TPG Inc
For the period ended Dec 31, 2024. Filed Feb 18, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 18, 2025
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-K
Period ended 2023-12-31; filed 2024-02-23.
0001880661-24-000013
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-18.
0001880661-25-000014
Item 7. 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 481 previous paragraphs and 363 current paragraphs.
186 unchanged; 98 reworded; 76 added; 167 removed; 30 previous and 3 current paragraphs rearranged.
Tables are not compared: 61 previous and 38 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 (76)
Current report
The following discussion includes a comparison of our results for the years ended December 31, 2024 and 2023. For a discussion of our results for the year ended December 31, 2022 and a comparison of results for the years ended December 31, 2023 and 2022, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023, which specific discussion is incorporated herein by reference.
Current report
Economic dynamics and financial conditions provided an accommodating backdrop for global markets in 2024, with the combination of moderating inflation, easing monetary policy, continued economic growth and AI-related enthusiasm driving risk assets higher and credit spreads tighter.
Current report
U.S. economic activity continued to expand in 2024. Quarter-over-quarter, real gross domestic product (“GDP”) grew at an annualized rate of 1.4%, 3.0% and 3.1%, respectively, for the first three quarters of 2024. In aggregate, 2024 GDP is estimated to have grown 2.7% relative to 2023. The labor market remained strong, though the unemployment rate ticked up slightly to end the year at 4.1%, up from 3.7% as of the end of 2023.
Current report
Despite the robust economic growth and resilience in the labor market, inflation in the United States moderated throughout 2024 but still remains elevated relative to the Federal Reserve long-term target of 2.0%. The December reading of the U.S. Consumer Price Index (“CPI”) showed prices increased 2.7% over the prior twelve months, a slower pace of growth than the 3.1% level observed as of the end of 2023. Similarly, core CPI, which excludes food and energy, fell to 3.3% annual growth as of the latest reading, down from 4.0% as of the end of 2023.
Current report
The trajectory of inflation towards the Federal Reserve’s 2.0% target provided the central bank confidence to reduce interest rates during the year for the first time since the onset of the COVID-19 pandemic. After holding target federal funds rate steady at 5.25%-5.50% for a year, the Federal Reserve cut rates by 50 basis points at its September 2024 meeting, followed by 25 basis point reductions at both its November and December 2024 meetings. As of the end of 2024, the federal funds target range sits at 4.25%-4.50%, with additional cuts expected in 2025.
Current report
The U.S. Treasury market was relatively volatile in 2024. The yield curve steepened throughout the year as yields at the short end of the curve fell in response to rate cuts by the Federal Reserve, while longer dated bonds sold off. Yields on the 10-Year Treasury ended the year 4.57%, up 69 basis points from the start of the year. 2-Year Treasury yields were flat year-over year, ending 2024 at 4.24%.
Current report
Major U.S. equity indices recorded significant gains during 2024, with the S&P 500, Nasdaq and Dow Jones rising 23.3%, 28.6% and 12.9%, respectively, during the year. Indices were led higher by a collection of mega-cap stocks, including Nvidia, Microsoft, Amazon, Apple, Alphabet, Meta and Tesla, which collectively represent approximately one third of the S&P 500 as of December 31, 2024—the highest level of concentration in the index’s history. Technology sectors outperformed during the year, driven by AI-related enthusiasm, with Communication Services and Information Technology S&P sectors gaining 38.9% and 35.7%, respectively. Materials, Healthcare and Real Estate sectors were relative laggards throughout the year, posting performances of (1.8%), 0.9% and 1.7%, respectively. Volatility in the U.S. equity market, as measured by the CBOE Volatility Index, was modestly higher year-over-year, ending 2024 at 17.4, up from 12.5 as of the end of 2023. Global equity markets rose over 2024, though lagged the United States, with the MSCI Europe Index rising 5.8%, the MSCI Asia Index rising 7.2% and the MSCI World Index gaining 17.0% during the year.
Current report
•$16.3 million paid during the year ended December 31, 2024 to the sellers of Angelo Gordon as a result of post close net working capital adjustments;
Current report
Management Fees. Management fees increased by $450.0 million, or 38%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Current report
This change was primarily driven by an increase of $458.9 million in management fees from TPG Angelo Gordon, acquired in November 2023. During the year ended December 31, 2024, we recognized additional fees of $283.5 million from TPG AG Credit, primarily driven by MVP Fund, MMDL III, MMDL IV and Credit Solutions II, and $175.4 million from TPG AG Real Estate, primarily driven by Realty Value XI, Realty Value X, Asia Realty V, Europe Realty IV, Net Lease Realty III and Net Lease Realty IV.
Current report
Management fees from our Capital platform decreased $19.8 million during the year ended December 31, 2024, primarily driven by a reduction of invested capital due to realizations for TPG VII and a step down in fee basis from committed to invested capital for TPG VIII during the fourth quarter of 2024. During the fourth quarter of 2023, TPG IX and THP II recognized catch-up fees from new capital raised. These decreases were partially offset by additional fees from Asia VIII due to fee earning capital raised and catch-up fees earned during the twelve months ended December 31, 2024.
Current report
Management fees from our Growth platform increased $10.9 million primarily attributable 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 $2.1 million, primarily attributable to Rise Climate I, which had a step down in fee basis from committed to invested capital during the fourth quarter of 2024, partially offset by additional fees from Rise Climate II, which was activated during the third quarter of 2024.
Current report
Management fees from our Real Estate platform decreased $8.5 million, primarily attributable to TREP III, which had a step down in fee basis from committed to invested capital in the second quarter of 2023.
Current report
Management fees from our Market Solutions platform increased $9.9 million primarily attributable to TGS and NewQuest V as a result of additional fee earning capital raised during the twelve months ended December 31, 2024, partially offset by a decrease in fees from TPEP as a result of a decrease in fee earning AUM.
Current report
Certain management fees totaling $50.4 million earned during the year ended December 31, 2024 were considered catch-up fees as a result of additional capital commitments from limited partners. Catch-up fees primarily consisted of $21.9 million for Asia VIII and $8.7 million for TGS.
Current report
Transaction, Monitoring and Other Fees. Transaction, monitoring and other fees increased by $90.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily driven by a $42.0 million increase in our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer and a $18.8 million increase in monitoring fees earned from portfolio companies primarily in our Capital platform.
Current report
Expense Reimbursements and Other. Expense reimbursements and other increased by $12.3 million, or 5%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily due to the acquisition of TPG Angelo Gordon in November 2023, partially offset by primarily lower income from our former affiliate. As of April 2024, the contracts to provide services to such party have ended.
Current report
Performance allocation income was $1,301.8 million for year ended December 31, 2024 compared to $808.2 million for year ended December 31, 2023. This change was primarily driven by higher performance allocations from our Capital, Growth and Real Estate platforms during the year ended December 31, 2024 compared to the year ended December 31, 2023, and from the acquisition of TPG Angelo Gordon in November 2023, which contributed $301.6 million of net gains during the year ended December 31, 2024.
Current report
Performance allocation income from our Capital platform was $560.6 million for the year ended December 31, 2024 compared to $438.5 million for the year ended December 31, 2023. Performance allocation income for the year ended December 31, 2024 was largely driven by gains of $236.2 million from TPG VIII, $176.9 million from TPG VII and $174.8 million from TPG IX, partially offset by losses of $73.6 million from Asia VI and $56.4 million from Asia VII. Performance allocation income for the year ended December 31, 2023 was primarily driven by gains of $318.9 million from TPG VIII and $60.9 million from THP I, partially offset by losses of $48.4 million from Asia VI.
Current report
Performance allocation income from our Growth platform was $362.4 million for the year ended December 31, 2024 compared to $121.7 million for the year ended December 31, 2023. Performance allocation income for the year ended December 31, 2024 was primarily driven by $156.8 million from Growth IV, $120.8 million from Growth V and $83.6 million from TTAD II. Performance allocation income for the year ended December 31, 2023 was primarily driven by gains of $80.8 million from Growth V and $64.4 million from Growth IV.
