TPG plans to raise as much as $ 877 million in an initial public offering that the US buyout firm could value at more than $ 9 billion as it seeks to exploit a wave of investor interest in private equity.
After TPG, co-founded by David Bonderman and Jim Coulter in 1992, last month, it said on Tuesday it planned to sell 28.3 million shares at between $ 28 and $ 31 each.
TPG resisted the stock market crisis after the financial crisis, a route taken by competitors including Blackstone, KKR and Apollo, and one that paid off well as their shares rose. The Texas-based group, whose investments include Spotify, Uber and Airbnb, has $ 109 billion in assets.
TPG said it would transform into a single-class corporation within five years of listing a private partnership, as part of its ambitions to exploit public investors to fund its expansion.
In a submission to regulators on Tuesday, TPG also announced that China Life Insurance, which acquired a $ 250 million stake in TPG in 2014, will sell as many as 5.6 million shares in the IPO.
Forty percent of the proceeds from the shares sold by TPG will be used to buy shares from existing outside investors, the firm said in its prospectus, while the rest will be used to fund expansion into new business lines and markets.
TPG executives, including Bonderman and Coulter, as well as CEO Jon Winkelried, a former top Goldman Sachs banker, own a total of about 240 million shares and units, according to Tuesday’s filing. They will be worth more than $ 7.4 billion if TPG sells shares at the top of its price range.
While the firm did not break out most of the individual ownership, it did disclose that Bonderman, who is TPG chairman, had pledged 24.99 percent of the partnership units he owned to an unnamed financial institution as collateral for a loan.
TPG’s expected market value will be dwarfed by competitors, including Carlyle and Apollo. Blackstone, the industry’s largest firm, is valued at more than $ 150 billion.
After disastrous bets on the Texas utility TXU and the casino-rich Caesars Entertainment, TPG has been trying for the past decade to reposition himself as one of the buyout industry’s top investors in fast-growing companies.
It also built a successful healthcare buyout franchise, and Rise, a $ 13 billion asset venture aimed at environmentally and socially beneficial investments.
However, TPG’s focus on traditional private equity investments means that it still relies on performance fees for about 80 percent of its revenue. In contrast, Blackstone, Apollo and KKR reduced their dependence on the large, but volatile, fees generated by leveraged buyouts and moved to more stable credit, insurance and real estate investments.
TPG is expected to take a similar push to diversify, saying in its prospectus that it will use the IPO to help fund new investment strategies and pursue acquisitions.
TPG declined to comment outside of the filing.