TPG Inc
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
TPG$46.50-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001880661-24-000032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001880661-24-000044
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 185 previous paragraphs and 223 current paragraphs.
99 unchanged; 78 reworded; 35 added; 7 removed; 1 previous and 11 current paragraphs rearranged.
Tables are not compared: 11 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Launched in 2021, TPG Rise Climate is our dedicated climate impact investing product, which has raised $7.3 billion in total commitments. TPG Rise Climate pursues climate-related investments that benefit from the diverse skills of TPG’s investing professionals, the strategic relationships developed across TPG’s existing portfolio of climate-focused companies, and a global network of executives and advisors. TPG Rise Climate takes a broad-based approach to investment types, from growth equity to value-added infrastructure, and focuses on climate solutions in thematic areas including clean electrons, clean molecules and materials and negative emissions.
Current report
The U.S. market environment was constructive and relatively stable during the three months ended June 30, 2024, as the domestic economy remained on solid footing while inflationary pressures moderately eased.
Current report
U.S. employment data continued to show strength, with the economy adding 532,000 net payrolls over April, May and June. Unemployment remained relatively low during the second quarter, though rose slightly to 4.1% as of the June 2024 Labor Report, up from 3.8% as of the end of the first quarter of 2024.
Current report
Inflationary pressures largely eased during the quarter, despite continued economic growth and a strong labor market. The latest reading of the U.S. Consumer Price Index (“CPI”) showed prices increased 3.3% over the prior twelve months, a slower rate of growth than the 3.5% level observed as of the end of the first quarter of 2024. Similarly core CPI, which excludes food and energy, fell to 3.4% annual growth as of the latest reading, down from 3.8% as of the end of the first quarter.
Current report
Despite the progress on inflation, levels remain above the Federal Reserve’s target of 2.0%. The central bank has kept rates restrictive in response, electing to hold Federal Funds rates steady at 5.25% - 5.50% at both meetings during the second quarter of 2024. The Federal Reserve has now held rates steady for seven consecutive meetings, though the latest progress on inflation has increased expectations that a rate cut could occur at the Federal Reserve’s July or September meetings. Other global central banks have already elected to reduce rates, with the European Central Bank lowering its key interest rate during the quarter to 3.75% from 4.0%, its first rate cut in almost five years.
Current report
U.S. Treasury yields slightly rose during the second quarter of 2024, with moves more pronounced towards the longer end of the curve. Yields on the 10-Year Treasury rose approximately 20 basis points relative to the end of the first quarter of 2024, closing the quarter at 4.40%. 2-Year Treasury yields rose approximately 13 basis points, ending the quarter at 4.76%.
Current report
Management fees from our Impact platform decreased $4.1 million, primarily attributable to Rise III due to catch-up fees earned during the three months ended June 30, 2023, offset by additional fees from TPG Next, which was activated during the fourth quarter of 2023.
Current report
Management fees from our Market Solutions platform increased $2.9 million, primarily due to NewQuest V as a result of additional fee earning capital raised during the last twelve months ended June 30, 2024.
Current report
Performance allocation income was $200.9 million for three months ended June 30, 2024 compared to $262.3 million for three months ended June 30, 2023. This change was primarily driven by lower performance allocations from our Capital and Market Solutions platforms during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, partially offset by the acquisition of TPG Angelo Gordon in November 2023, which contributed $60.7 million of net gains during the three months ended June 30, 2024.
Current report
Performance allocation losses of $15.2 million from our Real Estate platform were primarily due to a loss from TREP III during the three months ended June 30, 2024 compared to a loss of $4.7 million during the three months ended June 30, 2023.
Current report
Interest Expense. Interest expense increased by $13.0 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to additional interest expense on our Senior Notes and Subordinated Notes issued during the first quarter of 2024, as described in Note 8 to the Condensed Consolidated Financial Statements.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Fees and other revenues increased by $396.5 million, or 62%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023. This change resulted from a $312.3 million increase in management fees, a $70.4 million increase in transaction, monitoring and other fees, net and a $13.8 million increase in expense reimbursements and other.
Current report
Management Fees. Management fees, increased by $312.3 million, or 61%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current report
This change was primarily driven by the addition of $276.1 million in management fees from TPG Angelo Gordon, acquired in November 2023. During the six months ended June 30, 2024, we recorded $167.3 million in fees from TPG AG Credit, largely driven by the MVP Fund, MMDL IV, Credit Solutions II and MMDL Fund III and $108.7 million from TPG AG Real Estate, largely driven by the Realty Value XI, Realty Value X, Asia Realty V, Europe Realty IV and Net Lease Realty III.
Current report
Management fees from our Capital platform increased $42.5 million during the six months ended June 30, 2024. Fee earning capital raised during the last twelve months ended June 30, 2024 resulted in additional fees from Asia VIII, TPG IX and THP II, partially offset by Asia VI and TPG VIII resulting from fee credits applied during the six months ended June 30, 2024.
Current report
Management fees from our Growth platform increased $4.6 million mainly due to Growth VI, which was activated during the fourth quarter of 2023, partially offset by a decrease in fees from Growth V, which primarily resulted from a step down in fee basis from committed to invested capital during the first quarter of 2024.
Current report
Management fees from our Impact platform decreased $3.3 million, primarily attributable to Rise III due to catch-up fees earned during the six months ended June 30, 2023, offset by additional fees from TPG Next, which was activated during the fourth quarter of 2023.
Current report
Management fees from our Market Solutions platform increased $5.0 million primarily due to NewQuest V as a result of additional fee earning capital raised during the last twelve months ended June 30, 2024.
Current report
Expense Reimbursements and Other. Expense reimbursements and other increased by $13.8 million, or 13%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily driven by the addition of expense reimbursements from TPG Angelo Gordon, which was acquired in November 2023.
Current report
Performance Allocations. Performance allocation income decreased by $87.5 million, or 15%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Realized performance allocations for the six months ended June 30, 2024 and 2023 totaled $333.0 million and $184.3 million, respectively. Unrealized performance allocation losses for the six months ended June 30, 2024 and 2023 totaled $157.6 million and $393.7 million, respectively.
Current report
Performance allocation income was $490.5 million for six months ended June 30, 2024 compared to $578.1 million for six months ended June 30, 2023. This change was primarily driven by lower performance allocations from from our Capital, Impact and Market Solutions platforms during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, partially offset by the acquisition of TPG Angelo Gordon in November 2023, which contributed $140.5 million of net gains during the six months ended June 30, 2024 and increase in performance allocation income from our Growth platform.
Current report
Performance allocation income from our Capital platform was $153.9 million for the six months ended June 30, 2024 compared to $364.5 million for the six months ended June 30, 2023. Performance allocation income for the six months ended June 30, 2024 was largely driven by gains of $146.9 million from TPG VII, $58.8 million from TPG IX and $36.8 million from TPG VIII, partially offset by losses of $88.3 million from Asia VII and $18.7 million from THP I. Performance allocation income for the six months ended June 30, 2023 was led by gains of $223.8 million from TPG VIII and $60.8 million from TPG VII.
