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Unquote
  • Buyout

TPG holds final close on $10.5bn

  • Kenny Wastell
  • Kenny Wastell
  • @kennywastell
  • 10 May 2016
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San Francisco-based private equity house TPG Capital has held a final close for its seventh buyout fund on $10.5bn, above its target.

TPG Partners VII had a target of $8bn with a hard-cap for external commitments of $10bn, unquote" understands.

A source close to the situation told unquote" the vehicle, which reportedly held a $6.5bn first close in January 2015, was oversubscribed. It is understood the GP was forced to limit commitments from some LPs, while other investors were unable to be accommodated at all.

TPG Partners VII

  • Target:

    $8bn

  • Launched:

    Jul 2014

  • Closed on:

    $10.5bn, final close

  • Focus:

    Mid-market and large-cap buyouts

  • Fund manager:

    TPG Capital

The latest fund is some way short of the $19bn raised by its predecessor, which reportedly delivered returns of 1.4x to limited partner California Public Employees' Retirement System (Calpers).

The GP's sixth fund was impacted by the effect the global financial crisis had on assets. Of particular note was Las Vegas casino operator Caesar's Entertainment, which it acquired alongside Apollo Global Management for $30bn in 2008 and subsequently filed for bankruptcy in January 2015.

TPG specifically targeted a lower sum for its latest vehicle to reflect the current market, according to a source. The firm has raised a number of specialist funds since the financial crisis totalling more than $45bn, including its growth, real estate, Asian and credit vehicles.

Investments
To date, TPG Partners VII has made six investments totalling $2.1bn. In May 2015, it made a $150m all-equity investment in UK value retailer Poundworld in exchange for a majority stake.

The fund has also backed Canadian circus company Cirque du Soleil, in addition to four US companies: real estate business Cushman & Wakefield, educational software company Ellucian, oil & gas company Enlink and health resort manager Life Time Fitness.

The GP has invested in around 175 companies since its foundation in 1992, with an average cheque size of $300m.

Investors
Commitments to the new fund came from a mixture of new and existing investors. The GP and its staff together committed $400m.

Investors in previous TPG funds have included Washington State Investment Board, Calpers, Swedish National Pension Fund and Canada Pension Plan Investment Board.

People
TPG Capital – Jim Coulter (co-founder, co-CEO); Jon Winkelried (co-CEO); Todd Sisitsky (managing partner); Jonathan Coslet (CIO, partner).

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