TPG earnings slide in first quarterly report since IPO

TPG inc

TPG -0.33%

said in the private equity firm’s first financial report since its IPO in January that its earnings fell in the fourth quarter.

TPG’s net income for the period was $41.2 million, or 52 cents a share, compared to $45 million, or 56 cents a share, a year earlier as the value of its investments slowed.

Though the numbers predate TPG’s IPO, they have been adjusted to reflect the way the company is structured now and how it will report earnings going forward.

The value of the company’s investments rose 7% in the quarter, up from 17% a year earlier. The S&P 500 rose 11% for the quarter. TPG’s investments grew 38% for the full year, compared to 18% a year earlier.

Based in Fort Worth, Texas, and San Francisco, TPG was one of the last of the original private equity giants to remain a close partnership before deciding last year to move forward with a plan to list its shares publicly. The stock closed at $29.99 on Friday, just above its IPO price of $29.50, giving the company a market cap of about $9.3 billion.

Like many of its peers, TPG benefited from a strong market in 2021, selling $25.4 billion in assets, including $7 billion in the fourth quarter.

As a result of asset sales, TPG’s distributable earnings, or cash it was able to return to shareholders, were $137 million in the quarter, versus $102 million.

Asset sales continued in the first quarter. On March 1, two private equity firms struck a deal to buy cybersecurity firm McAfee Corp. that TPG had taken public in 2020. The company, which still owned a large stake in the company, made almost seven times its money from the sale.

In January, technology company Aptiv PLC agreed to buy TPG portfolio company Wind River Systems Inc. for $4.3 billion.

“We have always believed that creating liquidity in the portfolio and capitalizing on the high valuation environment that we all generally live in should be a top priority,” Jon Winkelried, TPG chief executive, told The Wall Street Journal. “That’s backed up by the volatility we’ve seen.”

Assets under management were $113.6 billion at the end of the fourth quarter, compared to $109.1 billion in the third quarter and $89.5 billion a year ago. TPG has raised $20.5 billion in 2021, including $2.8 billion in Q4, and is in the early stages of a major fundraising cycle for its biggest strategies.

Fee-based assets under management increased nearly $10 billion to $60.1 billion for the quarter.

write to Miriam Gottfried at

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