on what drove this result, but I wanted to highlight a changing dynamic in our transaction activity.
Jack: The two year period from 2022 to 2023.
Jack: We deployed nearly one five times the amount of capital we realized across our private equity strategies.
Jack: While our deployment pace has remained very strong in 2024.
Jack: Our realizations stepped up meaningfully in private equity and we've returned more capital than we invested during the year.
Jack: As we talk to our clients our DPI has consistently been a point of differentiation and shrimp.
Jack: Before I wrap up I want to make a few comments about our global partner meeting that we hosted in Brooklyn, a few weeks ago.
Jack: Every two years, we bring our entire partnership together to discuss the investment landscape our growth strategy.
And our culture.
Jack: Since our IPO, we've doubled our AUM to nearly $250 billion and during the meeting we spoke extensively about our path to doubling our AUM again to 500 billion over the next several years.
Jack: We set some very ambitious goals for ourselves and the full force of our partnership is engaged and driving the next leg of growth for TPG.
Jack: With that I'll turn the call over to Jack.
Jack: Thanks, John and thank you all for joining us today.
Jack: I'll begin with the discussion of our financial results and investment performance before wrapping up with our outlook for the year.
Jack: As John noted 2024 was an outstanding year across the firm, including a strong finish in the fourth quarter.
Jack: With after tax distributable earnings of $261 million, our highest level, yet as a public company.
Jack: Our fee related revenue in the fourth quarter was $461 million consistent with the third quarter. This.
Jack: This included $19 million in FRP are primarily attributable to incentive fees from one of our direct lending SMA.
Jack: For the full year fr $1 8 billion increased 37% year over year.
Jack: Primarily driven by the contribution from TPG AG following the closing of the acquisition in November of 2023.
Jack: We reported fee related earnings of $190 million for the fourth quarter and $764 million for the full year, which increased 26% compared to 2023.
Jack: Our 2024, FRE margin was 42% consistent with our previous guidance that we would exceed 40%.
Jack: As John mentioned realized performance allocations totaled $105 million in the fourth quarter, which is the second highest quarter. Since we went public three years ago.
This reflects the strength and increased diversification of our business as well as our ongoing efforts to drive monetization across the firm it is important.
Jack: To highlight that $43 million or 41% was generated by our credit strategies, including structured credit credit solutions and middle market direct lending.
Jack: In addition on the private equity side, our capital in growth platforms generated $35 million and $23 million respectively.
Jack: For monetization is primarily within the technology sector.
Jack: For the full year realized performance allocations were $195 million compared to $74 million in 'twenty three.
Jack: Our clients remain very focused on DPI as a key performance metric in our ability to drive successful realizations continues to be a real differentiator for TPG.
Jack: This is particularly important as we look to significantly increase our capital raised in 2025.
Jack: After tax distributable earnings for the fourth quarter totaled 261 million or <unk> 62.
Jack: Share of class, a common stock, which increased 27% compared to the year ago quarter and 38% sequentially.
Jack: For the full year after tax de of $837 million increased 43% versus the prior year, primarily due to significant growth in management fees from the addition of TPG AG as well as the meaningful increase in realized performance allocations I just discussed.
Jack: We finished 2024 with 246 billion of total assets under management up 11% year over year.
Jack: This was driven by $30 billion of capital raised and $19 billion of value creation.
Jack: Partially offset by 23 billion of realizations over the last 12 months.
Jack: It's also important to note that even with a strong investment pace, our dry powder increased from 51 billion to nearly 58 billion in 2024, which represents 41% of fee, earning assets under management.
Jack: AUM subject to fee, earning growth was $28 billion at the end of the fourth quarter, which grew 15% year over year.
Jack: This included 19 billion of.
Jack: AUM, not yet, earning fees, which increased 37% over the past year, primarily driven by successful fundraising across our credit platform.
Jack: Which generally earns fees on invested capital.
Jack: Our net accrued performance balance was $974 million at the end of the fourth quarter.
Jack: Even though we generated more than $100 million of performance related earnings for shareholders in the quarter, we still maintained our net accrued performance balance of nearly a $1 billion.
Jack: Due to strong value creation that I'll discuss shortly.
Jack: Our performance eligible AUM at the end of the fourth quarter totaled $209 billion or 85% of our total AUM of which $163 billion is currently generating performance fees.
Jack: Okay.
Jack: Turning to our portfolio, we have continued to generate strong investment performance with positive value creation across all our platforms for the fourth quarter and for the full year 2024.
Jack: Our private equity portfolio in aggregate appreciated more than 3% in the fourth quarter and 10% over the last 12 months.
Jack: Overall, the portfolio companies within our capital growth and impact platforms continue to meaningfully outperform the broader market with revenue growth of approximately 16% over the last 12 months.
Jack: In credit our portfolio appreciated over 3% in the quarter and 13% over the last 12 months.
Jack: And middleware excuse me in middle market direct lending, we've continued to maintain our disciplined credit underwriting and strong fund performance as we scaled.
Jack: As of December 31, Twin Brooks current fund middle market direct lending five.