Current report
Performance allocation income from our Impact platform was $135.2 million for the year ended December 31, 2024 compared to $229.6 million for the year ended December 31, 2023. Performance allocation income for the year ended December 31, 2024 was largely driven by gains of $63.9 million from Rise III, $45.2 million from Rise Climate I and $41.6 million from Rise II, partially offset by losses of $15.5 million from Rise I. Performance allocation income for the year ended December 31, 2023 was primarily driven by gains of $177.3 million from Rise Climate I and $55.9 million from Rise II.
Current report
TPG AG Credit generated income of $406.5 million primarily attributable to $81.1 million from Credit Solutions II, $68.8 million from MVP, $37.7 million from MMDL IV, $25.7 million from ABC Fund and $20.8 million from Essential Housing II. TPG AG Real Estate generated net losses of $105.0 million primarily attributable to $90.2 million from Realty Value X, $31.9 million from Europe Realty II, $29.9 million from Asia Realty IV and $12.5 million from Realty VIII, which were partially offset by gains of $41.8 million from Net Lease Realty III.
Current report
TREP III within the Real Estate platform generated $21.2 million of gains during the year ended December 31, 2024 compared to a losses of $73.3 million during the year ended December 31, 2023.
Current report
Performance allocation losses of $29.7 million from our Market Solutions platform were primarily driven by $32.1 million of loss from NewQuest IV and $29.4 million from NewQuest III, partially offset by net gains of $16.0 million from TPEP during the year ended December 31, 2024. Performance allocation income for the year ended December 31, 2023 was primarily driven by gains of $33.5 million from TPEP and $8.8 million from NewQuest V, partially offset by net losses of $20.2 million from NewQuest III.
Current report
TPG Operating Group Excluded generated losses of $51.4 million during the year ended December 31, 2024 compared to a loss of $58.8 million during the year ended December 31, 2023. Performance allocation losses for the year ended December 31, 2024 were primarily driven by losses of $27.2 million from Biotech III from our Growth platform and $9.5 million from Asia V from our Capital platform, partially offset by gains of $5.3 million from Biotech V from our Growth platform. Performance allocation losses from TPG Operating Group Excluded for the year ended December 31, 2023 was primarily driven by losses of $24.6 million from TPG VI and $24.4 million from Asia V from our Capital platform and $22.9 million from Gator within our Growth platform, offset by gains of $12.6 million from Biotech III within our Growth platform.
Current report
Capital Interests. Capital interests income increased by $64.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily attributable to gains from our investments in TPG VII, TPG VIII, TPG IX, Rise III, TRTX, Growth V and MVP Fund, offset by losses from our investment in Asia VI and Asia VII during the year ended December 31, 2024. During the year ended December 31, 2023, we recognized gains on our investments in TPG VII, TPG VIII and Rise Climate I offset by losses from our investments in Asia VI.
Current report
General, Administrative and Other. General and administrative expenses increased by $101.2 million, or 21%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily driven by the increase in information technology costs, rent expenses and other administrative costs from TPG Angelo Gordon, which was acquired in November 2023.
Current report
Expenses of Consolidated Public SPACs. Expenses of consolidated Public SPACs decreased by $1.1 million for the year ended December 31, 2024 compared to the year ended December 31, 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
Income Tax Expense. Income tax expense decreased by $8.2 million or 14% for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to income tax expense in connection with an increase in valuation allowance during the year ended December 31, 2023 as compared to an income tax benefit in connection with a decrease in valuation allowance during the year ended December 31, 2024, offset by an increase in certain compensation expenses that are not tax deductible incurred during the year ended December 31, 2024.
Current report
Cash and cash equivalents increased $142.8 million during the year ended December 31, 2024 primarily due to $351.0 million of proceeds from our Senior Notes and Subordinated Notes offerings and our 364-Day Credit Facility, net of repayment of our outstanding borrowings under our Senior Unsecured Revolving Credit Facility and Senior Unsecured Term Loan, and cash generated from our operating activities, partially offset by payments of dividends and distributions to our Class A common stockholders and to holders of non-controlling interests in subsidiaries.
Current report
Other assets increased $331.2 million during the year ended December 31, 2024 primarily due to the deferred tax assets recorded in connection with the exchange of Common Units described in Note 20 to the Consolidated Financial Statements.
Current report
Debt obligations increased $336.9 million during the year ended December 31, 2024 primarily due to the Senior Notes and Subordinated Notes offerings and borrowings under our 364-Day Credit Facility, offset by repayment of our outstanding borrowings under our Senior Unsecured Revolving Credit Facility and Senior Unsecured Term Loan.
Current report
Due to affiliates increased $322.0 million during the year ended December 31, 2024 primarily due to an increase of $308.9 million in expected payments to be made in future years in connection with certain exchanges of Common Units for Class A common stock subject to our Tax Receivable Agreement.
Current report
Management fees increased by $447.0 million, or 38%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Current report
This change was primarily driven by the increase of $436.6 million in management fees from TPG Angelo Gordon, acquired in November 2023. During the year ended December 31, 2024, we recorded $311.0 million in fees from TPG AG Credit, primarily driven by MVP Fund, MMDL III, MMDL IV and Credit Solutions II, and $209.6 million from TPG AG Real Estate, primarily driven by Realty Value XI, Realty Value X, Asia Realty V, Europe Realty IV, Net Lease Realty III and Net Lease Realty IV.
Current report
Management fees from our Capital platform increased $0.6 million during the year ended December 31, 2024. Fee earning capital raised during the year ended December 31, 2024 resulted in additional fees from Asia VIII, partially offset by catch-up fees earned during the fourth quarter of 2023 from TPG IX and realizations from TPG AAF in the third quarter of 2023.
Current report
Management fees from our Growth platform increased $12.0 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 largely due to 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 $2.4 million, primarily attributable to Rise Climate I, which had a step down in fee basis from committed to invested capital during the fourth quarter of 2024, partially offset by additional fees from Rise Climate II, which was activated during the third quarter of 2024.
Current report
Management fees from our Real Estate platform decreased $8.5 million primarily due to TREP III, which had a step down in fee basis from committed to invested capital in the second quarter of 2023.
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Removed paragraphs (167)
Previous report
The market environment improved in 2023 as inflation slowed, the Federal Reserve tapered and ultimately paused its rate hiking cycle, and the domestic economy remained strong, all despite ongoing geopolitical instability and stress within the regional banking sector during the early part of the year.
Previous report
The U.S. Consumer Price Index (“CPI”) reading for the last month of 2023 showed a 3.1% year-over-year increase in prices, a much slower rate of increase relative to the December 2022 reading of 6.5%. Core CPI, which excludes food and energy, also declined from 5.7% in December 2022 to 3.9% in the December 2023 reading. As inflation tapered, the Federal Reserve began to slow its pace of rate hikes. After increasing the target federal funds rate by 4.25% over the course of 2022, the Federal Reserve increased rates only by another 1.00% in 2023 via 0.25% increases at four of its first five meetings of 2023. The Central Bank has held rates steady since, at 5.25% - 5.50%. The timing of the Federal Reserve’s first rate cut and the pace of the rate cutting cycle remains a significant question impacting markets. Economic data has remained strong despite the extended period of elevated rates. The U.S. added 2.8 million payrolls over the course of 2023, and the unemployment rate ended the year at 3.7%, a modest increase from 2022’s final reading of 3.4%.
Previous report
U.S. Treasuries experienced a degree of volatility over the twelve months ending December 31, 2023, though finished the year relatively flat to yields seen at the end of 2022. Treasury yields fell sharply early in the year, particularly at the shorter end of the curve, as stress within the U.S. regional banking sector drove a flight to safety. Yields steadily widened over the following months, with the 10-Year Treasury touching above 5% in October. However, Treasury bonds rallied significantly heading into the end of the year. The 10 Year Treasury yield ended the year at 3.879%, little changed from its yield at the end of 2022. 2 Year Yields touched as high as 5.212% during 2023 but closed the year at 4.250%.
Previous report
Major U.S. equity indices rallied significantly in 2023, after posting losses in 2022. The S&P 500, Dow Jones, and Nasdaq gained 24.2%, 13.7%, and 43.4% respectively during the year. Growth oriented sectors were market leaders, with the Information Technology and Communication Services sectors rising 56.4% and 54.4% respectively on the year. Energy and Utilities were laggards, declining (4.8%) and (10.2%) respectively. Volatility, as measured by the CBOE Volatility Index, continued its downward trend over the year from 21.7 at the start of the year to 12.5 at the end of 2023.
