Mon. Jan 24th, 2022

Shares of TPG jumped in their first trading day when the private equity group co-founded by billionaires David Bonderman and Jim Coulter became the latest to capitalize on rising valuations by leveraging public markets to fund growth.

The stock rose more than 15 percent on Thursday and closed at $ 34, lifting the company’s market capitalization above $ 10 billion.

The US-based TPG priced its initial public offering late Wednesday at $ 29.50 per share, the centerpiece of an offering range targeting early 2022.

TPG is the largest company to go public in the US so far this year, and its successful listing comes as the broader IPO market struggles with poor performance and increasing volatility.

Companies have a record breaking $ 150 billion through US IPOs last year, but many of them struggled to maintain investor enthusiasm after completing their listings. About two-thirds of businesses that went public in 2021 ended the year below their offer price, with some falling further during a stock market selling this month.

On Wednesday Do not work, a software company ready to go public this week, said it would postpone its IPO due to the recent volatility.

“The markets are turbulent,” Jon Ginkelried, CEO of TPG, told the Financial Times. “This IPO was a high-quality institutional book from a company that is highly profitable and has been around for 30 years. It’s just another part of the IPO market. ”

In the disclosure, TPG is preparing to dramatically expand its $ 109 billion assets platform by launching new funds and investment products and striking acquisitions. TPG raised $ 1 billion in the IPO.

“The trend of consolidation in our industry is clearly increasing as scale starts to matter more,” Winkelried said. “There are some other businesses in the market that are very complementary and interesting to us,” he added, referring to possible acquisitions in credit and infrastructure.

Winkelried also said the listing would help the firm grow as vibrant market conditions deteriorated.

“We sleep with one eye open,” he said, “you have to set yourself up so that you can seize opportunities when it comes and markets turn.”

Bonderman, 79, and Coulter, 62, co-founded TPG in 1992 after cutting their teeth as traders working under Texas oilman Robert Bass. The firm has become one of the buyout industry’s biggest and fastest growing players before it stumbled during the 2008 crisis.

TPG has been reformed as a younger generation of transaction makers focused on smaller transactions aimed at growth sectors in the world economy, such as software, healthcare and entertainment. TPG has also started expanding and launching platforms in real estate and sustainability-linked investments that are now more than $ 10 billion in assets.

The public listing is also used to confirm succession planning of Bonderman and Coulter. The interests in the firm will increase for a group that oversees TPG’s investment platform. Winkelried, who was appointed sole CEO in May 2021, will join Coulter and Bonderman as a controlling shareholder through a class of voting shares.

By 2028, TPG will dissolve the controlling shareholder group so that it has a single class of equities, which would qualify it to join the S&P 500 equities index.

Coulter described the listing as the culmination of a decade of watching peers in the industry unveiled, and then adjusting the firm’s structure to suit investors in the public market.

“We were basically waiting and learning from what’s going on in the industry,” Coulter said, referring to TPG’s decision to list as a corporation instead of a partnership, and the restructuring of its public finances to management fee-based earnings that are currently achieving a high multiple. in the market.

“We come to the market in a moment with our management plan very clearly set out and a model that we think fits [public markets]”We suspect others will be after us.”

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