Jack: Is tracking above its targeted return range with a gross IRR of 18% and a net IRR of 14%.
Jack: Our credit solutions platform also had strong results for the quarter and the year.
Jack: As our credit solutions funds generated net returns of more than 5% in the fourth quarter.
Jack: And from 11, 5% to 14% for the full year.
Jack: These returns far outpaced the U S high yield bond index, which generated a return of just 17 basis points in the fourth quarter and eight 2% for the year.
Jack: In addition, our essential.
Secondly, social housing fund generated a net return of three 2% during the fourth quarter and 13% for 2024.
Jack: Lastly in structured credit our asset based credit funds net IRR since inception remained above its target range at nearly 14%.
Jack: At the end of the fourth quarter.
Jack: Our mortgage value partners fund was $6 5 billion of AUM generated a net return of 12% for the year with significantly less volatility less volatility than the broader market indices.
Jack: In real estate Tpg's real estate portfolio appreciated, 3% in the fourth quarter and 10% over the last 12 months.
Jack: This outperformance was primarily driven by the platform's continued focus on assets with positive secular demand trends and operating fundamentals such as industrial data centers purpose built single family rentals and student housing.
Jack: Additionally, TPG AG real estate portfolio appreciated 60 basis points in the fourth quarter and more than 2% over the last 12 months.
Jack: Turning to fund raising we raised $8 $8 billion during the fourth quarter and 30 billion for the full year.
Jack: Driven by continued broad based credit fund raising.
Jack: Strong first closes across our climate private equity strategies.
Jack: As John noted, we raised more than 12 billion across our credit strategies, and 24, which exceeded the $10 billion target we had set for the year.
Jack: Additionally, we raised more than $14 billion in 2024 across our private equity and infrastructure strategies.
Jack: Overall, our fundraising momentum remains strong.
Jack: We expect aggregate capital raising to increase significantly in 2025 compared to 2024.
Jack: Driven by the following.
Jack: Number one continued scaling of our credit platform as we successfully introduce and expand our client partnerships.
Jack: Across our credit strategies.
Jack: Number two additional closes for our climate private equity and infrastructure campaigns.
Jack: Number three the completion of our TPG growth campaign.
Jack: Number four initial closes for our next flagship buyout funds TPG capital and health care partners.
Jack: Number five initial closes for our next generation funds and our GP solutions and tech adjacency strategies and in rise our broad based impact private equity fund.
Jack: And six increasing penetration of the high net worth market generally where we are.
Jack: We're building new products might tip up and investing in our distribution team.
Jack: Regarding the timing around teapot I'd like to note that we continue to make steady progress toward our goal of launching in the first quarter.
Jack: This would enable us to collect indications from our initial channel partners and position us to go live with the fund in the second quarter.
Jack: Stepping back I'd like to provide some perspective on 2024 and our outlook for 'twenty five.
Jack: We entered 2024 excited about our acquisition of Angelo Gordon.
Jack: And focused on putting the building blocks in place for our next wave of growth.
Jack: We've made great progress and have begun to capitalize on the revenue synergies we discussed at the time of the acquisition.
Jack: Financially, we always expected 2024 to be a transitional year with slower growth as we raised significant capital to scale, our credit businesses that wouldn't flow into.
Jack: AUM until 2025.
Jack: And as our new climate, P/e and infrastructure funds wouldn't activate until late last year.
Jack: Consistent with that expectation.
Jack: Fee, earning AUM of 141 billion at the end of 'twenty four grew approximately 3% versus year end 2003.
Jack: This was driven by several timing related factors.
Jack: First in our capital platform step downs and monetization exceeded fee, earning capital during the year.
Jack: Capital raised by approximately $2 billion.
Jack: As we focused on driving performance and realization activity in advance of launching TPG 10.
Jack: Second in the fourth quarter the fee base in our first rise climate fund stepped down to actively invested capital. After we activated Trc two at the end of September.
Jack: The step down was unusually large because there were a couple of signed investments in Trc, one that had not yet closed as of year end.
Jack: Additionally, given the nature of our climate strategy, we often stage our commitments to invest additional capital as we build portfolio of companies.
Jack: As the final investments in Trc, one close and as we make these follow on investments, we anticipate a meaningful increase in actively invested capital.
Jack: And management fees for impacted platform.
Jack: Additionally, in our credit business much like in private equity, we've been focused on taking advantage of attractive market conditions to drive monetization.
Jack: Towards the end of the fourth quarter, we realized an incremental $840 million in proceeds that had not yet been distributed to Lps at year end.
Jack: Pro forma for this distribution realizations and credit for the quarter were $3 2 billion, rather than our reported $2 4 billion.
Jack: As we look ahead at 2025.
Jack: We expect these factors to reverse.
Jack: And we expect to see significant growth over the course of the year.
Jack: In our capital business.
Jack: AUM should grow meaningfully this year as we hold first closes on our new flagship funds around mid year.
Jack: Likewise in rise climate, we expect accelerated AUM growth.
Through both continued fundraising for Trc too and.
Jack: And continued deployment and AIC growth in Trc one.
