TPG Inc. Q2 FY2025 earnings call

• Acknowledged the senseless act of violence at 345 Park Avenue and expressed solidarity with affected parties. - Reported GAAP net income attributable to TPG Inc. of $15 million and after-tax distributable earnings of $268 million or $0.69 per share of Class A common stock, with a dividend of $0.59 per share declared. - Achieved second highest fundraising quarter in history, with $11.3 billion raised, including $5.4 billion from the credit platform. Private equity fundraising for TPG Growth VI exceeded target, and credit had a record fundraising quarter. - Had robust deployment with over $10 billion of capital invested, including take-private of AvidXchange and carve-out of Sabre's Hospitality Solutions. Deployed $4.3 billion in credit across strategies. - Realized $6.5 billion in realizations during the quarter, including exits from Viking Cruises, Tata Technologies, etc. - Ended the quarter with record dry powder of $63 billion, 43% of fee-earning AUM. - Made progress in private wealth and insurance, with T-POP raising ~$430 million and Twin Brook's nontraded BDC having highest organic fundraising quarter.

TPG's second quarter showed strong performance across segments. In Private Equity, TPG Growth VI exceeded its $4 billion target, raising $4.8 billion, and the second GP solutions fund saw early momentum. T-POP, a new private equity product, raised approximately $430 million across its first 2 closes in June and July. In Credit, it was a record fundraising quarter with $5.4 billion raised, including $1.4 billion for Credit Solutions' third flagship fund and $1.4 billion in structured credit. Real Estate ended the quarter with record dry powder of $63 billion, representing 43% of fee-earning AUM, and TREP acquired high-quality office towers, with LTM value creation for TPG real estate at 14%.

• Expect to raise significantly more capital in 2025 than last year. - Deployment pace is expected to accelerate in the back half of 2025. - Third quarter results will include the financial contribution from TPG Peppertree. - FRE margin is expected to be in the mid-40s by year-end. - Activated TPG Capital X in July, and expect to activate Healthcare Partners III in the first quarter of next year.

Q: Glenn Schorr inquired about the private equity cycle, asking if TPG is seeing a different picture than the general private equity theme.

A: Jon Winkelried stated TPG's private equity is different, with strong performance, gaining share, and LPs increasing commitments.

Q: Ken Worthington asked about balance sheet heavy vs light, seeking TPG's view.

A: Jon Winkelried discussed maintaining FRE centricity, avoiding undue balance sheet risk, and partnering for distribution capabilities.

Q: Alex Blostein asked about private equity fund size and P&L impact.

A: Jack Weingart discussed gaining share with existing LPs increasing commitments and step-down in management fees with new fund activation.

Q: Bill Katz inquired about the deployment of $30 billion AUM not yet paying fees.

A: Jon Winkelried mentioned positive deployment opportunities across businesses with increasing pipelines.

Q: Steven Chubak asked about capital markets windfall.

A: Jon Winkelried and Jack Weingart discussed capital markets growth correlated with firm and transactional activity.

Q: Dan Fannon asked about T-POP retail distribution.

A: Jack Weingart discussed T-POP's launch with partners and expansion plans.

Q: Brian Bedell asked about the Impact platform.

A: Jim Coulter discussed fundraising pipeline for Impact platform, Rise IV first close in Q4, and Climate franchise progress.

Q: Michael Cyprys inquired about cross-platform strategic partnerships.

A: Jack Weingart and Jon Winkelried discussed partnerships with largest LPs for longer-term capital commitments.

Q: Kyle Voigt asked about the 401(k) opportunity.

A: Jack Weingart discussed 401(k) market as a natural focus area, partnerships with potential partners for alternatives investment.