Previous report
In commercial real estate, the Green Street Commercial Property Price Index ended December 2023 down 9.5% from its the beginning of 2023. Commercial property transaction volume in the United States and Europe remained relatively muted, consistent with 2022, primarily due to continued elevated borrowing rates and reductions in liquidity and credit availability. Major Asian markets faced similar challenges, with commercial property transaction volume for the year declining 17 year-over-year overall; however, Q4 2023 saw an uptick in volume, registering a 3% rise year-on-year. In Hong Kong full year 2023 investment volume reached HK$40.4 billion, marking the weakest period since 2008. In China, transaction volume fell 13.0% year-over-year, largely due to prolonged overseas interest rate hikes and ongoing geopolitical tension. Similarly, Japan saw investment volume decline 3.0% year-over-year, mostly due to a decrease in foreign investment.
Previous report
U.S. residential real estate improved slightly during the quarter, with national U.S. home prices rising approximately 6.0% year-to-date through November 2023, slightly above the peak recorded in June 2022 according to the S&P/Case-Shiller U.S. National Home Price Index, in part due to constrained housing supply.
Previous report
•$18.8 million in payable as of December 31, 2023 to the escrow agent on behalf of the sellers of Angelo Gordon, subject to adjustment;
Previous report
On November 1, 2023, Angelo Gordon had $75.3 billion in assets under management, with $57.4 billion attributable to its credit business and $17.9 billion attributable to its real estate business.
Previous report
Net Gains from Investment Activities of consolidated TPG Funds and Public SPACs. Net gains (losses) from investment activities includes (i) realized gains (losses) from the sale of equity, securities sold and not yet purchased, debt and derivative instruments and (ii) unrealized gains (losses) from changes in the fair value of such instruments.
Previous report
Fees and other revenues increased by $288.0 million, or 23%, during the year ended December 31, 2023 compared to the year ended December 31, 2022. This change resulted from a $268.1 million increase in management fees, a $24.2 million increase in expense reimbursements and other and a $4.3 million decrease in transaction, monitoring and other fees, net.
Previous report
Management Fees. Management fees increased by $268.1 million, or 29%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by fee earning capital raised resulting in additional management fees of $107.6 million from TPG IX, $47.9 million from Asia VIII, $40.7 million from THP II, and $29.2 million from Rise III, each of which were activated during the third quarter of 2022. Management fees also increased $87.3 million due to the additional fees earned from TPG Angelo Gordon, primarily $18.8 million from Middle Market Direct Lending funds, $12.4 million from Real Estate Multi-Strategy funds, and $9.8 million from Credit Solutions funds. These increases were partially offset by a decrease in management fees of $36.9 million earned from Asia VII resulting from a decrease in fee earning AUM during the year ended December 31, 2023 compared to the year ended December 31, 2022.
Previous report
Certain management fees totaling $41.5 million earned during the year ended December 31, 2023 were considered catch-up fees as a result of additional capital commitments from limited partners primarily related to TPG IX of $18.0 million, THP II of $8.7 million, Rise III of $6.7 million and Asia VIII in the amount of $6.3 million.
Previous report
Transaction, Monitoring and Other Fees, Net. Transaction, monitoring and other fees, net decreased by $4.3 million, or 4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by a $9.5 million decrease in transaction, monitoring and incentive fees earned from portfolio companies in our Real Estate and Capital platforms, partially offset by a $6.3 million increase in our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer.
Previous report
Expense Reimbursements and Other. Expense reimbursements and other increased by $24.2 million, or 12%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by a $21.2 million increase in income from services rendered to TPG funds and a $5.1 million increase in additional reimbursements from funds, mainly due to increase in expense reimbursements attributable to TPG Angelo Gordon.
Previous report
The increase in total performance allocations for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by higher realized and unrealized appreciation in TPG VIII, THP I, Growth IV, Growth V, Rise Climate and Rise II. These increases were partially offset by lower realized and unrealized appreciation in TREP III and Asia VI. Performance allocations also increased $127.3 million due to the acquisition of TPG Angelo Gordon primarily due to realized and unrealized appreciation from TPG AG Credit.
Previous report
Capital Interests. Capital interests income increased by $10.9 million, or 30%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by an increase in income from our investments in TRTX in our Real Estate platform and Rise Climate in our Impact platform. These increases were partially offset by a decrease in income from our investments in TPG VII, TPG VIII and TPG AAF in our Capital platform.
Previous report
General, Administrative and Other. General and administrative expenses increased by $113.7 million, or 31%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by a $78.0 million increase in professional fees and an increase of $7.6 million in travel and other administrative expenses. General and administrative expense also increased $39.1 million from TPG Angelo Gordon. These increases were partially offset by a decrease in insurance expenses, primarily related to a $20.6 million insurance policy purchased in connection with the IPO during the year ended December 31, 2022.
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Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs decreased by $2.3 million, or 68%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
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Interest, Dividends and Other of Consolidated TPG Funds and Public SPACs. Interest, dividends and other of consolidated TPG Funds and Public SPACs increased by $1.0 million, or 14%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Previous report
Income Tax Expense. Income tax expense increased by $27.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to the Pre-Closing TPG Transactions, (as defined herein) which resulted in an increase to our valuation allowance for the year ended December 31, 2023.
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Management Fees. Management fees increased by $201.5 million, or 28%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by fee earning capital raised resulting in additional management fees of $40.3 million from TPG IX, $22.0 million from Asia VIII, $19.4 million from Rise III and $10.4 million from TPH II, each of which were activated during the third quarter of 2022; $76.2 million from TREP IV, which was activated during the first quarter of 2022; and $65.4 million from Rise Climate, which was activated during the third quarter of 2021. These increases were partially offset by a decrease in management fees of $29.9 million earned from TPG VII resulting from a decrease in fee earning AUM during the year ended December 31, 2022 compared to the year ended December 31, 2021.
Previous report
Certain management fees in the year ended December 31, 2022 were considered catch-up fees as a result of additional capital commitments from limited partners to Rise Climate and TTAD II in the amount of $2.8 million.
Previous report
Transaction, Monitoring and Other Fees, Net. Transaction, monitoring and other fees, net increased by $12.5 million, or 12%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a $9.6 million increase in transaction fees earned from portfolio companies in our Real Estate and Capital platforms and a $5.1 million increase in our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer.
Previous report
Expense Reimbursements and Other. Expense reimbursements and other increased by $54.8 million, or 35%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a $18.4 million increase in additional reimbursements from TPG funds due to increased fundraising activities, $19.8 million in administrative service fees from RemainCo earned during the year ended December 31, 2022, and a $14.9 million increase in income from services rendered to TPG funds and Portfolio Companies.
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Performance Allocations. Performance allocations decreased by $3,072.8 million to $720.1 million, or 81%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by an 8% appreciation of our realized and unrealized portfolio during the year ended December 31, 2022 compared to a 38% appreciation of our realized and unrealized portfolio during the year ended December 31, 2021. Realized performance allocations for the year ended December 31, 2022 and 2021 totaled $1,409.8 million and $1,956.2 million, respectively. The change in unrealized performance allocations for the year ended December 31, 2022 was a loss of $689.7 million. Unrealized performance allocation gains for the year ended December 31, 2021 totaled $1,836.7 million.
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The decrease in total performance allocations for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily driven by lower realized and unrealized appreciation in TPG VII, Asia VI, Asia VII, Growth III, Growth IV, THP I, Rise I and TREP III. For the year ended December 31, 2022, our investments have generated realized and unrealized portfolio appreciation of 8% compared to 38% for the year ended December 31, 2021.
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Capital Interests. Capital interests income decreased by $169.5 million, or 82%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a decrease in income from our investments in TPG VII, TPG VIII, Asia VI and Asia VII in our Capital platform, TRTX in our Real Estate platform, Growth III, Growth IV and TTAD I in our Growth platform, and Rise I in our Impact platform. These decreases were partially offset by an increase in income from our investment in AAF in our Capital platform.