Jack: On management fees, we expect to see growth in the first half of the year driven by continued progress on credit deployment as well as fund raising for our climate and transition infrastructure funds.
Jack: We expect our growth to accelerate in the back half of the year with the activation of our new capital funds.
Jack: Additionally, as we progress through our climate and capital campaigns, we expect catch up fees to step up throughout the year and into 2026.
Jack: We expect continued strength in capital markets revenue driven by a solid pace of transaction volumes and the ongoing expansion of our broker dealer capabilities across all our platforms, including credit and impact.
Jack: We expect our compensation and benefits expense to increase as we continue to invest in our teams to drive organic growth.
Jack: With a particular focus on private wealth and institutional distribution capabilities.
Jack: We also expect to see a seasonal step up of approximately $15 million in the first quarter.
Jack: Driven by employer tax expense associated with our annual RSC vesting, which just occurred in January.
Jack: Taking all of this into account, we expect our FRE margin to decline modestly in the first quarter and then expand throughout the year as we grow fr and realize additional operating leverage.
Jack: We expect to exit 2025, with an FRE margin in the mid Forty's.
Jack: Wrapping up we're very pleased with the strong investment in our financial performance, we delivered for our stakeholders in 2024.
Jack: We also made substantial progress across key drivers of our business, including fundraising deployment and organic growth.
Jack: We're entering 2025 with significant momentum and we have multiple levers to generate accelerated growth during the year.
Jack: We're excited about the opportunities to continue to provide differential differentiated returns to our clients and build long term value for our shareholders.
Jack: Now I will turn the call the operator to take your questions.
Jack: Okay.
Speaker Change: At this time, if you wish to ask a question. Please press star one on your telephone keypad, you may remove yourself from the queue by pressing star two again, please limit yourself to one question. We will take our first question from Ken Worthington with Jpmorgan you May proceed.
Ken Worthington: Hi, Good morning, Thanks for taking the question I wanted to follow up on your annual TPG Partners meeting you mentioned the doubling of AUM in the coming years, where do you place a bigger presence and an opportunity for insurance in your list of priorities, which you commented being credit climate growth in wealth.
Ken Worthington: Highlight of what is important and where there are schemes that were either reoccur throughout your gathering or that you think might be helpful to shareholders. As we think about the next couple of years here.
Speaker Change: Yes, Thanks, Ken I appreciate that.
Ken Worthington: Yeah, Let me, let me frame it in the following way because this is what I did.
Speaker Change: At the at the partner meeting and.
Speaker Change: And we spent a lot of time talking about each of these drivers, but I think the easiest way to frame. It is.
Speaker Change: Is there sort of five quarters.
Speaker Change: Five core growth drivers of that.
Speaker Change: We think about in terms of doubling our AUM again.
Speaker Change: First we will would be and some of these youll recognize but the first would be continuing to grow our core I think as you know.
Speaker Change: We've always talked about our investing performance and the quality of our performance as well as the relationships that we have with our clients and on the back of that I think we have been since our IPO.
Speaker Change: We've been able to grow our fund overfund sizes anywhere between 10% to 30%.
Speaker Change: And that's been a core.
Speaker Change: Objective of ours, and we continue to be focused on our ability to grow in an appropriate way vintage.
Speaker Change: Vintage over vintage so number one is growing our core number two.
Speaker Change: Would be continue.
Speaker Change: Our track record of organic innovation, which we've talked a lot about on this call.
And importantly, scaling what we built.
Speaker Change: I think as you know I think we've had a very good track record of growing our firm through organic innovation a series of step out strategies.
Speaker Change: And.
Speaker Change: We generally see the opportunities built into them and then try to scale over time I think.
Speaker Change: Examples of that that are important that we've already mentioned.
Speaker Change: Just to reiterate our things like our secondary strategy TTS.
Speaker Change: Fund raise that will work that we're that we're engaged in now for our tech adjacency strategy, Teco, which I mentioned.
Speaker Change: Where we closed on an.
Speaker Change: Nearly half of our target for our first fund, which is our first growth equity strategy in Asia.
Speaker Change: Hybrid, which I talked about transition infra.
Which is off to a very strong start all of these are sort of pillars of organic growth.
Speaker Change: <unk> are off to a very strong start play an important role in our overall mix of products and capabilities.
Speaker Change: And all have the ability to grow in scale.
Speaker Change: Into.
Speaker Change: They are next generation funds.
Speaker Change: The third.
Speaker Change: Is inorganic additions to our business obviously, when we went public we talked about continuing to diversify our platform. We successfully did that with Angelo Gordon.
Speaker Change: I think we've executed very well in terms of the integration as I said, we are operating as one firm, but there are other areas. We think that we can be.
Speaker Change: Based upon our capabilities and what we've learned about integrating strategies integrating firms I think there are other areas, where we can continue to be opportunistic and aggressive about adding inorganically.
Speaker Change: Areas just generally speaking.
Speaker Change: Like.
Speaker Change:
Speaker Change: To expand our infrastructure capabilities like digital infra as one example.
Speaker Change: Another might be geographic in terms of expanding our footprint Europe as an example, where we spent some time, but there are a number of other areas as well the fourth would be.
