TPG Operating Group II, L.P. 6.950% Fixed-Rate Junior Subordinated Notes due 2064 Q1 FY2025 earnings call

• Acquired Peppertree Capital Management, a leading specialized digital infrastructure manager focused on wireless communication towers.
• Market environment has shifted due to tariffs and policy uncertainty, causing volatility. TPG remains focused on executing business and driving growth.
• Portfolio has minimal first order risk to tariffs. Investment strategy provides confidence in portfolio quality. Leaning into deployment opportunities.
• Strong capital formation efforts with expectation to raise significantly more capital than last year. Credit has strong momentum with over $3 billion of discrete credit mandates closing soon. Private equity has launched new fund campaigns. Impact platform has strong fundraises. TPG AG Real Estate had a successful final close for its fourth European fund. Established a large strategic partnership worth over $4 billion.
• Private wealth is a growth area with progress in launching TPOP and expanding product set. Deployment had $7.3 billion invested in Q1 with several key investments.
• Realizations include successful exits and public listings. Launched TPG Sports strategy with anchor commitment.

TPG reported GAAP net income attributable to TPG Inc. of $25 million and after tax distributable earnings of $187 million or $0.48 per share of Class A common stock. Fee-related revenues in the first quarter were $476 million, including $413 million of management fees and $54 million of transaction fees. Total assets under management finished the first quarter at $251 billion, up 12% year-over-year. Fee-earning AUM was $143 billion, and performance eligible AUM was $212 billion, or 85% of total AUM.

• Expect to raise significantly more capital this year than last, despite elongated campaigns for some. Credit platform scaling, next TPG Capital and Healthcare Partners funds to close midyear, GP solutions and tech adjacencies funds to close, progress in climate and private equity campaigns, completion of TPG growth campaign, strategic partnerships, and private wealth channel penetration. - Peppertree acquisition expected to be immediately accretive to fee-related earnings and after tax distributable earnings per share upon closing.

• Market volatility and policy uncertainty causing elongated fundraising campaigns. - Impact on deployment and investment opportunities due to macroeconomic uncertainty.

Q: On private wealth channel, expected flow contribution from TPOP and TCAP?

A: TPOP launch on track for June, inflows to be seen in next quarters. TCAP flows increasing as Twinbrook's position is attractive. Actively working on multi-strategy credit and real estate products for private wealth.

Q: On transaction and other fees, status of capital markets build out?

A: Capital markets team is three quarters built out, with broad-based use across transaction closings and refinancing. More upside expected in coming quarters.

Q: On private equity fundraising, confidence in getting first closes this year?

A: Strong resonance with clients due to portfolio performance, return of capital, and differentiated investment approach. Clients recognize TPG's consistency and performance, leading to good fundraising momentum.

Q: On credit scale and insurance broadening?

A: Credit platform can expand through growing Twinbrook, expanding CLO platform, and growing presence in Europe. On insurance, focused on partnerships and embedded capital flows without becoming an insurance company.

Q: On impact platform fundraising and deployment in U.S. vs outside?

A: Outside The U.S. has more activity with clean energy spending, while The U.S. has policy uncertainty but acceleration in grid upgrading. Fundraising elongating slightly but targets remain focused.

Q: On Peppertree acquisition, fee-earning AUM, fund progression?

A: FAUM in $4.5B to $5B range, average fee rate 1.5%-2%. Next fund expected next year with evergreen structure consideration.

Q: On geographic diversification and China exposure?

A: Clients evaluating geographic diversification, TPG is global with opportunities in various markets. China exposure is less than 2% of total AUM, with focus on regional economic ties.

Q: On FRE margin and Peppertree accretion?

A: FRE margin assumptions include fundraising elongation. Peppertree is accretive but not built into current models.