Current report
Performance allocation income from our Growth platform was $151.0 million for the six months ended June 30, 2024 compared to $74.8 million for the six months ended June 30, 2023. Performance allocation income for the six months ended June 30, 2024 was primarily driven by $60.2 million from Growth IV, $55.1 million from TTAD II and $45.0 million from Growth V. Performance allocation income for the six months ended June 30, 2023 was led by gains of $41.5 million from Growth V and $33.3 million from Growth IV.
Current report
Performance allocation income from our Impact platform was $59.0 million for the six months ended June 30, 2024 compared to $121.2 million for the six months ended June 30, 2023. Performance allocation income for the six months ended June 30, 2024 was largely driven by gains of $36.7 million from Rise Climate and $28.9 million from Rise III, partially offset by losses of $9.8 million from Rise. Performance allocation income for the six months ended June 30, 2023 was led by gains of $100.9 million from Rise Climate and $35.3 million from Rise II.
Current report
TPG AG Credit generated income of $176.5 million primarily attributable to $40.2 million from MVP Fund, $19.2 million from MMDL IV, $25.6 million from Credit Solutions II, $12.9 million from ABC Fund and $11.7 million from MMDL III. TPG AG Real Estate generated net losses of $36.0 million mainly due to losses of $18.5 million from Realty X, $31.5 million from Europe Realty II and $11.4 million from Realty VIII, which were partially offset by gains of $13.5 million from Net Lease Realty III and $13.4 million from Europe Realty III.
Current report
Performance allocation losses of $24.4 million from our Market solutions platform were primarily driven by $29.4 million of loss from NewQuest III and $11.6 million from NewQuest IV, partially offset by net gains of $9.8 million from NewQuest V during the six months ended June 30, 2024. Performance allocation income for the six months ended June 30, 2023 was led by gains of $32.7 million from TPEP and $10.8 million from NewQuest.
Current report
TPG Operating Group Excluded generated losses of $1.9 million during the six months ended June 30, 2024 compared to a loss of $16.6 million during the six months ended June 30, 2023. Performance allocation losses for six months ended June 30, 2024 were primarily driven by losses of $11.3 million from Biotech III from our Growth platform and $2.8 million from MMI from our Capital platform, partially offset by gains of $6.2 million from Biotech V from our Growth platform and $3.9 million from TPG VI from our Capital platform.
Current report
Capital Interests. Capital interests income increased by $12.9 million, or 43%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily attributable to gains from our investments in TPG VII, TPG IX and TRTX, offset by losses from our investment in Asia VII during the six months ended June 30, 2024. During the six months ended June 30, 2023, we recognized gains on our investments in TPG VIII, Rise Climate and TPG VII, partially offset by net losses from our investments in Asia VI.
Current report
Cash-Based Compensation and Benefits. Cash-based compensation and benefits expense increased by $161.7 million, or 68%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily driven by the increase in headcount due to the acquisition of TPG Angelo Gordon in November 2023.
Current report
General, Administrative and Other. General and administrative expenses increased by $112.4 million, or 54%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily driven by additional expenses from TPG Angelo Gordon, which was acquired in November 2023, as well as an increase in professional fees during the six months ended June 30, 2024.
Current report
Expenses of Consolidated Public SPACs. Expenses of consolidated Public SPACs decreased by $1.0 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was due to the redemption of all outstanding shares of the Public SPACs during the year ended December 31, 2023.
Current report
Net (Losses) Gains from Investment Activities. Net (losses) gains from investment activities was a loss of $21.9 million for six months ended June 30, 2024 compared to a gain of $15.7 million for the six months ended June 30, 2023. This change was primarily attributable to a net loss of $18.6 million from our investments in NRDY during the six months ended June 30, 2024.
Current report
Interest, Dividends and Other. Interest, dividends and other increased by $8.8 million, or 49%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily driven by additional interest income and dividend income from TPG Angelo Gordon, which was acquired in November 2023.
Current report
Income Tax Expense. Income tax expense increased by $1.5 million or 6% for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to an increase in certain compensation expenses that is not deductible, offset by a decrease in net income attributable to TPG Inc. during the six months ended June 30, 2024.
Removed paragraphs (7)
Previous report
TPG Rise Climate is our dedicated climate impact investing product. TPG Rise Climate has raised $7.3 billion in total commitments. In addition to committing capital to the fund, the companies joined TPG in forming the TPG Rise Climate Coalition, an effort focused on identifying and sharing best practices for considering investment opportunities, among the corporate group and more broadly across the TPG Impact platform. TPG Rise Climate’s core areas of focus include energy transition, green mobility, sustainable fuels, sustainable materials and products and carbon solutions.
Previous report
Product: Evercare
Previous report
The Evercare Health Fund (“Evercare”) is an emerging markets healthcare fund that is striving to provide affordable, high-quality healthcare in emerging markets. Evercare’s investments are integrated under a common operating platform, The Evercare Group, which is an integrated healthcare delivery platform in emerging markets across Africa and South Asia, including India, Pakistan, Bangladesh, Kenya and Nigeria.
Previous report
The market environment remained constructive during the first three months of 2024, with risk assets performing well and data continuing to show a healthy underlying domestic economy, despite persistent inflation data and delayed expectations for rate cuts from the Federal Reserve.
Previous report
The U.S. Consumer Price Index (“CPI”) remained relatively flat during the first three months of 2024, with readings of January, February and March data showing prices rose 3.4%, 3.1% and 3.2%, respectively, from the year prior. Core CPI, which excludes food and energy, likewise remained flat coming in at 3.9%, 3.9% and 3.8% for the same three months. While inflation has slowed relative to the recent peak, the last few months of data have raised concerns that the last leg to achieving the Federal Reserve’s target of 2% inflation will be the most difficult. As a result of stubborn inflation, commentary from the Federal Reserve turned slightly more hawkish in the quarter, relative to the three months prior. Target Fed Funds rates were held constant during both the January and March 2024 meetings at 5.25% to 5.50%, and market expectations for rate cuts, initially expected in March or May 2024, have been pushed to the back half of the year. Economic data has remained strong despite the extended period of elevated rates. The U.S. added 829,000 payrolls during the first three months of the year, and the unemployment was recorded as 3.8% in March 2024, up slightly from the end of 2023.
Previous report
U.S. Treasury prices fell and yields rose across the curve during the first three months of 2024 amid hotter than expected inflation data in January and February and hawkish commentary from the Federal Reserve, which delayed expectations for the onset of a rate cutting cycle. Moves were more pronounced in the middle of the curve, with yields on the 2-Year and 5-Year Treasury rising 37 basis points. Yields on the 10-Year Treasury rose 33 basis points relative to the end of 2023, closing the quarter at 4.20%. The yield curve remains inverted, with 2-Year Treasuries yielding 42 basis points in excess of the 10-Year Treasury, as of March 31, 2024.