Speaker Change: What we talked about on wealth and continuing to penetrate.
Speaker Change: With both.
Speaker Change: Spanning our capabilities expanding the breadth of our distribution capabilities on the private wealth side as well as product development.
Speaker Change: Pop <unk>, which both of Us mentioned.
Speaker Change: We are in the process of.
Speaker Change: Rolling it out.
Speaker Change: And launching at the end of this quarter.
Speaker Change: And beginning to foreign capital into the second quarter into the middle of the year. There are other areas, where I think we feel we can continue to develop traction in that part of the market. We have as you know a BDC on the credit side, which T cap, which we can continue to expand its penetration.
Speaker Change: We at some point, we'll be focused on introducing an asset based credit product.
Speaker Change: And.
Speaker Change: And then there are areas, where I think we can penetrate.
Speaker Change: In these types of products in our real estate franchise given the.
Speaker Change: The exceptional performance of our real estate franchise and the ability to it too.
Speaker Change: Product development into that part of the market as well and then lastly, as insurance, which obviously is a kind of a category.
Speaker Change: A separate category, but it's also.
Speaker Change: It goes back to the inorganic strategy and on the insurance side I think we continue to work on building our insurance capital base.
Speaker Change: Across several different vectors.
Speaker Change: One is essentially just continue to expand our relationships if you look at.
Speaker Change: The progress that we made in 2024, and where we're managing assets on behalf of insurance companies. We made very good progress and continuing to broaden our partnerships.
Speaker Change: Secondly, it would be something in the on the debt that's on the M&A side on the insurance on the insurance side. We continue to do some work on that we continue to look at a number of situations.
Speaker Change: The market continues to evolve in terms of.
Speaker Change: The types of organizations that are looking for.
Speaker Change: Alternative asset management partnerships, we're not going to do something unless it fits us well and unless we feel like it's the right fit from the from a perspective of growth over time.
Speaker Change: But we continue to work on it we continue to see an interesting pipeline of opportunities and I think that over time.
Speaker Change: Our expectation is that.
Speaker Change: If we once we find the right partnership its ability to really lever our growth across in particular, our credit platform, but also beyond that including what we're doing in infrastructure.
Speaker Change: Our infrastructure credit potentially.
Speaker Change: As well as real estate and real estate credit.
Speaker Change: It will have a relative kind of leveraging effect across those strategies, but probably.
Speaker Change: Lever our credit our credit.
Speaker Change: Platform most significantly so those are really the five pillars I think that we've talked about and spend a lot of time on and Thats, where we expect.
Speaker Change: Most of our growth to come from.
Speaker Change: Amazing. Thank you so much that's really helpful.
Thank you we will take our next question from Alex Blaustein with Goldman Sachs.
Alex Blaustein: Hi, Good morning, everybody Hey, good morning, just maybe to build on that John.
Alex Blaustein: When it comes to insurance, we've talked about it for a couple of quarters now maybe just remind us how important is it for TPG to remain fairly balance sheet light capital light.
Alex Blaustein: Value at various insurance opportunities out there.
Alex Blaustein: And a bit of a follow up to that not so much related to insurance, but do partnerships broadly we've.
Alex Blaustein: We've seen a number of alternative asset managers formed partnerships with some of the larger traditional firms.
Alex Blaustein: More on the JV fashion more in kind of product region and distribution. How important is that for you guys as you're thinking about your plan over the next couple of years.
Alex Blaustein: Yes, well I think on the first part of your question as it relates to.
Alex Blaustein: The balance sheet considerations.
Alex Blaustein: And we've said this consistently.
I think that.
Alex Blaustein: We are open minded I think the important I think the most important thing for US is finding the right partner in terms of quality in terms of the ability to grow.
Alex Blaustein: And the nature of how that partner wants to engage with us and we I.
Alex Blaustein: I think I put a pretty high bar on that and we will continue to.
I think that.
Alex Blaustein: We're mindful of the fact that I think that when you think about growth in the markets today.
Alex Blaustein: What we're finding and what we're observing is that there is sort of an interesting.
Alex Blaustein: Convergence going on between you know the market and our shareholder base I think appreciating and wanting us to continue to be focused on the let's call. It the balance sheet light model and so.
Alex Blaustein: And essentially drive our growth with FRE growth and some combination of FRE and PRA growth driving the value creation for our shareholders, but.
Alex Blaustein: But on the other hand wanting some of the.
Alex Blaustein: Leveraging effects of having a strong balance sheet.
Alex Blaustein: And having some inherent ability to leverage that balance sheet to drive growth.
Alex Blaustein: So I think.
Alex Blaustein: I think in fact in conversations that you and I have had I think you would call that sort of your cake and eat it too strategy.
Alex Blaustein: And so I think that where we're trying to think through.
Alex Blaustein: As we as we look at different opportunities, we're trying to think through.
Alex Blaustein: That balance and to.
Alex Blaustein: To be honest with you I think we're sort of going to know it when we see it in terms of what feels right for us but.
Alex Blaustein: Hi.
Alex Blaustein: I don't think that we will end up in a position where we transform ourselves into.
