TPG’s eighth Asia-focused fund has held a final close on $5.3 billion, making it the firm’s largest Asia fund to date, the firm announced on its Q1 2024 earnings call on Wednesday.
The fund was launched in January 2022 with an initial target of $6 billion, according to Private Equity International data. TPG had raised $4.3 billion as of end-September, the firm noted on its Q3 2023 earnings call in November.
Although short of its target size, TPG Asia VIII is 14 percent larger than its predecessor. TPG Asia VII, which collected $4.6 billion in 2019, has generated a 1.52x TVPI and distributed $100 million as of Q2 2022, according to documents from the California Public Employees’ Retirement System.
The latest final close comes at a time when fundraising for Asia-focused strategies is more difficult than ever. Asia VIII is one of the few multi-billion Asia-focused funds to have closed since the start of 2023 – succeeding Primavera’s $4.1 billion Fund IV, which closed in February 2023, and Bain Capital’s $7.1 billion Fund V, which closed in November.
Other managers are still battling the region’s fundraising slowdown. Funds in market include PAG’s 2021-vintage Asia Capital IV, which has so far collected just $2.41 billion against a target of $9 billion, per PEI data. Carlyle, meanwhile, is fundraising for its 2022-vintage Asia Partners VI and has collected $1.75 billion as of March 2024 against a $6 billion target, PEI data shows.
TPG Asia VIII has received commitments from its US LP base, including the likes of Teacher Retirement System of Texas, Washington State Investment Board and Employees Retirement System of Texas. “We raised approximately $600 million in the first quarter and over $345 million in early April,” chief executive Jon Winkelried said on the earnings call.
According to Winkelried, India has been a stronghold for TPG’s Asia deployment. “Over the last five years, more than 40 percent of the capital we’ve deployed in Asia has been in India, and we’ve taken eight portfolio companies public there since late 2021,” he said. “Looking ahead, we plan to extend our leadership position in Asia with near-term plans for further organic growth.”
According to the PEI Awards 2023, for which TPG was named Firm of the Year in India, the Texas-headquartered manager is understood to have deployed or committed $1.6 billion across various PE strategies in India. It also saw $1.6 billion of realisations from full or partial exits in the market, including the sale of Manipal Health to Singapore’s Temasek.
Like many of its global counterparts, TPG is also looking to ramp up its private wealth offering. The firm is planning to launch semi-liquid products tailored for private wealth clients, Winkelried said on the earnings call. TPG has historically raised $1 billion-$2 billion annually from the private wealth channel, and is focused on “growing that figure by several multiples over the coming years”.
Winkelried added: “During 2024, we plan to raise capital for nine products in the wealth channel, including climate, growth, credits solutions, direct lending and structured credit.”
The private equity semi-liquid strategy will also provide a “stable and growing” source of capital for the firm, CFO Jack Weingart noted on the call. “We don’t yet have a private equity semi-liquid product, but we’re actively working on that and expect to launch it early next year at the latest,” he said.
Within the first quarter of 2024, TPG raised $4.7 billion, $2.1 billion of which was raised across credit strategies and $1.8 billion from Asia VIII and TPG Growth VI. Total assets under management grew by 63 percent, from $137 billion in Q1 2023 to $224 billion, mainly driven by the acquisition of credit and real estate manager TPG Angelo Gordon last year.
Hannah Zhang contributed to this report