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Cash-Based Compensation and Benefits. Cash-based compensation and benefits expense decreased by $106.0 million, or 18%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a $127.7 million decrease in bonuses for senior professionals for the year ended December 31, 2022 which, following our Reorganization and IPO, are recorded in performance allocation compensation expense. This decrease was partially offset by increases in salaries and benefits and accrued bonuses of $29.8 million and $11.0 million, respectively, driven by an increase in headcount for the year ended December 31, 2022.
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Equity-Based Compensation. Equity-based compensation expense increased by $627.7 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily attributable to the Reorganization and IPO, which resulted in $550.0 million of expense associated with unvested units granted prior to or in conjunction with the IPO to certain of our employees at TPG Partner Holdings, RemainCo, and the TPG Operating Group as well as $77.7 million of expense associated with RSUs granted to TPG employees and certain of our executives upon completion of our IPO in January 2022. We had no such expense during the year ended December 31, 2021.
Previous report
Performance Allocation Compensation. Performance allocation compensation increased by $416.6 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily attributable to the recognition of partnership distributions to our partners and professionals as compensation expense following our IPO. We had no such expense during the year ended December 31, 2021 as we were a private partnership.
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General, Administrative and Other. General and administrative expenses increased by $90.3 million, or 32%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a $18.4 million increase in expenses related to our fundraising activities that are ultimately reimbursable from TPG funds, a $28.8 million increase in office overhead and other, inclusive of a $20.6 million insurance policy purchased in connection with the IPO and a $26.5 million increase of other administrative expenses.
Previous report
Interest Expense. Interest expense increased by $5.3 million, or 33%, for the year ended December 31, 2022 compared to the year ended December 31, 2021 primarily due to higher interest rates on certain borrowings.
Previous report
Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs decreased by $17.4 million, or 84%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a reduction in non-recurring professional services expenses as a result of business combinations associated with TPG PACE Tech Opportunities Corp. (“PACE”) and TPG Pace Solutions Corp. (“TPGS”) during the year ended December 31, 2021.
Previous report
Net (Losses) Gains from Investment Activities. Net losses from investment activities for the year ended December 31, 2022 were $110.1 million compared to a gain of $353.2 million for the year ended December 31, 2021. This change was primarily attributable to a gain of $122.7 million recognized on the deconsolidation of PACE, a gain of $109.9 million on the deconsolidation of TPGS, and a gain of $95.0 million recognized on the acquisition of NewQuest during the year ended December 31, 2021. Additionally, we incurred losses of $80.4 million and $25.1 million from our investments in Vacasa, Inc. and Nerdy Inc, respectively, during the year ended December 31, 2022. Following the Reorganization, we no longer recognize net gains or losses from certain strategic investments that were transferred to RemainCo on December 31, 2021.
Previous report
Interest, Dividends and Other. Interest, dividends and other increased by $2.7 million, or 42%, for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Previous report
Net Gains (Losses) from Investment Activities of Consolidated TPG Funds and Public SPACs. Net gains (losses) from investment activities of consolidated TPG Funds and Public SPACs had no activity during the year ended December 31, 2022 compared to a net gain of $23.4 million for the year ended December 31, 2021. Following certain Reorganization activities, we no longer consolidate TPEP as we do not have a controlling financial interest.
Previous report
Unrealized Gains on Derivative Liabilities of Public SPACs. The $12.4 million and $211.8 million of unrealized gain on derivative instruments recognized during the year ended December 31, 2022 and 2021, respectively, were attributable to warrants issued by the consolidated Public SPAC entities and forward purchase agreements held by third parties. The warrants held by public investors and forward purchase agreements are treated as liability instruments rather than equity instruments and subject to mark-to-market adjustments each period. Upon the consummation of acquisitions of target companies by our Public SPACs or the wind down of a Public SPAC, the associated liability will no longer be included in our Consolidated Financial Statements.
Previous report
Interest, Dividends and Other of Consolidated TPG Funds and Public SPACs. Interest, dividends and other of consolidated TPG Funds and Public SPACs decreased by $3.6 million, or 35%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily related to an expense reimbursement of EUR 15.0 million on the termination of a proposed business combination, recognized by TPG Pace Beneficial Finance Corp. during the year ended December 31, 2021. These decreases were partially offset by increased interest income resulting from higher interest rates on the balance of assets held in Trust Accounts by Consolidated Public SPACs.
Previous report
Income Tax Expense. Income tax expense increased by $23.4 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was due to the Company now being treated as a corporation for U.S. federal and state income taxes in connection with the Reorganization and IPO, beginning in January of 2022.
Previous report
Cash and cash equivalents decreased $442.3 million during the year ended December 31, 2023 primarily due to the acquisition of Angelo Gordon. The acquisition resulted in cash paid of $740.7 million, which is comprised of $270.7 million of cash on hand and $470.0 million of proceeds from drawing on our Senior Unsecured Revolving Credit Facility. This is partially offset by cash and cash equivalents acquired in the transaction of $383.9 million.
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Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information presented in our historical financial statements and the related notes included elsewhere in this report. In addition to historical information, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and elsewhere in this report, particularly in “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A.—Risk Factors” and “—Unaudited Pro Forma Condensed Consolidated Financial Information and Other Data.” We assume no obligation to update any of these forward-looking statements.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information presented in our historical financial statements and the related notes included elsewhere in this report. In addition to historical information, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and elsewhere in this report, particularly in “Cautionary Note Regarding Forward-Looking Statements,” and “Item 1A.—Risk Factors”. We assume no obligation to update any of these forward-looking statements.
Previous wording
We completed the Acquisition on November 1, 2023. Accordingly, the results of TPG Angelo Gordon included in our consolidated results of operations are from November 1, 2023 through December 31, 2023.
Current wording
We completed the Acquisition on November 1, 2023. Accordingly, the results of TPG Angelo Gordon included in our consolidated results of operations for the year ended December 31, 2023 are from November 1, 2023 through December 31, 2023.
Previous wording
We are a leading global alternative asset manager with approximately $221.6 billion in assets under management (“AUM”) as of December 31, 2023. We primarily invest in complex asset classes such as private equity, credit, real estate and public market strategies. We have built our firm through more than 30 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 as compared to other alternative asset managers and a diversified, innovative array of multi-strategy investment platforms that position us well to continue generating sustainable growth across our business.
Current wording
We are a leading global alternative asset manager with $245.9 billion in assets under management (“AUM”) as of December 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 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
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
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 2023. According to J.P. Morgan data, the U.S. high yield market saw gains of 13.5% in the United States and the European market saw gains of 12.7% during the year. Notably, lower-rated CCCs significantly outperformed higher-rated BBs over this period, generating returns of 19.9% and 11.8%, respectively. In U.S. high, yield bonds further tightened and ended the year at 377 basis points compared to 490 basis points to start the year. In Europe, high yield spreads tightened 44 points ending the year at 449 basis points. The high yield default rate rose modestly to 2.8% in the United States and 2.4% in Europe. Additionally, the J.P. Morgan U.S. Leveraged Loan Index posted a 13.5% return and the J.P. Morgan European Leveraged Loan Index posted a 13.6% return for the year ended 2023. From a spread and yield basis, the US Leveraged Loan Index ended the year at a yield of 8.6% and 500 basis point spread while the European Leverage Loan Index ended the year at a yield of 7.96% and 542 basis point spread.
Current wording
In corporate credit markets, both U.S. and European high yield generated positive performance in the fourth quarter of 2024. According to J.P. Morgan data, U.S. high yield gained 0.3% and the European market returned 1.8% during the three-month period. In the United States, high yield bond spreads tightened by 20 basis points to 325 basis points, while in Europe, high yield spreads tightened 48 basis points to end the quarter at 377 basis points. The high yield default rate, measured on a trailing twelve-month basis, declined modestly from 1.6% to 1.5% in the United States but increased from 2.7% to 3.3% in Europe. Additionally, the J.P. Morgan U.S. Leveraged Loan Index posted a 2.40% return, and the J.P. Morgan European Leveraged Loan Index posted a 2.1% return for the third quarter of 2024. From a spread and yield basis, the US Leveraged Loan Index ended the quarter at a yield of 8.2% and 426 basis point spread, while the European Leverage Loan Index ended the quarter at a yield of 7.1% and 480 basis point spread.