Previous report
In commercial real estate, the Green Street Commercial Property Price Index was relatively flat in the beginning of 2024. Although quarter-to-date data is not yet available, initial transaction volume in the United States indicates Q1 2024 activity will remain muted compared to 2021 peaks, primarily due to continued elevated borrowing rates and reductions in liquidity and credit availability. In Europe, the central bank kept interest rates at the record-high of 4% in April, pushing back on market expectation of a rate cut in early 2024. With interest rate cuts likely delayed, bond yields edged up, which we expect will put further downward pressure on commercial real estate valuations in the near-term. Major Asian markets have faced similar challenges. In mainland China and Hong Kong, a slow recovery and ongoing geopolitical tensions have resulted in cautious investor sentiment. In March, the Bank of Japan increased interest rates for the first time in nearly two decades. Although the base rate remains near zero, this end a nearly eight-year era of negative interest rates.
Reworded paragraphs (78)
Previous wording
TPG is a leading global alternative asset manager with $223.6 billion in assets under management (“AUM”) as of March 31, 2024. We have built our firm through years of successful innovation and growth, and believe that we have delivered attractive risk-adjusted returns to our clients and established a premier investment business focused on the fastest-growing segments of both the alternative asset management industry and the global economy. We believe that we have a distinctive business approach and a diversified, innovative array of investment platforms that position us well to continue generating highly profitable, sustainable growth.
Current wording
TPG is a leading global alternative asset manager with $229.0 billion in assets under management (“AUM”) as of June 30, 2024. We have built our firm through years of successful innovation and growth, and believe that we have delivered attractive risk-adjusted returns to our clients and established a premier investment business focused on the fastest-growing segments of the alternative asset management industry. We believe our distinctive business approach and diversified array of innovative investment platforms position us well to continue generating highly profitable, sustainable growth.
Previous wording
We primarily invest in complex asset classes such as private equity, credit, real estate and public market strategies, which is distinct from most other asset managers that invest only in traditional asset classes such as stocks, bonds or commodities. We have constructed a high-quality base of assets under management within highly attractive sub-segments of the alternative asset management industry. The strength of our investment performance, our ability to innovate within our business and our focus on strategic, inorganic growth has led to consistent historical growth in our assets under management, all on a scaled infrastructure that gives our business a high degree of operating leverage. Recently, we have also pursued highly strategic inorganic growth, notably our acquisition on November 1, 2023 of Angelo Gordon, an alternative investment firm focused on credit and real estate investing.
Current wording
We offer a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit and real estate, and have constructed a high-quality base of assets under management within attractive sub-segments of these asset classes. The strength of our investment performance and our proven ability to innovate within our business, together with our ongoing focus on strategic, inorganic growth has led to consistent historical growth in our assets under management, all with the support of a scaled infrastructure that provides our business with a high degree of operating leverage. Recently, we have also pursued highly strategic inorganic growth, most notably with our acquisition on November 1, 2023 of Angelo Gordon, a scaled alternative investment firm focused on credit and real estate investing.
Previous wording
Our differentiated operating model unites our investment products and global footprint around a cohesive commercial framework. Our compensation structure and team-oriented culture inspire collaboration, support our shared investment themes approach to sourcing and executing deals and lead to attractive returns for our investors. Through multiple decades of experience, we have developed an ecosystem of insight, engagement and collaboration across our platforms and products, which currently include over 300 active portfolio companies, over 300 real estate properties and over 5,000 credit positions across more than 30 countries.
Current wording
Our differentiated operating model unites our investment products and global footprint around a cohesive commercial framework. Our team-oriented culture fosters collaboration and alignment, supports our shared investment themes approach to sourcing and executing deals and leads to attractive returns for our investors. Through multiple decades of experience, we have developed an ecosystem of insight, engagement and collaboration across our platforms and products, which currently include more than 300 active portfolio companies, more than 300 real estate properties and over 5,000 credit positions, across more than 30 countries.
Previous wording
Our firm consists of six multi-strategy investment platforms: (1) Capital, (2) Growth, (3) Impact, (4) TPG Angelo Gordon, (5) Real Estate and (6) Market Solutions. Each of our six investment platforms is comprised of a number of products that are complementary to each other and provide our clients with differentiated avenues for capital deployment. Most of our products have raised multiple generations of funds, which we believe highlights the value our clients see in these products.
Current wording
Our firm consists of six multi-strategy investment platforms: (1) Capital, (2) Growth, (3) Impact, (4) TPG Angelo Gordon, (5) Real Estate and (6) Market Solutions. Each of our six investment platforms is comprised of a number of products that are complementary to each other and provide our clients with differentiated avenues for capital deployment. Most of our products have raised multiple generations of funds, which we believe highlights the value these products provide to our clients.
Previous wording
Our Capital platform is focused on large-scale, control-oriented private equity investments. Our Capital platform funds are organized in four primary products: (1) TPG Capital, (2) TPG Asia, (3) TPG Healthcare Partners, and (4) Continuation Vehicles.
Current wording
Our Capital platform is focused on large-scale, control-oriented private equity investments. We pursue opportunities across geographies and specialize in sectors where we have developed deep thematic expertise over time. Our Capital platform funds are organized in four primary products: (1) TPG Capital, (2) TPG Asia, (3) TPG Healthcare Partners, and (4) Continuation Vehicles.
Previous wording
TPG Capital is our North America and Europe-focused private equity investing business, with $42.1 billion in assets under management as of March 31, 2024. TPG Capital seeks to invest through leveraged buyouts and large-scale growth equity investments in market leaders with fundamentally strong business models that are expected to benefit from long-term secular growth trends. We also seek to help our portfolio companies accelerate their growth under our ownership through operational improvements, by investing in organic and inorganic growth, and by leveraging our human capital team to upgrade or enhance our management teams and boards.
Current wording
TPG Capital is our North America and Europe-focused private equity investing business, with $42.6 billion in assets under management as of June 30, 2024. TPG Capital employs a sector-driven, highly thematic approach to sourcing and primarily seeks to invest in traditional buyouts, transformational deals such as corporate carve-outs and large-scale growth equity transactions. We invest in market leaders with fundamentally strong business models that are expected to benefit from long-term secular growth trends. We also seek to help our portfolio companies accelerate their growth under our ownership through a variety of operational improvements, such as by leveraging our human capital team to upgrade or enhance our management teams and boards, and by investing in organic and inorganic growth.
Previous wording
TPG Asia focuses on pursuing investments in the Asia-Pacific region, including Australia, India, Korea and Southeast Asia, with $21.9 billion in assets under management as of March 31, 2024. Our distributed regional footprint has provided a foundation to pursue the region’s highly attractive investing opportunities with both new and existing products and strategies. We invest through a variety of transaction structures, including through partnerships with large corporations and families.
