Private equity firm TPG valued at over $10 billion in first big market debut of 2022

• The private equity firm manages over $109 billion

• TPG’s net income jumped over fivefold to $1.7 billion for the nine-months ended September 2021

Shares of TPG Inc’s (NASDAQ: TPG) rose over 15% on Thursday, the first trading day after listing itself in Nasdaq, valuing the 30-year-old private equity giant over $10.4 billion in the year’s first big stock market debut.

TPG earlier said the initial public offering (IPO) would give the firm a new way of compensating employees and capital for buying new businesses, which is known for its leveraged buyouts and investments across sectors from retail to healthcare.

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The company will be looking at expanding its franchise into other areas such as credit and infrastructure, TPG Chief Executive Officer Jon Winkelried told Reuters in an interview.

“We will continue to build on the business in the way we have historically - organic growth, seeing opportunities and building into it,” he said.

History

TPG went public a decade after most of its major peers went public, and rivals like Blackstone Inc (NYSE: BX) and KKR & Co Inc (NYSE: KKR) have outpaced the S&P 500 over the past year.

In 1992, David Bonderman and Jim Coulter founded Texas Pacific Group in Mill valley, California, and later in 2007 changed its name to TPG. Its first major investment was in the then bankrupt Continental Airlines in 1993.

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After years of poor investments, the firm spent years recovering in the 2000s and diversified its private-equity platform into growth and social impact investing.

Financials

The firm manages over $109 billion in assets under management (AUM), with investments in companies like Spotify Technology SA (NYSE: SPOT), Airbnb Inc (NASDAQ: ABNB), McAfee Corp (NASDAQ: MCFE), and Burger King.

TPG said its net income from January to September 2021 has jumped over fivefold to $1.7 billion. Its revenue increases to $3.89 billion, from $564.4 million a year earlier.

The Fort Worth, Texas-based company’s shares surged to $33 from an offering price of $29.50. TPG and its selling shareholders sold 33.9 million shares at the offering price, which the company announced earlier, raising about $1 billion.

Picture Credit: Reuters