Previous wording
We are a holding company and our only business is to act as the owner of the entities serving as the general partner of the TPG Operating Group partnerships and our only material assets are Common Units representing approximately 22% of the legally outstanding Common Units and 100% of the interests in certain intermediate holding companies as of December 31, 2023. In our capacity as the sole indirect owner of the entities serving as the general partner of the TPG Operating Group partnerships, we indirectly control all of the TPG Operating Group’s business and affairs.
Current wording
We are a holding company and our only business is to act as the owner of the entities serving as the general partner of the TPG Operating Group partnerships and our only material assets are Common Units representing approximately 30% of the outstanding Common Units and 100% of the interests in certain intermediate holding companies as of December 31, 2024. In our capacity as the sole indirect owner of the entities serving as the general partner of the TPG Operating Group partnerships, we indirectly control all of the TPG Operating Group’s business and affairs.
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 $1,145.9 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
We operate our business in a single operating and reportable segment, which is consistent with how our CEO, who is our chief operating decision maker, reviews financial performance and allocates resources. We operate collaboratively across platforms with a single expense pool.
Current wording
We operate our business in a single operating and reportable segment, as our CEO, who is our chief operating decision maker (the “CODM”), manages the business on a consolidated basis. We operate collaboratively across product lines through shared investment themes and shared support functions that span across product lines.
Previous wording
When an entity is consolidated, we reflect the accounts of the consolidated entity, including its assets, liabilities, revenues, expenses, investment income, cash flows and other amounts, on a gross basis. While the consolidation of an entity does not impact the amounts of net income attributable to controlling interests, the consolidation does impact the financial statement presentation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). This is a result of the fact that the accounts of the consolidated entities being reflected on a gross basis, with intercompany transactions eliminated, while the allocable share of those amounts that are attributable to third parties are reflected as single line items. The single line items in which the accounts attributable to third parties are recorded are presented as non-controlling interests on the Consolidated Statements of Financial Condition and net income (loss) attributable to non-controlling interests on the Consolidated Statements of Operations.
Current wording
When an entity is consolidated, we reflect the accounts of the consolidated entity, including its assets, liabilities, revenues, expenses, investment income, cash flows and other amounts, on a gross basis. While the consolidation of an entity does not impact the amounts of net income attributable to controlling interests, the consolidation does impact the financial statement presentation in accordance with U.S. GAAP. This is a result of the fact that the accounts of the consolidated entities being reflected on a gross basis, with intercompany transactions eliminated, while the allocable share of those amounts that are attributable to third parties are reflected as single line items. The single line items in which the accounts attributable to third parties are recorded are presented as non-controlling interests on the Consolidated Statements of Financial Condition and net income (loss) attributable to non-controlling interests on the Consolidated Statements of Operations.
Previous wording
We are not required under U.S. GAAP to consolidate the majority of investment funds we advise in our Consolidated Financial Statements because we do not have a more than insignificant variable interest. Following our Reorganization and IPO, we no longer have a controlling financial interest in certain TPG Funds. Public SPACs are consolidated pursuant to U.S. GAAP. Management fees and performance allocations from the consolidated Public SPACs are eliminated in the Consolidated Financial Statements. The assets and liabilities of the consolidated Public SPACs are generally held within separate legal entities and, as a result, the liabilities of the consolidated Public SPACs are non-recourse to us. Since we only consolidate a limited portion of our TPG investment funds, the performance of the consolidated Public SPACs is not necessarily consistent with or representative of the aggregate performance trends of our TPG investment funds.
Current wording
We are not required under U.S. GAAP to consolidate the majority of investment funds we advise in our Consolidated Financial Statements because we do not have a more than insignificant variable interest. Public SPACs are consolidated pursuant to U.S. GAAP in the relevant periods presented. Management fees and performance allocations from the consolidated Public SPACs are eliminated in the Consolidated Financial Statements. The performance of the consolidated Public SPACs is not necessarily consistent with or representative of the aggregate performance trends of our TPG investment funds.
Previous wording
Fees and Other. Fees and other consists primarily of (i) management and incentive fees, (ii) monitoring fees, (iii) transaction fees, (iv) incentive fee income and (v) expense reimbursements from unconsolidated funds, portfolio companies and third parties. These fee arrangements are documented within the contractual terms of the governing agreements and are recognized when earned, which generally coincides with the period during which the related services are performed and in the case of transaction fees, upon closing of the transaction. Monitoring fees may provide for a termination payment following an initial public offering or change of control. These termination payments are recognized in the period in which the related transaction closes.
Current wording
Fees and Other. Fees and other consists primarily of (i) management fees, (ii) monitoring fees, (iii) transaction fees, (iv) incentive fee income and (v) expense reimbursements from unconsolidated funds, portfolio companies and third parties. These fee arrangements are documented within the contractual terms of the governing agreements and are recognized when earned, which generally coincides with the period during which the related services are performed and in the case of transaction fees, upon closing of the transaction. Monitoring fees may provide for a termination payment following an initial public offering or change of control. These termination payments are recognized in the period in which the related transaction closes.
Previous wording
Capital Allocation-Based Income (Loss). Capital allocation-based income (loss) is earned from the TPG funds when we have (i) a general partner’s capital interest and (ii) performance allocations which entitle us to a disproportionate allocation of investment income or loss from investment funds. We are entitled to a performance allocation (typically 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These performance allocations are subject to the achievement of preferred returns or high water marks, where applicable, in accordance with the terms set forth in the respective fund’s governing documents. We account for our investment balances in the TPG funds, including performance allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member; however, we do not have control as defined by Accounting Standards Codification (“ASC”) Topic 810, Consolidation. The Company accounts for its general partner interests in capital allocation-based arrangements as financial instruments under ASC Topic 323, Investments – Equity Method and Joint Ventures as the general partner has significant governance rights in the TPG funds in which it invests which demonstrates significant influence. Accordingly, performance allocations are not deemed to be within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).
Current wording
Capital Allocation-Based Income (Loss). Capital allocation-based income (loss) is earned from our funds when we have (i) a general partner’s capital interest and (ii) performance allocations which entitle us to a disproportionate allocation of investment income or loss from investment funds. We are entitled to a performance allocation (typically 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These performance allocations are subject to the achievement of preferred returns or high water marks, where applicable, in accordance with the terms set forth in the respective fund’s governing documents. We account for our investment balances in the TPG funds, including performance allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member; however, we do not have control as defined by ASC Topic 810, Consolidation. The Company accounts for its general partner interests in capital allocation-based arrangements as financial instruments under ASC Topic 323, Investments – Equity Method and Joint Ventures as the general partner has significant governance rights in the TPG funds in which it invests which demonstrates significant influence. Accordingly, performance allocations are not deemed to be within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).
Previous wording
Compensation and Benefits. Compensation and benefits expense includes (i) cash-based compensation and benefits, (ii) equity based compensation and (iii) performance allocation compensation. Bonuses are accrued over the service period to which they relate. In addition, we have equity-based compensation arrangements that require certain TPG executives and employees to vest ownership of a portion of their equity interests over a service period of generally one to six years, which under U.S. GAAP will result in compensation charges over current and future periods. In connection with our IPO and subsequent acquisition, we granted restricted stock units (“RSUs”) to executives and employees. Distributions of performance allocations in the legal form of equity made directly or indirectly to our partners and professionals are allocated and distributed, when realized, pro rata based on ownership percentages in the underlying investment partnership and are accounted for as distributions on the equity held by such partners rather than as compensation and benefits expense prior to the Reorganization and IPO. We account for these distributions as performance allocation compensation.
Current wording
Compensation and Benefits. Compensation and benefits expense includes (i) cash-based compensation and benefits, (ii) equity-based compensation and (iii) performance allocation compensation. Bonuses are accrued over the service period to which they relate. In addition, we have equity-based compensation arrangements that require certain TPG executives and employees to vest over a service period of generally one to five years, which under U.S. GAAP will result in compensation charges over current and future periods. In connection with our IPO and subsequent acquisition, we granted restricted stock units (“RSUs”) to executives and employees. Distributions of performance allocations in the legal form of equity made directly or indirectly to our partners and professionals are allocated and distributed, when realized, pro rata based on ownership percentages in the underlying investment partnership. These distributions were accounted for as distributions on the equity held by such partners rather than as compensation and benefits expense prior to the Reorganization and IPO and are now accounted for as performance allocation compensation.