Current wording
TPG was one of the first alternative asset management firms to establish a dedicated Asia franchise and began investing in the region in 1994. Currently, TPG Asia focuses on pursuing investments in the Asia-Pacific region, including Australia, India, Korea and Southeast Asia, with $21.9 billion in assets under management as of June 30, 2024. Our distributed regional footprint has provided a foundation for us to pursue highly attractive investing opportunities in the region with both new and existing products and strategies. We invest through a variety of transaction structures, including through partnerships with large corporations and families.
Previous wording
Periodically, across our platforms, we identify portfolio companies in which certain of our limited partners would like to remain invested but which we own in a fund nearing the end of its life. In these situations, we have utilized single-asset continuation vehicles (“CVs”) managed by TPG that allow the limited partners who choose to do so to remain invested in a portfolio company beyond the life of the TPG fund that initially invested in the company. CVs are attractive for both our limited partners, who retain ongoing exposure to strong assets, and for TPG, as these vehicles extend the duration of our capital. CVs provide opportunities for TPG to continue creating value for our investors and earning management and performance fees.
Current wording
Periodically, across our platforms and investment portfolios, we identify companies in which certain of our limited partners would like to remain invested but which we own in a fund nearing the end of its life. In these situations, we have utilized single-asset continuation vehicles (“CVs”) managed by TPG that allow the limited partners who choose to do so to remain invested in a portfolio company beyond the life of the TPG fund that initially invested in the company. CVs are attractive for our limited partners, who have the opportunity to retain ongoing exposure to strong assets, and for TPG, as these vehicles extend the duration of our investment capital.
Previous wording
TPG Growth is our dedicated growth equity and middle market investing vehicle. Our Growth platform provides us with a flexible mandate to capitalize on investment opportunities that are earlier in their life cycle, are smaller in size and/or have different profiles than would be considered for our Capital platform. Our Growth funds are organized in four primary products: (1) TPG Growth, (2) TPG Tech Adjacencies, (3) TPG Digital Media, and (4) TPG Life Sciences Innovation.
Current wording
TPG Growth is our dedicated growth equity and middle market investing vehicle. Our Growth platform provides us with a flexible mandate to invest in companies across our core sectors that are earlier in their life cycle, are smaller in size and/or have different profiles than would be considered for our Capital platform. Our Growth funds are organized in four primary products: (1) TPG Growth, (2) TPG Tech Adjacencies, (3) TPG Digital Media, and (4) TPG Life Sciences Innovation.
Previous wording
TPG Growth is our dedicated growth equity and middle market investing product, with $17.7 billion in assets under management as of March 31, 2024. TPG Growth seeks to make growth buyout and growth equity investments, primarily in North America and India.
Current wording
TPG Growth is our dedicated growth equity and middle market investing product, with $17.6 billion in assets under management as of June 30, 2024. TPG Growth seeks to make growth buyout and growth equity investments, primarily in North America and India.
Previous wording
TPG Tech Adjacencies, or “TTAD”, with $6.9 billion in assets under management as of March 31, 2024, is a product we developed organically to pursue minority and/or structured investments in internet, software, digital media and other technology sectors. Specifically, TTAD aims to provide flexible capital for founders, employees and early investors looking for liquidity, as well as primary structured equity solutions for companies looking for additional, creative capital for growth.
Current wording
TPG Tech Adjacencies, or “TTAD”, with $6.5 billion in assets under management as of June 30, 2024, is a product we developed organically to pursue minority and/or structured investments in internet, software, digital media and other technology sectors. Specifically, TTAD aims to provide flexible capital for founders, employees and early investors seeking liquidity, as well as primary structured equity solutions for companies looking for additional, creative capital for growth.
Previous wording
TPG Digital Media, or “TDM”, is a flexible source of capital to pursue opportunities to invest in digital media. TDM seeks to pursue investments in businesses in which we have the opportunity to capitalize on our long history of studying and pursuing content-centric themes.
Current wording
TPG Digital Media, or “TDM”, is a flexible source of capital focused on pursuing control equity investments in digital media. TDM seeks to pursue investments in businesses in which we have the opportunity to capitalize on our long history of studying and pursuing content-centric themes.
Previous wording
TPG Life Sciences Innovation, or “LSI”, is a new product that will invest in the life sciences sector in novel therapeutics as well as digital health, medical devices, diagnostics, and tech-enabled services. LSI will invest across different therapeutic areas and stages from company creation to IPO, and will leverage TPG’s broad experience in the healthcare sector.
Current wording
TPG Life Sciences Innovation, or “LSI”, was launched in 2023 and seeks to invest in the life sciences sector in novel therapeutics as well as digital health, medical devices, diagnostics and tech-enabled services. LSI invests across different therapeutic areas and stages, from company creation to IPO, and leverages TPG’s broad experience in the healthcare sector.
Previous wording
Our multi-fund Impact platform pursues both competitive financial returns and measurable societal benefits at scale, harnessing the diverse skills of a differentiated group of stakeholders:
Current wording
Our multi-fund Impact platform, which we believe is among the largest in the industry, pursues both competitive financial returns and measurable societal benefits at scale, harnessing the diverse skills of a differentiated group of value-add stakeholders including:
Previous wording
•The TPG Rise Climate Coalition: A partnership between TPG and 28 leading global corporations to identify and share best practices for considering climate solutions investment opportunities through TPG Rise Climate.
Current wording
•The TPG Rise Climate Coalition: A partnership between TPG and 28 leading global corporations that are investors in TPG Rise Climate, to accelerate the sharing of knowledge, best practices and investment opportunities within climate solutions among the group and more broadly across the TPG Impact platform.
Previous wording
Based on our investment strategy, we believe our impact investments can deliver profit and positive impact in tandem. Our Impact funds are organized in four primary products: (1) The Rise Funds, (2) TPG Rise Climate, (3) Evercare, and (4) TPG NEXT.
Current wording
Based on our investment strategy and performance track record, we have demonstrated that our impact investments can deliver profit and positive impact in tandem. Our Impact funds are organized in three primary products: (1) The Rise Funds, (2) TPG Rise Climate, and (3) TPG NEXT.
Previous wording
The Rise Funds are our dedicated vehicles for investing in companies that generate a demonstrable and significant positive societal impact alongside business performance and strong returns, with $8.8 billion in assets under management as of March 31, 2024. The Rise Fund’s core areas of focus include climate and conservation, education, financial inclusion, food and agriculture, healthcare and impact services, and invest globally.
Current wording
The Rise Funds are our dedicated vehicles for investing in companies that generate a demonstrable and significant positive societal impact alongside business performance and strong returns, with $9.0 billion in assets under management as of June 30, 2024. The Rise Fund’s core areas of focus include climate and conservation, education, financial inclusion, food and agriculture, healthcare and impact services, and invest globally.