Further further when you think about the spectrum I don't think we will transform ourselves into a full on kind of balance sheet heavy model I do not think we will do that.
Alex Blaustein: I think it'll be more of a hybrid structure when we find it being mindful of I think what kind of quality growth looks like in the market. So that's how I would kind of think about that.
Alex Blaustein: And then with respect to other partnerships I think.
Alex Blaustein: What we see happening in the market as these partnerships are starting to evolve just if you just look at insurance as an example.
Alex Blaustein: When you look at some of the traditional insurance companies and their realization that the competitive dynamic, particularly in life and annuity has changed and evolved and so you're starting to see the.
Alex Blaustein: A transformation in how some of the public companies on the insurance side and even some of the Mutuals are starting to think about the importance of partnerships to enhance their asset management capabilities and naturally we are in that dialogue.
Alex Blaustein: I think that based upon our capabilities as investors the breath of our platform and some of the some of the more innovative.
Alex Blaustein: Investment strategies that we've been able to build we are naturally in that dialogue with a number of them and I think it's I'm not sure of that.
Alex Blaustein: As we go forward that will just be kind of one size fits all in terms of what these partnerships will look like.
Alex Blaustein: And we continue to we're engaged in exploring them with I would say several.
Alex Blaustein: Several sort of <unk>.
Alex Blaustein: Larger more traditional.
Alex Blaustein:
Alex Blaustein: Companies, So that's on our radar screen as well and.
Alex Blaustein: We will continue to work on them and my guess is that.
Alex Blaustein: Those will continue to play a role in terms of how our industry.
Alex Blaustein: <unk> continues to adjust.
Speaker Change: Awesome very helpful. Thanks for that.
Speaker Change: Thank you. Our next question comes from Michael Cyprus with Morgan Stanley.
Michael Cyprus: Great. Thank you good morning, just coming back to your commentary around looking to double AUM over the next several years it sounds like that could maybe be under five years, maybe I'm, putting words in your mouth, but is that fair just how youre thinking about that you also mentioned five.
Michael Cyprus: Biggest drivers just curious which of those do you see as the most meaningful or two how much would you sort of anticipate from organic versus inorganic and then on the inorganic side, maybe just remind us of your hurdles that criteria. Maybe you can elaborate on some of the areas that youre thinking about you mentioned broadly infrastructure and geographic expansion. Thank you.
Michael Cyprus: Yeah.
Michael Cyprus: I think you are characteristic of the timeframe.
Michael Cyprus: Mike is it fair.
Michael Cyprus: And.
Speaker Change: I used the word several years and so I think your characterization of it is fair and in the ballpark.
I think that.
Speaker Change: It's hard to predict exactly sort of what kinds of opportunities are kind of realizable win so.
Speaker Change: I'll leave it at that on the timing.
Speaker Change: I think that.
Speaker Change: With respect to sort of how to think about these drivers.
Speaker Change: I mean, maybe one way to characterize that I took I tried to take a shot and then youll have to.
Speaker Change: You have to give us some leeway on this but I tried to take a shot at thinking about.
Speaker Change: Through a combination of fund over fund growth.
Speaker Change: Organic innovation growing those strategies.
Speaker Change: And continue.
Speaker Change: Continuing to build into the wealth channel.
And just our normal fundraising and the expansion of our related expansion of our relationships into other products.
Speaker Change: For instance, we mentioned that.
Speaker Change: With a G now fully integrated our credit businesses.
Are really benefiting from expanding relationships with large pools of capital and we have we have a if you looked at our pipeline sheet you would what you would see is that.
Speaker Change: There are a lot of new relationships that are opening up for our credit platform. So if you look at all of that.
Speaker Change: Think that without.
Speaker Change: Inorganic.
Speaker Change: Without inorganic growth.
Speaker Change: That we feel like.
Speaker Change: We don't we Wouldnt double.
Speaker Change: But we would get.
Speaker Change: We will get a significant amount of the way there.
Speaker Change: So let's call it something like $2 50 to 400 something like that.
Speaker Change: And then.
Speaker Change: Using organic levers between tuck in strategies or add in strategies that we think are interesting.
Speaker Change: The categories that I mentioned as.
Speaker Change: As well as insurance.
Speaker Change: I think that that either gets us there puts us over the top and it could be don't hold me to those ratios because it could be some sort of mix of that depending upon the size of the opportunities that come along one of the things I think we feel though pretty strongly about is that.
Speaker Change: If we see the right kinds of opportunities on the inorganic front I think we feel like we have developed clear.
Speaker Change: Clearly have developed the expertise to know how to execute on those deals and also to know how to integrate them.
Speaker Change: Because I think what we've learned in the course of the Angela Gordon transaction has been invaluable on that and I think that if you you know us well enough to know that I think.
Speaker Change: The integration has gone extremely well, we're operating as one firm where starting new strategies together like hybrid which is a co sponsored strategy between PE and credit.
Speaker Change: You can't really do that.
Speaker Change: Doing deals like we met we talked about last quarter like dish as an example, like Directv dish.
