Overview
- Fund size is anticipated to be $18 – $20 billion.
- Significant investments in operating companies through acquisitions and restructurings.
- Invest between $250 million & $1 billion of equity capital in companies with market valuations of $300 million or more.
Fund Strategy
- Investing in businesses with strong underlying “franchise” assets, partnering with outstanding management teams, and prudently using leverage to enhance returns.
- Focus on generating strong cash distributions earlier in the fund cycle than most other global private equity firms.
- Pennsylvania Presence – TPG does not currently have a PA presence; however several of their portfolio companies sell their products in PA retail stores.
Investment Team
- The Fund will be managed by TPG’s Founding Partners, David Bonderman and James Coulter.
- The Team consists of over 100 professionals in North America, Europe and Asia.
GP “Value Add”
- Developed the “Operating Group,” enabling TPG to pursue turnaround opportunities others could not consider, and improve portfolio company performance with active participation with management.
- 11 professionals support the Operating Group with unique, focused skill sets such as lean manufacturing, pricing strategy, and procurement.
Performance
- An overall gross IRR of 55% for vintage years 1985 through 2007.
Market Opportunity
- Staff values TPG’s ability to generate attractive returns in all market cycles and their depth of experience across industry sectors.
- TPG has proven success in contrarian, complex, distressed and turnaround situations.
History with PSERS
- This is PSERS fourth fund with TPG Partners. Prior funds were TPG Partners I, II and V.
Recommendation
- Staff, together with Portfolio Advisors, recommends a commitment of $400 million.
Source: Charles Spiller, PSERS