Previous wording
TPG AG Credit Solutions, with $13.4 billion in assets under management as of March 31, 2024, invests in stressed, distressed and special situation corporate credit opportunities, primarily in North America and Europe, and can dynamically pivot between the public and private markets. We employ what we believe to be a differentiated, solutions-based approach that is capable of being executed in any market environment. TPG AG Credit Solutions seeks to align with companies, financial sponsors and business owners and to use its structuring skill and capital base to create bespoke, bilaterally-negotiated financing transactions that help resolve complex and idiosyncratic financial challenges. TPG AG Credit Solutions funds may also opportunistically invest in securities acquired at what the investment team believes are discounted prices relative to their intrinsic value and offer the potential for contractual income and/or price appreciation. TPG AG Credit Solutions invests through its Credit Solutions and Essential Housing closed-ended funds, as well as its Corporate Credit Opportunities open-ended fund.
Current wording
TPG AG Credit Solutions, with $14.9 billion in assets under management as of June 30, 2024, invests in stressed, distressed and special situation corporate credit opportunities, primarily in North America and Europe, and can dynamically pivot between the public and private markets. TPG AG Credit Solutions employs what we believe to be a differentiated, solutions-based approach that is capable of being executed in any market environment. TPG AG Credit Solutions seeks to align with companies, financial sponsors and business owners and to use its structuring skill and flexible capital base to create bespoke, bilaterally-negotiated financing transactions that help resolve complex and idiosyncratic financial challenges. TPG AG Credit Solutions funds may also opportunistically invest in securities acquired at what the investment team believes are discounted prices relative to their intrinsic value and offer the potential for contractual income and/or price appreciation. TPG AG Credit Solutions invests through the Credit Solutions and Essential Housing closed-ended funds, as well as the Corporate Credit Opportunities open-ended fund.
Previous wording
TPG AG Structured Credit & Specialty Finance focuses on major non-corporate credit sectors, including consumer, residential and commercial real estate, and specialty lending markets, and also has substantial CLO debt and equity investing capabilities. TPG AG Structured Credit & Specialty Finance invests through the Mortgage Value Partners Fund, an open-ended hedge fund, the Asset Based Credit Fund, a closed-ended fund, separately managed accounts (“SMAs”) and AG Mortgage Investment Trust, Inc. (NYSE: MITT) (“MITT”), an externally-managed, publicly traded residential mortgage real estate investment trust focused on investing in a diversified risk-adjusted portfolio of residential mortgage-related assets in the U.S. mortgage market. As of March 31, 2024, TPG AG Structured Credit & Specialty Finance had $16.0 billion in assets under management.
Current wording
TPG AG Structured Credit & Specialty Finance focuses on major non-corporate credit sectors, including consumer, residential and commercial real estate, and specialty lending markets, and also has substantial CLO debt and equity investing capabilities. TPG AG Structured Credit & Specialty Finance invests through a variety of vehicles including the Mortgage Value Partners Fund open-ended hedge fund, the Asset Based Credit closed-ended fund, separately managed accounts (“SMAs”) and AG Mortgage Investment Trust, Inc. (NYSE: MITT) (“MITT”), which is an externally-managed, publicly traded residential mortgage real estate investment trust. As of June 30, 2024, TPG AG Structured Credit & Specialty Finance had $17.6 billion in assets under management.
Previous wording
TPG AG Middle Market Direct Lending (“MMDL”) and TPG Twin Brook Capital Partners focus on sourcing, underwriting and actively managing a diversified portfolio of middle market, floating rate, senior secured loans, including revolvers, first lien debt and, opportunistically, second lien debt. As a direct lender to private equity sponsored middle market companies, the product focuses on opportunities where we can receive a pricing premium relative to broadly syndicated loans and relies on ongoing borrower support from sponsors. TPG AG Middle Market Direct Lending includes the MMDL closed-ended fund series, as well as a public, non-traded business development company (“BDC”), AG Twin
Current wording
TPG AG Middle Market Direct Lending (“MMDL”) and TPG Twin Brook Capital Partners focus on sourcing, underwriting and actively managing a diversified portfolio of lower middle market, senior secured loans, including revolvers and first lien debt, and seek to deliver stable and attractive returns while minimizing volatility and protecting the downside. As a direct lender to private equity backed lower middle market companies primarily with $25 million of EBITDA or less, the product focuses on sourcing differentiated opportunities from our long-standing and diverse set of sponsor relationships. TPG AG Middle Market Direct Lending includes the MMDL closed-ended fund series and evergreen vehicle and SMAs, as well as a public, non-traded business development company (“BDC”), AG Twin Brook Capital Income Fund (“TCAP”). As of June 30, 2024, TPG AG Middle Market Direct Lending had $24.3 billion in assets under management.
Previous wording
TPG AG CLOs, with $8.5 billion in assets under management as of March 31, 2024 invests predominantly in non-investment grade senior secured bank loans. TPG AG issues U.S. CLOs investing predominantly in U.S. dollar-denominated loans, and Euro CLOs investing predominantly in Euro-denominated loans and secured bonds. TPG AG CLOs include performing credit bespoke vehicles, CLO funds and direct investment in the tranches of Northwoods CLOs.
Current wording
TPG AG CLOs, with $8.4 billion in assets under management as of June 30, 2024 invests predominantly in non-investment grade senior secured bank loans. TPG AG CLO platform is Global with investment teams in both New York and London. TPG AG U.S. CLOs invest in U.S. dollar-denominated broadly syndicated loans, and our Euro CLOs invest in Euro-denominated loans and secured bonds. Our Global platform allows us to provide our investors with diversification across industries and geographies as we construct well diversified, liquid portfolios that are actively traded. TPG AG CLOs include performing credit bespoke vehicles, CLO funds and direct investment in the tranches of Northwoods CLOs.
Previous wording
TPG AG Multi-Strategy, with $2.1 billion in assets under management as of March 31, 2024, invests across the breadth of TPG AG Credit, with a geographic focus in the United States and Western Europe. TPG AG Multi-Strategy offers actively managed co-mingled funds, including its Super Fund (“Super Fund”), in addition to bespoke vehicles and various multi-strategy credit funds of one. These funds invest in public and private investment opportunities sourced from across TPG AG Credit, as well as arbitrage strategies, including convertible arbitrage and merger arbitrage. TPG AG Multi-Strategy funds invest in, among other products, corporate loans and bonds, residential, consumer and asset-based loans and securities, hybrid instruments and derivative securities, including currency and interest rate hedges.
Current wording
TPG AG Multi-Strategy, with $2.2 billion in assets under management as of June 30, 2024, invests across the breadth of TPG AG Credit, with a geographic focus in the United States and Western Europe. TPG AG Multi-Strategy offers actively managed co-mingled funds, including the Super Fund, in addition to bespoke vehicles and various multi-strategy credit funds of one. These funds invest in public and private investment opportunities sourced from across TPG AG Credit, as well as arbitrage strategies, including convertible arbitrage and merger arbitrage. TPG AG Multi-Strategy funds invest in, among other products, corporate loans and bonds, residential, consumer and asset-based loans and securities, hybrid instruments and derivative securities, including currency and interest rate hedges.