Speaker Change: And what we were able to put together on the credit side. There are combined with our private equity capabilities you can't do that unless these teams are operating well together so.
Speaker Change: That's how I would that's how I'd frame it for you.
Speaker Change: Great. Thank you.
Speaker Change: Thank you. Our next question comes from the line of Glenn Schorr with Evercore.
Hello there.
Speaker Change: Hey, Glenn.
Speaker Change: So I appreciate the aspirational target and there's a lot of moving parts and we idiots always want to try to pin you down to numbers, So I apologize.
Speaker Change: Im curious within this conversation about the <unk>.
Speaker Change: Asset growth and all the drivers underneath.
Speaker Change: How do you think about FRE alongside with that.
Speaker Change: Meaning can it grow in lockstep with the asset growth given more drivers.
Speaker Change: And if you had any thoughts on how to define significantly more capital being raised next year that'd be great also appreciate it.
Speaker Change: Well.
Speaker Change: I think that I'll take a shot at it and then maybe Jack might have some perspective on this as well, but I think if you look at the FRE growth dynamics of.
Speaker Change: And map that against the growth of our business, maybe like the visual that I would use or the consent.
Speaker Change: I would frame it conceptually Glenn is that I think that.
Speaker Change: Our FRE.
Speaker Change: Kind of.
Speaker Change: Follows the.
Speaker Change: The growth of our strategies the innovation your organic innovation and it kind of stair steps because what ends up happening right as we start these new strategies.
Speaker Change: Vintage one is usually something that we kind of put together.
Speaker Change: Through some combination of partnerships that we have with <unk>.
Speaker Change: Strong relationships of ours.
Speaker Change: Invest while we're doing that.
Speaker Change: Then raise more capital based upon people being able to tangibly see how we're investing.
Speaker Change: Okay, and that sort of that sort of is what we used to build into kind of version one and there are they are you know there've been occasionally a few exceptions like exceptions to that.
Speaker Change: Or what I would call sort of like a bit of a outlier.
Speaker Change: Like.
Speaker Change:
Jim and the impact team did on.
Speaker Change: On climate, one as an example in terms of raising a very large scale.
Speaker Change: First generation fund, which is unusual in our industry.
Speaker Change: But generally that's kind of how we innovate and then what happens is based upon the success of that we then can go into vintage too.
Speaker Change: In a more normalized kind of capital formation way, which expands the capital base and Leverages, our ability to do that and Leverages on the team. What we generally try to do is we generally try to use existing resources to the best we can to lever entities organic builds and then as the capital base grows we add resource.
Speaker Change: As to it we add.
Speaker Change: Sure.
Speaker Change: In order for it to be kind of both FRE accretive margin accretive et cetera, but it usually takes I mean, one of the things that if you study it what youll find is that organic innovation in our industry. It takes a long time.
Speaker Change: To get to sort of scaled fund sizes.
Speaker Change: It pays off because obviously, it's very super accretive.
Speaker Change: The way the way you build it.
Speaker Change: And it's very it's from a shareholder perspective, I think its very value additive.
Speaker Change: And I think we've been able to do this consistently so I see it more like a stair step function.
Speaker Change: Which for US if you look at kind of where our platform is and where our margins are.
Speaker Change: And what we've said we were we are trying to accomplish in terms of scaling our various platforms as.
Speaker Change: As well as the way we build into it for US. The key is that we continue to get to that level of scale, where we really start to see that kind of next stage of margin expansion, because FRE is kind of growing faster than.
Speaker Change: And where scale, we're scaling the infrastructure essentially.
So.
Jack: That's how I would describe it I don't know Jack if you would add anything to that but yes.
Speaker Change: The best response, I mean, Glenn.
Speaker Change: Basically say, what you're asking I think you're asking us about FRE margin expansion and as we get to call it 4% to 500 billion of.
Speaker Change: AUM and scale <unk>. Similarly, we should definitely see more operating leverage I mean, I talked about our near term target for FRE margin.
Speaker Change: By the time, we get to this kind of size, we should clearly be in the fifties. So not only should in my mind that Alicia FRE expand alongside AUM, it should expand faster than AUM, because we'll definitely be generating operating leverage on our expense base.
Speaker Change: Really appreciate all that color. Thanks.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from Brian Bedell with Deutsche Bank.
Brian Bedell: Hey, good afternoon folks and good morning, so sorry.
Speaker Change:
Speaker Change: Question on <unk>.
Speaker Change: Hum.
Speaker Change: I guess, it's a two part question one on how youre seeing the.
Speaker Change: The intact.
Speaker Change: From the television partnership with intersect power your portfolio company and in Rice climate in and Google are in.
Speaker Change: In terms of the I guess, just first of all the financial impact of TPG from that partnership and then longer term the potential for more of these types of partnerships.
Speaker Change: In growing the impacts platform broadly and I guess I, just just linking into the 500 billion.
Speaker Change: To what extent do you see the opportunity in impact and infrastructure, assuming that youre going to keep infrastructure and the impact platform.
Speaker Change: For this to be the fastest grower.
Speaker Change: In your business overall, maybe even to get to the size comparable to the capital platform in five years.