Previous wording
Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs consist of interest expense and other expenses related primarily to professional services fees, research expenses, trustee fees, travel expenses and other costs associated with organizing and offering these entities.
Current wording
Expenses of Consolidated Public SPACs. Expenses of consolidated Public SPACs consist of interest expense and other expenses related primarily to professional services fees, research expenses, trustee fees, travel expenses and other costs associated with organizing and offering these entities.
Previous wording
Unrealized Gains (Losses) on Derivative Liabilities of Consolidated Public SPACs. Unrealized gains (losses) on derivative liabilities of consolidated Public SPACs are changes in the fair value of derivative contracts entered into by our consolidated Public SPAC entities, which are included in current period earnings.
Current wording
Investment and Other Income of Consolidated Public SPACs. Investment and other income of consolidated Public SPACs include changes in the fair value of derivative contracts entered into by our consolidated Public SPAC entities, which are included in current period earnings and interest, dividend and other income earned by the consolidated Public SPACs.
Previous wording
Fees and other revenues increased by $268.7 million, or 27%, during the year ended December 31, 2022 compared to the year ended December 31, 2021. This change resulted from a $201.5 million increase in management fees, a $54.8 million increase in expense reimbursements and other and a $12.5 million increase in transaction, monitoring and other fees, net.
Current wording
Fees and other revenues increased by $552.4 million, or 36%, during the year ended December 31, 2024, compared to the year ended December 31, 2023. This change resulted from a $450.0 million increase in management fees, a $90.1 million increase in transaction, monitoring and other fees and a $12.3 million increase in expense reimbursements and other.
Previous wording
Performance Allocations. Performance allocations increased by $88.1 million to $808.2 million, or 12%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. Realized performance allocations for the year ended December 31, 2023 and 2022 totaled $582.2 million and $1,409.8 million, respectively. Unrealized performance allocation gains for the year ended December 31, 2023 was $226.0 million. The change in unrealized performance allocations for the year ended December 31, 2022 was a loss of $689.7 million.
Current wording
Performance Allocations. Performance allocations increased by $493.5 million, or 61%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. Realized performance allocation gains for the years ended December 31, 2024 and 2023 totaled $955.4 million and $582.2 million, respectively. Unrealized performance allocation gains for the years ended December 31, 2024 and 2023 totaled $346.4 million and $226.0 million, respectively.
Previous wording
(2)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 intend to 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 wording
(2)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.
Previous wording
As of December 31, 2023, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group shared TPG general partner entities totaled $5.3 billion. As of December 31, 2023, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group excluded TPG general partner entities totaled $0.4 billion.
Current wording
As of December 31, 2024, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group shared TPG general partner entities totaled $5.7 billion. As of December 31, 2024, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group excluded TPG general partner entities totaled $0.3 billion.
Previous wording
Cash-Based Compensation and Benefits. Cash-based compensation and benefits expense increased by $73.7 million, or 16%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by a $63.9 million increase in salaries and benefits driven by an increase in headcount as a result of the Acquisition for the year ended December 31, 2023, and an $8.7 million increase in bonuses for the year ended December 31, 2023.
Current wording
Cash-Based Compensation and Benefits. Cash-based compensation and benefits expense increased by $288.0 million, or 53%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the increase in headcount due to the acquisition of TPG Angelo Gordon in November 2023.
Previous wording
Equity-Based Compensation. Equity-based compensation expense increased by $27.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily attributable to a net $36.6 million increase in expenses largely associated with RSUs granted to TPG employees and certain of our executives and a $12.8 million expense associated with RSUs granted to TPG Angelo Gordon employees as a result of the Angelo Gordon acquisition, partially offset by the vesting of certain Other Awards, as defined in Note 19, during the year ended December 31, 2022.
Current wording
Equity-based Compensation. Equity-based compensation expense increased by $351.4 million, or 54%, for the year ended December 31, 2024 compared to the year ended December 31, 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 RSU grants to TPG employees, certain of our executives and TPG Angelo Gordon employees, as described in Note 19 to the Consolidated Financial Statements.
Previous wording
Performance Allocation Compensation. Performance allocation compensation increased by $175.1 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily attributable to the increase in performance allocations, which drives the compensation allocated to our partners and professionals during the year ended December 31, 2023, inclusive of $103.4 million attributable to TPG Angelo Gordon.
Current wording
Performance Allocation Compensation. Performance allocation compensation increased by $338.4 million, or 57%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily attributable to the increase in performance allocations that drives compensation attributable to our partners and professionals.
Previous wording
Depreciation and Amortization. Depreciation and amortization increased by $14.7 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily due to the amortization of intangible assets resulting from the acquisition of Angelo Gordon in November 2023.
Current wording
Depreciation and Amortization. Depreciation and amortization increased by $87.7 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily due to the amortization of intangible assets resulting from the acquisition of TPG Angelo Gordon in November 2023.
Previous wording
Interest Expense. Interest expense increased by $16.9 million, or 78%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to higher interest rates on certain borrowings and increased interest expense on draws under our Senior Unsecured Revolving Credit Facility to partially fund the Acquisition.
Current wording
Interest Expense. Interest expense increased by $49.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to additional interest expense on our Senior Notes and Subordinated Notes issued during the year ended December 31, 2024, as described in Note 12 to the Consolidated Financial Statements, and higher interest rates on certain borrowings.
Previous wording
Net Gains (Losses) from Investment Activities. Net gains (losses) from investment activities was a gain of $6.6 million for year ended December 31, 2023 compared to a loss of $110.1 million for the year ended December 31, 2022. This change was primarily attributable to a gain of $15.3 million from our investment in Nerdy Inc, partially offset by a loss of $7.7 million from our investment in Vacasa, Inc. during the year ended December 31, 2023.
Current wording
Net (Losses) Gains from Investment Activities. Net (losses) gains from investment activities was a loss of $29.3 million for year ended December 31, 2024 compared to a gain of $6.6 million for the year ended December 31, 2023. This change was primarily attributable to a net loss of $26.8 million from our investment in Nerdy Inc. (“NRDY”) during the year ended December 31, 2024.
Previous wording
Interest, Dividends and Other. Interest, dividends and other increased by $33.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by additional interest income earned due to higher interest rates during the year ended December 31, 2023 compared to the year ended December 31, 2022.
Current wording
Interest, Dividends and Other. Interest, dividends and other increased by $40.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily driven by additional interest income and dividend income from TPG Angelo Gordon, which was acquired in November 2023.
Previous wording
Unrealized Gains on Derivative Liabilities of Public SPACs. The $0.7 million and $12.4 million of unrealized gain on derivative instruments recognized during the year ended December 31, 2023 and 2022, respectively, were attributable to warrants issued by the consolidated Public SPAC entities and forward purchase agreements held by third parties. The warrants held by public investors and forward purchase agreements are treated as liability instruments rather than equity instruments and subject to mark-to-market adjustments each period. Upon the consummation of acquisitions of target companies by our Public SPACs or the wind down of a Public SPAC, the associated liability will no longer be included in our Consolidated Financial Statements. Pursuant to the redemption of Class A Ordinary shares of AFTR and YTPG during the year ended December 31, 2023, we no longer have any derivative liabilities associated with SPACs in our Consolidated Financial Statements as of December 31, 2023.
Current wording
Investment and Other Income of Consolidated Public SPACs. Investment and other income of consolidated Public SPACs recognized during the year ended December 31, 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.
Previous wording
Investments increased $1,394.2 million during the year ended December 31, 2023 primarily attributable the acquisition of Angelo Gordon of $1,046.4 million. Investments also increased due to net capital allocation-based income of $855.3 million, which was partially offset by net proceeds from performance allocations of $582.2 million.
Current wording
Investments increased $779.2 million during the year ended December 31, 2024 primarily due to net capital allocation-based income of $1,413.0 million and purchases of $862.8 million, which were partially offset by proceeds of $1,460.5 million.
Previous wording
Accrued performance allocation compensation increased $826.2 million for the year ended December 31, 2023, primarily attributable the acquisition of Angelo Gordon of $745.0 million and net increases in performance fee compensation expense of $591.7 million, partially offset by settlements of performance allocation compensation of $497.8 million during the year ended December 31, 2023.