Previous wording
TPG Angelo Gordon’s real estate products (collectively referred to as “TPG AG Real Estate”) are (1) TPG AG U.S. Real Estate, (2) TPG AG Asia Real Estate, (3) TPG AG Europe Real Estate, and (4) TPG AG Net Lease. TPG AG Real Estate products in the United States, Asia and Europe primarily focus on the acquisition of equity interests of underperforming and undervalued assets in the United States, Asia and Europe, where we employ our opportunistic and value-add strategies to improve performance. TPG AG Net Lease primarily invests in single tenant commercial real estate acquired in simultaneous sale-leaseback transactions.
Current wording
TPG Angelo Gordon’s real estate products (collectively referred to as “TPG AG Real Estate”) are (1) TPG AG U.S. Real Estate, (2) TPG AG Asia Real Estate, (3) TPG AG Europe Real Estate, and (4) TPG AG Net Lease. TPG AG Real Estate products in the United States, Asia and Europe primarily focus on the acquisition of equity interests of underperforming and undervalued assets, where we can employ our opportunistic and value-add strategies to improve performance. We believe TPG AG Real Estate’s extensive and proprietary network of operating partners across each of the regions where we operate positions us to effectively identify inefficiencies and source opportunities on an off-market basis. TPG AG Net Lease primarily invests in single tenant commercial real estate acquired in simultaneous sale-leaseback transactions.
Previous wording
TPG AG U.S. Real Estate, with $6.7 billion in assets under management as of March 31, 2024, manages assets across various product sectors and has been active in many of the major U.S. real estate markets. TPG AG U.S. Real Estate focuses on purchasing what we believe to be underperforming and undervalued real estate assets, where we then execute an active asset management strategy to reposition and stabilize the properties. TPG AG U.S. Real Estate is diversified across property sectors, with a thematic portfolio construction focused on rental residential, industrial, self-storage, life science, student housing and medical office, among other sectors.
Current wording
TPG AG U.S. Real Estate, with $6.5 billion in assets under management as of June 30, 2024, manages assets across various product sectors and has been active in many of the major U.S. real estate markets. TPG AG U.S. Real Estate focuses on purchasing what we believe to be underperforming and undervalued real estate assets, where we then execute an active asset management strategy to reposition and stabilize the properties. TPG AG U.S. Real Estate is diversified across property sectors, with a thematic portfolio construction focused on rental residential, industrial, self-storage, life science, student housing and medical office, among other sectors.
Previous wording
TPG AG Asia Real Estate, with $5.3 billion in assets under management as of March 31, 2024, manages assets across Asia, with investments primarily in Japan, South Korea, Hong Kong, China and Singapore. TPG AG Asia Real Estate focuses on capitalizing on opportunistic investments, primarily created through lack of real estate expertise, illiquidity or distress in many Asian markets. The TPG AG Asia Real Estate portfolio includes office, industrial, residential, hotel, retail, life science and other asset types.
Current wording
TPG AG Asia Real Estate, with $5.1 billion in assets under management as of June 30, 2024, manages assets across Asia, with investments primarily in Japan, South Korea, Hong Kong, China and Singapore. TPG AG Asia Real Estate focuses on capitalizing on opportunistic investments primarily created through situations such as a lack of real estate expertise, illiquidity or distress. The TPG AG Asia Real Estate portfolio includes office, industrial, residential, hotel, retail, life science and other asset types.
Previous wording
TPG AG Europe Real Estate, with $4.3 billion in assets under management as of March 31, 2024, manages assets across Europe, with investments primarily located in major cities in Western Europe and the United Kingdom. TPG AG Europe Real Estate focuses on sub-performing and distressed real estate assets. Business plans may range from modest lease-up and operational improvement to more significant value-add strategies, which may require complete capital restructuring or asset repositioning to stabilize. The TPG AG Europe Real Estate portfolio includes industrial, residential, office, hotel, retail, student housing, self-storage and other asset types.
Current wording
TPG AG Europe Real Estate, with $4.5 billion in assets under management as of June 30, 2024, manages assets across Europe, with investments primarily located in major cities in Western Europe and the United Kingdom. TPG AG Europe Real Estate focuses on sub-performing and distressed real estate assets. The TPG AG Europe Real Estate portfolio includes industrial, residential, office, hotel, retail, student housing, self-storage and other asset types.
Previous wording
We established our TPG real estate investing practice in 2009 to pursue real estate investments systematically and build the capabilities to do so at significant scale. We invest in real estate through four primary products: (1) TPG Real Estate Partners, (2) TPG Real Estate Thematic Advantage Core-Plus, (3) TPG RE Finance Trust, Inc., and (4) TPG Real Estate Credit Opportunities.
Current wording
We established our TPG real estate investing practice in 2009 to pursue real estate investments systematically and at significant scale. We invest in real estate through four primary products: (1) TPG Real Estate Partners, (2) TPG Real Estate Thematic Advantage Core-Plus, (3) TPG RE Finance Trust, Inc., and (4) TPG Real Estate Credit Opportunities.
Previous wording
TPG Real Estate Partners (“TREP”), with $11.4 billion in assets under management as of March 31, 2024, focuses on acquiring and building platforms rather than investing on a property-by-property basis, which we believe creates more efficient operating structures and ultimately results in scaled investments that may trade at premium entity-level pricing in excess of the net asset value of individual properties. TREP utilizes a distinct theme-based strategy for sourcing and executing proprietary investments and, over time, many of these themes have aligned with TPG’s broader thematic sector expertise, particularly those pertaining to the healthcare and technology sectors.
Current wording
TPG Real Estate Partners (“TREP”), with $11.2 billion in assets under management as of June 30, 2024, focuses on acquiring and building platforms, which we believe creates more efficient operating structures and ultimately results in scaled investments that may trade at premium entity-level pricing in excess of the net asset value of individual properties. TREP utilizes a distinct theme-based strategy for sourcing and executing proprietary investments and, over time, many of these themes have aligned with TPG’s broader thematic sector expertise, particularly those pertaining to the healthcare and technology sectors.
Previous wording
TPG Real Estate Thematic Advantage Core-Plus (“TAC+”), with $1.7 billion in assets under management as of March 31, 2024, is an extension of our opportunistic real estate investment program. TAC+ targets investments in stabilized (or near stabilized) high-quality real estate, particularly in thematic sectors where we have gained significant experience and conviction. The investment strategy is designed to enhance traditional core-plus objectives of capital preservation and reliable current income generation by applying our differentiated thematic approach, strategy and skillset.
Current wording
TPG Real Estate Thematic Advantage Core-Plus (“TAC+”), with $1.8 billion in assets under management as of June 30, 2024, is an extension of our opportunistic real estate investment program. TAC+ targets investments in stabilized (or near stabilized) high-quality real estate, particularly in thematic sectors where we have gained significant experience and conviction. The investment strategy is designed to enhance traditional core-plus objectives of capital preservation and reliable current income generation by applying our differentiated thematic approach, strategy and skillset.