Speaker Change: Sure. This is Jim culture, Let me give a report from the front on the climate impacts side of the business where activity remains very high while at Mr. X also are obviously shifting in the.
Speaker Change: In the background.
Speaker Change: The intersect Google.
Speaker Change: Relationship that you talked about is a very important relationship and I think it's indicative of what's happening on the ground in the climate marketplace. Let me give you four quick points on this first of all we get questions from time to time on our existing portfolio.
Speaker Change: It's the same for us because we launched the climate effort in the middle of the Trump administration, not expecting the IRI etcetera, so as we built that portfolio.
Speaker Change: Most of the capital went in before the IRA.
Speaker Change: Post CRA has experienced investors in <unk>.
Speaker Change: Regulated industries, we knew which neighborhoods to stay out of so we're seeing very muted effects in our portfolio that we just exited one of our positions next tracker and a company that has grown very strongly throughout all of this.
Speaker Change: So portfolio effects seem quite muted so far secondly.
Speaker Change: There's a lot of attention on the U S. Right now I would make sure that you pay attention to what's happening around the world.
Speaker Change: Last year, 65% of energy related spending was on clean energy and the <unk>.
Speaker Change: Question of how much drilling one is doing is dependent on whether you have fossil fuels to drill for it which is not true in most of the world.
Speaker Change: So the robust opportunities internationally remain high.
Speaker Change: Third to your point on data centers, there's a lot of attention right now on.
Speaker Change: What's happening in Washington, and its effect on things like offshore wind in Evs, which were areas, we've been quite vocal about avoiding historically.
Speaker Change: While that debate has been going on we're seeing an absolute explosion of spending around the grid in the U S driven in part by data centers, but really a more broad based electrification of our economy and thats, giving rise for the opportunities that youre seeing at places like intersect.
Speaker Change: And you'll see a series of announcements from us of other opportunities to build out clean power backbones for what's happening in AI and whether its deep seeker open AI. The one thing that's clear is more power will be needed.
Speaker Change: And we are very well positioned.
Speaker Change: In that world to provide returns on that so I think this really is opening up underneath the atmospherics of what's happening in Washington, It's really opening up a very large investment opportunity for us.
Speaker Change: And the last point is.
Speaker Change: While the debate goes on in Washington, and pay attention to what's happening on the ground. If you look at our recent investments whether it's intersect that could be tens of billions of dollars of spending at the company level at intersect.
Speaker Change: We our largest deal in climate was a European based home decarbonization, They don't really care much about what's happening with U S policy.
Speaker Change: And we just to take private I think would not have been able to be done without some of the disruption in the market. So this disruption is creating opportunity.
Speaker Change: So on the ground, we continue to see a lot of opportunity our.
Speaker Change: Our investor base is 70% outside of the U S for the climate product. So far we haven't seen any one step back.
Speaker Change: Maybe some elongation to fundraising, but generally long term, we feel very good about that.
Speaker Change: <unk> trend.
Speaker Change: Obviously, a lot of that trend is going to be input related essentially credit related too and we.
Speaker Change: Feel good about our launch there in our ability to continue to expand the product set.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you. Our next question comes from Mike Brown with Wells Fargo Securities.
Mike Brown: Okay, great. Thanks for taking my question.
Speaker Change: So lots of commentary on the management fee dynamics in the fourth quarter and it's there.
Speaker Change: The pieces are in place for growth here in 2025, but just given some of the noise here I'm, just hoping to maybe narrow in on a quarter over quarter movement in <unk> and maybe just the right range to consider here as we think about.
Speaker Change: Cash here for <unk>. Thank you.
Mike Brown: Yeah, Hey, Mike.
Speaker Change: Thank you.
Speaker Change: What I said in my comments is we do expect obviously.
Speaker Change: Yes.
Speaker Change: For our growth throughout this year, we've put we've been working hard throughout 2000 and for to put the building blocks in place for that if you think about the trajectory of that growth during the year. This year.
Speaker Change:
Speaker Change: It should accelerate towards the back half of the year as we add more funds to the fund raising pipeline.
Speaker Change: A bit about the kind of roadmap for fund raising for the year one of the big events for this year is going to be the addition of our TPG capital in healthcare partners funds.
Speaker Change: We're where we expect to increase the size of that capital base.
Speaker Change: Fund Overfund just like we did.
In the last cycle and we expect to hold our first close around mid year. So activation will depend upon when the current funds are fully deployed but if you assume and activation in the back half of the year.
Speaker Change: That should that activation should accelerate FRE growth so I'd expect.
Speaker Change: Moderate growth in the first quarter accelerating towards the back half of the year.
Speaker Change: Okay. That's helpful. Thank you Jack.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from are not good luck with BNP.
Speaker Change: Yes, good morning.
Speaker Change: Just a quick question on <unk>.
Speaker Change: If I had one is that 20% of <unk>.
Speaker Change: I'm just wondering how the economy itself. This is kind of today, whether this is through a fund or to invest in one of the clinics.
Speaker Change: In that.
Speaker Change: Yeah.
Speaker Change: What's that.
Speaker Change: Good deal.
