TPG Inc. reports its first-quarter results on Tuesday, May 10, about three months after the Fort Worth- and San Francisco-based private equity firm went public.
While the company has more than $113.6 billion in assets under management and has been around since 1992, it maintains a relatively low profile.
Founded by Bass family alumni James Coulter and David Bonderman, the firm underwent its first major leadership shifts last year, including naming Jon Winkelried sole CEO, followed by Jack Weingart as CFO, both brought on as the firm moved closer to announcing its IPO. The firm’s IPO saw it raise more than $1 billion, offering 33.9 million shares at $29.50. The company is now listed on the NASDAQ under the symbol TPG.
In May 2021, TPG announced that Coulter became executive chairman of the firm and Winkelried, who has served as co-chief executive officer with Coulter, was named sole chief executive officer. Bonderman continues as chairman of TPG.
Coulter and Bonderman’s first big investment with TPG (then known as Texas Pacific Group) was $66 million in then-failing Continental Airlines, which ultimately made the firm a $640 million profit, according to Forbes.
Bonderman said in a interview two years ago that the pair saw that while Continental had twice filed for bankruptcy, it had also made $900 million a few years’ earlier. “We thought that if you got proper management and behaved reasonably with the unions, who hated the management, the numbers might be overwhelmingly good,” Bonderman said in the interview.
That is kind of the blueprint of how private equity firms typically make money by helping companies become more efficient, said Thomas Allison, associate professor of entrepreneurship at the TCU Neeley School of Business.
“There’s probably two or three kinds of different classes or ways they can do that, but that’s the core of it,” he said.
Allison said TPG is similar to other private equity firms such as KKR, Blackstone, The Carlyle Group and Bain Capital. KKR and The Carlyle Group are also publicly traded.
The firm operates globally across several investing arms, including TPG Capital, TPG Real Estate, TPG Healthcare Partners, TPG Life Sciences Innovation and TPG Rise Fund.
Current investments in the firm’s portfolio include short-term rental leader Airbnb, cybersecurity company McAfee and business services provider People 2.0.
Former investments include Fender Musical Instruments,Greek yogurt maker Chobani, Burger King and Petco.
While TPG has maintained a low profile, it has received some press for its Rise Fund, Rise Climate Fund and Evercare Health Fund. With $13 billion under management, those three funds invest in companies having social and environmental impacts. The Rise Fund was founded in 2016 in partnership with, among others, U2’s Bono.
“A lot of people don’t see these private equity companies operating in the background as they help fund these companies, but some of these investments are a little more high profile,” said Allison.
These types of investments can be very popular for investors because they are seen as helping create solutions for social or environmental problems, Allison said.
In March, TPG’s Rise Climate announced an investment in Monarch Bioenergy, a joint venture between Roeslein Alternative Energy and a subsidiary of Smithfield Foods, Inc. Launched in 2018, Monarch captures methane emissions and converts them into carbon-negative renewable natural gas to power homes, vehicles and businesses.
“Applying RAE’s anaerobic digester technology, as well as additional circular technologies and environmental protections, to Smithfield’s hog farms is a significant and meaningful step towards addressing methane emissions at their source,” said Marc Mezvinsky, business unit partner in TPG Rise in a statement.
TCU’s Allison said the types of investments made by the TPG Rise funds are attractive to investors who want to avoid placing investments related to fossil fuels.
“There are some investors who are looking for those types of funds and they have become more popular,” Allison said.
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