Previous wording
TPG RE Finance Trust, Inc. (NYSE: TRTX) (“TRTX”) is externally managed by an affiliate of TPG and directly originates, acquires and manages commercial mortgage loans and other commercial real estate-related debt instruments in North America for its balance sheet. The platform’s objective is to provide attractive risk-adjusted returns to its stockholders over time through cash distributions. As of March 31, 2024, the TRTX loan investment portfolio consisted of 51 first mortgage loans (or interests therein) and total loan commitments of $3.5 billion.
Current wording
TPG RE Finance Trust, Inc. (NYSE: TRTX) (“TRTX”) is externally managed by an affiliate of TPG and directly originates, acquires and manages commercial mortgage loans and other commercial real estate-related debt instruments in North America for its balance sheet. The platform’s objective is to provide attractive risk-adjusted returns to its stockholders over time through cash distributions. As of June 30, 2024, the TRTX loan investment portfolio consisted of 48 first mortgage loans (or interests therein) and total loan commitments of $3.3 billion.
Previous wording
TPG Real Estate Credit Opportunities (“TRECO”) is our opportunistic, real estate credit strategy targeting risk-adjusted returns through investments primarily in real estate-related high-yield senior and subordinate loans and securities. TRECO focuses on select sectors and geographies where we have distinct expertise informed by our longstanding practice around theme development. The fund has a flexible mandate and will aim to invest opportunistically across the credit spectrum.
Current wording
TPG Real Estate Credit Opportunities (“TRECO”), which was established in 2023, is our opportunistic, real estate credit strategy targeting risk-adjusted returns through investments primarily in real estate-related high-yield senior and subordinate loans and securities. TRECO focuses on select sectors and geographies where we have distinct expertise informed by our longstanding practice around theme development. The fund has a flexible mandate and seeks to invest opportunistically across the credit spectrum.
Previous wording
TPG Public Equities (“TPEP”) seeks to generate superior risk-adjusted returns through deep, fundamental private equity-style research in the public markets. TPEP is not siloed from our private investment businesses from an information perspective, which allows TPEP to collaborate with sector-focused teams across the rest of our firm and leverage TPG’s full intellectual capital and resources. TPEP manages a $1.9 billion long / short fund and a $1.3 billion long-only fund as of March 31, 2024, both of which are managed with broad, opportunistic mandates.
Current wording
TPG Public Equities (“TPEP”) seeks to generate superior risk-adjusted returns through deep, fundamental private equity-style research in the public markets. TPEP is not siloed from our private investment businesses from an information perspective, which allows TPEP to collaborate with sector-focused teams across the rest of our firm and leverage TPG’s full intellectual capital and resources. TPEP manages a $1.8 billion long / short fund and a $1.2 billion long-only fund as of June 30, 2024, both of which are managed with broad, opportunistic mandates.
Previous wording
Through our capital markets activities, we generate underwriting, placement, arrangement, structuring and advisory fee revenue. In the three months ended March 31, 2024 and 2023, our capital markets business drove $46.2 million and $5.2 million in transaction revenue, respectively. We believe that the high margin profile of our business coupled with our consistent ability to deliver superior financing outcomes drives significant value to our portfolio companies and our stockholders.
Current wording
Through our capital markets activities, we generate underwriting, placement, arrangement, structuring and advisory fee revenue. In the three and six months ended June 30, 2024, our capital markets business drove $46.7 million and $92.9 million in transaction revenue, respectively. In the three and six months ended June 30, 2023, our capital markets business drove $17.2 million and $22.5 million in transaction revenue, respectively. We believe that the high margin profile of our business coupled with our consistent ability to deliver superior financing outcomes drives significant value to our portfolio companies and our stockholders.
Previous wording
Our private markets solutions business provides single asset and portfolio liquidity solutions to private asset owners, typically through continuation vehicles, funds or underlying third-party investment managers who will continue to control such assets in which the funds invest. Our private markets solutions business is organized into two businesses: (1) NewQuest and (2) TPG GP Solutions (“TGS”).
Current wording
Our private markets solutions business provides single asset solutions to private asset owners, typically through continuation vehicles, funds or underlying third-party investment managers who will continue to control such assets in which the funds invest. Our private markets solutions business is organized into two businesses: (1) NewQuest and (2) TPG GP Solutions (“TGS”).
Previous wording
NewQuest seeks to acquire private equity positions on a secondary basis in underlying portfolio companies whose businesses are substantially based in the Asia Pacific region. With $3.0 billion in assets under management as of March 31, 2024, NewQuest is principally focused on complex secondary transactions.
Current wording
NewQuest seeks to acquire private equity positions on a secondary basis in underlying portfolio companies whose businesses are substantially based in the Asia Pacific region. With $3.2 billion in assets under management as of June 30, 2024, NewQuest is principally focused on complex secondary transactions.
Previous wording
Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions. Changes in global economic conditions and regulatory or other governmental policies or actions can materially affect the values of funds managed by TPG, as well as our ability to source attractive investments and deploy the capital that we have raised. However, we believe our disciplined investment philosophy across our diversified investment platforms and our shared investment themes focusing on attractive and resilient sectors of the global economy has historically contributed to the stability of our performance throughout market cycles.
Current wording
Our business is affected by a variety of factors, including financial markets and economic and political conditions. Changes in global economic conditions and regulatory or other governmental policies or actions can materially affect the values of funds managed by TPG, as well as our ability to source attractive investments and deploy the capital that we have raised. However, we believe our disciplined investment philosophy across our diversified investment platforms and our shared investment themes focusing on attractive and resilient sectors of the global economy has historically contributed to the stability of our performance throughout market cycles.
Previous wording
In corporate credit markets, both U.S. and European high yield markets performed positively during the first quarter of 2024. According to J.P. Morgan data, the U.S. high yield market saw gains of 1.6% in the United States and the European market saw gains of 1.4% during the first quarter. In the United States, high yield bond spreads continued to tighten and ended the quarter at 343 basis points compared to 377 basis points to start the year. In Europe, high yield spreads tightened 31 points, ending the quarter at 430 basis points. The high yield default rate ended the quarter at 2.6% in both the United States and Europe. Additionally, the J.P. Morgan U.S. Leveraged Loan Index posted a 2.65% return, and the J.P. Morgan European Leveraged Loan Index posted a 2.49% return for the first quarter of 2024. From a spread and yield basis, the US Leveraged Loan Index ended the quarter at a yield of 8.81% and 476 basis point spread, while the European Leverage Loan Index ended the quarter at a yield of 8.17% and 535 basis point spread.
