The underperformance of its competitors’ stocks for much of the past decade caused TPG to pause in pursuit of a public listing, sources previously said. The company also tried to bounce back from a string of bad investments in the 2000s, diversifying its private equity platform into growth and investing with a social impact.
With interest rates at record lows and the global economic recovery from the COVID-19 pandemic, which boosted profits in the buyout industry and sparked a rally in the stocks of its competitors, TPG decided to pull the trigger to go public.
The Fort Worth, Texas-based company, an investor in Airbnb Inc, Uber Technologies Inc, and Spotify Technology SA, said it plans to sell approximately 28.3 million shares in the offering at a price between $ 28 and $ 31 each Piece for sale.
TPG would raise about $ 877.6 million at the higher end of the stated price range. Around 40% of this would go to TPG shareholders who are planning a payout. This does not apply to founders who want to keep their holdings for the time being.
The remainder of the proceeds will be used to spend and fund TPG’s business, including growth initiatives, the company said.
Founded in 1992 by David Bonderman and Jim Coulter as the Texas Pacific Group, TPG made its first investment in 1993 in the then bankrupt Continental Airlines. It now manages approximately $ 109 billion in assets across sectors from retail to healthcare.
The company placed huge bets two decades ago, placing most of its operations in JPMorgan Chase & Co. against companies like Texas utility Energy Future Holdings Corp, casino operator Caesars Entertainment Corp, and troubled bank Washington Mutual Inc.
TPG managed to convince enough investors to hold on to it, and its fortunes gradually recovered. Business is booming now; It reported that its net income more than quintupled to $ 1.7 billion for the nine months ended September 2021. Revenue increased from $ 564.4 million a year ago to $ 3.89 billion.
INSIDERS KEEP IN CONTROL
TPG continues to be controlled by Bonderman, Coulter, Chief Executive Jon Winkelried and other partners under a two-tier stock structure that gives executives approximately 98% voting control over the company.
This is an arrangement that was also adopted by TPG’s peers when they went public, although most of them have been converted to a one-share-one-vote structure in the past two years. Blackstone Inc has remained an exception, with CEO Stephen Schwarzman staying in control.
TPG said it will end the two-tier share agreement sometime over the next five years. It said it planned to expand its control group over the next two years by inviting two of its partners to join Bonderman, Coulter and Winkelried.
In 2021, Bonderman raised approximately $ 174 million in dividends and compensation, which is made up of carried interest, base salary and bonuses. Coulter received $ 23.8 million in compensation, Winkelried received $ 11.6 million, while TPG President Todd Sisitsky took home $ 42 million.
JP Morgan, Goldman Sachs, Morgan Stanley, TPG Capital BD LLC and BofA Securities are the lead underwriters for the TPG offering. It expects to be listed on the Nasdaq under the symbol “TPG”. (Corrected this story to remove China Life shares in the fifth paragraph)
(Reporting by Sohini Podder and Manya Saini in Bengaluru and Chibuike Oguh in New York; editing by Aditya Soni and Cynthia Osterman)
By Chibuike Oguh
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