Speaker Change: If I could just have a quick follow up on the bridging the growth in <unk>.
Speaker Change: <unk> and the capital and infra.
Speaker Change: I was wondering if there was any co invest I guess gets captured in the in the UN.
Speaker Change: For me is that that would never then.
Speaker Change: <unk> is there.
Speaker Change: Any of that to US is just the timing.
Speaker Change: The timing of activation.
Speaker Change: Yes.
Speaker Change: <unk> to be clear is that as a fund level investment and opportunity to grow with that would be continued investment into intersect as it as it moves forward with its strategy.
Speaker Change: It is indicative of a larger trend which is <unk>.
Speaker Change: Multiple.
Speaker Change: Multiple opportunities like intersect that are flowing into the market today because of this grid growth based on just a radical shift in the demand for energy in the U S.
Speaker Change: So think of it as ongoing opportunity to invest into intersect and opportunity to expand that strategy.
Speaker Change: As a way of driving growth in our infrastructure and climate activity.
Speaker Change: And co invest Jack.
Speaker Change: Co invest theres always I mentioned some of the some of the big drivers of the Delta in Q4, but we always are going to have some of our capital raise come through come through no fee no carry co.
Speaker Change: Co invest vehicles, it's an important part of our business.
Speaker Change: I'm sure you know from all the Lps and the industry delivering co invest is kind of table stakes to their view of relationships. So every quarter we will.
Speaker Change: Have a portion of our of our capital raising in Indophenol carry co invest vehicles that was the case for us in some of our credit.
Speaker Change: Capital raising in Q4 and it was the case for example in TPG capital, where we disclosed how much capital. We raised we're obviously not in the market for either Asia or the capital campaigns now so most of what you saw on the capital platform would have been in co invest alongside the deals we're doing in capital.
Speaker Change: That will go in cycles, but over time, you should expect that to be an important part of our business as it is for our Lps.
Speaker Change: Yes.
Speaker Change: Great. Thank you very much.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from the line of Dan Fannon with Jefferies.
Dan Fannon: Thanks, Good morning, I wanted to follow up on credit performance, good and as we think about this past year.
Speaker Change: One year kind of post integration of the deal Bruce about just kind of a growth outlook, where you are and kind of maximizing the integration and kind of pro forma leverage of that of the combined businesses as we think about 2025 and beyond.
Speaker Change: I still think it's early days.
Speaker Change: Lot of respects in terms of maximizing the combination.
Speaker Change: I think you heard me mentioned the.
Speaker Change: Opening.
Speaker Change: The dialogue with many of our largest pools of capital that are partners of ours.
Speaker Change: And obviously we.
Speaker Change: In certain respects.
Speaker Change: With many of those.
Speaker Change: The credit our credit teams are meeting some of those.
Those partners for the first time.
Speaker Change: In any asset class raising capital is a multi meeting cycle.
Speaker Change: If you observe how how that how that the pace of that.
Speaker Change: Really works.
Speaker Change: So.
Speaker Change: We're now at this stage deep into that process.
Speaker Change: Multiple meeting cycle with large pools of capital.
Speaker Change: Some of which we are working on customized multi product or multi strategy sma's some of which are single.
Speaker Change: Product focused depending on how those Lps want to allocate.
Speaker Change: But it's across the board.
Speaker Change: The engagement is really across the board now and so.
Speaker Change: If you again as I mentioned like if you looked at our pipeline and where we expect to convert.
Speaker Change: On a number of those dialogues.
Speaker Change: I think that those represent significant incremental allocations to those strategies.
Speaker Change: That will.
Speaker Change: Meaningfully expand our capital base.
Speaker Change: And some of that's happened already.
Speaker Change: Where we were able to create those conversions, but there's still a lot of that on the come so I think that in la and a lot of respects. It's still early days in terms of the expansion of the.
Speaker Change: Credit capabilities across across the strategies and remember.
Speaker Change: The platform is a multi strategy business, it's not a model line business. So.
Speaker Change: There are different types of partnerships with different types of Lps.
Speaker Change: That are available to us that we're working on from.
Speaker Change: But across the across the across the distribution of different types of LP partners of ours.
Speaker Change: I think that also given the nature of the integration of AG entity BG and the combination of the combined brand if you will.
Speaker Change: The reach that I think.
And penetration that we can have.
Speaker Change: In the private wealth and kind of mass affluent channels is different as a result of.
AG Napoli now being part of TPG.
Speaker Change: And the relationships that we have with channel partners and so I think that Thats also another area.
Speaker Change: Which where theres a lot of white space for us in terms of growing our penetration so.
Speaker Change: I think a lot more to come there.
Speaker Change: Thank you.
Speaker Change: Thank you. This concludes the Q&A portion of today's call I would now like to turn the call back over to Gary Stein for closing remarks.
Speaker Change: Great. Thank you operator, and 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. Please feel free to reach out to the Investor Relations team.
Speaker Change: Thanks, everyone.
Speaker Change: This concludes today's TPG fourth quarter 2024 earnings call and webcast. You may disconnect. Your lines at this time and have a wonderful day.
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