Current wording
In corporate credit markets, both U.S. and European high yield generated positive performance in the second quarter of 2024. According to J.P. Morgan data, U.S. high yield gained 1.2% and the European market returned 1.5% during the three-month period. In the United States, high yield bond spreads widened by 8 basis points to 351 basis points, while in Europe, high yield spreads tightened 14 basis points to end the quarter at 416 basis points. In the United States, default activity was muted during the quarter, resulting in the high yield default rate declining from 2.6% to 1.7%, though in Europe, the high yield default increased modestly from 2.6% to 2.8%. Additionally, the J.P. Morgan U.S. Leveraged Loan Index posted a 1.92% return, and the J.P. Morgan European Leveraged Loan Index posted a 2.37% return for the second quarter of 2024. From a spread and yield basis, the US Leveraged Loan Index ended the quarter at a yield of 8.78% and 464 basis point spread, while the European Leverage Loan Index ended the quarter at a yield of 8.07% and 511 basis point spread.
Previous wording
Major U.S. equity indices continued to rise during the first three months of 2024. The S&P 500, Dow Jones and Nasdaq gained 10.2%, 5.6% and 9.1%, respectively, during the quarter. The best performing S&P sectors included Communication Services, Energy and Information Technology, which rose 15.6%, 12.7% and 12.5%, respectively. Real Estate was the lone retreating sector, losing (1.4%) during the quarter. Utilities and Consumer Discretionary were also laggards, but still posted positive gains of 3.6% and 4.8%, respectively, in the quarter. Volatility, as measured by the CBOE Volatility Index, was relatively flat for the three months ending March 31, 2023, ending the quarter at 13.0, up from 12.5 as of the end of 2023.
Current wording
Major U.S. equity indices were mixed during the three months ended June 30, 2024, with a high degree of underlying dispersion from a sector and size perspective. The S&P 500 and Nasdaq gained 3.9% and 8.3% respectively, while the Dow Jones fell (1.7%). The S&P 500 and Nasdaq were boosted by the significant outperformance of mega-cap technology stocks such as NVIDIA Corp. and Apple Inc., which gained 36.7% and 22.8% during the quarter, respectively. Information Technology and Communication Services were broadly the top performing S&P sectors during the quarter, gaining 13.6% and 9.1%. Materials, Industrials and Energy were relative laggards, falling (4.9%), (3.3%) and (3.2%), respectively. Small-cap stocks were also laggards, with the Russell 2000 index falling (3.6%). Volatility, as measured by the CBOE Volatility Index, was relatively unchanged for the three months ending June 30, 2024, ending the quarter at 12.4, down from 13.0 as of the end of the prior quarter.
Previous wording
On November 1, 2023, we acquired Angelo Gordon pursuant to the terms and subject to the conditions set forth in the Transaction Agreement. Pursuant to the Transaction Agreement, we acquired Angelo Gordon for both cash and non-cash consideration under U.S. GAAP equal to $1,142.7 million (the “Purchase Price”), comprised of:
Current wording
On November 1, 2023, we acquired Angelo Gordon pursuant to the terms and subject to the conditions set forth in the Transaction Agreement. Pursuant to the Transaction Agreement, we acquired Angelo Gordon for both cash and non-cash consideration under U.S. GAAP equal to $1,143.4 million (the “Purchase Price”), comprised of:
Previous wording
•$15.7 million paid during the three months ended March 31, 2024 to the sellers of Angelo Gordon as a result of post close net working capital adjustments;
Current wording
•$16.3 million paid during the six months ended June 30, 2024 to the sellers of Angelo Gordon as a result of post close net working capital adjustments;
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Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
Revenues consisted of the following for the six months ended June 30, 2024 and 2023:
Current report — wording carried from elsewhere
Certain management fees totaling $39.0 million earned during the six months ended June 30, 2024 were considered catch-up fees as a result of additional capital commitments from limited partners. Catch-up fees primarily consisted $21.9 million for Asia VIII which was activated in the third quarter of 2022.
Current report — wording carried from elsewhere
Transaction, Monitoring and Other Fees, Net. Transaction, monitoring and other fees, net increased by $70.4 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily driven by a $56.5 million increase in our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer.
Current report — wording carried from elsewhere
The table below highlights performance allocations for the six months ended June 30, 2024 and 2023, and separates the entities listed into two categories to reflect the Reorganization: (i) TPG general partner entities from which the TPG Operating Group Common Unit holders are expected to receive a 20% performance allocation and (ii) TPG general partner entities from which the TPG Operating Group Common Unit holders are not expected to receive any performance allocation.
Current report — wording carried from elsewhere
(1)After the Reorganization, we retained an economic interest in performance allocations from the Growth III and Asia VI general partner entities, which entitles us to a performance allocation equal to 10%; however, we allocate the full amount as performance allocation compensation expense. As such, net income available to controlling interest holders is zero for each of these funds following the Reorganization.
Current report — wording carried from elsewhere
(2)The TPG Operating Group Excluded entities’ performance allocations are not a component of net income attributable to TPG following the Reorganization; however, the TPG general partner entities continue to be consolidated by us. We transferred the rights to the performance allocations the TPG Operating Group historically would have received to RemainCo on December 31, 2021. As such, net income available to controlling interest holders will be zero for each of the TPG Operating Group Excluded entities beginning January 1, 2022.
Current report — wording carried from elsewhere
As of June 30, 2024, accrued performance allocations presented as investments in the Condensed Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group shared TPG general partner entities totaled $5.5 billion. As of June 30, 2024, accrued performance allocations presented as investments in the Condensed Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group excluded TPG general partner entities totaled $0.3 billion.
Current report — wording carried from elsewhere
Equity-based Compensation. Equity-based compensation expense increased by $143.0 million, or 46%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily driven by an increase in compensatory equity awards under U.S. GAAP associated with the TPG Angelo Gordon acquisition, and an increase in compensatory restricted stock unit grants to TPG employees, certain of our executives and TPG Angelo Gordon employees, as described in Note 14 to the Condensed Consolidated Financial Statements.
Current report — wording carried from elsewhere
Performance Allocation Compensation. Performance allocation compensation decreased by $63.2 million, or 16%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily attributable to the decrease in performance allocations that drives compensation attributable to our partners and professionals.
Current report — wording carried from elsewhere
Depreciation and Amortization. Depreciation and amortization increased by $48.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This change was primarily due to the amortization of intangible assets resulting from the acquisition of TPG Angelo Gordon in November 2023.
Current report — wording carried from elsewhere
Investment and Other Income of Consolidated Public SPACs. Investment and other income of consolidated Public SPACs recognized during the six months ended June 30, 2023 was related to the interest income earned on the Assets held in Trust Account and the unrealized losses on derivative instruments warrants issued by the consolidated Public SPAC entities and forward purchase agreements held by third parties. As of December 31, 2023, we no longer hold any Assets held in Trust Accounts or have any derivative liabilities associated with Public SPACs in our Consolidated Financial Statements due to the redemption of the outstanding shares of the Public SPACs during the year ended December 31, 2023.
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Previous report — wording carried elsewhere
Brook Capital Income Fund (“TCAP”). As of March 31, 2024, TPG AG Middle Market Direct Lending had $21.3 billion in assets under management.