Current wording
Accrued performance allocation compensation increased $280.5 million for the year ended December 31, 2024, primarily attributable to net increases in performance fee compensation expense of $930.1 million, partially offset by settlements of performance allocation compensation of $639.7 million during the year ended December 31, 2024.
Previous wording
Distributable Earnings. Distributable Earnings (“DE”) is used to assess performance and amounts potentially available for distributions to partners. DE is derived from and reconciled to, but not equivalent to, its most directly comparable U.S. GAAP measure of net income. DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include (i) unrealized performance allocations and related compensation and benefit expense, (ii) unrealized investment income, (iii) equity-based compensation expense, (iv) net income (loss) attributable to non-controlling interests in consolidated entities, or (v) certain other items, such as contingent reserves.
Current wording
Distributable Earnings. Distributable Earnings (“DE”) is used to assess performance and amounts potentially available for distributions to partners. DE is derived from and reconciled to, but not equivalent to, its most directly comparable U.S. GAAP measure of net income. DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include (i) unrealized performance allocations and related compensation expense, (ii) unrealized investment income, (iii) equity-based compensation expense, (iv) net income (loss) attributable to non-controlling interests in consolidated entities, or (v) certain other items, such as contingent reserves.
Previous wording
After-Tax Distributable Earnings. After-tax Distributable Earnings (“After-tax DE”) is a non-GAAP performance measure of our distributable earnings after reflecting the impact of income taxes. We use it to assess how income tax expense affects amounts available to be distributed to our Class A common stock holders and Common Unit holders. After-tax DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include the items described in the definition of DE herein; however, unlike DE, it does reflect the impact of income taxes. Income taxes, for purposes of determining After-tax DE, represent the total U.S. GAAP income tax expense adjusted to include only the current tax expense (benefit) calculated on U.S. GAAP net income before income tax and includes the current payable under our Tax Receivable Agreement, which is recorded within other liabilities in our Consolidated Statements of Financial Condition. Further, the current tax expense (benefit) utilized when determining After-tax DE reflects the benefit of deductions available to the Company on certain expense items that are excluded from the underlying calculation of DE, such as equity-based compensation charges. We believe that including the amount currently payable under the Tax Receivable Agreement and utilizing the current income tax expense (benefit), as described above, when determining After-tax DE is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to shareholders.
Current wording
After-Tax Distributable Earnings. After-tax Distributable Earnings (“After-tax DE”) is a non-GAAP performance measure of our distributable earnings after reflecting the impact of income taxes. We use it to assess how income tax expense affects amounts available to be distributed to our Class A common stockholders and Common Unit holders. After-tax DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include the items described in the definition of DE herein; however, unlike DE, it does reflect the impact of income taxes. Income taxes, for purposes of determining After-tax DE, represent the total U.S. GAAP income tax expense adjusted to include only the current tax expense (benefit) calculated on U.S. GAAP net income before income tax and includes the current payable under our Tax Receivable Agreement, which is recorded within due to affiliates and other liabilities in our Consolidated Statements of Financial Condition. Further, the current tax expense (benefit) utilized when determining After-tax DE reflects the benefit of deductions available to the Company on certain expense items that are excluded from the underlying calculation of DE, such as equity-based compensation charges. We believe that including the amount currently payable under the Tax Receivable Agreement and utilizing the current income tax expense (benefit), as described above, when determining After-tax DE is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to shareholders.
Previous wording
Fee-Related Revenues. Fee-related revenues is a component of FRE. Fee-related revenues is comprised of (i) management fees, (ii) fee-related performance revenues, (iii) transaction, monitoring and other fees, net, and (iv) other income. Fee-related performance revenues refers to incentive fees from perpetual capital vehicles that are: (i) measured and expected to be received on a recurring basis and (ii) not dependent on realization events from the underlying investments. Fee-related revenue differs from revenue computed in accordance with U.S. GAAP in that it excludes certain reimbursement expense arrangements. Refer to “—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations.
Current wording
Fee-Related Revenues. Fee-related revenues (“FRR”) is a component of FRE. Fee-related revenues is comprised of (i) management fees, (ii) fee-related performance revenues, (iii) transaction, monitoring and other fees, net, and (iv) other income. Fee-related performance revenues refers to incentive fees from perpetual capital vehicles that are: (i) measured and expected to be received on a recurring basis and (ii) not dependent on realization events from the underlying investments. Fee-related revenues differs from revenue computed in accordance with U.S. GAAP in that it excludes certain reimbursement expense arrangements. Refer to “—Reconciliation to U.S. GAAP Measures” to the comparable line items on the Consolidated Statements of Operations.
Previous wording
Fee-Related Expenses. Fee-related expenses is a component of FRE. Fee-related expenses differs from expenses computed in accordance with U.S. GAAP in that it is net of certain reimbursement arrangements and does not include performance allocation compensation. Fee-related expenses is used in management’s review of the business. Refer to “—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations.
Current wording
Fee-Related Expenses. Fee-related expenses is a component of FRE. Fee-related expenses differs from expenses computed in accordance with U.S. GAAP in that it is net of certain reimbursement arrangements and does not include performance allocation compensation. Fee-related expenses is used in management’s review of the business. Refer to “—Reconciliation to U.S. GAAP Measures” to the comparable line items on the Consolidated Statements of Operations.
Previous wording
Fee-related revenues increased by $251.2 million, or 23%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was primarily due to additional management fees of $248.9 million.
Current wording
Fee-related revenues increased by $494.2 million, or 37%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily due to additional management fees of $447.0 million.
Previous wording
Transaction, monitoring and other fees, net increased by $3.8 million, or 4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily attributable to an increase in fees received by our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer.
Current wording
Transaction, monitoring and other fees, net increased by $39.9 million, or 37%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily attributable to an increase in fees received by our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer.
Previous wording
Fee-related expenses increased by $98.8 million, or 16%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, comprised primarily of higher cash-based compensation and benefits, net of $59.3 million and increased operating expenses, net of $38.1 million.
Current wording
Fee-related expenses increased by $336.3 million, or 46%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, comprised primarily of higher cash-based compensation and benefits, net of $236.7 million and increased operating expenses, net of $84.5 million.
Previous wording
Total cash-based compensation and benefits, net decreased by $128.4 million, or 25%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily due to a decrease in bonuses of $146.2 million as a result of certain TPG senior professionals no longer receiving discretionary bonuses, and increased compensation reimbursements related to services provided to certain fund and portfolio companies. The decrease was partially offset by increased salaries of $28.0 million driven by firm headcount expansion.
Current wording
Total cash-based compensation and benefits, net increased by $236.7 million, or 52%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the increase in headcount due to the acquisition of TPG Angelo Gordon in November 2023. These increases were partially offset by an increase in compensation reimbursements related to services provided to certain fund and portfolio companies of $16.1 million.
Previous wording
Total fee-related performance compensation increased by $1.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Current wording
Total fee-related performance compensation increased by $15.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to fees generated by TCAP and certain SMAs, which were part of the acquisition of TPG Angelo Gordon in November 2023.
Previous wording
Operating expenses, net includes general and administrative expenses as well as reimbursements for professional services and travel expenses related to investment management and advisory services provided to investment funds that we manage and monitoring services provided to our portfolio companies. Operating expenses, net were $277.3 million and $239.2 million for the year ended December 31, 2023 and 2022, respectively, with the increase of $38.1 million primarily due to an increase in professional fees of $22.9 million, travel expenses of $8.2 million, and other administrative expenses of $7.0 million.
Current wording
Operating expenses, net includes general and administrative expenses as well as reimbursements for professional services and travel expenses related to investment management and advisory services provided to investment funds that we manage and monitoring services provided to our portfolio companies. Operating expenses, net were $361.7 million and $277.3 million for the years ended December 31, 2024 and 2023, respectively, with the increase of $84.5 million primarily driven by the increase in information technology costs, rent expenses and other administrative costs from TPG Angelo Gordon, which was acquired in November 2023.
Previous wording
Realized performance allocations, net of $74.0 million for the year ended December 31, 2023 were largely generated from realizations of $39.5 million from TPG AAF and $14.9 million from TPG VIII in the Capital platform, $6.6 million from TPEP in the Market Solutions platform, and $4.1 million from TREP III within the Real Estate platform. Realizations also include $5.6 million primarily from MVP Fund in TPG AG Credit. This activity included realizations sourced from portfolio companies such as Creative Artists Agency, DirecTV and Alloy Properties.
Current wording
Realized performance allocations, net of $194.6 million for the year ended December 31, 2024 were largely generated from realizations of $48.3 million from TPG VIII and $11.5 million from TPG VII in the Capital platform, $27.9 million from Growth IV in the Growth platform, $17.8 million from Rise Climate I in the Impact platform, and $14.4 million from MVP Fund and $13.5 million from MMDL IV in TPG AG Credit. This activity included realizations sourced from portfolio companies such as Global Music Rights, Azoff Music, Nextracker, DirecTV and Viking Cruises.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The table below presents capital raised by platform for the years ended December 31, 2024 and 2023:
Current report — wording carried from elsewhere
The table below presents available capital by platform as of December 31, 2024 and 2023:
Current report — wording carried from elsewhere
The table below presents capital invested by platform for the years ended December 31, 2024 and 2023:
Rearranged previous paragraphs (30)
Previous report — wording carried elsewhere
Interest, Dividends and Other of Consolidated TPG Funds and Public SPACs. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established.
Previous report — wording carried elsewhere
Revenues consisted of the following for the years ended December 31, 2021 and December 31, 2020:
Previous report — wording carried elsewhere
The table below highlights performance allocations for the years ended December 31, 2022 and 2021, 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.
Previous report — wording carried 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 intend to 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.
Previous report — wording carried 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. See “—Unaudited Pro Forma Condensed Consolidated Financial Information and Other Data” which reflects the projected impact of the Reorganization.
Previous report — wording carried elsewhere
As of December 31, 2022, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group shared TPG general partner entities totaled $4.1 billion. As of December 31, 2022, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group excluded TPG general partner entities totaled $0.6 billion.
Previous report — wording carried elsewhere
Depreciation and Amortization. Depreciation and amortization increased by $11.8 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily due to the amortization of intangible assets resulting from the acquisition of NewQuest in July 2021.
Previous report — wording carried elsewhere
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
Previous report — wording carried elsewhere
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Previous report — wording carried elsewhere
The following table presents management fees in our platforms for the years ended December 31, 2022 and 2021:
Previous report — wording carried elsewhere
The following table presents fee-related performance revenues for the years ended December 31, 2022 and 2021:
Previous report — wording carried elsewhere
Transaction, Monitoring and Other Fees, Net
Previous report — wording carried elsewhere
The following table presents transaction, monitoring and other fees, net in our platforms for the years ended December 31, 2022 and 2021:
Previous report — wording carried elsewhere
The following table presents other income for the years ended December 31, 2022 and 2021:
Previous report — wording carried elsewhere
Cash-Based Compensation and Benefits, Net
Previous report — wording carried elsewhere
The following table presents cash-based compensation and benefits, net for the years ended December 31, 2022 and 2021:
Previous report — wording carried elsewhere
Operating expenses, net includes general and administrative expenses as well as reimbursements for professional services and travel expenses related to investment management and advisory services provided to TPG funds and monitoring services provided to our portfolio companies. Operating expenses, net were $239.2 million and $167.1 million for the year ended December 31, 2022 and 2021, respectively, with the increase of $72.1 million primarily due to an increase in professional fees of $26.1 million, travel expenses of $19.8 million, and other administrative expenses of $26.3 million.
Previous report — wording carried elsewhere
The following table presents realized performance allocations, net from our platforms for the years ended December 31, 2022 and 2021:
Previous report — wording carried elsewhere
Realized Investment Income and Other, Net
Previous report — wording carried elsewhere
The following table presents realized investment income and other, net for the years ended December 31, 2022 and 2021:
Previous report — wording carried elsewhere
The following table presents interest expense, net for the years ended December 31, 2022 and 2021:
Previous report — wording carried elsewhere
Distributable Earnings. DE is used to assess performance and amounts potentially available for distributions to partners. DE is derived from and reconciled to, but not equivalent to, its most directly comparable U.S. GAAP measure of net income. DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include (i) unrealized performance allocations and related compensation and benefit expense, (ii) unrealized investment income, (iii) equity-based compensation expense, (iv) net income (loss) attributable to non-controlling interests in consolidated entities or (v) certain non-cash items, such as contingent reserves.
Previous report — wording carried elsewhere
After-Tax Distributable Earnings. After-tax DE is a non-GAAP performance measure of our distributable earnings after reflecting the impact of income taxes. We use it to assess how income tax expense affects amounts available to be distributed to holders of our Class A Shares and Common Unit holders. After-tax DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include the items described in the definition of DE herein; however, unlike DE, it does reflect the impact of income taxes. Income taxes, for purposes of determining After-tax DE, represent the total U.S. GAAP income tax expense adjusted to include only the current tax expense (benefit) calculated on U.S. GAAP net income before income tax and includes the current payable under our Tax Receivable Agreement, which is recorded within other liabilities in our Consolidated Statement of Financial Condition. Further, the current tax expense (benefit) utilized when determining After-tax DE reflects the benefit of deductions available to TPG on certain expense items that are excluded from the underlying calculation of DE, such as equity-based compensation charges. We believe that including the amount currently payable under the Tax Receivable Agreement and utilizing the current income tax expense (benefit), as described above, when determining After-tax DE is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to stockholders.
Previous report — wording carried elsewhere
TPG and Angelo Gordon believe that while the inclusion or exclusion of the aforementioned U.S. GAAP income statement items provides investors with a meaningful indication of core operating performance, the use of After-tax DE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. This measure supplements U.S. GAAP net income and should be considered in addition to and not in lieu of the results of operations presented in accordance with U.S. GAAP.
Previous report — wording carried elsewhere
Fee-Related Earnings. FRE is a supplemental performance measure and is used to evaluate our business and make resource deployment and other operational decisions. FRE differs from net income computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of DE and also adjusts to exclude (i) realized performance allocations and related compensation expense, (ii) realized investment income from investments and financial instruments, (iii) net interest (interest expense less interest income), (iv) depreciation, (v) amortization and (vi) certain non-core income and expenses. We use FRE to measure the ability of our business to cover compensation and operating expenses from fee revenues other than capital allocation-based income. The use of FRE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein.
Previous report — wording carried elsewhere
Fee-Related Revenues. Fee-related revenues is a component of FRE. Fee-related revenues is comprised of (i) management fees, (ii) fee-related performance revenues, (iii) transaction, monitoring and other fees, net, and (iv) other income. Fee-related performance revenues refers to incentive fees from perpetual capital vehicles that are: (i) measured and expected to be received on a recurring basis and (ii) not dependent on realization events from the underlying investments. Fee-related revenue differs from revenue computed in accordance with U.S. GAAP in that it excludes certain reimbursement expense arrangements. Refer to “Angelo Gordon Information—Management’s Discussion and Analysis of Financial Condition and Results of Operations of Angelo Gordon—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations.
Previous report — wording carried elsewhere
Fee-Related Expenses. Fee-related expenses is a component of FRE. Fee-related expenses differs from expenses computed in accordance with U.S. GAAP in that it is net of certain reimbursement arrangements and does not include performance allocation compensation. Fee-related expenses is used in our review of the business. Refer to “Angelo Gordon Information—Management’s Discussion and Analysis of Financial Condition and Results of Operations of Angelo Gordon—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations.
Previous report — wording carried elsewhere
As of December 31, 2022, AUM Not Yet Earning Fees was $10.1 billion, which primarily consisted of TPG VII, TPG VIII and Asia VII within the Capital platform, TTAD II and TDM within the Growth platform, TAC+ within the Real Estate platform and TSCF within the Market Solutions platform.
Previous report — wording carried elsewhere
2.00% and 3.00%, depending on the term of the loan. The subsidiary is also required to a pay a quarterly facility fee equal to 0.30% per annum of the total facility capacity of $150.0 million, as well as certain customary fees for any issued loans.
Previous report — wording carried elsewhere
(4)See Note 9 to the Consolidated Financial Statements for further discussion of the repurchase agreements.